Publicis Groupe has reported a second quarter of improving revenues versus pre-COVID levels and upgraded its annual growth forecasts for a second time.
The Paris-based agency announced overnight that Q3 revenues are 11.2 per cent ahead of this time last year. However, it should be noted revenues were well down in the peak of the pandemic 12 months ago.
Revenue was up five per cent in Q3 versus 2019, after a two per cent rise in Q2 and a flat Q1 compared with two years earlier.
Highlights of Publicis’ Q3 included:
- Q3 organic growth up 11.2 per cent, with US up10.9 per cent, Europe at plus 10 per cent and Asia (where Australia is reported) up 12.5 per cent
- Epsilon up 13 per cent and Publicis Sapient up 20 per cent in the US
- Exceeding Q3 2019 by five per cent: US was up eight per cent, Europe fully recovering and Asia up two per cent versus 2019’s numbers
- The agency posted a number of strong account wins globally including Samsung, Ferrero, Planet Fitness, TD Bank and Walmart
- Second upgrade of all 2021 guidance KPIs:
- Organic growth between up 8.5 per cent and nine per cent versus seven per cent previously
- Operating margin rate now slightly above 17 per cent
- Free cash flow close to €1.3 billion ($A2.03 billion), at the high-end of the previous objective
Commenting on the numbers, Arthur Sadoun (main photo), chairman and CEO of Publicis Groupe, said: “In Q3 we delivered strong organic growth at 11.2 per cent. All of our regions contributed to this performance with double-digit growth, notably the Us, which grew 10.9 per cent, Europe at 10 per cemt and Asia at 12.5 per cent.
“The continued outperformance of our data and tech capabilities once again demonstrated our ability to capture a disproportionate share of the shift in client investment towards digital media, commerce and DTC. This was particularly the case in the US, where Epsilon delivered 13 per cent and Publicis Sapient was at 20 per cent.
“The strength of our model not only means we have fully recovered from the impact of the pandemic, but it has also allowed us in Q3 to grow five per cent versus 2019. On a two-year basis, Asia is at two per cent, Europe has returned to pre-pandemic levels and the US is accelerating to eight per cent.
“Today, all of this means that we are in a position to upgrade our full year guidance for all our KPIs a second time this year. This is the case for organic growth, that we now anticipate at 8.5-9 per cent from seven per cent. We are also revising our operating margin upwards, to slightly above 17 per cent, while continuing to invest in future growth and talent. And at close to 1.3 billion Euros, our free cash flow is expected at the high end of our previous objective.
“Overall, 18 months after the beginning of the pandemic, we are emerging as a stronger group.
“Our differentiated go to market is allowing us to confirm our leadership position in new business. After wins in H1 including Samsung US, Stellantis globally, L’Oréal in China to name just a few, Q3 has been a busy quarter, with new wins like Ferrero, Planet Fitness, TD Bank and Walmart.
“We have a product and service offering that uniquely positions us to respond to our clients’ needs and help them address and lead the major revolutions in the industry, from the disappearance of third party cookies, the acceleration of advanced TV and retail media, and the ongoing rise of direct to consumer channels.
“And our platform organisation, supported by our shared services and Marcel is fit for the future of work. A future that will be more diverse, more inclusive and more responsible than ever before, to the benefit of all of our people.
“I’d like to thank our clients for their ongoing trust, and our teams for their outstanding efforts, which once again made the difference this quarter,” Sadoun said.