The United Kingdom achieved a recovery as bold as its (-9.4%) decline in 2020 by posting +6.9% GDP growth, the best performance in Europe. The recovery was curbed by the fallout from Brexit, which hampered trade with the euro zone, and the impact of the worldwide year-end resurgence of the health crisis on economic activity, which impacted the UK perhaps a little more than elsewhere. The Bank of England implemented a highly expansionary monetary policy before contemplating a rate hike, prompted by rising prices (+5.1% at year-end) without completing its Quantitative Easing program.
China, the only major country not to see its economy shrink in 2020 (+2.3%), posted +8% GDP growth in 2021. However, the average growth rate of over +5% for these two years is in sharp contrast to the underlying slowdown in growth seen over recent years. Despite the impressive growth rate, economic momentum slowed throughout 2021. An incipient property development crisis resulting from credit restrictions and the development of new viral infection clusters explain the economic slowdown in the second half of the year.
In this buoyant environment, the advertising market grew strongly in 2021. According to Zenith’s December 2021 forecasts, global advertising spend grew 15.6% in the year, to reach 705 million dollars, above pre-crisis 2019 levels, driven by the development of new digital channels and of ecommerce, which were accelerated by the pandemic. Digital ad spend is expected to represent over 60% of total ad spend in 2022, after exceeding 50% for the first time in 2020.
Consumer habits were significantly impacted by the Covid-19 pandemic, and advertisers adapted by increasing their spend in technology, infrastructure and advertising. This included brand spend promoting ecommerce websites, targeted advertising to increase traffic and drive performance, and retail media. While the pandemic accelerated the shift to digital, Zenith sees this trend as structural and expects it to persist during the next few years, with global ad spend forecasted to grow by +9.1%, +5.7%, and +7.4% respectively in 2022, 2023 and 2024, with an ever-growing share of digital.
Publicis Groupe is uniquely positioned to help its clients navigate these marketing revolutions and win in a platform world.
After demonstrating remarkable resilience and adaptability in 2020, 2021 was a record year for the Groupe, exceeding 2019 levels on all indicators.
In 2021, net revenue came in at euro 10,487 million compared to euro 9,712 million in 2020, growing by +8.0% on a reported basis and +10.0% organically.
Operating margin was euro 1,840 million, an increase of +18.1% year-on-year, implying an operating margin rate of 17.5%, 150 basis points higher than in 2020.
The Groupe’s net income in 2021 was euro 1,027 million, almost double compared to the euro 576 million recorded in 2020.
Headline net income (as defined in Note 10 of the consolidated financial statements) stood at euro 1,264 million, compared to euro 1,034 million in 2020. Diluted headline net income per share was 5.02 euros, an increase of 17.6% compared to 2020.
The balance sheet as of December 31, 2021 showed net financial debt of euro 76 million compared with euro 833 million as of December 31, 2020. Average net financial debt stood at euro 1,530 million in 2021 compared to euro 3,286 million in 2020.
The dividend that will be proposed to the General Shareholders’ Meeting of May 25, 2022 is of euro 2.40 per share. As a percentage of diluted headline earnings per share, it represents a pay-out ratio of 47.8%, in line with the new dividend pay-out policy of a 45 to 50% pay-out ratio. Subject to the approval of the General Shareholders’ Meeting, payment of the dividend will be made on July 6, 2022 and will be paid entirely in cash this year.
