Strong Q3 2024 at +5.8% organic
growth
Upgrading full year organic growth
guidance
despite challenging macro
October 17,
2024
-
Q3 2024 organic growth at +5.8%
-
Continuing to gain market share
-
Accelerating versus 4-year Q3 CAGR of +5.1%
-
#1 ranking in net new business1
in Q3 and 2024 YTD
-
M&A acceleration: acquisition of the world’s largest
influencer and commerce marketing companies for $1
billion
-
Expecting to maintain momentum in Q4: upgrading full year
2024 organic growth guidance floor to +5.5%, versus +5.0%
previously.
-
Confirming industry-high 2024 financial KPIs: operating
margin rate at 18.0% and free cash flow2
between €1.8bn-1.9bn
Q3 2024
9M 2024
Arthur Sadoun, Chairman and CEO of Publicis Groupe:
“Publicis had a very busy and very strong Q3,
with organic growth of +5.8%.
Once again, we were able to gain market share by
capturing a disproportionate amount of client demand for
personalization at scale, with our combined media and Epsilon
activities growing at almost +10%. All of our regions delivered
strongly, with the U.S. at +4%, Europe at +4.9% and APAC at +6.4%,
with China accelerating to +12.4%.
The strength of our model is also reflected in
our net new business performance. Not only have we topped new
business league table since the beginning of 2024, for the fifth
year in a row we also led the ranking in Q3 which was very active
quarter when it comes to pitch activity.
Despite an increasingly challenging
macroeconomic environment, we expect to sustain our momentum in Q4.
We are in a position to upgrade our organic growth guidance for the
full year. This means that we should outperform the industry by
close to 400 basis points on average in 2024.
Beyond our immediate results, in Q3 we also took
steps to continue to stay ahead of the industry thanks to our
model. We invested 1 billion dollars in acquiring Influential, the
world’s largest influencer marketing platform and Mars United
Commerce, the #1 independent commerce marketing company. We are now
clearly leading on 3 critical expertise for our clients:
addressable media, Creators and Commerce. We are then able to
directly link this expertise with Epsilon’s identities around the
world to create a connected media ecosystem that we can build
transparently within our clients’ owned environments.
Our ability to fuel this unique and breakthrough
connected ecosystem with intelligent content through our creative
and production capabilities, and power it with the technology of
Publicis Sapient, makes us confident in our ability to continue to
outperform the market in 2024, and in the years to come.
I’d like to take this opportunity to thank our
clients for their trust, and our people for their outstanding
efforts.”
* *
*
Q3 2024 NET REVENUE
Publicis Groupe's net revenue in Q3 2024 was 3,423 million
euros, up +5.6% compared to 3,241 million euros in Q3 2023.
Exchange rate variations had a 36 million euros negative impact.
Acquisitions, net of disposals, accounted for a positive impact of
33 million euros. Organic growth reached +5.8%.
Breakdown of Q3 2024 net revenue by
region
|
EUR million |
Net revenue |
Reported |
Organic |
|
|
Q3 2024 |
Q3 2023 |
growth |
growth |
|
North America |
2,105 |
1,999 |
+5.3% |
+4.7% |
| Europe |
812 |
769 |
+5.6% |
+4.9% |
| Asia
Pacific |
307 |
288 |
+6.6% |
+6.4% |
| Middle East
& Africa |
105 |
95 |
+10.5% |
+13.6% |
|
Latin America |
94 |
90 |
+4.4% |
+30.3% |
|
Total |
3,423 |
3,241 |
+5.6% |
+5.8% |
North America net revenue was
up +4.7% organically in Q3 2024. Taking into account a negative
impact of the US dollar to euro exchange rate and the contribution
of acquisitions completed over the last 12 months, reported growth
was at +5.3%. The U.S. posted a very solid quarter
with +4.0% organic growth, with Media and Epsilon combined
continuing to be accretive, confirming the strength of the Groupe’s
integrated offer in this geography where its model is the most
advanced. Publicis Sapient posted a slight decline in a context of
a continued “wait and see” attitude from clients. Finally, Creative
activities were up by a mid-single digit on the quarter.
