Publicis Groupe staff in line for bonus pay after ‘record’ year for holding company

What do the results show?

• Net revenue for the full year was €10.5bn. Revenue growth accelerated throughout the year, with Q4 seeing 13.1% revenue growth against -3.6% for the first quarter of 2021.

• Publicis Groupe’s organic growth in the last year was 10%. Given the extraordinary demand seen by most digital agencies in 2021 amid a pandemic bounce back, double figures aren’t surprising. More telling are comparisons with performance prior to Covid; the group posted 3% organic growth against 2019.

• The group’s operating margin and EBITDA (earnings before interest, taxes, depreciation and amortization – a commonly used measure of a net income) margin also increased. EBITDA rose from €2.15bn in 2020 to €2.31bn in 2021; its operating margin rose by €282m, representing a 17.5% rate.

• The effects of last year’s hiring spree (it hired over 9,000 new employees in 2021) can be seen in the results. Staff costs rising to account for 62.8% of Publicis’s overall revenue, though the company spent less on restructuring activities than in previous years.

• In its investor report, chief executive Arthur Sadoun praised the company’s commercial performance: ”2021 was a record year not just financially, but also commercially. For the third time in the past four years, we topped the new business rankings as league tables placed us well-ahead of the pack, with landmark wins including Stellantis, Walmart and Meta, to name just a few. We also started 2022 on a high note, with the win of McDonald’s US.”

Which regions and sectors performed best?

• Sadoun picked out Epsilon and Publicis Sapient as particularly strong performers. ”Both were accretive to our full year growth, at +12.8% and +13.8% respectively, as we were in a position to capture the structural shifts in the industry towards first-party data management, digital media, commerce and business transformation.”

• The group’s organic growth was driven by activity in North America, which saw 9% organic growth against 2019 figures. Organic growth in Asia Pacific was flat, while growth in Europe was 1% less than 2019 levels. The US alone accounted for 57% of its net revenue.

• Reflecting trends seen earlier in 2021, Epsilon and Sapient performed strongly across most territories, while healthcare saw particular growth in the US, posting double-digit growth for the seventh quarter in a row. Healthcare clients accounted for 10.9% of the group’s 2021 revenue – an increase of 17%.

What does Publicis expect to see in 2022?

• Publicis says it is investing more in staff by doubling its bonus pool compared to 2019 and giving a one-off bonus equal to at least a week’s salary to everyone who has worked with there for the past two years.

• Sadoun said: ”Now, when it comes to 2022, we have three clear priorities: leveraging our unique assets in data and technology for all of our clients; giving our people more opportunity to progress, with unprecedented experiences like Work Your World; and delivering growth that is both profitable and responsible.”

• In its presentation to investors, Publicis stated it had allotted between €400m and €600m for mergers and acquisitions over the next year, with a particular focus on data and tech capabilities.

• Despite those ambitions, Publicis plans to cut its net debt back to €1bn.