Publicis Groupe has had a hard journey, to outperform the market on organic growth.
The global advertising company posted better than expected 7.1% organic growth for the three months to June, maintaining same rate as the March quarter.
The holding group, expecting margins close to 18%, has now increased its forecast for full year organic growth to 5%, up from 3%-5% on previous guidance.
The road “has not been easy” to shift the company from a communication to a transformation business.
Publicis says its operating model now leads the industry and is truly resilient, resisting a business cycle currently overshadowed by economic uncertainty.
This is underpinned by a well balanced revenue mix and an ability to win market share for the performance of Publicis Media, says CEO Arthur Sadoun.
“We are outperforming again the market on growth, and we are continuing to deliver by far the best financial ratios,” he says.
He named data platform Epsilon, digital transformation consulting company Publicis Sapient and the impact of new business on Publicis Media.
“On the macroeconomic context that is still challenging, the strength of our uniquely balanced revenue mix continues to perform,” he told analysts in a briefing.
“The growth of our data and tech activities, representing one-third of our revenue, came in strong.”
Epsilon posted 6.8% organic growth and Publicis Sapient was up 5.5% for the quarter despite clients slowing down decision-making process in digital business transformation.
“Creative saw a low single-digit organic growth for the quarter with some expected localised cut on smaller projects in classic advertising, compensated by continued solid momentum in production,” Sadoun says.
“Media activities, which represents another third of our revenue, accelerated even further with double-digit organic growth, thanks to our new business track record in 2022.”
A slide from the analyst briefing:
Sadoun says Publicis has emerged from the pandemic as a stronger business.
Since 2019, net revenue is up 45% on a reported basis, organic growth is up plus 19% with the US at plus 22%.
“We set the objective to shift from a communication to a transformation partner for our clients,” he says. “Six years later, the shift is now completed.
“Today, we are outperforming our industry, thanks to our ability to win market share and the resilience of our model to business cycles.
“But that's not all. Not only are we performing very well, but thanks to our transformation journey, we are also uniquely positioned to lead the future of our industry, which will be shaped by data, technology and AI.
“AI is the flavour of the day. And thanks to ChatGPT's great launch, everyone has discovered this potential.
“What truly sets us apart from our competition is that, in our case, AI is already at the core of our business model.
“And we have been pioneers in many areas. Thanks to our investments in Sapient, Epsilon and Marcel, we actually have three unmatched competitive advantages to make sure that our clients but also our people can truly leverage AI to grow.
“We are just at the beginning to see the potential of AI. Thanks to our investment over the last years, we are clearly leading the industry in terms of capabilities. We now need to bring those capabilities into the end of ever one at Publicis, which is our priority in the coming months.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.