Strong Q3 with organic growth at
+5.3%
Upgrade of FY 2023 guidance on all
KPIs
Regulatory News:
Publicis Groupe (Paris:PUB):
- Q3 organic growth at +5.3% thanks to revenue mix and New
Business tailwind
- Very solid U.S. at +3.2% after 2 years of double-digits,
standout performance in Europe at +10.7%, Asia Pacific improving to
+3.8%
- Acceleration of organic growth versus 2019: +22% in Q3,
after +20% in Q2 and +18% in Q1
- Further upgrade of 2023 guidance despite persistent
macroeconomic uncertainties:
- Organic growth expected at +5.5% to 6%, vs. circa +5%
previously
- Operating margin rate at 18%, vs. close to 18%
previously
- Free cash flow1 close to €1.7bn, vs. at least €1.6bn
previously
Q3 2023
€3,241 m
+0.1%
+5.3%
9M 2023
9,559m€
+4.9%
+6.5%
________________________________ 1 Before change in working capital
requirements
Arthur Sadoun, Chairman and CEO of Publicis Groupe:
“Despite a macroeconomic context that became more difficult over
the quarter, we delivered strong organic growth of +5.3% in Q3,
ahead of expectations.
Our media capabilities, which continued to gain market share,
and Epsilon’s data offer were the main drivers of this performance,
achieving high single-digit and double-digit growth respectively.
At a moment when the comparable consulting firms experienced
project delays, Publicis Sapient nonetheless continued to grow, and
Creative confirmed its resilience once again, in spite of
industry-wide cuts to classic advertising activities.
All of our regions posted solid organic growth, with the US at
+3.2% on top of double digits in the last two years, Europe at a
standout +10.7% and APAC improving again at +3.8%.
Looking at our journey since the pandemic, the acceleration of
our growth amid persistent macroeconomic challenges is clearly
visible, with Q3 at +22% compared to 2019 levels, coming after +20%
in Q2 and +18% in Q1.
Today we have a differentiated go-to-market, that allows us to
gain market share; a uniquely balanced revenue mix that makes us
more resilient to business cycles; and a platform organization that
enables us to post industry high financial ratios.
This gives us the confidence to further upgrade our 2023
guidance, even in a context of rising global socio-economic
tensions. We now expect to deliver +5.5% to 6% organic growth for
the full year, while upgrading our operating margin to 18% and free
cash flow at close to 1.7 billion euros.
For the rest of the year, we intend to lead what we believe to
be the two major priorities for our industry today: bringing our
teams back together in person, and accelerating the AI-ification of
our operations, which we are uniquely able to do through Publicis
Sapient.”
NET REVENUE IN Q3 2023
Publicis Groupe's net revenue in Q3 2023 was 3,241 million
euros, broadly stable compared to 3,237 million euros in Q3 2022.
Exchange rate variations had a 189 million euros negative impact.
The acquisitions (net of disposals) have a positive impact of 32
million euros this quarter.
Organic growth was +5.3% in Q3 2023 compared to 2022. Media, one
third of revenue, continued to experience strong new business
momentum and grew high-single digit on top of double-digit last
year. Data and tech activities, another third or revenue, posted
very solid growth overall. On the one hand, in a context of
slowdown in digital business transformation experienced by
comparable consulting firms, Publicis Sapient nonetheless achieved
a +1.2% organic growth despite a very strong comparable base of
+18% in Q3 2022. On the other hand, Epsilon’s strong performance
further accelerated to double-digits with +10.5% organic growth in
Q3 after double-digits also last year, benefitting from increased
client demand for first-party data management. Creative, the
remaining third, posted a resilient performance with organic growth
in the low-single digits for the quarter.
