4. Risks related to employees
Employee health and well-being is at the heart of the Groupe’s concerns. In the context of a post-Covid-19 world and a widespread use of remote working, the Groupe's talent face health and psychological risks in their professional activities. They may also be exposed to other risks that may have a physical or moral impact on them.
The advertising and communication industry is known for high turnover among its management and talent. Technology companies and the Internet sector attract certain profiles that the Groupe would like to recruit or retain. Talent retention and attraction remain difficult for certain areas of expertise due to their scarcity on the market and the intensity of competition. Nonetheless, significant recruitment took place. The Groupe is working on measures to improve the onboarding of new talent and then retain them, particularly in the remote working context. The loss of these talent could damage the Groupe. In fact, Publicis' success depends mostly on the skills and expertise of its teams as well as on the quality of its relationships with clients.
In an environment where digital expertise is key to the transformation of organizations, the Groupe’s businesses are seeing significant turnover, which may represent a risk if not sufficiently anticipated.
Finally, the rapid changes in our business require our talent to continuously develop their skills. The absence of an adequate plan could impact the implementation of certain projects and lead to a lack of resources in specific areas of expertise.
The Groupe has launched ambitious action plans around diversity, equity and inclusion both at global and local level. The risk of non-execution of these plans within the allotted time could lead to the departure of certain talent and harm the Groupe’s image as an employer.
If the Groupe was no longer able to actively attract, retain and motivate valuable managers or employees, its prospects, business, financial position and results could be highly affected.
5. Risks associated with client portfolios
Contracts may be challeneged easily: clients are free to terminate their contracts, after a relatively short notice period. In addition, unfavorable economic conditions could lead to a more frequent contracts renegociations.
Moreover, competitive bids for advertising and media contracts with the Groupe's clients may occur at shorter intervals.
There is also a trend towards operating on a project-by-project basis, a gradual reduction in the number of agencies working with a client, and to a certain extent, the concentration of advertising budgets among a few leading agencies. The internalization of some activities may impact our ability to retain clients. Each of these factors increase the risk that a single event with impact on a client can have significant consequences.
A significant percentage of the Groupe’s revenue is derived from its major clients. In 2022, the Groupe’s top 5, 10, 30 and 100 clients accounted for 12%, 21%, 36% and 57% of the Groupe’s consolidated revenue, respectively (see also Section 6.6 “Notes to the consolidated financial statements”, Note 29 “Risk management”).
One or several large clients may decide, either to switch advertising and communication agencies, or to curtail its spending on advertising or even suspend it, at any time, with relatively short notice, and without having to justify it. A substantial decline in the advertising and communication spending of the largest clients, or the loss of any of these accounts, could have a negative impact on the Groupe.