Publicis Reports a Return to Organic Revenue Growth

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Organic revenue at

Publicis Groupe SA

increased 2.8% in the first quarter, the advertising agency conglomerate said, ending a streak of recent declines as the pandemic’s impact on its business continued to abate.

Organic revenue is a common metric that strips out currency effects, acquisitions and disposals.

Much of the growth came in the U.S. and the Asia-Pacific region, according to

Arthur Sadoun,

chief executive of Paris-based Publicis, which owns agencies such as Spark Foundry, Saatchi & Saatchi and Leo Burnett.

Some clients are restarting projects in the U.S., where marketers’ confidence seems to be growing, Mr. Sadoun said.

Clients are also investing more in digital marketing services to reach consumers online and to prepare for coming changes in consumer tracking and ad targeting, he added.

“Clients are realizing that digital channels, e-commerce and direct-to-consumer are going to be more core to growth,” Mr. Sadoun said.

Mr. Sadoun urged caution about the year ahead, however, noting that some parts of the world are still struggling with uncertainty related to the pandemic.

Publicis’ net revenue, which strips out pass-through costs, decreased in the first quarter to €2.39 billion, equivalent to $2.86 billion, from €2.48 billion a year earlier. The new figure beat analysts’ expectations of €2.29 billion, according to an analyst consensus provided by Publicis.

Organic growth in North America, Asia Pacific, Europe and Latin America, exceeded analyst expectations, according to the consensus provided by Publicis.

Organic revenue rose 4.7% in North America, including a 5.1% increase in the U.S.; 5.7% in the Asia Pacific region; and 7.7% in Latin America, the company said. It declined 1.8% in Europe and 11% in the Middle East and Africa.

Organic revenue at Publicis Sapient, a division that focuses on digital marketing and technology consulting services, increased 11.2%, benefiting from work that started to return in the third quarter last year, the company said.

Epsilon, a data company Publicis acquired in 2019, saw organic revenue grow 4.7%, driven in part by its recovery in the automotive sector and increasing demand for digital media and data services.

Publicis will likely consider acquisitions abroad that bolster Epsilon’s international operations, which, although they only account for 5% of its overall business, are growing at a rate of 25%, said Mr. Sadoun.

In the second quarter this year, the company expects to recover a majority of the organic revenue it lost during the same period in 2020, when the ad business was hit hard by the effects of the pandemic, implying organic growth of between 8% and 10%, it said.

Write to Alexandra Bruell at [email protected]

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