Maisie McCabe
Apr 15, 2021

Publicis Groupe rebounds, driven by Asia, US and Latam

The holding company recorded organic growth of 5.7% for Q1 across Asia, and China returned to growth at 3.0%.

Arthur Sadoun, CEO, Publicis Groupe
Arthur Sadoun, CEO, Publicis Groupe

Publicis Groupe has reported a “solid” organic revenue growth of 2.8% between January and March 2021, driven by the US and Asia. Net revenue across the company was €2.4 billion ($2.87 billion), a decline of 3.6% on a reported basis. 

With a 5.7% increase, Asia was the group's second strongest region in terms of organic growth (behind Latin America at 7.7%). China returned to growth, notching a 3.0% organic-revenue increase on the strength of a series of wins over the past 18 months, Publicis said. Net revenue in Asia Pacific was down by 0.9% year-over-year, at €217 million ($260 million). India and Australia both recorded organic growth in Q1 as well.

In North America, organic growth was up 4.7% to €1.5 billion ($1.79 billion). The surge was driven by the US, where organic growth increased 5.1%. On a reported basis, North America declined 3.2% as a result of changes to the US dollar exchange rate.

Publicis attributed growth in the US to increasing demand for e-commerce services from clients, which sent Sapient's growth up 11.5% organically in the first quarter. Epsilon also grew 4.7% and digital media saw double-digit growth. 

Sadoun said he was surprised by the “sharp increase” in the demand from clients in commerce in the January to March period. 

He continued: “We were expecting it, but not at this level. Having Sapient growing for the second quarter in a row in the US was a good surprise. 

“The reorganization we have put in place there at the end of 2019 made us confident that we would have good traction this year, as the pipeline has been picking up since Q3 2020.

“But this kind of exponential growth shows how much commerce is at the forefront of every clients’ approach, and how well we are positioned to meet that with Sapient.”

Two years after its “audacious move” to buy Epsilon in a $3.95 billion deal, Sadoun said the data analytics company places Publicis Groupe as an “indisputable leader in personalization at scale, and brings our clients a huge competitive advantage.” 

He said: “Epsilon has been instrumental in our new business performance, making the difference in a lot of our client strategies. The evidence of that is the overall growth we are experiencing at the moment, with a huge acceleration on the international front, that is growing by 25% in Q1.”

Epsilon recently inked a partnership with The Trade Desk to preserve user targeting and “personalization at scale” as third-party cookies phase out. 

Publicis did not fare as well in Europe, where net revenue was €561 million ($671 million), an organic revenue decline of 1.8% and a fall of 2.9% on a reported basis. In the UK, organic revenue declined by 3.4%, which Publicis Groupe attributed to ongoing government restrictions continuing to weigh on its operations. The digital transformation company was also hit by client cuts in the UK.

Publicis Groupe said it expected to recover “between 60% to 80% of what it lost in Q2 2020” in Q2 2021, which would translate to organic growth of between 8% and 10%, but warned the crisis is not over yet and said it was not able to provide guidance for the full year because of “limited visibility.”

Publicis Groupe shares rose last month after French business news service BFMTV reported there had been talks between it and Havas-owned Vivendi.

When asked about M&A speculation, Sadoun said: “These rumours are unfounded. We have denied them firmly and immediately. Let’s be clear, people can always speculate and spread rumours. But if there is one thing that is an essential part of Publicis’ DNA, it is our independence.”

In January Publicis Groupe declined to comment for Campaign’s story that there had been talks between it and a private equity investor but the group subsequently issued a statement denying talks were “going on”.

Alison Weissbrot contributed to this article.

Source:
Campaign UK

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