Publicis Groupe kept its head above water as grim old 2020 came to a close, reporting organic growth in Q4 at -3.9% (better than expectations) and -6.3% for the year.
The US, French-based Publicis’ biggest market, was the star in Q4 delivering a 0.9% increase in organic growth, largely due to the efforts of data businesses Epsilon (up 5.5%) and Publicis Sapient.
Europe, where the economy was harder hit by the pandemic than the US, was down -13.4% in net revenue with 12.7% organic decline. Latin America and the Middle East and Africa were also badly impacted by the pandemic. Asia Pacific did better, dropping 7.4% and 6.7% (organic.)
Overall Publicis’ net revenue for the full year was $11.7 billion (€9.7bn), down 0.9% compared to 2019, which is pretty respectable.
Publicis is reimbursing the 6000 or so managers who took voluntary salary cuts and increasing its bonus pool.
CEO Arthur Sadoun (above) says: “In the tough context of 2020, Publicis posted solid performance thanks to our transformation. Our long-term investment in data and technology, our country model, and our platform Marcel, have enabled us to stay strong by containing our revenue decline and maintaining best-in-class financials.
“This is the result of our ability to capture the shift in our clients’ investment towards digital channels, e-commerce and direct-to-consumer, which intensified throughout the year.
“It is particularly visible in the U.S. where Epsilon delivered growth of 5.5% in Q4, enabling our most important country to be slightly positive. This was also the case for Publicis Sapient.
“We gained market share by growing with our top 200 clients by 1.8%, and recorded a continued new business momentum with wins like Kraft Heinz, Reckitt Benckiser, Pfizer, Visa, L’Oréal in China, TikTok and Sephora.”
Sadoun says he does not expect a return to growth until Q2 2021: “It is clear now that the crisis did not end with 2020, so we are going into this new year with a renewed fighting spirit, ready to double down on our efforts to keep our people safe, make our clients win in a platform world and continue to improve our efficiency.”
The next challenge for Publicis and Sadoun is to get the share price moving in the right direction. It rose 5.5% in early trading today.
Predators, particular private equity, will be looking at the ad holding companies and their depressed share prices, looking to pick up bargains as their performance recovers.