Third Quarter
2022 Revenue
3rd consecutive
quarter of double-digit organic
growth-FY 2022 guidance
upgrade
October
18,
2022
-
Q3 reported growth
of
+23.5%
-
A third quarter of double-digit organic
growth with +10.3% in Q3:
-
Publicis Sapient at
+18.1%
and Epsilon at
+13.9%,
both significantly accretive
-
Continued strength across
regions with notably
both the U.S.
and Europe at
+11.1%
-
Acceleration of organic growth
compared to pre-pandemic
levels:
+16% in
Q3 versus 2019, after +12% in Q2 and +10% in
Q1
-
Continued momentum
of account wins
strengthening leadership position
in New
Business
leagues
-
Second upgrade of
FY 2022
guidance:
-
Organic growth circa
+8.5%, vs. +6% to
+7% previously
-
Operating margin
rate close to
18%,
vs. 17.5% to 18% previously
-
Free cash flow close to
€1.6bn,
vs. at least
€1.5bn
previously
-
An exceptional bonus
of one-week salary for half of our
employees, to support
our talent with no
variable remuneration
Q3 2022
9M
2022
Arthur Sadoun, Chairman and CEO of Publicis Groupe:
“ Q3 came in strong at +23.5% on a reported
basis.
In an increasingly uncertain global economic
context, organic growth for the quarter was ahead of expectations
at +10.3%.
For the third quarter in a row, our model
allowed us to deliver double digit growth by once again capturing
the evolution in client spend towards first-party data management,
digital media and business transformation. Publicis Sapient
continued to perform strongly with +18.1% organic growth, and
Epsilon saw an acceleration to +13.9% organic growth this
quarter.
All of our regions posted solid organic growth,
with both the U.S. and Europe at +11.1%, and China at +5.9% despite
the ongoing lockdowns there.
Furthermore, our new business record continues
to place us at the top of industry rankings on a 12-month basis,
well ahead of competition.
Overall, our results since the beginning of the
year mean that today we are in a position to upgrade our full year
2022 guidance for the second time. We are now confident of
delivering circa +8.5% organic growth versus +6 to +7% previously,
with an operating margin at close to 18% and a Free Cash Flow close
to €1.6bn.
Our Q3 numbers are clearly encouraging. But what
really stands out is our performance versus pre-pandemic levels.
Compared to 2019, we’ve seen our organic growth accelerate to +16%
in Q3. This demonstrates our ability to more than withstand the ups
and downs of the global economy, and makes us confident in our
ability to face ongoing macroeconomic uncertainties. I’d
like to thank our clients for their partnership. I also want to say
a big ‘merci’ to all of our people for their outstanding efforts.
In a context where inflation is impacting the daily lives of many
of them, we want to ensure we are giving additional support where
it is most needed as we enter the holiday season. That is why we
are granting next month an additional one-week salary to half of
our team members who do not have any variable remuneration and have
contributed to everything we have achieved over the past year.
”
NET REVENUE IN Q3
2022
Publicis Groupe's net revenue in Q3 2022 was 3,237 million euros
compared to 2,621 million euros in Q3 2021, increasing by +23.5%.
Exchange rate variations had a 295 million euros positive impact.
The acquisitions (net of disposals) have a positive impact of 22
million euros this quarter.
Organic growth was +10.3% in Q3 2022 compared to 2021.
Breakdown of
Q3 2022
Net revenue by region
EUR million |
Net revenue |
Reported |
Organic |
|
Q3 2022 |
Q3 2021 |
Growth |
growth |
North America |
2,076 |
1,602 |
+29.6% |
+11.0% |
Europe |
694 |
619 |
+12.1% |
+11.1% |
Asia
Pacific |
303 |
266 |
+13.9% |
+4.1% |
Middle East
& Africa |
90 |
77 |
+16.9% |
+1.9% |
Latin America |
74 |
57 |
+29.8% |
+19.4% |
Total |
3,237 |
2,621 |
+23.5% |
+10.3% |
North America net revenue was
up by +29.6% on a reported basis in Q3 2022, including a
significant positive impact of the US dollar to Euro exchange rate.
Organic growth in the region was +11.0%. The U.S.
posted another strong quarter with a +11.1% organic growth. Media
grew double-digit for a third quarter in a row, while Creative
activities posted high-single digit growth driven notably by strong
Production. Publicis Sapient grew +20.9% organically, fueled by a
continued high demand for digital business transformation. Epsilon
posted +14.1% organic on the quarter, with a particularly strong
performance in Digital Media.
