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    PUB   FR0000130577

PUBLICIS GROUPE SA

(PUB)
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Publicis Groupe: Q3 2021 Revenue

10/14/2021 | 03:32am EST

Third Quarter 2021 Revenue

-

Strong Q3 organic growth

leading to full year guidance upgrade

October 14, 2021

  • Q3 organic growth at +11.2%, with U.S. at +10.9%, Europe at +10.0% and Asia at +12.5%
  • Epsilon at +13% and Publicis Sapient at +20% in the U.S., confirming outperformance
  • Exceeding Q3 2019 by +5%: U.S. at +8%, Europe fully recovering and Asia +2% vs. 2019
  • Strong account wins confirming our leadership position in new business
  • Second upgrade of all 2021 guidance KPIs:
  1. Organic growth between +8.5% and +9% vs. +7% previously o Operating margin rate now slightly above 17%
    o Free cash flow close to €1.3 bn, at the high-end of the previous objective

Q3 2021

2021 Net revenue

€2,621 m

2020 Net revenue

€2,343 m

Reported growth

+11.9%

Organic growth

+11.2%

9M 2021

2021 Net revenue

€7,552 m

2020 Net revenue

€7,117 m

Reported growth

+6.1%

Organic growth

+10.2%

WWW.PUBLICISGROUPE.COM

Arthur Sadoun, Chairman and CEO of Publicis Groupe:

  • In Q3 we delivered strong organic growth at +11.2%. All of our regions contributed to this performance with double-digit growth, notably the U.S., which grew +10.9%, Europe at +10% and Asia at +12.5%.

The continued outperformance of our data and tech capabilities once again demonstrated our ability to capture a disproportionate share of the shift in client investment towards digital media, commerce and DTC. This was particularly the case in the U.S., where Epsilon delivered +13% and Publicis Sapient was at +20%.

The strength of our model not only means we have fully recovered from the impact of the pandemic, but it has also allowed us in Q3 to grow 5% versus 2019. On a two-year basis, Asia is at +2%, Europe has returned to pre-pandemic levels and the U.S is accelerating to +8%.

Today, all of this means that we are in a position to upgrade our full year guidance for all our KPIs a second time this year. This is the case for organic growth, that we now anticipate at +8.5-9% from +7%. We are also revising our operating margin upwards, to slightly above 17%, while continuing to invest in future growth and talent. And at close to 1.3 billion Euros, our free cash flow is expected at the high end of our previous objective.

Overall, 18 months after the beginning of the pandemic, we are emerging as a stronger group.

Our differentiated go to market is allowing us to confirm our leadership position in new business. After wins in H1 including Samsung US, Stellantis globally, L'Oréal in China to name just a few, Q3 has been a busy quarter, with new wins like Ferrero, Planet Fitness, TD Bank and Walmart.

We have a product and service offering that uniquely positions us to respond to our clients' needs and help them address and lead the major revolutions in the industry, from the disappearance of third party cookies, the acceleration of advanced TV and retail media, and the ongoing rise of direct to consumer channels.

And our platform organization, supported by our shared services and Marcel is fit for the future of work. A future that will be more diverse, more inclusive and more responsible than ever before, to the benefit of all of our people.

I'd like to thank our clients for their ongoing trust, and our teams for their outstanding efforts, which once again made the difference this quarter."

**

*

2/11

NET REVENUE IN Q3 2021

Publicis Groupe's net revenue in Q3 2021 was 2,621 million euros compared to 2,343 million euros in Q3 2020, increasing by 11.9%. Exchange rate variations had a 4 million euros positive impact. The acquisitions (net of disposals) have a positive impact of 9 million euros this quarter.

Organic growth was +11.2% in Q3 2021 compared to 2020. Compared to 2019, this implies organic growth of +5% in Q3, accelerating after a flat Q1 and Q2 at +2%. All regions continued to recover and posted double-digit growth. Q3 came ahead of expectations: in a context where the global environment remained supportive of a rise in consumer demand, the performance this quarter confirmed the strength in the Groupe's model that places data and tech at the core of its creativity and media.