Breakdown of Q3 2023 Net revenue by region
EUR million
Net revenue
Reported
Organic
Q3 2023
Q3 2022
Growth
growth
North America
1,999
2,076
-3.7%
+3.0%
Europe
769
694
+10.8%
+10.7%
Asia Pacific
288
303
-5.0%
+3.8%
Middle East & Africa
95
90
+5.6%
+18.2%
Latin America
90
74
+21.6%
+6.9%
Total
3,241
3,237
+0.1%
+5.3%
North America net revenue was up +3.0% organically in Q3
2023. Taking into account a negative impact of the US dollar to
Euro exchange rate, reported growth was at -3.7%. The U.S. posted a
very solid quarter with a +3.2% organic growth. Media grew
mid-single digit on top of double digits last year. Creative
activities were slightly negative on the quarter, affected by
localized cuts in classic advertising and on top of a high base in
Q3 last year. Epsilon posted double-digit organic growth this
quarter on top of +14% in Q3 2022, largely driven by digital media
and data divisions. Finally, in the context of delays in IT
consulting projects, Publicis Sapient was stable, facing a
particularly strong comparison base of +21% in Q3 2022.
Europe net revenue was up by +10.7% on an organic basis
(+10.8% reported). It grew +10.2% organically when excluding the
contribution of our Outdoor Media activities and the Drugstore. The
U.K. was again very strong at +10.0% organically on a particularly
high base of +23% last year, mainly led by Media and Creative,
while Publicis Sapient grew mid-single digit. France recorded a
+6.5%2 organic growth, driven by Media as well as Creative. In
Germany, organic growth was up by +4.0%.
_________________________________
2 Excluding Outdoor Media activities & the Drugstore
Net revenue in Asia Pacific improved sequentially to
+3.8% organic this quarter (-5.0% on a reported basis), led by
growth in India and Singapore by New Business wins. This was
achieved despite a slower China at -2.5% organic growth, due to
delays in spend this quarter in a tougher macroeconomic
context.
Net revenue in the Middle East and Africa region was up
by +18.2% organically (+5.6% on a reported basis), largely driven
by strong dynamics at Publicis Sapient.
In Latin America, net revenue was up +6.9% organically
(+21.6% on a reported basis), led by Argentina while Brazil was
slightly down and Mexico stable.
NET REVENUE IN 9M 2023
Publicis Groupe's net revenue in the first nine months 2023 was
9,559 million euros compared to 9,110 million euros in 9 months
2022, up +4.9%. Exchange rate variations had a 201 million euros
negative impact. The acquisitions (net of disposals) have a
positive impact of 72 million euros in the first nine months.
Organic growth was +6.5% in the first nine months of 2023.
Breakdown of Net revenue for the first 9 months 2023 by
region
EUR million
Net revenue
Reported
Organic
9M 2023
9M 2022
Growth
Growth
North America
5,892
5,736
+2.7%
+4.5%
Europe
2,321
2,065
+12.4%
+12.7%
Asia Pacific
838
853
-1.8%
+2.4%
Middle East & Africa
274
255
+7.5%
+13.5%
Latin America
234
201
+16.4%
+6.8%
Total
9,559
9,110
+4.9%
+6.5%
Breakdown of Net revenue for the first 9
months 2023 by sector
Automotive
15%
Financial
14%
Healthcare
13%
Food and beverage
13%
TMT
12%
Non Food consumer products
11%
Retail
10%
Public sectors & Others
4%
Leisure & travel
4%
Energy & Manufacturing
4%
Based on 3,478 main clients representing 92% of
the Groupe’s net revenue.
Net debt and liquidity
Net financial debt amounted to 714 million euros as of September
30, 2023, compared to 226 million euros net debt position as of
June 30, 2023 and to a net debt of 919 million euros at the end of
September 2022. The Groupe’s last twelve months average net debt as
of September 30, 2023 amounted to 451 million euros compared to 870
million euros as of September 30, 2022.
Acquisitions and disposals
On January 4, 2023, Publicis announced the acquisition of
Yieldify, a London-based marketing technology company.
Founded in 2013, Yieldify’s leading platform and service enable
companies to better personalize consumers’ website experiences,
driving incremental revenue and other desired outcomes by
delivering the right message at the right time based on a
consumer's profile and stage in their purchase journey. Yieldify
will become part of Epsilon, and its onsite personalization,
conversion optimization and customer journey offerings will
complement Epsilon PeopleCloud to better address the
mid-market.
