Publicis expects to regain COVID losses in 2021

1:32 am Thursday, July 22nd, 2021

By Milla Nissi

(Reuters) – France’s Publicis said on Thursday its financials would make a full return to pre-pandemic levels this year, after its second-quarter organic growth exceeded market expectations and 2019 levels.

The world’s third-largest advertising group behind Britain’s WPP and U.S.-based Omnicom was last year hit by a market-wide depletion of revenue streams as its clients cut advertising budgets to wade through the COVID-19 crisis.

Publicis, which has wooed new customers by promising targeted campaigns based on large pools of data, now expects to regain those losses a year earlier than anticipated.

“We assume that the demand for data and direct consumer will not stop due to the pandemic,” Chief Executive Officer Arthur Sadoun told reporters.

Underlying sales in the United States, Publicis’ biggest market and the source of more than half of its revenues, grew 15.2% in the three months to June, steered by strong performances from its digital business Sapient and data company Epsilon, up 27% and 31% respectively.

“When we see the growth rates we have seen with Epsilon and Sapient, we are confident in our ability to deliver,” Sadoun said.

On group level, quarterly underlying sales increased 17.1% to 2.54 billion euros ($3.00 billion), beating analysts’ estimate of 12.9% organic growth. They also grew 2% from two years ago.

Publicis, home to ad agencies such as Leo Burnett and Saatchi & Saatchi, said the “overperformance” was thanks to a new acceleration in the United States and continued growth in Asia. Both regions saw a 7% growth from 2019.

Europe, mirroring the lifting of lockdowns, grew 23% from the low base level last year, but still lagging the pre-pandemic level.

Growth in the first half was boosted by a strong run of new business wins, such as Stellantis’ global media and Unilever’s shopper marketing in the United States, the company said.

It forecast organic growth of 7% for the full year, with a 17% operating margin.

($1 = 0.8478 euros)

(Reporting by Milla Nissi and Anait Miridzhanian in Gdansk; Editing by Steve Orlofsky)