Although the Covid-19 epidemic once again dominated the news throughout the year, financial markets experienced a breathtaking growth in 2021 with a rise in euros of 30%, a significant rebound after a 35% decrease in 2020. Accordingly, global markets rose sharply, as illustrated by the MSCI World index, but also by the 35% increase recorded by the American markets and a CAC 40 above 7,100 points, up by 28.9% over the year.
On the one hand, the rapid development of vaccines, the rebound in economic activity and the good results of many groups, often driven by a catch-up effect, have enabled the markets to build on a solid base to rebuild their gains.
On the other hand, fears related to the emergence of Sars-cov-2 variants, supply-chain difficulties causing shortages in certain sectors and fears about the acceleration of inflation, linked to the overheated economy and the surge in commodities, will ultimately have been only short jolts in an increasingly promising trend for equity markets.
Two strong sector rotations during the year should be stressed:
Strong recovery in economic growth following the global vaccination campaign enabled this rebound. Indeed, in the first half of this year, the United States returned to its GDP level of 2019 with expected growth of +7% and a situation of full employment.
More generally, virtually no major global indexes escaped the euphoria of 2021, and most of them also peaked this year. The pan-European Euro Stoxx 50 index posted an annual increase of more than 21%. In Germany, the Dax rose by around 16%, and the British FTSE 100 rose by more than 14%. In the United States, the S&P 500 broke no less than 70 closing records, rising by more than 27% on December 30. The Dow Jones and the Nasdaq Composite rose by around 20% and 22% respectively. In Asia, the Nikkei grew by almost 5% over the year. On the other hand, China recorded a sharp decline in its stock market in a context of regulatory change. The country also had to deal with the crisis in its real estate market, with a significant impact on its GDP growth rate, which is not expected to exceed +4-5% in the coming years.
The euro lost nearly 7.5% against the US dollar in 2021. The dollar has strengthened steadily since the spring, driven by a faster economic recovery in the United States and by the proactive policy of President Biden, while Europe struggled to find a coordinated response to stem the advance of different variants without hindering recovery. From a monetary point of view, the measures of the ECB and the Fed remained very accommodating, but the acceleration of inflation from the summer prompted them to launch their “tapering”, i.e. the reduction of their respective asset buyback programs, from the first quarter of 2022.
In a global context of strong market rebound, Stoxx 600 Media gained 31.7% in 2021 compared to 22.2% for the broad Stoxx 600 index, thus reversing the trend of 2020. The prices of the largest advertising agencies all finished the year with an increase in local currency of at least 17%. Publicis stood out with a performance of +45.2%, in a buoyant global advertising market.
2021 saw the media/advertising equities most heavily exposed to North America record the best increases in terms of share prices, as the economic impacts of the pandemic were less visible in this part of the world and the measures much larger government stimulus programs, particularly benefiting Publicis, Wolters Kluwer and RELX. We can also note the multiplication of announcements of M&A transactions, such as the consolidation (TF1, M6), the spin-off of UMG by Vivendi for euro 46 billion or the latter’s offer for Lagardère.
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 2021, Publicis Groupe met with close to 800 institutional investors at roadshows and industry investor conferences. As in 2020, almost all meetings were held virtually.