On January 10, 2023, Publicis announced the acquisition
of Advertise BG, one of the leading performance marketing
agencies in Bulgaria. The strategic acquisition will further
reinforce Publicis Groupe Bulgaria’s competencies in digital
transformation, adding firepower to its existing offering across
digital strategy, data, social media, and digital content
creation.
On March 30, 2023, Publicis announced the acquisition of
Practia, based in Buenos Aires, a leading Latin America
independent technology company and provider of digital business
transformation services. With its 1,200 experienced professionals,
this acquisition will position Publicis Sapient to enter the Latin
America market while establishing a foundation for a nearshore
delivery platform that will enable the company to better service
clients based in North America.
On May 23, 2023, Publicis announced the acquisition of
full stake in Publicis Sapient AI Labs, an innovative
artificial intelligence research and development joint venture
launched in 2020 in partnership between Publicis Sapient, Elder
Research and Tquila. The acquisition will further strengthen
Publicis Sapient’s data & AI capabilities and enable the
company to develop innovative solutions across industries for a
wide range of applications, such as generative AI, natural language
processing (NLP), computer vision and autonomous systems.
On June 5, 2023, Publicis announced the acquisition of
Corra, based in New York, an ecommerce leader recognized by
Adobe as one of the top commerce firms in North America. Corra will
augment Publicis Sapient’s existing expertise in commerce
solutions, including Adobe Commerce, while extending Publicis
Sapient’s offerings in digital and omnichannel commerce. By
acquiring Corra, Publicis Sapient will further establish itself as
a global leader across the entire Adobe Product Suite, in addition
to further cementing its already leading capabilities.
On June 15, 2023, Publicis and Carrefour announced the
launch of their joint venture Unlimitail, to address the
booming retail media market in Continental Europe, Brazil and
Argentina. The launch of the company comes six months after the
initiative was announced and has been unveiled during VivaTech.
Unlimitail will partner with retailers and brands, bringing the
scale, connectivity and consistency for retail media to reach its
full potential in those geographies. It is built on the most
advanced technologies, “CitrusAd powered by Epsilon”, and the
deepest retail expertise from Carrefour. Unlimitail has already
converted its first 13 retail partners, representing together more
than 120 million loyalty customers.
Outlook
Thanks to the strength of its model and a better than expected
Q3 performance, the Groupe is in a position to upgrade once again
its 2023 guidance despite ongoing macroeconomic uncertainties.
When it comes to organic growth, the Groupe now aims at +5.5%
to 6% for the full year, compared to circa +5% previously.
Our +5.5% is solid and factors in:
- Economic and social tensions that are likely to continue to
affect client spend,
- Further delays in digital business transformation,
- And negative end of year adjustments of advertisers’
budgets.
Organic growth could move closer to the higher end of the
guidance range under the following assumptions:
- Fewer cuts in classic advertising,
- A faster ramp up in new business,
- Some positive impact from increased client budgets in Q4.
This means that Q4 organic growth is now expected between +3%
and +5% at a stretch.
The Groupe anticipates to continue to deliver industry-high
financial ratios, upgrading its operating margin guidance to
18% (from ‘close to 18%’ previously) and its free cash flow
before working capital requirements to close to 1.7 billion
euros (from ‘at least 1.6 billion euros’ previously).
