2019 was a pivotal year for the Groupe with the acquisition of Epsilon, the marketing Big Data specialist. Epsilon has the technology and platforms to structure client first-party data, round it out with an incomparably diverse range of data sources and put together personalized campaigns at scale.
By positioning Epsilon as the data expert of the Groupe, Publicis draws on this wealth of resources for all its business activities turning it into a key, differentiating advantage. Now more than ever, our activities are resolutely positioned to the future with more than 30% of our net revenue generated by data and digital business transformation.
Publicis is also reshaping its organization over time to meet the needs of clients for streamlined and efficient access to the range of expertise in the Groupe. Publicis Groupe has also realigned its operations, organizing them by country, to leverage synergies between areas of expertise and to discover novel solutions. The Power of One strategy, initiated in 2016 as an integrated working model providing even more benefits to clients, is now fully up and running. Through the Groupe Client Leader (client manager dedicated to a client), clients are offered a tailored service and direct access to the Groupe’s entire range of expertise. The Groupe helps its clients to constantly innovate and grow their sales, while controlling costs.
In 2019, the Groupe completed its transformation in terms of assets and structure. The Groupe is now in a unique position to serve clients across the entire value chain. The only Groupe to have large-scale creative, media, data and technology assets, Publicis has a clear competitive edge demonstrated by the new account wins in 2018 and 2019. For the second year in a row, the Groupe topped the league tables for winning new accounts and secured contracts in the biggest global tenders for existing or new clients (Disney, Beiersdorf, Axa and Novartis).
2020 was marked by the global Covid-19 pandemic, which affected all countries and sectors of activity for most of the year. This major health crisis resulted in one of the largest economic crises in recent history. The measures taken by various governments to contain this pandemic, such as lockdowns, have had a sudden and unprecedented impact on consumption and production.
Certain trends, already visible in the communications and media industry, have thus been greatly accelerated. This is notably the case for the growth of digital, with a significant development in e-commerce and direct-to-consumer. The transformation that Publicis Groupe had initiated several years earlier enabled it to best meet the needs of its clients to navigate alongside them in the crisis, define strategies to overcome it, accelerate their digital transformation, and build direct links with their consumers.
At the same time, the Groupe has taken important operational decisions to preserve its talent. The roll-out of Marcel, the Groupe’s artificial intelligence platform, has thus been accelerated to meet the requirements of new working methods and enable better sharing, even remotely. Marcel has acted as a way of bringing teams together and proved to be a valuable tool during such a period.
In order to contain the financial impacts of this pandemic, the Groupe quickly faced up to the situation and put a number of strong measures in place, such as the implementation of a cost savings plan of euro 500 million and a reduction of 50% in the dividend initially proposed.
In this context, the Groupe managed to deliver solid results thanks to the corporate transformation undertaken several years ago, posting organic growth of -6.3%, an operating margin rate of 16.0%, and free cash flow before change in working capital of nearly euro 1.2 billion. Several factors were decisive in the Groupe’s performance: the Groupe’s investment in data and technology, with the acquisitions of Sapient and then Epsilon; its country organization, which enabled it to support its clients as closely as possible at each stage of the crisis and to provide a complete offer combining data, technology, media and creativity in an integrated manner; and its Marcel platform, which enabled the Groupe to adapt and act quickly by allocating resources efficiently. In 2020, the Groupe continued to win new business and strengthen its partnerships with many clients, including Bank of America, GSK, Heineken, Kraft Heinz, Mondelez, Reckitt Benckiser and Visa.
2021 was exceptional in more than one aspect. Firstly, it saw a strong rebound in advertising spend globally, growing 15.6% according to Zenith estimates, boosted by general economic growth and multiple stimuli from central banks and governments. It was also marked by the continuation of structural changes in the industry, in first-party data management, new digital media, the evolution of commerce and the digital business transformation. In this context, the Groupe achieved record results, with all metrics exceeding their 2019 levels. Organic growth reached +10%, with a significant contribution from Epsilon and Publicis Sapient, particularly in the United States where the Groupe’s model is the most advanced. With an operating margin of 17.5% and a free cash flow at euro 1.4 billion, our financial ratios remain the highest in the industry.
2021 was a very strong year for the Groupe not only financially, but also commercially, thanks to iconic gains such as Stellantis, Walmart, and Meta, to name but a few. The Groupe also recruited more than 9,000 net new talent, while investing in training and personal development through its Marcel platform. Lastly, the Groupe is emerging from this pandemic both strengthened and ever more committed, as evidenced by the progress recorded this year in terms of ESG, which is reflected by obtaining the first place, in our sector, in the rankings of 8 of the top 10 rating agencies.
In 2022, the Groupe set new records, despite a difficult macroeconomic context marked by the conflict in Ukraine, the return of inflation and the Covid-19 pandemic, still present around the world. The Groupe’s revenues exceeded euro 14 billion for the first time and net revenue euro 12 billion, driven in particular by double-digit organic growth for the second consecutive year. This performance reflects the strong momentum of the Data & Tech activities, which represent one-third of the Groupe’s revenue, and their integration into the creative and media businesses, which uniquely positions our offer to clients. Thanks to its assets, the Groupe was able to continue to capture the change in client spend towards first-party data management, increasingly targeted Media and the development of client-specific ecosystems. All this in a context of media landscape fragmentation, which has seen the growth of platforms slow down and other digital channels emerge, such as Retail Media.
At the same time, the Groupe maintained its financial ratios, which are among the highest in the sector, with an operating margin of 18%, while increasing bonuses to a level never before achieved by the Groupe. The Groupe also continued to invest in its talent by recruiting nearly 9,700 people in order to respond to strong business growth, thus reaching a total of circa 98,000 employees at the end of the year.
In terms of ESG, the Groupe maintained its position as an industry leader by remaining number one for the vast majority of rating agencies, and made its entry into the Dow Jones Sustainability World Index and Dow Jones Sustainability Europe Index. In addition, the Groupe has laid the foundations for a major initiative, #WorkingWithCancer aimed at eradicating the stigma of cancer in the workplace, by supporting affected employees or those whose relatives are affected by the disease. Many companies have joined the project since the beginning of 2023.
