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Publicis, IPG & Omnicom results: how have holding companies fared in first half of 2021?

IPG and Omnicom results: how have the holding companies fared in the first half of 2021?

After a calamitous 2020, the first six months of 2021 have seen clients recover confidence and advertising spend return – first as a trickle, then as a wave.

With the holding companies declaring H1 results for this financial year, we round up the performance of the biggest networks in advertising, highlight areas of opportunity and identify potential speedbumps.

Publicis

  • Publicis Groupe’s results have given it reason to celebrate – organic growth at the French advertising giant has not only recovered against its 2020 losses, but surpassed pre-pandemic levels.

  • Organic growth for the first half of the year was 9.7%, versus -8% during the first six months of 2020. Q2 organic growth was at 17.1%, against -13% for the same period last year.

  • Net revenue in H1 2021 increased 3.3%, to €4.9bn; Q2 net revenue was €2.5bn, following a 10.7% year-on-year increase.

  • The company reached an all-time high for its operating margin rate, which was at 16.5%.

  • Almost all of its regions have completely recovered past 2020 levels; organic growth in North America was 15.1% and Europe reached 23%. The US and Asia Pacific markets both grew 7% compared to 2019.

  • Chief executive Arthur Sadoun highlighted performance in France and Germany; the former saw organic growth of 30.6%.

  • Demand for digital media, first party data management and direct-to-consumer has driven much of Publicis’ growth, though the performance of its creative agencies has also picked up, following a quiet first quarter.

  • “In the first half of the year, we had a very strong performance thanks to our model in an improving business environment. Not only did we fully recover the revenue lost in 2020, but all of our KPIs over the first half exceeded 2019 levels.

  • “We now expect to fully recover to pre-pandemic levels, a year ahead of our initial expectations... provided there are no major deteriorations in the global sanitary situation,“ he stated. “In H2 we are focused on the execution of our plan, in a context that remains challenging in many parts of the world.“

  • In light of its good performance, Publicis has upgraded its 2021 guidance, and now expects a ’full recovery’ within the year, rather than the end of 2022, as previously predicted.

Omnicom

  • Omnicom says it has recovered from the decline in growth suffered last year. The company recorded a net income for the second quarter of 2021 of $348.2m, versus a net loss of $24.3m in the same period of 2020.

  • Its worldwide revenue for the first six months of the year was $6.9bn, a 12.7% increase on last year’s figures.

  • Worldwide revenue increased 27.5% to $3.57bn in Q2; 24.4% of that was organic growth amid the Covid-19 recovery, while the company also benefitted from favorable exchange rates.

  • Organic growth increased across the entire business in H1. Advertising grew 13.9%, while precision marketing grew 15.8%. In the second quarter, every area of the business experienced growth.

  • US revenue growth reached 8.5%, the UK had 6.7% growth, and Asia Pacific saw 14.4% growth. The Middle East and Africa was also a fast-developing market, with 10.1% growth in the second quarter.

  • Omnicom boss John Wren highlighted recent Philips and WaterWipes account wins and told investors the company had ”rounded the corner into positive growth”.

  • He said: ”We had extremely strong results top and bottom line and continue to make very good progress on several of our strategic initiatives.”

IPG

  • IPG’s performance this year has been so positive that the company upgraded its predictions for its full-year performance, telling investors: ”... we believe we can deliver organic growth for the full year of 9%-10%, and, with that level of growth, we would expect to achieve 2021 adjusted EBITA margin of approximately 16.0%.”

  • In the second quarter of 2021, net revenue rose 22.5% to $2.27bn (versus $1.85bn in 2020). Organic revenue grew 19.8%, with US revenue growing 17.4% and international markets growing 24.4%.

  • The FCB, FutureBrand and Golin owner saw net revenue increase 12.3% compared with the first half of 2020, to $4.3bn.

  • The company’s wage bill also rose; it paid 5.5% more in salaries in the first half of 2021 than it did in the same period of 2020. IPG said it paid out more bonuses than usual, owing to its unexpected good fortune in the second quarter.

  • In a statement, Philippe Krakowsky, chief executive officer of IPG, said: “Our performance this quarter is highlighted by very strong revenue growth across agencies, disciplines and world regions, and by outstanding margin performance. These results represent a remarkable rebound from the impact of the pandemic on our business, demonstrating the resilience of our people, as well as their commitment to each other, our clients and our craft.

  • “As we emerge from the pandemic, we continue to focus on the health and wellbeing of our people. This includes a focus on equity and inclusion, as well as a long-term commitment across the ESG spectrum, including climate change, responsible data stewardship, digital media and brand safety practices.”

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