First Quarter 2022
Revenue
-Very strong start of
the year
April 14, 2022
· Q1
organic growth at +10.5%, well above expectations
·
Acceleration of Publicis Sapient at +18.5% organic
growth
· Strong organic
growth in all regions:
o Continued momentum in the U.S. at +8.0%,
with good performance of Epsilon
o Robust recovery in Europe at
+14.9%1 fueled by France and the
U.K.
o Very solid growth in Asia at +14.4% with
China double-digit again this quarter
·
Significant wins in New Business, driven by strength of the
model combining data, creative, media and technology
·
2022 guidance confirmed, with organic growth now at upper
end of the +4 to +5% range
Q1
2022
|
|
|
€2,800m |
|
€2,392m |
|
+10.5% |
|
+17.1% |
|
|
1 +9.4% excluding Outdoor Media activities & the
Drugstore
Arthur Sadoun, Chairman and CEO of Publicis
Groupe:
“We started the year very strongly, both
financially and commercially.
Our organic growth for the quarter came well
above expectations at +10.5%, versus +2.8% for the same period last
year.
Our model is going from strength to strength, as
it continues to capture rising client demand for first-party data,
digital media and commerce. This is particularly true in business
transformation, where Publicis Sapient saw strong acceleration this
quarter and grew +18% globally.
All of our regions performed well. The organic
growth of the U.S. at +8% confirms the country’s continued dynamic
with a good performance of Epsilon at its core. Europe posted
robust recovery at +15% organic growth, fueled by France and the
U.K. Meanwhile, in Asia, we also delivered very solid numbers, with
+14% organically and double-digit growth once again in China.
We are confident in our ability to deliver on
all of the objectives we set for the year and actually come in at
the upper end of our organic growth target, despite the uncertainty
caused by the global health situation, the evolution of the
conflict in Ukraine, and the consequences of inflation for our
clients.
This confidence is underpinned by our truly
differentiated model. Once again, we demonstrated in the last
quarter that with Epsilon and Publicis Sapient integrated with our
creative and media operations, we have unique capabilities to help
our clients transform, grow and optimize their spend in this very
challenging period.
The best proof of the uniqueness and
attractiveness of our offer is our new business performance. After
topping all of the new business rankings in 2021, we are confirming
our momentum with significant wins last quarter like McDonald’s,
Singapore Tourism Board, Siemens, Etisalat, LVMH, Pepsi and the
largest pitch of the year so far, AB InBev, to name just a few.
I would like to thank our teams for their
incredible efforts, and our clients for their partnership.
Of course, the start to the year has also been
dominated by the war in Ukraine. Our thoughts and unwavering
solidarity go out to the Ukrainian people, and our 350 employees in
the country. We will continue to respond to the gravity of this
situation with concrete actions, and a clear focus on protecting
their safety and wellbeing.”
. . .
NET REVENUE IN Q1 2022
Publicis Groupe’s net revenue in Q1 2022 was
2,800 million euros, up 17.1% from 2,392 million euros in 2021.
Exchange rates had a positive impact of 125 million euros.
Acquisitions, net of disposals, accounted for an increase in net
revenue of 19 million euros. Organic growth reached +10.5%.
Breakdown of Q1 2022 Net revenue by
region
EUR |
Net revenue |
Reported |
Organic |
million |
Q1 2022 |
Q1 2021 |
Growth |
Growth |
North
America |
1,748 |
1,505 |
+16.1% |
+8.1% |
Europe |
662 |
561 |
+18.0% |
+14.9%2 |
Asia
Pacific |
261 |
217 |
+20.3% |
+14.4% |
Middle East
& Africa |
75 |
62 |
+21.0% |
+13.4% |
Latin America |
54 |
47 |
+14.9% |
+13.1% |
Total |
2,800 |
2,392 |
+17.1% |
+10.5% |
North America net revenue was
up +16.1% on a reported basis in Q1 2022, including a positive
impact of the US dollar to Euro exchange rate. Organic growth in
the region was +8.1%. In the U.S., organic growth
came at +8.0%, confirming the country’s strong dynamic in all its
activities. Publicis Sapient grew +16.3% organically, as the demand
for business transformation continued to accelerate. Media posted
double-digit organic increase, while Creative activities saw their
net revenue grow mid-single digit, with notably strong Production.
