Business

Publicis Groupe Sees a Quicker Recovery as Organic Revenue Rises

Publicis Groupe SA reported a 17.1% increase in organic revenue in the second quarter, joining competitors in reporting significant growth over the dire second quarter last year, when advertisers paused spending amid uncertainty caused by the coronavirus pandemic.

During the same period last year, the Paris-based company reported a 13% decline in organic revenue, a common metric that strips out the effects of currency fluctuations, acquisitions and disposals.

Growth in the quarter this year was largely driven by the U.S. and Asia, where organic revenue rose 15.2% and 13.6%, respectively, the company said. Digital and data marketing firms were the main drivers of growth in the U.S., with data firm Epsilon generating a 31.1% increase in organic revenue and digital marketing and technology agency Publicis Sapient seeing a 27% gain.

Publicis said it is updating its guidance to reflect its recovery from the pandemic a year ahead of schedule. The company is expecting to achieve organic revenue growth of 7% annually and an operating margin of 17%, assuming there is no major deterioration in the health situation, it said.

The company, which owns ad agencies such as Spark Foundry, Saatchi & Saatchi and Leo Burnett, follows competitors

Omnicom Group Inc.

and

Interpublic Group of

Cos. in reporting second-quarter results reflecting a vast improvement in organic revenue compared with a year ago, when the pandemic led to client spending pauses and layoffs across ad holding companies.

The company, which beat revenue expectations, according to FactSet, chalked up its performance to an improving global economy and the strength of its digital and data operations, which are key for clients shifting investments toward data management, digital media and commerce.

Publicis last week announced the acquisition of CitrusAd, a software company that helps brands improve their marketing performance on retailer websites.

Net revenue, a metric that strips out pass-through costs such as media and production expenses that can be rebilled to clients, increased 10.7% year-over-year in the second quarter to 2.5 billion euros, equivalent to $2.95 billion.

Write to Alexandra Bruell at [email protected]

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