• by Steve McClellan  @mp_mcclellan, July 21, 2022

With strong growth that exceeded expectations in the second quarter, Publicis Groupe became the second ad holding company this week to raise its full-year 2022 organic growth guidance.

The firm said Thursday it expects organic growth this year to be in the 6% to 7% range, ahead of the previously projected 4% to 5%.

The new guidance is in line with the revised outlook provided by Omnicom on Tuesday (6.5% to 7%).

Net revenue for the Groupe in Q2 was €3.07 billion (about $3.12 billion), up 21% with organic growth (which factors out currency fluctuations and M&A activity) of 10.3%. For the first half net revenue was up 19.1% to a record €5.87 billion ($5.97 billion). Organic growth was 10.4%. Net income was up 31% to €727 million ($739 million).

Company shares surged 5% on the Paris Exchange Thursday morning on the strong earnings performance.

Publicis Groupe CEO Arthur Sadoun said the first half performance, “combined with our better visibility on a solid [second half] and the strength of our model, make us confident for the future. We are therefore upgrading our guidance on all KPIs for 2022.” In addition to organic growth, that includes an operating profit margin that could reach 18% and free cash flow which is now expected to be at least €1.5 billion ($1.52 billion).  

As to a potential recession, which some experts expect to hit late this year or in 2023, Sadoun commented, “Looking ahead, we are ready to face the ongoing uncertainties caused by the macro-economic context, thanks to our unique capabilities to help our clients weather any potential challenges and by leveraging our agile platform organization to sustain industry-high financial ratios.”

North America net revenue was up 25.2% in the second quarter, which included a boost from a positive US dollar to Euro exchange rate. Organic growth in the region was 10.3%.

In the U.S., organic growth was 10.1% with media operations posting double-digit growth, while creative activities grew in the high-single digits, “with notably strong production” growth.

Publicis Sapient grew 17.2% organically, as the demand for business transformation services continued to accelerate. Epsilon grew 13.7% organically, as its automotive division returned to positive territory, and with double-digit growth in all other divisions (Digital Media, Technology, Data).

Canada was up 15.6% organically.

Global account wins in Q2 included AB InBev (Media), Siemens (Creative), Norwegian Cruise Line (Media), and Singapore Tourism Board (Media & Creative).

Q2 growth in other regions included: Europe (10.1%), Asia Pacific (6.5%), Middle East & Africa (15.3%) and Latin America (20.7%).