Publicis Groupe tops 7% organic growth in first quarter
By Abimbola Mohammed
Publicis Groupe has beat expectations by recording 7.1% organic growth in the first quarter, the global agency growth followed by 10.5% growth achieved in the first quarter of last year.
But citing macroeconomic uncertainty, the company is managing growth expectations for the full year with guidance of between 3% to 5% albeit with confidence it will hit the top half of the range. Q2 is expected to be in that range as well.
Operating profit margin will be in the 17.5% to 18% range per company guidance with an estimated $1.7 billion of free cash flow for the full year.
According to a statement posted on the company website, Arthur Sadoun, CEO, Publicis Groupe said the results signal a strong start: “After two years of double digit growth, we posted a strong start to 2023. In Q1, our net revenue was up +10% again on a reported basis. Organic growth was +7.1%, demonstrating once more the ability of our differentiated model to gain market share. The U.S. continued their strong performance with +5.8% organic growth, Europe accelerated to +12.3% and China posted a solid +3.7% despite the health situation in the country.
According to a statement posted on the company website, Arthur Sadoun, CEO, Publicis Groupe said the results signal a strong start: “After two years of double digit growth, we posted a strong start to 2023. In Q1, our net revenue was up +10% again on a reported basis. Organic growth was +7.1%, demonstrating once more the ability of our differentiated model to gain market share. The U.S. continued their strong performance with +5.8% organic growth, Europe accelerated to +12.3% and China posted a solid +3.7% despite the health situation in the country.
Since 2019, we’ve expanded our first quarter net revenue by +45% on a reported basis, of which +18% organically. Putting this performance in perspective, the Groupe has actually changed dimension in recent years, rising to the number 2 position in the industry in terms of revenue.”
Our differentiated revenue mix, with one third in data and tech, allowed us to grow faster than both the industry and the global economy in the last three years. This continued to be the case in Q1 this year, with Epsilon & Publicis Sapient again accretive to our growth at +10% and +11% organic respectively. It was also visible in our Media and Creative activities, which were very solid in the quarter.
Not only do those capabilities at scale lead us to outpace competition, but they also set us apart in the way we go to market. With Epsilon’s real time data and Publicis Sapient’s technology embedded in our Creative and Media offerings, our New Business momentum continued in Q1 after topping the leagues 4 times in the last 5 years, with recent wins like Adobe or Walgreens Media, Sonepar Business Transformation, Mondelez Production and Dunkin US Creative.
It is this differentiated revenue mix, our go-to-market and our platform organization, allowing us to invest in growth while delivering industry-high margins, which drive our confidence to achieve all of our 2023 KPIs guidance.
Actually, despite an increasingly challenging macroeconomic environment, we now anticipate that organic growth for the year will come in at the top half of our +3% to +5% guidance, while delivering 17.5% to 18% operating margin and circa 1.6 billion Euros in free cash flow.
“I would like to thank our teams for their continued efforts and our clients for their trust,” Sadoun added.
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