New business
EUROPE
Santen France (Health), Glaxo Smith Kline (Health), Comité
Colbert (Creative), Speedy (Data), Carlsberg (Creative), Abeille
Assurances (Creative), Visa (Technology & Creative), DomusVi
(Technology), DocuSign (Creative), The Football Association Premier
League (Creative), Allwyn (Creative), Pivovara Daruvar (Creative),
heroal (Creative), Deutsche Telekom (Creative), DATEV (Influence),
Samsung (DTC), PepsiCo (Media), L’Oréal (Media), Tesco (Creative),
Asda (Technology), Renault (Influence), FoodWell (Media), Notino
(Media), Casavo (Creative), La Poste (Media), Dream Games (Media),
Cassa Depositi e Prestiti (Media), Meggle (Media), Île-de-France
Mobilités (Creative), TotalEnergies (Creative), Bioderma
(Creative), Pernod Ricard (Influence), Ovo Energy (Creative), Le
manège à bijoux (Creative), Inserm (Media), SNCF (Digital), John
Lewis (Creative), Alfa Romeo (Air France KLM (Influence), Ikea
(Creative & media), Gruppo Iren (Creative), Bulgari (Creative),
Gruppo Campari (Influence), Western Union (Media), Beko
(Influence), Société Générale (DBT), Iveco (Media), Sony Music
(Digital), Legrand (Creative), Nexity (Creative), Skoda (Social
Media), Charlotte Tilbury (Media), Ferrero
(Media/Creative/Influence), Laya Healthcare (Creative),
PublicJobs.ie (Creative), ADAC (Influence), Innomotics (Media),
Bosch (Media), ASOS (Media), Sodexo (Media, Portu (Media),
Bundesministerium fuer Arbeit und Soziales (DBT), Belvedere Vodka
(Creative), SAS Bagel Chef (Creative), Answear.com (Creative),
Miele (Commerce), Sandoz (Content)
NORTH AMERICA
Krafton (Influence), Intuit (Creative), Shelter Movers
(Influence), Universite de Sherbrooke (Creative), Steak 'n Shake
(Creative), Loblaws (Cretaive), Mattress Firm (Creative), Jasco
Games (Creative), Wondery (CRM), McDonalds (CRM), Milton Hershey
School (Influence), University of Oklahoma (Production), Progress
Residential (Production), Wyndham Hotels & Resorts
(Production), Robert Walters (Production), HP (Commerce), Sun Life
of Canada (Commerce), Rite Aid (Media), The PUR Company (Media),
MTY Food Group (Influence), General Mills (Commerce), Dunkin’
(Creative & Digital), Walgreens (Media), KB Home (Creative),
Burger King (Creative), Sanofi (Influence), Virgin Mobile
(Creative), Toronto Parking Authority (Creative), HealthPartners
Canada (Influence), Groupe Atallah (Media), Kicking Horse Coffee
(Creative & Influence), General Motors Company (Production),
Tillamook County Creamery Association (Creative), Signet Jewelers
(Media & Production), Blue Diamond Growers (Media), Turo
(Creative & Production), UPS (Creative), LVMH (Media), Shark
Beauty (Creative), New Age Products (Media), Samsung (Commerce),
TGI Fridays (Media), National Life Insurance (Media), Sierra Nevada
Brewing Company (Creative), Coopers Hawk Winery and Restaurants
(CRM), Haribo of America (Creative), Air Transat (Influence), The
Cadillac Fairview Corporation (CRM), Kellogg Company (Content), The
Procter And Gamble Company (Influence), Duracell (Creative),
Kimberly-Clark (Media), The Container Store (Data), Dicks Sporting
Goods (CRM), ConAgra Foods (Creative), QuadReal Property (Content
& Influence), GlaxoSmithKline (Production), Edo Japan
Restaurants (Influence), Starbucks (Influence), Olymel (Creative),
Insurance Brokers Association of Ontario (Influence), Foresters
Life Insurance (Production), The TJX Companies (Content)
ASIA PACIFIC/MEA
Miele (CRM), United Homeware Company (Creative), Krungthai Bank
(Creative), Anker (Media), Royal Automobile Club (Media), Charles
& Keith (Commerce), Nick Did This (Media), Nine Network
(Creative), Essity (Media), OSHO (DBT), La Trobe University (DBT),
LVMH (Production), Cathay Pacific Airways (Commerce), Pepsico
