Publicis Groupe Releases 2021 Full Year Results
Publicis Groupe has released its full year results for 2021. Publicis saw a full year of organic growth at +10% with Q4 at +9.3% ahead of expectations. This exceeded 2019 levels with +3% organic growth in 2021, accelerating to +5% in the second half. This year also saw all employees receive a bonus, an exceptional one-week salary.
Arthur Sadoun, chairman and CEO of Publicis Groupe: “In 2021, Publicis published record numbers and exceeded 2019 levels across all of its KPIs. We delivered +10% full year organic growth, with Q4 at +9.3%, above expectations, and a strong performance across all of our regions.
Both Epsilon and Publicis Sapient 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.
Looking at our performance on a two-year basis, we exceeded 2019 levels faster and more strongly than expected, at 3% growth for the full year that accelerated to 5% in the second half. The US, where our model is the most advanced, was a strong contributor to this performance, growing +8% versus 2019.
We also continued to post industry-leading financial ratios in 2021, with our operating margin rate at 17.5% and a free cash flow at 1.4 billion euros. With this, we are in a position to propose a dividend of 2.40 euros, corresponding to a pay out of 47.8%.
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.
We are emerging from the pandemic as a stronger company, and a better one. The progress we have made across our Environmental, Social and Governance strategy is setting a clear industry standard. Our combined efforts on this front have led to Publicis topping the rankings for our sector with 8 out of 10 leading ESG ratings agencies.
I’d like to thank our clients for their partnership and everyone at Publicis for their dedication since the beginning of the crisis. In recognition of their outstanding efforts, everybody who has been with us for the past 24 months and beyond will receive a bonus this year. This includes the 35,000 who do not have any variable remuneration and will receive an additional week’s salary.
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.
Our overall dynamic, driven by the strength of our model and new business wins means that we aim to deliver organic growth between 4% and 5% in 2022, with an operating margin and free cash flow at the same record levels as in 2021, circa 17.5% and 1.4 billion euros respectively.”
Publicis Groupe’s Supervisory Board met on February 2nd, 2022, under the chairmanship of Maurice Lévy, to examine the 2021 annual accounts presented by Arthur Sadoun, CEO and chairman of the Management Board.
NET REVENUE IN FY 2021
Publicis Groupe’s net revenue for the full year 2021 was 10,487 million euros, up by 8.0% compared to 9,712 million euros in 2020. Exchange rate variations over the period have a negative impact of 191 million euros. Acquisitions (net of disposals) have a contribution of 18 million euros on net revenue.
Organic growth was +10.0% in FY 2021 compared to 2020. Compared to 2019, this implies organic growth of +3%, accelerating in H2 at +5% after +1% in H1. All regions continued to recover and posted strong growth.
2021 was a year of rebound after a year 2020 deeply impacted by the Covid-19 pandemic, but the Groupe was able to recover faster and more strongly than expected as its unique model allowed to capture the structural shifts in the industry towards first-party data management, digital media, commerce, and business transformation. This was particularly visible through the rise in organic growth at Publicis Sapient and Epsilon globally, at +13.8% and +12.8% respectively, both accretive to the Groupe performance.
Breakdown of FY 2021 net revenue by sector
Breakdown of FY 2021 net revenue by region
In North America, growth was +6.2% on a reported basis. On an organic basis, the region grew +9.7% versus 2020 (+7% compared to 2019). The U.S. was up +9.8% and Canada +6.1% organically.
Net revenue in Europe grew +11.2% on a reported basis and +9.6% on an organic basis (-4% compared to 2019). In this context, the United Kingdom posted organic growth of +4.9% in 2021. France was up +15.5% and Germany +7.7% on an organic basis. Excluding the impact of Publicis Groupe specific outdoor media activities and the Drugstore, organic growth was +11.7% in France and +8.6% in Europe.
Asia Pacific grew +11.4% on a reported basis and 10.3% on an organic basis (+3% compared to 2019). China organic growth was +10.3%.
The Middle East and Africa region was up +10.5% on a reported basis and +11.9% organically (-1% compared to 2019). In Latin America, reported growth at +5.7% while organic growth was +16.8% (+1% compared to 2019).
NET REVENUE IN Q4 2021
Publicis Groupe's net revenue in Q4 2021 was 2,935 million euros compared to 2,595 million euros in Q4 2020, up +13.1%. Exchange rate variations had an 81 million euros positive impact. The acquisitions (net of disposals) were a positive 10 million euros impact to net revenue in Q4 2021.
Organic growth was +9.3% in Q4 2021, ahead of the Groupe’s upgraded guidance in October. Organic growth compared to Q4 2019 was +5%.
Breakdown of Q4 2021 Net revenue by region
North America posted a +13.3% reported growth. The region grew +8.7% organically (+9% compared to Q4 2019). The U.S. grew in line with the region, at +8.7% organic, with Publicis Sapient at +22%, benefitting from both new business and expansion of existing clients. Media posted a good performance, both in traditional and digital, while creative activities continued to improve sequentially, with production business growing double-digit. Epsilon grew +6% despite lower activity related to U.S. car dealership business and despite a tough comparable base in Q4 2020. Publicis Health grew double-digit for the 7th quarter in a row.
In Europe, Q4 reported growth was +12.0%. Organic growth was +8.7% (-1% compared to Q4 2019). The U.K. was up +6.5% organically, France +11.5% and Germany +5.0%. Excluding outdoor media activities and the Drugstore, France grew +4.1% and Europe grew +6.7%.
In Asia Pacific, organic growth was +9.2% (reported growth was +12.7%) and Q4 was flat compared to Q4 2019, driven by strong China business (+17.1%) and Publicis Sapient activities in Thailand and Australia.
Middle East and Africa grew +15.3% on an organic basis (+20.5% reported) thanks to strong Publicis Sapient expansion in the region. Latin America grew by 22.6% on an organic basis and +11.8% on a reported basis, driven by strong business in Brazil and Mexico
ANALYSIS OF FY 2021 KEY FIGURES
Income Statement
EBITDA amounted to 2,317 million euros in 2021, compared to 2,158 million euros in 2020, up by 7.4%. EBITDA is 22.1% as a percentage of net revenue (compared to 22.2% in 2020).
Personnel costs totalled 6,639 million euros in 2021, up by 6.4% from 6,242 million euros in 2020. As a percentage of net revenue, the personnel expenses represented 63.3% in 2021, compared to 64.3% in 2020. Fixed personnel costs were 5,729 million euros representing 54.6% of net revenue versus 56.2% in 2020. The cost of freelancers rose by 114 million euros in 2021, representing 392 million euros. Restructuring costs reached 53 million euros, significantly lower than 2022 levels at 175 million euros, as expected.
Other operating costs (excluding depreciation & amortization) amounted to 2,782 million euros, compared to 2,388 million euros in 2020. This represents 26.5% of net revenue compared to 24.6% in 2020. This includes a rise in cost of sales for 129 million euros, mainly driven by the extension of a couple of large outdoor engagements for a short-term period. The related cost was accounted directly in other operating expenses rather than as a right of use and lease liability. This increase was partly offset by a decline in other G&A, notably in travel expenses, that decreased by 21 million euros year-on-year versus 2020.