Breakdown of Q3 2021 Net revenue by region

EUR million

Net revenue

Reported

Organic

Organic

Q3 2021

Q3 2020

Growth

growth

Growth

vs. 2019

North America

1,602

1,454

+10.2%

+10.8%

+7%

Europe

619

547

+13.2%

+10.0%

+0%

Asia Pacific

266

230

+15.7%

+12.5%

+2%

Middle East & Africa

77

62

+24.2%

+22.7%

+9%

Latin America

57

50

+14.0%

+16.7%

+0%

Total

2,621

2,343

+11.9%

+11.2%

+5%

Net revenue in North America up by 10.8% in Q3 on an organic basis (+10.2% on a reported basis, negatively impacted by the evolution of the US dollar over the quarter). The U.S. posted another strong quarter with an 10.9% organic growth. After -2.4% organic growth in Q3 2020, this means a +8% growth over 2019, accelerating from Q2. The operations there benefitted from continued strength in demand for 1P data management, DTC and digital, visible in the performance of Epsilon and Publicis Sapient with +13% and +20% organic respectively. Traditional media and creative activities both grew mid-single digit. Health operations delivered double digit growth, for the 6th quarter in a row.

Europe net revenue was up +10.0% on an organic basis in Q3 (+13.2% on a reported basis), as the economies in the region continued to reopen in the summer. Compared to 2019, Europe is coming back to its pre-pandemic levels, improving from Q2. In Q3, the UK recorded organic growth of +5.8%, with very solid growth in Creative and Media. In France, the organic growth was +16.1%, or +10.8% excluding Outdoor media operations and the Drugstore. In Germany, organic growth was up by +10.5%. In France and in Germany, all activities posted positive growth.

Asia Pacific net revenue was up +12.5% on an organic basis (+15.7% reported). China's organic growth was at +10.0%, more than recovering what was lost in 2020.

3/11

Net revenue in the Middle East and Africa region was up by +24.2% on a reported basis, and up +22.7% on an organic basis. In Latin America, net revenue was up +14.0% reported as currencies continued to have a negative impact, but was up +16.7% on an organic basis. Both regions saw an improved recovery ratio in Q3 versus Q2, recovering what was lost in 2020.

NET REVENUE IN 9M 2021

Publicis Groupe's net revenue in the first nine months 2021 was 7,552 million euros compared to 7,117 million euros in 9 months 2020, up 6.1%. Exchange rate variations had a 272 million euros negative impact. The acquisitions (net of disposals) had no significant impact in the first nine months.

Organic growth was +10.2% in the first nine months 2021. After -7.2% in 9 months 2020, this implies a growth of +2% over 2019, with the Groupe more than recovering what was lost in 2020 when it was impacted by the effects of the Covid-19 crisis. In the first 9 months, all regions posted positive organic growth. The performance was strong in the U.S. across the period and led to a +10.3% organic growth over 2020 which implies +7% growth over 2019. In Europe, organic growth was +10.0% with an improving recovery quarter after quarter, as economies progressively reopened in the year. Asia Pacific organic growth was +10,8% and the region more than recovered what it lost in 2020. Organic growth in Middle East and Africa and Latin America was +10.4% and +13.6% respectively.

.

Breakdown of Net revenue for the first 9 months by region

EUR million

Net revenue

Reported

Organic

Organic

9M 2021

9M 2020

Growth

Growth

Growth

vs. 2019

North America

4,634

4,467

+3.7%

+10.1%

+6%

Europe

1,814

1,635

+10.9%

+10.0%

-6%

Asia Pacific

736

664

+10.8%

+10.8%

+4%

Middle East & Africa

210

197

+6.6%

+10.4%

-2%

Latin America

158

154

+2.6%

+13.6%

-4%

Total

7,552

7,117

+6.1%

+10.2%

+2%

4/11

Breakdown of Net revenue for the first 9 months by sector

Based on 3,412 clients representing 92% of the Groupe's net revenue.

5/11

Disclaimer

Publicis Groupe SA published this content on 14 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 October 2021 07:31:05 UTC.


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Net income 2021 956 M 1 082 M 1 082 M
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P/E ratio 2021 15,0x
Yield 2021 3,79%
Capitalization 14 467 M 16 384 M 16 371 M
EV / Sales 2021 1,47x
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Nbr of Employees 82 592
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Number of Analysts 19
Last Close Price 57,92 €
Average target price 63,79 €
Spread / Average Target 10,1%
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Managers and Directors
Arthur Sadoun Chairman-Management Board & CEO
Agathe Bousquet Co-President
Marco Venturelli Co-President
Michel-Alain Proch Chief Financial Officer
Maurice LÚvy Chairman-Supervisory Board
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