Paris-based holding company Publicis Groupe has raised its full-year targets after posting 7.1 per cent organic revenue growth in the first half of 2023, helped by its shift towards digital marketing.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 3.7 per cent to €1.335 billion ($A2.19 billion) on net revenue of €6.32 billion ($A10.3 billion) in the first six months of 2023.
Publicis now expects organic net revenue to grow around five per cent this year, against a previous outlook for it to reach the upper bracket of three-five per cent, and after 10 per cent plus last year.
The company’s shares have roughly tripled since early 2020 when the pandemic hit, making Publicis, worth around €18.2 billion euros ($A30 billion), the largest advertising agency today by market cap. WPP still remains the largest by clients and head count.
Publicis is the second of the holding companies to post its second quarter numbers after Omnicom posted 3.4 per cent organic growth in its numbers yesterday. Read those results HERE.
Highlights of the numbers included:
- Q2 organic growth at +7.1 per cent thanks to revenue mix and New Business tailwind
- Continued sustained performance across regions: U.S. +5 per cent, Europe +15 per cent, China +7 per cent
- Operating margin rate maintained at historically high level of 17.3 per cent in H1
- Headline diluted EPS up +11 per cent at €3.21, Free Cash Flow slightly up at €725m despite FY’22 R&D tax payment
- Upgrade of 2023 guidance despite persistent macro uncertainties: organic growth now expected at circa +5 per cent, operating margin rate close to 18 per cent, Free Cash Flow at least €1.6bn
Commenting on the results, Arthur Sadoun, chairman and CEO of Publicis Groupe, said: “The first half of the year has been strong for Publicis.
“In Q2, we continue to outperform the market on organic growth thanks to our unique revenue mix and new business track record with +7.1 per cent, ahead of expectations after double-digit growth in 2022.
“We delivered the best financial KPIs in the industry in H1 thanks to our platform organisation, with operating margin at 17.3 per cent, in line with the historically high level of 2022.
“As we shifted from a communication to a transformation partner for our clients, we are confirming that we have become a stronger company since 2019 with our net revenue up +45 per cent on a reported basis and our operating margin up +68 per cent over this period.
“With our investments in Epsilon, powering Creative and Media through personalisation at scale, Sapient and Marcel, we are uniquely positioned to lead the future of our industry. It will inevitably be shaped by data, tech and AI that are already at the heart of our business model both in how we work for our clients and in the way we operate.
“But Publicis is not only future-proof. It is also more resilient to business cycles, allowing us to upgrade our guidance on all KPIs for the year despite persistent macroeconomic uncertainty. We now expect to deliver organic growth at circa +five per cent for 2023, above our 3Y CAGR of +four per cent, with operating margin rate close to 18 per cent.
“I would like to sincerely thank our clients for their continued trust and all our talent for their dedication throughout the last months,” Sadoun said.
