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Publicis raises its annual growth targets after better than expected results

2021-10-14T06:16:14.287Z

In the third quarter of 2021, the French group, number three in the world in communications, posted organic growth up 5% compared to the same period in 2019.



Publicis Groupe kicked off the financial results for the advertising sector on Thursday.

The French group, number three in the world in communications (Publicis, Leo Burnett, Saatchi & Saatchi, Starcom, Zenith ...), recorded in the third quarter of 2021 a net income of 2.6 billion euros, organic growth of 11 , 2%, higher than market expectations (7.8%).

Its activities in the United States, which represent more than 60% of the group's revenues, are up 10.9%, and sales in Europe have increased by 10% compared to last year.

In the first nine months of the year, Publicis' net income jumped 10.2% to reach 7.5 billion euros.

Read alsoAdvertising: adtech start-ups are on the rise

The communications agency exceeded its pre-pandemic levels over the period August, September and October, with organic growth of 5% compared to the third quarter of 2019. In 2020, Publicis had lost nearly € 600 million of net revenue.

On the Paris Bourse on Thursday, the Publicis share gained 0.39%, to 56.92 euros.

Better forecast for 2021

"

There is a growing demand from our customers, especially Americans, to equip themselves with proprietary data, at a time when third-party cookies are doomed to disappear,"

explains Arthur Sadoun, Chairman of the Board of Publicis Groupe.

The results of Sapient and Epsilon in the third quarter bear witness to this enthusiasm ”.

In a post-third-party advertising cookie world, media agency clients are looking for personalization at scale, to withstand the era of digital platform dominance. The "

logged in

" (or owners) data in particular is a Holy Grail for site editors and advertisers. The data subsidiary Epsilon (acquired in 2019 for $ 4.4 billion), which brings together 250 million personalized profiles worldwide (behavioral, demographic and transaction data), for example recorded growth of 13% in the United States. Through Epsilon's CORE ID

,

Publicis is able to see 56% of credit card transactions in the United States.

To date, we have not observed any impact on our customers' investments due to the disruption of the product supply chain.

Arthur Sadoun, Chairman of the Management Board of Publicis Groupe.

The group's growth is also driven by the signing of new large-scale contracts.

After the contract for the launch of Disney +, Publicis won the media strategy of Walmart, the American distribution juggernaut, during the summer.

"Thanks to our third quarter results, we are revising our forecasts upwards for 2021",

explains Arthur Sadoun.

Publicis now anticipates organic growth of 8.5% to 9% for the year, compared to 7% previously.

With an operating margin rate of over 17% and free cash flow close to 1.3 billion euros.

The group expects a target of 1.6 billion euros in average debt by the end of 2021.

Attentive to the shortage of components

In the coming months, small acquisitions could complete the Publicis data offer.

Like the Australian adtech CitrusAd, bought by the group last July to position itself more in “

retail media

”.

A booming part of the market with the health crisis which has further boosted e-commerce and the number of visitors to online marketplaces.

Publicis is also positioning itself on “

advanced TV

” (which includes connected TV, boxes, etc.), with the launch of PMX Lift in the second quarter.

The

"advanced TV" market

in the United States is expected to reach $ 33 billion in 2023.

Read alsoThe advertising market emerges from the crisis in the first half of the year

Publicis also remains attentive to the global shortage of electronic components, particularly semiconductors. “

To date, we have not observed any impact on our customers' investments due to the disruption of the product supply chain,”

says Arthur Sadoun.

We are following this subject very closely, particularly in the automotive sector where there may be budget reallocations depending on the brand portfolios. But it is still too early for our industry to be able to assess the potential consequences

.

Lastly, finally, in all industries, there are employees who are asking themselves structuring questions about their professional future.

We take these developments very seriously.

In this regard, our Marcel platform is an asset for retaining and attracting talent: employees can, for example, move from one job to another, or work on a project outside their territory, ”

concludes Arthur Sadoun.

Publicis' external growth, through small acquisitions, notably enables the group to integrate into its ranks technological, data and engineer profiles, highly prized in the race for talent.

Source: lefigaro

All life articles on 2021-10-14

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