In Q1 21, organic net revenue was up 2.8% and above expectation (-2% for the consensus). This was attributable to the strong performance in the US (+5.1%) where the economic recovery was faster than expected. According to management, 3pts of growth in the US was explained by the improved positioning in digital media, business transformation, data and technology. In Q2 21, Publicis is expecting organic net revenue growth of +8-10%, corresponding to a recovery ratio of 60-80% vs Q2 20.
Companies: Publicis Groupe (PUB:EPA)Publicis Groupe SA (PUB:PAR)
Publicis beat expectations in Q4 20. The decrease in organic net revenue slowed (-3.9% vs -5.6% in Q3 20) thanks to the positive reversal in the US (+0.5%) driven by Epsilon, the healthcare business, and an improvement at Publicis Sapient. In 2020, the operating margin rate (16% of net revenue, -0.9pt) largely exceeded expectations. For 2021, organic net revenue should increase in Q2 21 and an improvement in the operating margin is targeted, up to 0.5pt yoy.
Companies: Publicis Groupe SA
Publicis beat the consensus in Q3 20 with organic net revenue down 5.6% (vs -8% in H1 20). This was attributable to the US (60% of the total) where Publicis benefited from a double-digit increase at Publicis Health, strong growth in digital media, organic growth at Sapient US, and the resumption of the activity at Epsilon 2.0. Unfortunately, the perception on the stock remains tarnished by the lack of visibility in Q4 20 (no guidance) due to the COVID-19 pandemic.
In Q2 20, the decrease in organic net revenue was less than expected (-13%) thanks to the activities in the US and Asia Pacific which dropped below the group average. The cost reduction plan implemented when the coronavirus spread brought in savings of €286m (mainly in Q2 20), which limited the erosion of the operating margin rate (-1.1pt, -2pt restated from the Epsilon-related transaction cost in H1 19). Given the uncertain environment, there is no detailed guidance for H2 20.
Organic net revenue decreased by 2.9%, given the impact of the COVID-19 pandemic in China (-15.3%) and then in Europe (-9.2%). In January-February 2020, organic net revenue was flat. It is worth noting the positive performance in North America, +0.5% in Q1 20 (vs -4.9% in Q4 19). Publicis reacted strongly to the extremely tough situation with cost savings of €500m in 2020, capex reduction under review and preventively drew a €2.0bn revolving credit facility so that the available liquidity reache
Organic net revenue dropped by -4.5% in Q4 19, still affected by the attrition of traditional advertising. This negative item represented -2pts of growth on an annual basis (-3pts of growth in North America). In this poor environment, the Group operating margin (before the Epsilon-related transaction cost) improved by +0.3pt to 17.3% of net revenue thanks to restructurings. Publicis maintains 2020 guidance of organic net revenue of -2%/+1% and an operating margin of around 17% of net revenue.
Publicis delivered a disappointing Q3 19 with organic net revenue down -2.7% (vs -0.7% in H1 19). This was attributable to the continuing attrition of traditional advertising in the US, a slowdown in media that was amplified by a tough comparative last year, and the repositioning of Sapient in the US which is taking longer than expected. Guidance was revised downwards at the topline, including organic revenue down -2.5% in 2019 and a range of -2%/+1% in 2020.
Organic net revenue growth was disappointing in Q2 19 (+0.1%). Publicis continued to be affected by the attrition of revenue in traditional advertising in the US. The short-term outlook is less favourable so that organic net revenue should be stable in 2019 (vs +0.8% at least previously). Conversely, the operating margin improvement, excluding the Epsilon-related transaction cost, was of good quality in H1 19 (15% of net revenue, +0.6pt) thanks to significant cost savings partly reinvested in th
The acquisition of Epsilon for $4.4bn (or $3.95bn taking into account the effect of the tax reduction related to the acquisition-related amortisation of intangible assets) is based on a P/2018 EBITDA multiple of 8.2x, which is not excessive. This operation makes sense because the expertise in data is essential for traditional advertising agencies to enable customers to have direct and personalised communication with consumers. The main concerns are low growth at Epsilon in 2015-18 and Publicis’
In Q1 19, Publicis was affected by the continuing attrition of revenue in traditional advertising in North America and the negative impact of contract losses announced in Q3 18 and effectively starting 2019 as expected, none of which were offset by the ramp-up of contract wins in 2018. Jointly to its revenue release, Publicis announced the agreement to acquire Epsilon in the US for $4.4bn (see the related Latest).
