Publicis Groupe reports +2.7% growth year-to-date in Q3

Publicis Groupe’s net revenue in the first nine months 2020 was €7,117 million, compared to €6,929 million euros in 9 months 2019, up 2.7 per cent. Exchange rate variations had a €63 million negative impact. The acquisitions (net of disposals) had an impact of +10.7 per cent in the first nine months mainly due to the acquisition of Epsilon.

Organic growth was -7.2 per cent in the first nine months 2020. The performance showed the resilience and the efficiency of the model. Europe organic growth was at -14.1 per cent, or -11.4 per cent, excluding the Groupe’s French outdoor media activities and the Drugstore, and was highly impacted by the lockdowns that took place in the second quarter across most countries. Organic growth in North America was down -3.4 per cent, supported by the revenue streams built over the last quarters, thanks to both new business and cross-fertilisation. Asia Pacific organic growth was -5.9 per cent. Latin America was down 15.4% organically, and Middle East and Africa down by 11.5 per cent.

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Publicis Groupe reported a +2.7 per cent growth year-to-date. Q3 organic growth stood at -5.6 per cent, which was above market ad spend forecasts. The Groupe saw a solid US performance with Q3 organic growth at -2.4 per cent.

Top 200 clients net revenue year-to-date slightly up and continued new business momentum.

The Groupe saw a decrease in net debt to €3.2 billon at the end of September and robust liquidity.

In a release issued, Arthur Sadoun, Chairman and CEO of Publicis Groupe, said, “Our organic growth for Q3 is at -5.6%, ahead of ad spend forecasts at -10%. For the second quarter in a row, we are confirming that we have strong foundations to weather these unprecedented times.”

He further said, “Thanks to our model, we are mitigating the revenue decline we are experiencing due to the pandemic. As our clients continue to accelerate their investment into digital channels, e-commerce and direct-to-consumer, we are able to capture part of that shift thanks to our offer combining our leadership in creative and media, with unrivalled capabilities in Epsilon and Publicis Sapient. This is reflected in our solid US results. After posting the most resilient performance of the industry last quarter, Q3 organic growth in the US is at -2.4%, again better than market forecasts at -7%, in a region that now represents 60% of our business.”

“It is also visible in our new business track record over the past 18 months and in this last quarter in particular, with wins like Kraft-Heinz, TikTok and Reckitt Benckiser,” Sadoun added.

He believed that these relatively solid business trends should continue until year-end. “However, with the current resurgence of the pandemic and the restrictions imposed, we have to be cautious about Q4, which might be impacted further and come below Q3,” Sadoun cautioned.

“When it comes to our organisation, we have built three structural advantages with our global delivery centres, our country model, and Marcel, which enable us to adapt and continue to deliver strong financial performance. We are, therefore, confident in delivering our cost reduction plan, and as a result an operating margin rate slightly ahead of current analyst consensus of 14.3% for 2020,” he added.