Epsilon grew +6.3% organically, absorbing the anticipated impact of
supply chain issues that affected its Automotive division, thanks
to double-digit growth in Digital Media and Data.
Canada was up +11.7% organically.
Net revenue in Europe was up by
+18.0% on a reported basis. It was up by +9.4% on an organic basis,
or +14.9% including the contribution of our Outdoor Media
activities & the Drugstore. Organic growth in the
U.K. was +12.0%, with a notable double-digit growth in
Media and strong performance from Publicis Sapient, both driven by
recent new business wins. Organic growth in France
was +12.3%3 with very strong growth in Media and at Publicis
Sapient. Germany was up +1.2% organically, versus
a +6.0% comparable base in the same period last year.
Central & Eastern Europe was up +14.9%
organically, with double-digit growth in Poland, Romania and
Hungary.
Net revenue in Asia Pacific was
+20.3% on a reported basis, and +14.4% organically.
China grew double-digit organically again this
quarter, at +10.6%, supported by new business wins. The performance
was also double-digit in India and Singapore. Thailand recorded
strong performance largely driven by Publicis Sapient.
In Middle East & Africa,
net revenue was up +21.0% on a reported basis, and +13.4%
organically. Organic growth was largely driven by Media, Publicis
Sapient in the Middle-East and Creative in Africa.
Net revenue in Latin America
was up +14.9% on a reported basis, and +13.1%. organically, with
most countries reporting growth this quarter, largely driven by
Creative.
2 +9.4% excluding Outdoor Media activities
& the Drugstore3 +39.2% including Outdoor Media activities
& the Drugstore
Breakdown of net revenue
at March 31, 2022 by sector
On the basis of 3,052 clients
representing 91% of Groupe net revenue
NET DEBT AND LIQUIDITY
Net debt totaled 718 million euros at the end of
March 2022, compared with 76 million euros at year-end 2021,
reflecting the seasonality in the activity. Net debt was 1,866
million euros at the end of March 2021. The Groupe’s average net
debt on a 12-month basis stood at 1,277 million euros at the end of
March 2022.
The Groupe’s liquidity position remains very
solid, at 5.0 billion euros.
ACQUISITIONS AND DISPOSALS
On March 8, 2022, Publicis
finalized the acquisition of Tremend, based in Bucharest (Romania),
a fast-growing large independent software engineering company.
Tremend currently reaches 60 million of its clients’ end users with
its proven technology and will serve as the newest global delivery
center for Publicis Sapient, expanding its Digital Business
Transformation capabilities. With over 16 years of experience in
product engineering, Tremend has 650 strong software engineering
talent across high demand skills.
On March 15, 2022, Publicis
announced its exit from Russia, by ceding the ownership of its
agencies to local management. The Groupe handed over control of its
Russian operations to Sergey Koptev, Founding Chairman of Publicis
in Russia, with the clear contractual condition of ensuring a
future for its 1,200 employees there. The Groupe stopped its
business and investments in Russia, and the cession was
effective immediately. Our first quarter’s financial
statements include a related 87 million euros exceptional disposal
loss, and Russia was deconsolidated from April 1st, 2022.
OUTLOOK
In the first quarter 2022, Publicis recorded a
stronger-than-expected start to the year, both financially and
commercially. While this should have led the Groupe to upgrade its
expectations for 2022 organic growth, the global health
situation, the evolution of the conflict in Ukraine, and
the consequences of inflation for the clients, create too much
uncertainty to do so at this stage.