Europe net revenue was up +4.9%
on an organic basis (+5.6% reported). Organic growth in
France and Germany accelerated
this quarter, mainly led by double-digit growth in Media in both
countries. The U.K. was impacted by a high
comparable base last year, with Media and Creative activities
together going up single digit after three years at double digits,
while Publicis Sapient remained impacted by delays in digital
business transformation projects. Central & Eastern
Europe was very strong organically, with double-digit
growth in most countries, led by both Media and Creative.
Net revenue in Asia Pacific
recorded +6.6% growth on reported basis and +6.4% on an organic
basis. China accelerated to +12.4% organic growth
after +10.5% in Q2 2024, benefitting from new business wins in
Media. South-East Asia grew by a low-single digit,
on top of a double-digit growth in Q3 2023.
Australia and New Zealand were up
by a low-single digit this quarter.
Net revenue in the Middle East and
Africa region was up +13.6% organically (+10.5% on a
reported basis), largely driven by double-digit growth in Media and
at Publicis Sapient.
In Latin America, net revenue
was up +30.3% organically led by both Media and Creative, notably
in Brazil, Colombia and Mexico. Reported growth was +4.4% due to
the depreciation of the Argentinian peso relative to the euro.
Breakdown of net revenue for Q3 2024 by
sector
|
Client sectors |
% Net revenue |
| Healthcare |
17% |
| Automotive |
14% |
| Financial |
13% |
| Food &
beverage |
13% |
| TMT |
13% |
| Non-food
consumer products |
10% |
| Retail |
9% |
| Leisure &
travel |
4% |
| Public sector
& others |
4% |
|
Energy & manufacturing |
3% |
Based on 3,397 main clients representing 91% of
the Groupe’s net revenue.
2024 NET REVENUE AT END SEPTEMBER 2024
Publicis Groupe's net revenue in the first nine
months of 2024 was 10,111 million euros up +5.8% compared to 9,559
million euros in the first nine months of 2023. Exchange rate
variations had a 52 million euros negative impact. Acquisitions,
net of disposals, accounted for a positive impact of 76 million
euros. Organic growth reached +5.6%.
Breakdown of net revenue for the first 9
months of 2024 by region
|
EUR million |
Net revenue |
Reported |
Organic |
|
|
9M 2024 |
9M 2023 |
growth |
growth |
|
North America |
6,217 |
5,892 |
+5.5% |
+4.9% |
| Europe |
2,461 |
2,321 |
+6.0% |
+5.0% |
| Asia
Pacific |
879 |
838 |
+4.9% |
+6.8% |
| Middle East
& Africa |
295 |
274 |
+7.7% |
+9.0% |
|
Latin America |
259 |
234 |
+10.7% |
+19.7% |
|
Total |
10,111 |
9,559 |
+5.8% |
+5.6% |
NET DEBT
Net financial debt amounted to 1,710 million
euros as of September 30, 2024, compared to a net debt of 99
million euros as of June 30, 2024, and to a net debt of 714 million
euros at the end of September 2023. The Groupe’s last twelve months
average net debt amounted to 406 million euros as of September 30,
2024, down from 451 million euros as of September 30, 2023.
ACQUISITIONS
On January 18, 2024, Publicis
Groupe Singapore announced the acquisition of AKA
Asia, one of Singapore's leading integrated communications
agencies. Founded in 2009, AKA is a highly respected player in the
South-East Asian market, known for delivering award-winning and
innovative communication campaigns. The acquisition expands and
diversifies Publicis Groupe's capabilities in the region, while
bolstering the Groupe's strategic communications, PR and influence
offering. AKA has joined the Groupe's regional Influence
practice.
On March 12, 2024, Publicis
Sapient announced the acquisition of Spinnaker
SCA, a leading supply chain services firm that provides
end-to-end supply chain strategy, planning and execution consulting
services. Founded in 2002 and based in Boulder in the U.S.,
Spinnaker SCA has become part of Publicis Sapient and brings core
capabilities and skill sets including advanced AI and ML analytics,
supply chain digital twins, warehouse and transportation management
and expanded digital services. Spinnaker SCA further enables
Publicis Sapient to offer solutions for clients to optimize their
agile supply chains as part of their digital business
transformation.