Europe net revenue was up by
+12.1% on a reported basis. It was up by +11.1% on an organic basis
or +12.8% excluding the contribution of our Outdoor Media
activities and the Drugstore. It was driven by the performance in
the U.K., that posted +22.6% organically, with strong growth at
Publicis Sapient and very solid Media and Creative. France recorded
a +7.8%1 organic growth, driven by Media and Publicis Sapient. In
Germany, organic growth was up by +2.5%.
Net revenue in Asia Pacific was
+13.9% on a reported basis, and +4.1% organically. Despite the
impact of lockdowns, China’s organic growth accelerated from +2.7%
in Q2 to +5.9% in Q3 thanks to New Business ramp-up. South-East
Asia was broadly stable on the quarter.
Net revenue in the Middle East and
Africa region was up by +16.9% on a reported basis and
+1.9% organically. Organic growth was driven by Media and Creative
activities while Publicis Sapient faced a particularly high
comparable base this quarter. In Latin America,
net revenue was up +29.8% on a reported basis and up +19.4%
organically, with positive growth in Brazil fueled by Creative, and
a majority of countries recording double-digit organic growth,
largely driven by Media.
1 Excluding Outdoor Media activities & the
Drugstore
NET REVENUE IN 9M
2022
Publicis Groupe's net revenue in the first nine months 2022 was
9,110 million euros compared to 7,552 million euros in 9 months
2021, up +20.6%. Exchange rate variations had a 649 million euros
positive impact. The acquisitions (net of disposals) have a
positive impact of 62 million euros in the first nine months.
Organic growth was +10.3% in the first nine months of
2022.
Breakdown of Net
revenue for the first 9 months
2022 by region
EUR million |
Net revenue |
Reported |
Organic |
|
9M 2022 |
9M 2021 |
Growth |
Growth |
North America |
5,736 |
4,634 |
+23.8% |
+9.9% |
Europe |
2,065 |
1,814 |
+13.8% |
+11.9% |
Asia
Pacific |
853 |
736 |
+15.9% |
+7.9% |
Middle East
& Africa |
255 |
210 |
+21.4% |
+9.7% |
Latin America |
201 |
158 |
+27.2% |
+18.1% |
Total |
9,110 |
7,552 |
+20.6% |
+10.3% |
Breakdown of
Net revenue for the first 9
months 2022 by
sector
Based on 3,442 clients representing 92% of the
Groupe’s net revenue.
Net debt and
liquidity
Net financial debt amounted to 919 million euros
as of September 30, 2022, compared to 76 million euros as of
December 31, 2021. The Groupe’s last twelve months average net debt
as of September 30, 2022 amounted to 870 million euros compared to
1,835 million euros as of September 30, 2021.
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.
On May 3, 2022, Publicis
announced the acquisition of Profitero a leading SaaS global
e-commerce intelligence platform helping brands analyse and
optimize their sales, marketing and operations performance across
more than 700 retail websites around the world and 70 million
products. Profitero’s products, technology, and 300 employees will
further scale and supercharge Publicis Groupe’s existing commerce
capabilities around the world.
On June 14, 2022, Publicis
announced the acquisition of Wiredcraft, a digital product
consultancy and technology company focused on China and APAC, with
offices in Shanghai and Singapore. Wiredcraft brings together over
100 local and international experts in technology, design,
engineering, product management, consulting, and data, to help
global brands create and launch digital products. Wiredcraft
delivers solutions across digital transformation,
direct-to-consumer e-commerce and customer loyalty data.
On September 19, 2022, Publicis
finalised the acquisition of Changi Consulting, a cloud solutions
company based in Dubai and founded in 2010. Changi is a top five
Salesforce partner in the MENA region, that builds and delivers
cloud-based solutions to over 120 clients thanks to its expertise
across all main industries and business functions. As a digital
business transformation partner of choice, Changi will serves as a
foundation for Publicis Groupe’s strong growth in the MENA region
and further expansion of Salesforce partnership globally.
Governance and
appointments
On September 14, 2022, the Supervisory Board of
Publicis Groupe approved the renewal of Arthur Sadoun’s mandate as
Chairman (Président du Directoire) and CEO of Publicis Groupe for
four years.The mandates of the Management Board (Directoire)
members Anne-Gabrielle Heilbronner, Secretary General, and
Michel-Alain Proch, Chief Financial Officer, were also renewed for
four years.Steve King was appointed Chairman of Publicis Groupe
Europe and stepped down from the Management Board.