Thanks to the strength of its model, Publicis is
confident in its ability to deliver on all of the 2022 targets set
at its full year 2021 earnings, with organic growth now at the
upper-end of its previous +4 to +5% range. This guidance takes into
account a strong Q1 and an expected very solid Q2 at around +5%
organic, after +17.1% in Q2 2021. The Groupe confirms its 2022
guidance of circa 17.5% operating margin rate and circa 1.4 billion
Euros of Free Cash Flow before change in working capital. This
assumes no further major deterioration in the global health and
economic environment.
NEW BUSINESS
EUROPE
Primark (Data), abrdn (Media), Heineken
(Content), Biffa PLC (Commerce), HomeExchange (Digital Media
Planning & Buying), Wild (Creative), LVMH (Media), Air Liquide
(Digital), Churchilll Insurance (Creative), Neue Zürcher Zeitung AG
(Creative), Valoria Capital (Creative), Aroma-Zone (Creative),
Metro (Creative), Mundicenter (Creative), Sky Italia (Creative),
Sberbank (Content), Mapfre (Media), The Ministry of Education and
Science of Bulgaria (Influence), Landkreditt Bank AS (Media),
United Parcel Service (Data), Ferrero (Creative), Expo Serbia
(Creative), Campari (Influence), BNP Paribas (Creative), Avon
Products (Media), Barclaycard (Creative)
NORTH AMERICA
McDonald’s (Media), Walmart (Media), Toyota
Motor Corporation (DBT), KFC (Media), Boar's Head (DBT), Auto Club
Group (Integrated), CVS Health (Creative), Kruger Inc (Influence),
Properly (Influence), Liquor Control Board Of Ontario (Influence),
Dos Equis (Digital), Colgate (Digital), Off-Lease Only Auto
(Digital), Unilever NA (Digital), Nestlé (Digital), Inspire Brands
(Digital), The Kraft Heinz Company (Digital), Zespri (Digital),
Trident - Mondelez International (Creative), The Scotts Miracle-Gro
Company (DBT), Xero (Influence), Amazon (Data), Loblaw (Influence),
Regal Entertainment Group (Production), Pacaso (Creative), Nestlé
(Data), Cherry Lane Canada (Influence)
ASIA PACIFIC/MEA
ByteDance (Media), L'Oréal (Content), Volkswagen
Group (Influence), Vivo Communication Technology Co (Content),
Nestlé (Influence), Wellington Management Company (DBT), PlayerzPot
Media Pvt. Ltd. (Creative), SmarTone Telecommunications Holdings
Limited (Media), Abbott Laboratories (Commerce), Singapore
Telecommunications (Content), Geely Auto Group (Content), Deliveroo
(Media), PlayerzPot Media Pvt. Ltd. (Media), Jardine Restaurant
Group (Media), Clarins Group (Media), Cool Inc (Media), Humsafar
Trust (Creative), Zoomcar (Media), XYXX Apparels (Media), BMW
Malaysia (Creative & Digital), Pepsi (China), e& - Etisalat
(Creative), Krungthai Bank (Content), Infinix Mobility (Content),
Citigroup (Content), Easy Crypto NZ (Media), Meta (Creative)
LATAM
AB InBev (Creative), MeatMe (Media &
Content), Autoridad del Canal de Panama (Media), Scotiabank Inc
(Creative), Compania Nacional de Chocolates de Peru S.A. (Content),
SodaStream (Media), Alfred Kärcher SE & Co. KG (Media),
Celebrity Cruises (Media), Alpina (Creative), Citigroup (Creative),
Walmart (Media & Content), VeriTran (Creative), Nestlé
(Content), Logitech (Media)
GLOBAL
AB InBev (Media), Siemens (Creative), Norwegian
Cruise Line (Media), Singapore Tourism Board (Media &
Creative)
Disclaimer
Certain information contained in this document,
other than historical information, may constitute forward-looking
statements or unaudited financial forecasts. These
forward-looking statements and forecasts are subject to risks and
uncertainties that could cause actual results to differ materially
from those projected. These forward-looking statements and
forecasts are presented at the date of this document and, other
than as required by applicable law, Publicis Groupe does not assume
any obligation to update them to reflect new information or events
or for any other reason. Publicis Groupe urges you to carefully
consider the risk factors that may affect its business, as set out
in the Universal Registration Document filed with the French
Autorité des Marchés Financiers (AMF) and which is available on the
website of Publicis Groupe (www.publicisgroupe.com), including an
unfavorable economic climate, a highly competitive industry,
risks associated with the confidentiality of personal data, the
Groupe’s business dependence on its management and employees, risks
associated with mergers and acquisitions, risks of IT system
failures and cybercrime, the possibility that our clients could
seek to terminate their contracts with us on short notice, risks
associated with the reorganization of the Groupe, risks of
litigation, governmental, legal and arbitration proceedings, risks
associated with the Groupe’s financial rating and exposure to
liquidity risks.