On June 5, 2024, Publicis
Groupe in France announced the acquisition of Downtown
Paris, a creation and production house specialized in
leading brands in the beauty and luxury business. Founded in 2016,
the agency has strengthened the production vertical of Publicis
France and is working with the Groupe's various luxury
entities.
On July 25, 2024, Publicis
Groupe announced the acquisition of Influential,
the world’s preeminent influencer marketing company and platform,
creating the world’s leading influencer marketing solution.
Influential’s proprietary AI-powered technology platform with over
100 billion data points, coupled with its network of over 3.5
million creators, including access to and data on 90% of global
influencers with more than 1 million followers, currently serves
more than 300 brands around the world. By combining these
capabilities with the unique data and identity assets of Epsilon,
Publicis Groupe is putting the leadership of ID-driven influencer
marketing in the hands of all of its clients through a premium
creator network, revolutionized influencer planning and maximized
cross-channel outcomes.
On September 19, 2024, Publicis
Groupe announced the acquisition of Mars United
Commerce, the largest independent commerce marketing
company in the world. With over 1,000 employees based in 14 hubs
worldwide, Mars leverages its proprietary suite of commerce
solutions to drive growth for more than 100 of the world’s top
brands. The combined forces of Publicis Groupe and Mars has created
the industry-leading connected commerce solution, allowing clients
to influence the complete commerce journey for billions of global
shoppers through an offering that begins with the industry’s
deepest and richest database of consumer behavior and ends at the
digital and physical shelves of the world’s leading online and
offline retailers.
OUTLOOK
After delivering a very strong third quarter of
2024, which continued to demonstrate the strength of the Groupe’s
model and its ability to win market share and outperform the
industry, the Groupe raises the floor of its organic growth
guidance for the full year 2024.
The floor is now expected at +5.5%
organic growth for the full year compared to a floor of
+5.0% previously, despite a macroeconomic environment that became
more challenging over the quarter. This guidance takes into account
the current macroeconomic uncertainties, which affect client spend,
continue to weigh on Publicis Sapient like other IT consulting
firms and would impact clients’ end-of-year budget adjustments.
The Groupe also confirms its 2024
guidance on financial ratios, which will be maintained at
the industry-leading levels of 18% operating margin rate and
between 1.8 and 1.9 billion euros free cash flow before change in
working capital, while sustaining its industry-high bonus pool and
including the Groupe’s opex investment of 100 million euros for its
AI plan.
Disclaimer
Certain information contained in this document,
other than historical information, may constitute forward-looking
statements or unaudited financial forecasts. These
forward-looking statements and forecasts are subject to risks and
uncertainties that could cause actual results to differ materially
from those projected. These forward-looking statements and
forecasts are presented at the date of this document and, other
than as required by applicable law, Publicis Groupe does not assume
any obligation to update them to reflect new information or events
or for any other reason. Publicis Groupe urges you to carefully
consider the risk factors that may affect its business, as set out
in the Universal Registration Document filed with the French
Autorité des Marchés Financiers (AMF) and which is available on the
website of Publicis Groupe (www.publicisgroupe.com), including an
unfavorable economic climate, a highly competitive industry,
risks associated with the confidentiality of personal data, the
Groupe’s business dependence on its management and employees, risks
associated with mergers and acquisitions, risks of IT system
failures and cybercrime, the possibility that our clients could
seek to terminate their contracts with us on short notice, risks
associated with the reorganization of the Groupe, risks of
litigation, governmental, legal and arbitration proceedings, risks
associated with the Groupe’s financial rating and exposure to
liquidity risks.
