2020 has been a year of contrasts, with, on the one hand, a health crisis that caused a dramatic slump in the various Gross Domestic Products (GDP) – with the exception of the Chinese economy, which saw growth in 2020 – social riots (Black Lives Matter), an uncertain Brexit and high tension in the US elections, while, on the other hand, many equity markets set new historic highs.
The quantity of money in circulation is one of the main factors explaining the distortion between economic growth and fluctuations in stock market prices. The actions of the major central banks in response to the Covid-19 pandemic has thus authorized the surge in public and private debt and the famous “helicopter currency”, specifically checks and transfers sent directly to consumers.
It was the “currency” factor that made it possible to avoid global bankruptcy and which protected the financial markets from the economic shock of the health crisis. The outlook given by the central banks themselves foresees that this policy could last several more years and the sharp rise in debt/GDP ratios has become an accepted, almost natural, fact.
In this context, the health crisis has boosted the technology and health sectors and those dubbed stay at home stocks, with investors favoring so-called growth stocks for a large part of the year. In 2020, the Nasdaq (US technology stock exchange) recorded its best year in 11 years, supported by GAFA with Alphabet (+31%), Apple (+80%), Facebook (+33%), Amazon (+76%) and Microsoft (+41%). The US equity markets thus set new records overall, with the Dow Jones also growing at +7.3% and an S&P 500 at +16.3%.
At the same time, European equities lagged behind for a large part of the year and only began to erase the shock of Covid-19 at the end of the year. As a result, CAC 40 shares have been catching up with Wall Street since the fourth quarter of 2020, with the strong rebound of European cyclical stocks that were severely affected last March. The CAC 40 thus ended 2020 down by 7.1% for 2020 after falling by 35% in mid-March and hitting a low of 3,800 points.
Revisions to the earnings per share of the Stoxx 600 European Media securities showed a decline of almost 30% in 2020, compared to almost 40% for the Stoxx 600 as a whole. However, in terms of stock market performance, the sector fell by -7.7% in 2020 compared to -4% for the Stoxx 600 Global, suggesting poor relative performance.
European advertising agency stocks ended up at least 50% higher than their lows in March, and almost doubled in the case of Publicis. Publicis (+1%) and Interpublic (+1.8%) recorded the best performance of the agencies, contrasting with the fall of-25% of WPP, -23% of Omnicom and -19% for Dentsu. The organic performances of Publicis and Interpublic are the best in the agency sector based on the first nine months of the year. Publicis also demonstrated control over its costs and cash flow in 2020, while having acquired Epsilon 18 months earlier.
Publicis Groupe’s financial communication is based on the principle of providing precise, transparent, true and fair information on the Groupe’s situation to all financial markets within the framework of the current texts, standards and procedures in France: the Financial Security Law, the IFRS (International Financial Reporting Standards). The Publicis Groupe Investor Relations Department maintains a close, ongoing dialog with both brokerage company and investment fund analysts. Publicis Groupe’s financial communications with institutional investors is reflected in the organization of meetings in the world’s major financial markets, and by the participation of Groupe representatives at investor conferences.
In 2020, Publicis Groupe met with close to 500 institutional investors at roadshows and industry investor conferences. Due to Covid-19, all meetings from March 2020 took place virtually.
