Publicis Groupe reports strong first quarter, boosted by media wins and Publicis Sapient

Publicis Groupe has recorded a strong start to 2022, outstripping analyst expectations for the first quarter of the year despite the war in Ukraine, inflation and the ongoing pandemic. The holding company's organic revenue—which strips out the impact of acquisitions, divestitures and currency fluctuations—increased by 10.5%, ahead of analyst expectations of approximately 6%, to 2800 million euros. It was boosted by several major new business wins, particularly in media. These included PepsiCo’s media in China, LVMH’s media in the U.K. and France and AB InBev’s global media. The strongest growth came from Publicis Sapient, which increased its organic revenue by 18.5% globally and by 16.3% in the U.S. Speaking to Ad Age, Arthur Sadoun, CEO and chairman of Publicis Groupe, said its acceleration was driven by three sectors: financial services, automotive and retail. "The shift from paid media to owned media is accelerating and clients need their own digital ecosystem to go direct to consumer," he said. Regionally, Publicis’ performance was particularly strong in Europe, with 14.9% organic growth fueled by the U.K. and France in particular as those countries continue to recover from the pandemic. Business was also healthy in Asia, where it recorded organic revenue growth of 14.4% boosted by double-digit growth in China with wins including PepsiCo media. The U.S. grew by 8% which Publicis said continued its “momentum” from fast growth in 2021, and Canada by 11.7%. In the Middle East and Africa, revenue grew by 13% organically, mainly driven by media, and in Latin America, by 13.1%, mainly driven by creative activities. Publicis, which was named Holding Company of the Year in Ad Age's A List, is predicting a solid second quarter with growth of 5% and it is still predicting organic revenue growth of 4 to 5% for the full year, indicating that this would be at the “upper end” of its original predictions, and assuming that there would be further major deterioration in the global health and economic environment. The war in Ukraine has had some effect, with Publicis recording an 87 million euro exceptional disposal loss for exiting Russia. Sadoun said the company would continue to protect its 350 employees from Ukraine, whether they were still there or now based elsewhere. In terms of the effect of the crisis on other clients and general confidence, he said it was too early to say. “What could have an impact is more the uncertainty of the length of the conflict,” he added. Ad Age A-List 2022 Best agencies of the year, ranked Top production companies to know about Definitive rankings of advertisers and agencies Inflation and the rising cost of living will also be a factor in the coming year. However, Sadoun said that so far it had not impacted Publicis’ business and he does not anticipate a “major impact” for Q2. Sadoun added: “If inflation continues it will have an impact on our clients’ business and we need to make sure we can mitigate that. We need to help our clients maximize their investment to make sure they can continue to invest to grow while reducing their costs.” Sadoun—who last week revealed that he is remaining in France for two months following surgery for cancer—said that the pandemic continued to take up “a large part of our management time” at Publicis, particularly in terms of employee mental health. But in terms of business, it is not seeing much of an impact “other than when some countries go through lockdown, there is a slowdown, but then it comes back.”

Publicis Groupe reports strong first quarter, boosted by media wins and Publicis Sapient

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