About Publicis Groupe - The Power of One
Publicis Groupe [Euronext Paris FR0000130577,
CAC 40] is a global leader in communication. The Groupe is
positioned at every step of the value chain, from consulting to
execution, combining marketing transformation and digital business
transformation. Publicis Groupe is a privileged partner in its
clients’ transformation to enhance personalization at scale. The
Groupe relies on ten expertise concentrated within four main
activities: Communication, Media, Data and Technology. Through a
unified and fluid organization, its clients have a facilitated
access to all its expertise in every market. Present in over 100
countries, Publicis Groupe employs around 103,000 professionals.
www.publicisgroupe.com | Twitter: @PublicisGroupe | Facebook |
LinkedIn | YouTube | Viva la Difference!
Please find the presse release here
|
ContactsPublicis Groupe
|
|
Amy Hadfield |
Corporate Communications |
+ 33 1 44 43 70 75 |
amy.hadfield@publicisgroupe.com |
|
Jean-Michel Bonamy |
Investor Relations |
+ 33 1 44 43 74 88 |
jean-michel.bonamy@publicisgroupe.com |
|
Lorène Fleury |
Investor Relations |
+ 33 1 44 43 57 24 |
lorene.fleury@publicisgroupe.com |
|
Maxine Miller |
Investor Relations |
+ 33 1 44 43 74 21 |
maxine.miller@publicisgroupe.com |
Appendices
Net revenue: organic growth
calculation
|
(million euro) |
Q1 |
Q2 |
Q3 |
9 months |
|
Impact of currencyat end Sep.
2024(million euro) |
|
2023 net revenue |
3,079 |
3,239 |
3,241 |
9,559 |
|
GBP (2) |
20 |
|
Currency impact (2) |
(29) |
13 |
(36) |
(52) |
|
USD (2) |
(19) |
|
2023 net revenue at 2024 exchange rates (a) |
3,050 |
3,252 |
3,205 |
9,507 |
|
Others |
(53) |
|
2024 net revenue before acquisition impact (b) |
3,212 |
3,433 |
3,390 |
10,035 |
|
Total |
(52) |
|
Net revenue from acquisitions (1) |
18 |
25 |
33 |
76 |
|
|
|
|
2024 net revenue |
3,230 |
3,458 |
3,423 |
10,111 |
|
|
|
|
Organic growth (b/a) |
+5.3% |
+5.6% |
+5.8% |
+5.6% |
|
|
|
| |
(1) |
|
Acquisitions (Spinnaker SCA, Practia, Mars United Commerce,
Corra, Influential, AKA Asia, ARBH, Downtown Paris), net of
disposals. |
| |
|
|
|
| |
(2) |
|
EUR = USD 1.0871 on average in 9M 2024 vs. USD 1.0835 on
average in 9M 2023 |
| |
|
|
EUR = GBP 0.8514 on average in 9M 2024 vs. GBP 0.8710 on
average in 9M 2023 |
Definitions
Net revenue or Revenue less pass-through
costs: Pass-through costs mainly concern production and
media activities, as well as various expenses incumbent on clients.
These items that can be re-billed to clients do not come within the
scope of assessment of operations, net revenue is a more relevant
indicator to measure the operational performance of the Groupe’s
activities.
Organic growth: Change in net
revenue excluding the impact of acquisitions, disposals and
currencies.
4Y CAGR organic growth:
Calculated as: ( [1 + organic growth (n-4)]*[1 + organic growth
(n-3)]*[1 + organic growth (n-2)]*[1 + organic growth (n-1)]
)^(1/4) - 1.
Operating margin: Revenue after
personnel costs, other operating expenses (excl. non-current income
and expense) and depreciation (excl. amortization of intangibles
arising on acquisitions).
Operating margin rate:
Operating margin as a percentage of net revenue.
Free cash flow before changes in working
capital requirements: Net cash flow from operating
activities less interests paid & received, repayment of lease
liabilities & related interests and before changes in WCR
linked to operating activities.
Free cash flow: Net cash flow
from operating activities less interests paid & received,
repayment of lease liabilities & related interests.
Net debt (or financial net
debt): Sum of long and short financial debt and associated
derivatives, net of treasury and cash equivalents, excluding lease
liability since 1st January 2018.
Average net debt: Last 12-month
average of monthly net debt at end of each month.
1 JP Morgan new business ranking (published
October 10, 2024)
2 Before change in working capital
requirements
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