Very strong start of the year
- Q1 organic growth at +10.5%, well above
expectations
- Acceleration of Publicis Sapient at +18.5% organic
growth
- Strong organic growth in all regions:
- Continued momentum in the U.S. at +8.0%, with good
performance of Epsilon
- Robust recovery in Europe at +14.9%1 fueled by France and
the U.K.
- 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
Regulatory News:
Publicis Groupe (Paris:PUB):
Q1 2022
€2,800m
€2,392m
+10.5%
+17.1%
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.
Breakdown of net revenue at March 31, 2022 by sector
Automotive
16%
Financial
16%
TMT
14%
Healthcare
13%
Food and beverage
12%
Non Food consumer products
11%
Retail
9%
Public sectors & Others
3%
Energy & Manufacturing
3%
Leisure & travel
3%
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 One
Publicis 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!
Appendices
Net revenue: organic growth
calculation
(million euro)
Q1
Impact of currency at 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 2021 EUR = 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.
1 +9.4% excluding Outdoor Media activities & the
Drugstore
2 +9.4% excluding Outdoor Media activities & the
Drugstore
3 +39.2% including Outdoor Media activities & the
Drugstore
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220413005978/en/
Publicis Groupe Delphine Stricker Corporate
Communications +33 (0)6 38 81 40 00
delphine.stricker@publicisgroupe.com
Alessandra Girolami Investor Relations +33 (0)1 44 43 77 88
alessandra.girolami@publicisgroupe.com
Clémence Vermersch Investor Relations +33 (0)1 44 43 72 17
clemence.vermersch@publicisgroupe.com
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