The Groupe announced the creation of a new
management team called the Directoire + that will be comprised
of:
- Carla Serrano, Chief Strategy
Officer Publicis Groupe
- Dave Penski, CEO Publicis Media
U.S.
- Nigel Vaz, CEO Publicis
Sapient
- Agathe Bousquet, President Publicis
Groupe France
Outlook
The Groupe has continued to demonstrate a strong
momentum in Q3 despite the current macroeconomic environment. After
a third quarter of double-digit growth and upgraded expectations
for Q4, the Groupe is in a position to upgrade its full year 2022
guidance a second time this year.
The Groupe now expects to deliver in 2022:
- Organic growth at circa +8.5%,
compared to +6% to +7% previously
- Operating margin rate at close to
18%, versus 17.5% to 18% previously
- Free cash flow before working
capital requirement close to 1.6 billion euros, versus at least 1.5
billion euros previously
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 (Media), United
Parcel Service (Data), Ferrero (Creative), Expo Serbia (Creative),
Campari (Influence), BNP Paribas (Creative), Avon Products (Media),
Barclaycard (Creative), Betclic (Creative), Santé Publique France
(Production & Digital), Piaggio (Media), South Western Railway
(DBT), Hammerson (Creative), Assurpeople.com (Creative), Softbank
(Creative), Open (Creative), Castel Afrique (Creative), My Money
Bank (Creative), D&G (Creative), Promod (Creative), Royal Canin
(Creative), Atlantic Grupa (Content), TotalEnergies (Content),
Storytel (Creative), Shopee (Media), Société Générale (Content),
Wolters Kluwer Health (Media), Finderella (DBT), BSH Home
Appliances (Content), Volvo Cars (Media), Ferrero (DBT), Battersea
Dogs & Cats Home (DBT), Covea (Creative), AXA (CRM),
Commerzbank (Creative), Enel (Creative), Alcon (DBT), Marriott
International (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 (Shopper), Nestlé (Digital), Inspire Brands
(Digital & CRM), The Kraft Heinz Company (Digital), Zespri
(Digital), Trident (Creative), The Scotts Miracle-Gro Company
(DBT), Xero (Influence), Amazon (Data), Loblaw (Influence), Regal
Entertainment Group (Production), Pacaso (Creative), Nestlé (Data),
Intel (Shopper), Cherry Lane Canada (Influence), Heineken
(Commerce), Suntory Group (Commerce), HP (Commerce), Dalio
Philanthropies (DBT), Toyota Motor Corporation (Influence), Nearmap
(Influence), Metrolinx (Content), Pernod Ricard (Commerce), MTY
Food Group (Influence), Takeda Pharmaceuticals (Media), Texas
Capital Bank (Creative), CME Group Inc. (CRM), France Canada
Chamber of Commerce (Influence), Ontario Hockey Federation
(Influence), IBM (CRM), Reliant Energy (Creative), Laboratory
Corporation of America Holdings (Creative), World Vision
International (Influence), Sporting Life (Influence), Stellantis
(Creative), Regal Entertainment Group (Production), Molson Coors
Brewing Company (Influence)
ASIA PACIFIC/MEA
ByteDance (Media), L'Oréal
(Media/Content/Production), Volkswagen Group (Influence), Vivo
Communication Technology Co (Content), Nestlé (Media &
Influence), McDonald's (Creative), 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), PepsiCo
(Media & Creative), e& - Etisalat (Creative), Krungthai
Bank (Content), Infinix Mobility (Content), Citigroup (Content),
Easy Crypto NZ (Media), Meta (Creative), Singapore Ministry of
Communications and Information (Media), Westpac Banking Corporation
(CRM), Cashrewards (Media), City of Melbourne (Media), Shandong
Hongchang cultural and Creative Industrial Park (DBT), New Balance
(Production), Amica Financial Technologies (Media), Body Cupid
(Commerce), Bank of China (Media), Samsung (DBT), Essity Hygiene
& Health (Media), GlaxoSmithKline (DBT & Production), Neom
(Media), Shandong Culture & Travel Media Group (DBT), SAIC
Volkswagen (Creative), Eureka Forbes (Media), Chunghwa Telecom
(Creative), Sephora (Creative), Procter & Gamble (Creative),
