Publicis Groupe has kept up its strong start to 2023 as Q2 revenues jumped 7.1% — the same rate of growth as in Q1, when it was ahead of all its main agency rivals.
The French group’s performance was a confidence boost for the wider industry, after US rival Omnicom reported slower growth on Tuesday (18 July).
Arthur Sadoun, the chief executive of Publicis Groupe, credited its “unique revenue mix”, including data and consulting, and “tailwinds” from its new-business wins for driving growth.
Publicis Media was the top performer with “double-digit” percentage growth in Q2. Data unit Epsilon was up 6.8% and consulting arm Publicis Sapient 5.5%. Creative grew “low single digit”.
Campaign understands that global media wins such AB InBev and Mondelez and PepsiCo in China from last year boosted revenues, rather than more recent success such as the Pfizer global agency consolidation and the John Lewis Partnership UK creative account in spring 2023, which is likely to feed into future performance.
North America, Publicis Groupe’s most important market, was up 4.9% in Q2. Europe was up 15.2% and Asia-Pacific 2.6%.
The UK, which has dropped the chief executive role after Dame Annette King quit for Accenture in April, was notably strong with 17.1%, including “double-digit” growth in media and at Publicis Sapient.
Publicis also resumed some activities in Ukraine in Q2, more than a year after the war began.
Sadoun upgraded Publicis Groupe’s full-year forecasts despite “persistent macro-economic uncertainties” such as higher interest rates.
He expects annual revenues to increase 5%, up from previous guidance of between 3.5% and 5%, and operating margin should also come in at the top end of previous forecasts at 18%.
Growth of 7.1% in the first six months of 2023 follows 10.1% annual growth in 2022 and 10% in 2021.
Sadoun said: “The first half of the year has been strong for Publicis. In Q2, we continue to outperform the market on organic growth thanks to our unique revenue mix and new business track record with +7.1%, ahead of expectations after double-digit growth in 2022.
“We delivered the best financial KPIs in the industry in H1 thanks to our platform organisation, with operating margin at 17.3%, in line with the historically high level of 2022.”
He added that Publicis Groupe’s early investments in artificial intelligence, including the creation of its own internal platform Marcel in 2017, rather than just striking alliances with external partners, gave the company an advantage.
“With our investments in Epsilon, powering creative and media through personalisation at scale, Sapient and Marcel, we are uniquely positioned to lead the future of our industry. It will inevitably be shaped by data, tech and AI that are already at the heart of our business model both in how we work for our clients and in the way we operate," Sadoun said.
“But Publicis is not only future-proof. It is also more resilient to business cycles, allowing us to upgrade our guidance on all KPIs for the year despite persistent macro-economic uncertainty.”
Operating income rose 10.8% to €834m (£724m) on net revenues of €6.32bn in the six months to 30 June.
Publicis Groupe’s shares rose about 3% in early trading, partly because the stock price had slipped 24 hours earlier in response to Omnicom’s Q2 results.
Omnicom’s shares slumped almost 12% after the US-listed agency group said its revenues increased 3.4% in Q2 versus 5.2% in Q1.
Other agency rivals will report in the coming days. WPP grew 2.9% and IPG fell 0.2% in Q1.