Publicis Groupe forecasts up to 5% organic growth in 2024

Publicis Groupe is expecting 4-5% organic growth in 2024 thanks to continuing strong performance across media, tech and creative, as it posted its Q4 and full-year 2023 results.

As the group said in its pre-results announcement late last month—when it revealed a three-year plan to invest $324 million (€300 million) a year in its CoreAI platform—2023 net revenue organic growth was 6.3%, thanks largely to a better-than-anticipated fourth quarter, which grew 5.7%.

Publicis Groupe said it was confident about keeping its momentum in 2024, and expected to reach 4-5% organic growth and sustain a 18% operating margin. This quarter, it said it would "significantly outperform the industry."

Publicis pointed out that its organic growth was 500 basis points above the holding company average and that it was growing "twice as fast as its IT consulting peers."

Reported net revenue for 2023 was up 4.2% to $14.1 billion (€13.1 billion), while operating margin was 18% ($2.6 billion or €2.4 billion). Full year Ebitda was up 1.6% to $3.1 billion (€2.9 billion).

Arthur Sadoun, chairman and chief executive of Publicis Groupe, noted the "very challenging macroeconomic context" but added that "after six years of transformation, Publicis definitely extracted itself from the pack in 2023."

Media, creative and tech

Media, representing a third of revenue, experienced double-digit growth, thanks to new business and additional business from existing clients.

Data and tech (another third) grew in spite of a slowdown in spend from tech clients, with Publicis Sapient (at the core of its AI plans) growing 3.2% organically against a strong base of +19% in 2022, while Epsilon grew 9.6%.

Creative, the remaining third of Publicis Groupe's revenue base, achieved single-digit growth.

Geographic performance

Geographically, Europe gave the strongest level of organic growth over the year (10.3% to $3.4 million (€3.2 billion and +4.3% in Q4). The UK was a key driver of that performance, up a "very strong" 10.4%, while France grew 5.2%, Germany by 7.2% and Central and Eastern Europe were up 16%.

North America, which accounts for 60% of revenue, grew 4.9% to $8.7 billion (€8.1 billion) for the full year and was up 6% in Q4.

Elsewhere, the Middle East and Africa was up 12.4% to $409 million (€380 million) Asia-Pacific was up 2.9% to $1.7 billion (€1.2 billion) ("a very solid +4.0% in Q4 led by China returning to growth") and Latin America was up 8.9% to $367 million (€341 million).

Earnings per share grew 7.4% to €5.23. The group has proposed a dividend of €3.40 per share (up 17.2% on the previous year), which will be fully paid in cash. This amounts to a payment of nearly $969 million (€900 million). It is subject to a shareholder vote at the AGM on 29 May.

The Group has also earmarked money for M&A investment of $753 million - $861 million (€700-800 million) to "further strengthen the Groupe's data, tech, commerce and AI capabilities."

Women in key roles

The group also said it was on track to have 45% of women in key positions of responsibility by 2025 and had reached its target of 43% by 2023.

Sadoun said: "Our +6.3% net revenue organic growth for the full year, coming after a stronger than expected end to the year at +5.7% in Q4, means that not only are we substantially outperforming our holding company peers, we are also growing twice as fast as the main IT consulting firms.

"What is true for organic growth is also true for our financial KPIs, be it on margin or on free cash flow.

"At a moment when our clients need partners that can truly help them transform in a challenging and ever-changing environment, our unique model has made the difference, allowing us to significantly gain market share and rank first in new business for the fifth year in a row."

He thanked the group's clients for their trust in Publicis' strategy and its staff for their "outstanding efforts."

"Thanks to all of them, we have reached new heights as a group, and are now in a position to face what will be another year of uncertainties with confidence and ambition."

Last month, WPP announced that 2023 revenues less pass-through costs were expected to grow 0.9%, while forecasting 0.1% growth in 2024.