By Adria Calatayud
Publicis Groupe reported revenue for the third quarter on Thursday. Here is what you need to know:
ORGANIC NET REVENUE GROWTH: The Paris-based advertising group, which owns agencies including Saatchi & Saatchi, Leo Burnett and Zenith, reported organic growth of 5.3% in net revenue for the July-to-September quarter, beating a company-provided consensus of 3.6%. Still, this was a slower organic growth rate than the 7.1% the company had reported for each of the first and second quarters.
WHAT WE WATCHED:
–OUTLOOK: Publicis raised its 2023 guidance for organic growth, profitability and cash generation. It now expects organic net revenue growth to be between 5.5% and 6% this year, against its previous forecast of around 5%, which had been upgraded in July. The company forecast its operating margin to come in at 18%, up from its previous expectation of a result close to 18%, while free cash flow is now projected to be close to 1.7 billion euros ($1.81 billion) compared with at least EUR1.6 billion previously.
–INDUSTRY TRENDS: Publicis saw the macroeconomic context become more difficult over the quarter, Chairman and Chief Executive Arthur Sadoun said. The company’s Publicis Sapient business–which had been a growth engine in recent quarters–posted a 1.2% organic rise in net revenue, slower than the group overall. Sadoun said Sapient’s performance came at a moment when comparable consulting firms experienced project delays. Looking ahead, Publicis sees staff returning to the office and accelerating the adoption of artificial intelligence as the two major priorities for the industry today, Sadoun said.
Write to Adria Calatayud at [email protected]
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