Publicis Groupe Q3 organic growth at -5.6%, ahead of ad spend forecasts
The Groupe has posted net revenue of 2,343 million euros for the quarter
Publicis Groupe has recorded net revenue of 2,343 million euros in Q3 2020 compared to 2,577 million euros in Q3 2019, down by -9.1%.
The organic growth was -5.6% in Q3 2020. Most of Groupe’s regions recorded sequential improvement this quarter compared to Q2, although remaining negatively impacted by the crisis, the company has said in its financial statement.
Publicis Groupe's net revenue in the first nine months of 2020 was 7,117 million euros compared to 6,929 million euros in 9 months 2019, up 2.7%. The acquisitions (net of disposals) had an impact of +10.7% in the first nine months mainly due to the acquisition of Epsilon. Organic growth was -7.2% in the first nine months 2020.
The performance showed the resilience and efficiency of the model. Europe organic growth was at -14.1%, or -11.4% excluding our French outdoor media activities and the Drugstore, and was highly impacted by the lockdowns that took place in the second quarter across most countries. Organic growth in North America was down -3.4%, supported by the revenue streams built over the last quarters thanks to both new business and cross-fertilization. Asia Pacific organic growth was -5.9%. Latin America was down 15.4% organically, and Middle East and Africa down by 11.5.%.
Arthur Sadoun, Chairman and CEO of Publicis Groupe, said: “Our organic growth for Q3 is at -5.6%, ahead of ad spend forecasts at -10%. For the second quarter in a row, we are confirming that we have strong foundations to weather these unprecedented times. Thanks to our model, we are mitigating the revenue decline we are experiencing due to the pandemic.
As our clients continue to accelerate their investment into digital channels, e-commerce and direct-toconsumer, we are able to capture part of that shift thanks to our offer combining our leadership in
creative and media, with unrivalled capabilities in Epsilon and Publicis Sapient. This is reflected in our solid U.S. results. After posting the most resilient performance of the industry last quarter, Q3 organic growth in the U.S. is at -2.4%, again better than market forecasts at -7%, in a region that now represents 60% of our business.
It is also visible in our new business track record over the past 18 months and in this last quarter in particular, with wins like Kraft-Heinz, TikTok and Reckitt Benckiser. And as we continue to roll out our model to our client base, it is encouraging to see that our performance with the top 200 clients is slightly positive for the first 9 months of the year. We believe that these relatively solid business trends should continue until year-end. However, with the current resurgence of the pandemic and the restrictions imposed, we have to be cautious about Q4, which might be impacted further and come below Q3.
What is more, when it comes to our organization, we have built three structural advantages with our global delivery centres, our country model, and Marcel, which enable us to adapt and continue to deliver strong financial performance. We are therefore confident in delivering our cost reduction plan, and as a result an operating margin rate slightly ahead of current analyst consensus of 14.3% for 2020.”
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