Publicis started the year very strongly - financially & commercially: Arthur Sadoun

Publicis Groupe has recorded a stronger-than-expected start to the year, both financially and commercially, in the first quarter of 2022. Publicis Groupe’s net revenue in Q1 2022 was €2,800 million, up 17.1% from €2,392 million in 2021. Exchange rates had a positive impact of €125 million. Acquisitions, net of disposals, accounted for an increase in net revenue of €19 million. Organic growth reached +10.5%.

Net revenue in the Asia Pacific region 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.

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.

In the 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.

Key Highlights:

• 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

Commenting on the results, Arthur Sadoun, Chairman and CEO of Publicis Groupe, said, “We started the year very strongly, both financially and commercially. 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.”

He further said, “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 optimise 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,” Sadoun added.

Acquisitions & Disposals

On March 8, 2022, Publicis finalised 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.