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Driven by the United States, Publicis returns to growth in the first quarter of 2021

2021-04-15T05:37:48.814Z

The French group, world number three in communications, posted organic growth of 2.8%. The acquisition of Epsilon is bearing fruit.



"We did not expect to return to growth before the 2nd quarter of 2021"

, explains Arthur Sadoun, Chairman of the Management Board of Publicis Groupe at

Le Figaro

.

The French group, number three in the world in communication (Publicis, Leo Burnett, Saatchi & Saatchi, Starcom, Zenith ...), published Thursday its income for the first quarter of 2021, after a delicate year shaken by the pandemic.

Driven by its activities in the United States and Asia, the communications agency is returning to growth in a health and economic environment that is still uncertain.

Publicis recorded in the first quarter a net income of 2.392 billion euros, organic growth of 2.8%, higher than the expectations of the market which expected a decline of -2.0%.

The good results of Publicis, the first to publish them among its peers (the British WPP, world number one or the American Omnicom, number 2), set the tone for the industry, which is trying to regain the confidence of the market.

Supported by the United States and Asia

Arthur Sadoun believes above all that the fruits of Publicis' investments in data and the digital transformation of companies, with the integration of Epsilon in 2019 (for $ 4.4 billion), its subsidiary specializing in data and the creation of individualized profiles, and from Sapient (acquired for $ 3.7 billion in 2015), are beginning to be reflected in the group's results.

Read also: Publicis resists the crisis better than expected

In the United States, the group posted organic growth of + 5.1% in the first quarter of 2021, positive for the second consecutive quarter, thanks in particular to a 4.7% increase in Epsilon revenues and the acceleration of Publicis Sapient at + 11.2%

.

The recovery in the United States, which now represents more than 60% of the French group's revenues, is also explained by the success of the vaccination campaign against Covid-19 and the strength of the $ 1900 billion stimulus plan.

In the Asia-Pacific region, which represents 10% of its overall revenue, Publicis recorded an acceleration in organic growth in the first quarter to + 5.7%.

Publicis generated revenue of 119 million in France in the first quarter of 2021

These results confirm the relevance of the Publicis model, which mixes creation, data, media and technology, even as the health crisis continues to disrupt the picture in 2021. Customers have a growing need for large-scale personalization to win in a world dominated by platforms

”, explains Arthur Sadoun.

On the American and Asian market, Publicis believes that it has succeeded in capturing a significant part of the evolution of client investments in recent months in digital channels, e-commerce and direct-to-consumer.

On the European side, the recovery is less marked, with organic growth still down slightly in the first quarter at -1.8%

.

The latter nevertheless stands at + 2.8% if we exclude Mediatransports (display in transport) and the Drugstore Parisien, closed for a year.

Small shadow on the table for the group, an acceleration weaker than expected in the United Kingdom, linked to the strict confinement imposed in the region until the month of April.

The region recorded an organic decline of -3.4%.

In France, the group's organic growth in the first quarter came out positive at 4.9%.

With a turnover of 119 million, the country represents 5% of the total income of Publicis, reveals Publicis in Figaro.

The recent gain in several budgets, such as SNCF, La Poste, Renault, and Française des Jeux, after years spent in the Havas portfolio, made it possible to compensate in particular for the poor results on activities in the events sector.

No major movement to expect in 2021

Its subsidiary Epsilon currently has nearly 250 million personalized profiles, and is deployed in Europe where it already has 50 million.

At the beginning of April, Publicis announced a partnership with the American technology company The Trade Desk, to pool their data and their technology in order to offer a large-scale personalization offer for digital advertising to their customers.

A real alternative to the expected deletion of third-party cookies on platforms like Google and Apple.

Read also: Publicis hires Michelle Obama for her wishes

For 2021, no major movement is to be expected, as Publicis is no longer a buyer of new large assets.

Nevertheless, the desire to develop Epsilon in the rest of the world could in the future involve small “

non-structuring

acquisitions

, explains Arthur Sadoun.

With the Covid-19 crisis still in full swing in many parts of the world, the lack of visibility does not allow forecasting of income for the year 2021. The group will update its outlook when publishing its half-year results in July.

On the other hand, Publicis confirms its objective of 2 billion euros in average debt at the end of 2021. This had reached 3.3 billion in 2020. “

The

aim

is to continue to deleverage this year by more than 1 billion

euros

. euros after our acquisition of Epsilon

”, explains Arthur Sadoun.

After 2020 marked by a 50% drop in the dividend, the group wants to raise it to 2 euros in 2021, a level close to before the pandemic.

This will be proposed at its next general assembly.

For all communication players, the second quarter should show robust organic growth, after a second quarter of 2020 at an all-time low.

Believing that its performance in the first quarter bodes very well for the future, Publicis Group expects organic growth of between 8% and 10% in the second quarter of 2021.

Source: lefigaro

All life articles on 2021-04-15

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