Publicis raises its 2021 revenue forecast on the strength of its third quarter

Publicis Groupe's revenue rose 11.2% in the third quarter on an organic basis, boosted by some major new business wins and the strong performance of Epsilon and Publicis Sapient in the U.S., leading the holding company to raise its forecast for the full year. In results that exceed analyst expectations, Publicis' biggest markets all reported double-digit organic revenue growth, with the U.S. growing at 10.9%, Europe at 10% and Asia at 12.5%. Publicis, like many companies, reports organic results, which strip out the impact of acquisitions, divestitures and currency fluctuations. Net revenue rose 11.9% to 2,621 million euros, up from 2,343 million euros a year earlier, Publicis reported. Subscribe to Ad Age now for award-winning news and insight. The latest quarterly revenue figures demonstrated not only recovery from the pandemic, but significant increases over pre-pandemic levels recorded in the third quarter of 2019. Publicis now anticipates organic revenue growth of 8.5% to 9% this year, up from a July forecast calling for 7% growth, and implying organic growth of about 2% over 2019. Publicis also revised its operating margin target upwards to more than 17% for the year. New business success New business account wins in the quarter included Walmart’s U.S. media, after the biggest holding company pitch of the year so far, plus media for TD Bank and all of Planet Fitness’ marketing. In the U.S., Publicis stated that its operations benefited from "continued strength in demand for first-party data management, direct-to-consumer and digital," with Epsilon and Publicis Sapient recording revenue increases of 13% and 20%, respectively. Speaking to Ad Age, Arthur Sadoun, CEO and chairman of Publicis Groupe, added that Epsilon grew 40% outside the U.S., but from a smaller base. When it comes to data management, Sadoun stressed the importance of preparing Publicis Groupe clients for the deprecation of third-party cookies. “We are really focusing on building a unique product, service and offer. We are getting ready for the cookieless world; this is a priority for us.”“We have truly consolidated the foundation of our model,” he added. “Whatever the pitch, media, data or technology, it is making a big difference.” Sadoun stressed the importance of "needing to stay very agile in looking at our client product profile. We are seeing our clients adapting and evolving. If I want to be optimistic, the last crisis has shown the ability of our clients and ourselves to react.” Talent and supply issues While data and d-to-c boosted Publicis' performance most, its traditional media and creative agencies also recorded growth. In the U.S., both saw mid-single-digit growth, while health operations delivered double-digit growth for the sixth quarter in a row. The U.K. recorded organic revenue growth of 5.8%, with a "solid" performance in creative and media, while France saw organic revenue growth of 16.1%. Sadoun said the holding company's creative agencies have been boosted this year by key talent hires, such as Neil Heymann, the former Droga5 chief creative officer who joined in February. Speaking of the overall industry talent shortage, Sadoun said Publicis had increased recruitment by 10% over the quarter, with around 8,000 new staff, and thanks to its Marcel virtual platform it has been able to allocate resources to growing areas. “We have been growing very fast, and there are always roles to fill, but thanks to our platform and Marcel we are a very well-oiled machine,” he said. Asked about whether supply chain issues will affect the next quarter, Sadoun said: “To date, we don’t see any impact from supply shortage, and believe me I have been looking very hard. We are looking very closely at what is happening, starting with the automotive industry.” (Publicis won the global media account for Stellantis, which includes the Fiat and Peugeot brands, in April, and Saatchi & Saatchi handles U.S. creative and media for Toyota, while Leo Burnett handles Cadillac and GMC creative. Publicis lost the Mercedes-Benz CRM account to Omnicom Group in September.) WPP, Omnicom Group, Interpublic Group of Cos. and Dentsu have not yet reported third-quarter results.

Publicis raises its 2021 revenue forecast on the strength of its third quarter

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