Publicis Groupe has reported organic growth of 7.1 per cent in its first quarter numbers, with revenues up 10 per cent YOY.
Paris-based Publicis, which owns agencies such as Saatchi & Saatchi, Leo Burnett and Zenith, also said it expects to hit organic growth this year in the top half of its previously stated range of three to five per cent.
It also reported first-quarter net revenue of 3.08 billion euros, equivalent to $A5 billion.
Its North American operations were up 10.9 per cent, Europe was up 12.2 per cent and Australia’s organic growth was up 5.4 per cent.
Highlights of the numbers included:
- Q1 2023 reported net revenue up 10 per cent
- Organic growth of +7.1 per cent above expectations after +10.5 per cent in Q1 last year:
- Epsilon and Publicis Sapient both significantly accretive at +10 per cent and +11 per cent organic
- Continued strong performance in the US at +5.8 per cent organic
- Acceleration in Europe to +12.3 per cent organic
- China posting solid numbers at +3.7 per cent organic growth
- Continued New Business dynamics in Q1 after topping industry rankings four times in five years
- 2023 guidance confirmed despite rising macroeconomic uncertainties, organic growth now expected to reach the top half of the three to five per cent range
Outlook
Despite rising macroeconomic uncertainties, the Groupe confirms all of the 2023 KPIs set in February thanks to the strength of its model. When it comes to organic growth, the Groupe is increasingly confident to reach the top half of the three to five per cent range for the full year thanks to its strong Q1 and an expected solid Q2 between three to five per cent. The Groupe reiterates its 2023 guidance of 17.5 per cent to 18 per cent operating margin rate and circa 1.6 billion Euros of Free Cash Flow1 before change in working capital.
Arthur Sadoun, chairman and CEO of Publicis Groupe, said of the numbers: “After two years of double digit growth, we posted a strong start to 2023.
“In Q1, our net revenue was up +10 per cent again on a reported basis. Organic growth was +7.1 per cent, demonstrating once more the ability of our differentiated model to gain market share. The U.S. continued their strong performance with +5.8 per cent organic growth, Europe accelerated to +12.3 per cent and China posted a solid +3.7 per cent despite the health situation in the country.
“Since 2019, we’ve expanded our first quarter net revenue by +45 per cent on a reported basis, of which +18% organically. Putting this performance in perspective, the Groupe has actually changed dimension in recent years, rising to the number 2 position in the industry in terms of revenue.
“Our differentiated revenue mix, with one third in data and tech, allowed us to grow faster than both the industry and the global economy in the last three years. This continued to be the case in Q1 this year, with Epsilon & Publicis Sapient again accretive to our growth at +10 per cent and +11 per cent organic respectively. It was also visible in our Media and Creative activities, that were very solid in the quarter.
“Not only do those capabilities at scale lead us to outpace competition, but they also set us apart in the way we go to market. With Epsilon’s real time data and Publicis Sapient’s technology embedded in our Creative and Media offerings, our New Business momentum continued in Q1 after topping the leagues 4 times in the last 5 years, with recent wins like Adobe or Walgreens Media, Sonepar Business Transformation, Mondelez Production and Dunkin US Creative.
“It is this differentiated revenue mix, our go-to-market and our platform organization, allowing us to invest in growth while delivering industry-high margins, which drive our confidence to achieve all of our 2023 KPIs guidance.
“Actually, despite an increasingly challenging macroeconomic environment, we now anticipate that organic growth for the year will come in at the top half of our three to five per cent guidance, while delivering 17.5 per cent to 18 per cent operating margin and circa 1.6 billion Euros in free cash flow.
“I would like to thank our teams for their continued efforts and our clients for their trust.”