Publicis posted disappointing organic net revenue growth in Q4 18 (+0.5% excluding Publicis Health Services in North America) due to a higher than expected rate of attrition in traditional advertising in North America. The attrition is expected to weigh again in Q1 19, then slow afterwards. Regarding the operating margin, Publicis delivered a strong improvement (+0.6pt before IFRS16) thanks to cost savings and a decrease in restructuring costs.
The announcement of exclusive negotiations with the founders of Soft Computing to acquire a majority stake follows those to acquire Xebia a month ago. These proposed acquisitions are in line with the strategy of acquiring companies in data, dynamic creativity, and digital transformation. Publicis aims to invest €300-500m/year in acquisitions during the 2018-20 plan ‘Sprint to the future’.
Excluding Publicis Health Services for which the divestment is finally planned, organic net revenue growth accelerated significantly in Q3 18 (+2.2% vs +0.2% in H1 18) thanks to the ramp-up of contract wins since the beginning of this year. Contract wins continued in Q3 18 with the gain of many accounts, o/w the GSK global media budget which was the biggest global pitch for Publicis.
Q2 18 was disappointing indeed considering the lower organic net revenue (-2.1% vs +0.8% in Q2 18). The improvement in the operating margin in H1 18 (+0.6pt to 14.3% of revenue) did not save the game. Conversely, Q2 18 was a good quarter for winning new businesses which should contribute to an acceleration of growth in H2 18. So the strategic move to the combination of data, creativity and technology is paying-off progressively, although it was not visible at first glance.
Organic net revenue growth was satisfactory in Q1 18 (+1.6%). It was driven by North America (+2.8%) where the reorganisation is the most advanced within the group. Finally, Q1 18 was a busy quarter for contract wins, sustaining the perspective of higher organic growth in 2018 vs 2017.
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As midsummer’s day looms (where has this year gone?), there is greater optimism, in general, than may have been anticipated a few months ago. A post-pandemic, ‘vaccine-driven’ recovery demonstrated by increased consumer spending as lockdown measures are lifted has been one of the catalysts. The FTSE 100 has been range-bound in the last month 6,900-7,100. We have seen a combination of broadly positive company results across a range of sectors, further examples of M&A activity and a sequence of ne
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The UK market showed a continued recovery in the first quarter albeit the indices are still well short of their all-time peaks, unlike many of their international peers. The FTSE 100 has risen by 1,186 points (21.4%) since the end of October and the FTSE 250 by 4,304 points (25.0%). The comparable performance since the start of the year is less spectacular- the FTSE 100 has risen by 253 points (3.9%) and the FTSE 250 has risen by 1,070 points (5.0%). The factors behind the sustained rally are fa
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Reach continues to successfully execute on its enhanced Customer Value Strategy, driving strong top-line momentum in Digital. Digital sales (c.20%/revs) rose +25% y/y in Q1 supported by further growth in registered users (6.2m; Dec: 5.0m), whilst high demand for the Group’s ‘plus’ product portfolio is attracting strong advertiser interest, creating an attractive opportunity pipeline via enhanced monetisation of the Group’s growing first-party consumer interest data pool. In Print revenue decline
Companies: Reach plc
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Companies: S4 Capital plc
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Companies: Vela Technologies plc
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Companies: Future plc
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Kape has announced the transformative and significantly earnings enhancing acquisition of Israel-based Webselenese for a total consideration of $149.1m. Webselenese provides digital content creation platforms, offering independent and highly valued privacy and security related news to millions of users globally via market leading review sites. A strong fit with Kape’s existing privacy and security business, the deal represents an important step in the Group’s development to become the go-to play
Companies: Kape Technologies Plc
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Companies: Tremor International Ltd.
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Companies: ITV PLC
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Companies: Time Out Group PLC
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