About Publicis Groupe - The Power of
OnePublicis Groupe [Euronext Paris FR0000130577, CAC 40]
is a global leader in communication. The Groupe is positioned at
every step of the value chain, from consulting to execution,
combining marketing transformation and digital business
transformation. Publicis Groupe is a privileged partner in its
clients’ transformation to enhance personalization at scale. The
Groupe relies on ten expertise concentrated within four main
activities: Communication, Media, Data and Technology. Through a
unified and fluid organization, its clients have a facilitated
access to all its expertise in every market. Present in over 100
countries, Publicis Groupe employs around 90,000 professionals.
www.publicisgroupe.com | Twitter:@PublicisGroupe | Facebook |
LinkedIn | YouTube | Viva la Difference!
ContactsPublicis Groupe |
|
Delphine StrickerAlessandra Girolami |
Corporate CommunicationsInvestor Relations |
+ 33 (0)6 38 81 40 00+ 33 (0)1 44 43 77 88 |
delphine.stricker@publicisgroupe.comalessandra.girolami@publicisgroupe.com |
Clémence Vermersch |
Investor Relations |
+ 33 (0)1 44 43 72 17 |
clemence.vermersch@publicisgroupe.com |
Appendices
Net revenue: organic growth
calculation
(million euro) |
Q1 |
|
Impact of currencyat end March
2022(million euro) |
2021 net revenue |
2,392 |
|
GBP (2) |
8 |
Currency impact (2) |
125 |
|
USD (2) |
100 |
2021 net revenue at 2022 exchange rates (a) |
2,517 |
|
Others |
17 |
2022 net revenue before acquisition impact (b) |
2,781 |
|
Total |
125 |
Net revenue from acquisitions (1) |
19 |
|
|
|
2022 net revenue |
2,800 |
|
|
|
Organic growth (b/a) |
+10.5% |
|
|
|
(1) Acquisitions (CitrusAd, Boomerang, Tremend,
BBK, Balance Internet, Taylor Herring, Octopus UK, and Means
Advertising), net of disposals (DPZ&T and
Nexus)(2) EUR = USD 1.123 on average in Q1 2022
vs. USD 1.199 on average in Q1 2021EUR = GBP 0.836 on average in Q1
2022 vs. GBP 0.870 on average in Q1 2021
Definitions
Net revenue: Revenue less
pass-through costs which comprise amount paid to external suppliers
engaged to perform a project and charged directly to clients. Those
costs are mainly Production & Media costs and out of pocket
expenses.
Organic growth: Change in net
revenue excluding the impact of acquisitions, disposals and
currencies.
Net Debt (or financial net
debt): Sum of long and short financial debt and associated
derivatives, net of treasury and cash equivalents excluding lease
liability since 1st January 2018.
Average net debt: Average of
monthly net debt at end of each month.
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