In fiscal year 2021, Publicis recorded organic growth of 10% for an operating margin rate of 17.5%.
“Today we are preparing our group for its second century, insists Arthur Sadoun, chairman of the management board of Publicis Groupe, world number three in communication. The heart of our business remains and will remain creation and the media. But thanks to our unparalleled data and technology assets in our industry, we are in the best position to support our customers in the necessary transformations they must make.” On Thursday, the French group (Publicis, Leo Burnett, Saatchi & Saatchi, Starcom or Zenith) unveiled its financial results for the year 2021. It recorded net income of 10.5 billion euros, organic growth of 10% and above market expectations. The communications agency exceeded its pre-pandemic levels with organic growth of 3% compared to 2019.
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Its activities in the United States, which represent 60% of its revenues, grew by 9.8% over one year. Sales in Europe increased by 9.6% over one year, with an increase of 15.5% in France. The group’s growth is driven by the signing of major contracts. In 2021, Publicis was the big winner of the media budget transfer window, winning those of the manufacturer Stellantis, L’Oréal in China, Meta media or even that of the American distribution giant Walmart.
In the first exchanges this Thursday at the Paris Stock Exchange, the Publicis action won 2.77%, at 63.02 euros. The valuation of Publicis Groupe exceeds 15.9 billion euros.
Investments pay off
“We achieved record results from a commercial point of view, with double-digit growth over the year, but also from a financial point of view with a historically high margin rate”, rejoices Arthur Sadoun. The group ended the year with an operating margin rate of 17.5% and a free cash flow of 1.4 billion euros.
Above all, the Chairman of the Management Board believes that the results of Publicis’ investments in data and the digital transformation of companies in recent years, with the integration of Epsilon in 2019 (for 4.4 billion dollars), its subsidiary specializing in data and the creation of individualized profiles, and Sapient (acquired for 3.7 billion dollars in 2015), are now clearly reflected in the group’s results.
Each employee who does not usually benefit from a bonus will receive a bonus equivalent to one week of his salary
In a post-advertising third-party cookie world, media agency clients are looking for large-scale personalization to withstand the era of digital platform dominance. Mastery of datalogged in(or owners) in particular is a holy grail for site editors and advertisers. Epsilon, which brings together 250 million personalized profiles worldwide (behavioral, demographic and transactional data), recorded growth of 12.8%. Through Epsilon’s CORE ID, Publicis is able to see 56% of credit card transactions in the United States. Sapient’s growth is 13.8%. The group ends the year 2021 with a net debt of 1.5 billion euros. “We absorbed Epsilon’s investment a year and a half early“, explains Arthur Sadoun.
On the strength of its results and in order to reward the work of employees mobilized during its two years of health crisis, Publicis has taken the initiative of granting a bonus to employees present in the group since at least January 1, 2022. “From the young programmer who has just arrived in New York to the manager who has been in our offices on the Champs-Élysées for twenty years, passing through the reception teams, each employee who does not usually benefit from a bonus will receive a bonus equivalent to a week’s salary“says Arthur Sadoun. The overall envelope for bonuses thus amounts to 400 million euros, i.e. twice as much as in 2020. To expand its arsenal against its competitors in a context of talent wars, Publicis launched a program in December called “Work Your World”. It offers the 85,000 employees worldwide of Publicis the possibility of working for up to six weeks in one of the hundred countries where the French firm has an office.
600 million for small acquisitions
Last year, the group invested nearly 300 million euros. In particular, he got his hands on the Australian adtech CitrusAd to position himself more on the “ retail media “. A part of the booming market with the health crisis which has further boosted e-commerce and the use of online market places. He also bought the Romanian software publisher Tremend.
For the next few months, Publicis reserves an envelope of 400 to 600 million euros for “new small acquisitions in technology and data”. The group expects growth of between 4% and 5% for 2022
Publicis explains that it remains attentive to the inflationary context, which is gradually spreading to all countries. “We also remain vigilant in the face of broken supply chains globally, in particular the shortage of electronic components. Some U.S. manufacturers had slightly lowered their media investments in the fourth quarter, but the consequences were less significant than we had anticipated“.
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