Publicis Groupe reports +5.8% organic growth in Q3 2024

Publicis Groupe has reported an organic growth rate of +5.8% and is continuing to gain market share. The company has upgraded its full-year 2024 organic growth guidance from +5.0% to +5.5% and confirmed its  financial KPIs.

Arthur Sadoun, Chairman and CEO of Publicis Groupe, said, “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 personalisation 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.”

 Key Highlights:

• Q3 2024 Performance:

• Net revenue reached €3,423 million, up +5.6% from €3,241 million in Q3 2023.

• Organic growth stood at +5.8%, exceeding the four-year Q3 CAGR of +5.1%.

• Publicis Group ranked #1 in net new business in Q3 and for 2024 year-to-date.

• Reported growth for the first nine months of 2024 was +5.8%, with net revenue totaling €10,111 million.

Q3 2024 Net revenue

The 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%.

In 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%. acquisitionsPublicis 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.

In 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.

2024 Net Revenue at end September 2024

The 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%.

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  integrated communications agencies. Founded in 2009, AKA is a player in the South-East Asian market, known for delivering award-winning and innovative communication campaigns. The acquisition expands and diversifies the 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  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 advanced AI and ML analytics, supply chain digital twins, warehouse and transportation management and expanded digital services. 

On June 5, 2024, Publicis Groupe in France announced the acquisition of Downtown Paris, a creation and production house 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, the groupe announced the acquisition of Influential, an influencer marketing company and platform. 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.

On September 19, 2024, Publicis Groupe announced the acquisition of Mars United Commerce, an independent commerce marketing company. With over 1,000 employees based in 14 hubs. 

Outlook

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 bonus pool and including the groupe’s investment of 100 million euros for its AI plan.