Lexus (Creative), Ekaterra - Lipton Tea, Pukka Herbs (Media),
Edrington (Media), Mix & Match Travel (Media), Crino
Biotechnology (DBT), Bose (Creative), Bank of Queensland (Media),
FrieslandCampina (Media), Cross River Rail (Media), Trident
(Creative), Uniqlo (Media), Genesis Motor (Production), Superloop
(Creative), Cue Learn (Media), Hyatt Hotels (Media), Charlotte
Tilbury Beauty (Production), Alibaba (Creative), New Balance
(Creative), Marriott International (Creative), Victorian Plumbing
(Creative), Niva Bupa (Creative)
LATAM
AB InBev (Creative), MeatMe (Media &
Content), Autoridad del Canal de Panama (Media), Scotiabank Inc
(Creative), Compania Nacional de Chocolates de Peru (Content),
SodaStream (Media), Alfred Kärcher SE & Co. KG (Media),
Celebrity Cruises (Media), Alpina (Creative), Citigroup (Creative),
Walmart (Media & Content), VeriTran (Creative), Nestlé (Content
& CRM), Logitech (Media), Unimed Seguros Saúde (Creative &
Media)
GLOBAL
AB InBev (Media), Siemens (Creative), Aldi
(Media), Norwegian Cruise Line (Media), Singapore Tourism Board
(Media & Creative), Mondelez International (Media), Standard
Chartered (Creative), Stellantis (CRM), Crocs (Creative &
Media), Jim Beam (Creative), Spar International (Retail Media),
Binance (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 96,000
professionals.www.publicisgroupe.com | Twitter:@PublicisGroupe |
Facebook | LinkedIn | YouTube | Viva la Difference!
ContactsPublicis Groupe |
|
Amy HadfieldAlessandra Girolami |
Corporate CommunicationsInvestor Relations |
+ 33 (0)1 44 43 70 75+ 33 (0)1 44 43 77 88 |
amy.hadfield@publicisgroupe.comalessandra.girolami@publicisgroupe.com |
|
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Appendices
Net revenue: organic growth
calculation
(million euro) |
Q1 |
Q2 |
Q3 |
9 months |
|
Impact of currencyat end
Sep. 2022(million
euro) |
2021 net revenue |
2,392 |
2,539 |
2,621 |
7,552 |
|
GBP (2) |
12 |
Currency impact (2) |
125 |
229 |
295 |
649 |
|
USD (2) |
544 |
2021 net revenue at 2022 exchange rates (a) |
2,517 |
2,768 |
2,916 |
8,201 |
|
Others |
93 |
2022 net revenue before acquisition impact (1) (b) |
2,781 |
3,052 |
3,215 |
9,048 |
|
Total |
649 |
Net revenue from acquisitions (1) |
19 |
21 |
22 |
62 |
|
|
|
2022 net revenue |
2,800 |
3,073 |
3,237 |
9,110 |
|
|
|
Organic growth (b/a) |
+10.5% |
+10.3% |
+10.3% |
+10.3% |
|
|
|
(1) Acquisitions (CitrusAd, Tremend, Profitero,
Boomerang, Balance Internet, BBK, Wiredcraft, Taylor Herring,
Octopus UK, Means Advertising, Like-A-Rainbow), net of disposals
(Russia, DPZ&T, Nexus and Makers Lab)(2) EUR =
USD 1.065 on average in 9M 2022 vs. USD 1.194 on average in 9M
2021EUR = GBP 0.847 on average in 9M 2022 vs. GBP 0.862 on average
in 9M 2021
Definitions
Net revenue or Revenue less pass-through
costs: Pass-through costs mainly concern production and
media activities, as well as various expenses incumbent on clients.
These items that can be re-billed to clients do not come within the
scope of assessment of operations, net revenue is a more relevant
indicator to measure the operational performance of the Groupe’s
activities.
Organic growth: Change in net
revenue excluding the impact of acquisitions, disposals and
currencies.
Operating margin: Revenue after
personnel costs, other operating expenses (excl. non-current income
and expense) and depreciation (excl. amortization of intangibles
arising on acquisitions).
Operating margin rate:
Operating margin as a percentage of net revenue.
Net Debt (or financial net
debt): Sum of long and short financial debt and associated
derivatives, net of treasury and cash equivalents.
Average net debt: Average of
monthly net debt at end of month.
Free cash flow: Net cash flow
from operating activities less interests paid & received,
repayment of lease liabilities & related interests linked to
operating activities.
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