(Production), Duolingo (Creative), Aeries Financial Technologies
(Media), Central Provident Fund Board (Production), AIA Company
(Media), Haleon (Production), LOréal (Media & Production), The
Standard Bank of South Africa (Creative), Sanofi (Creative), Nestlé
(Production), Diageo (Commerce), Mondelez (Production), Pizza Hut
(Creative), Cancer Council Victoria (Media), Emirates NBD
(Creative), Grupo Bimbo (Creative), Microsoft (Influence), JioMart
(Creative), AkBank (Media), Novartis (Creative & Production),
United Breweries (Production), Charlotte Tilbury Beauty (Creative),
Genesis Motor (Creative), Torrent Pharmaceuticals (Creative), More
Retail (Media), GlaxoSmithKline (Creative), Crocs (Creative),
Shanghai Neobio (Creative), FWD Group (Media), Bank of China
(Media), Yili (Creative), Singhealth (Digital), P&G (Digital),
Oritain (Creative & Media), Neom Company (Creative), Renault
(Media), Bosideng (Production), HSBC (Creative), BASF (Creative),
Union Bank of the Philippines (Creative), Roborock (Production),
Indeed (Influence), Samsonite (Media), New Balance (Production),
Keypath Education (Media), Jio-bp (Digital), Enamor (Digital),
UniScholars (Creative), The Procter And Gamble Company (Commerce),
Friesland Campina (Media), Sony Playstation (Creative), TPG
(Media), Iveco (Media), Sace (Media), PUMA (Creative), Microtek
(Creative), BikesOnline (Digital), Reliance Retail (Creative),
Shimao Hotel Group (Influence), Hong Kong Technology Venture
Company (Content), Honor (Influence), Hang Lung Properties
(Creative), Amway (Production)
LATAM
LOréal (Media), Bayer (Media), Samsung (Media), Nestlé
(Creative), PicPay (Creative), Pizza Hut (Commerce), Polla Chilena
(Media), Telecom Argentina (Media), Paper Excellence (Media),
Comgás (Media), Sportingbet (Content)
GLOBAL
Adobe (Media), Mondelez (Production), King (Creative), Ninjacart
(Creative), Alvarium Tiedemann (Creative), Amplifon (Creative),
Pfizer (Creative, Media, Data, Production), Miele (Media), Ancestry
(Media)
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 101,000 professionals.
www.publicisgroupe.com | Twitter:@PublicisGroupe | Facebook |
LinkedIn | YouTube | Viva la Difference!
Appendices
Net revenue: organic growth
calculation
(million euro)
Q1
Q2
Q3
9 months
Impact of currency at end Sep.
2023 (million euro)
2022 net revenue
2,800
3,073
3,237
9,110
GBP (2)
(21)
Currency impact (2)
61
(73)
(189)
(201)
USD (2)
(95)
2022 net revenue at 2023 exchange rates
(a)
2,861
3,000
3,048
8,909
Others
(85)
2023 net revenue before acquisition impact
(b)
3,065
3,213
3,209
9,487
Total
(201)
Net revenue from acquisitions (1)
14
26
32
72
2023 net revenue
3,079
3,239
3,241
9,559
Organic growth (b/a)
+7.1%
+7.1%
+5.3%
+6.5%
(1)
Acquisitions (Practia, Profitero, Corra,
Tquila, Yieldify, Tremend, Retargetly, Wiredcraft, Bizon,
VivNetworks, Cheat, ARBH, Changi, Perlu, Advertise Bulgaria,
Publicis Sapient AI Labs), net of disposals (Russia, Qorvis, Makers
Lab)
(2)
EUR = USD 1.0835 on average in 9M 2023 vs.
USD 1.065 on average in 9M 2022
EUR = GBP 0.871 on average in 9M 2023 vs.
GBP 0.847 on average in 9M 2022
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.
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: 12 month average of monthly net debt at
end of month.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231011746600/en/
Amy Hadfield, Corporate Communications + 33 1 44 43 70 75
amy.hadfield@publicisgroupe.com Alessandra Girolami, Investor
Relations + 33 1 44 43 77 88 alessandra.girolami@publicisgroupe.com
Lorène Fleury, Investor Relations + 33 1 44 43 57 24
lorene.fleury@publicisgroupe.com Maxine Miller, Investor Relations
+ 33 1 44 43 74 21 maxine.miller@publicisgroupe.com
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