PUBLICIS, largest increase in the SBF 120 at the close on Tuesday, October 22, 2019

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(AOF) – PUBLICIS (+ 1.93% to 38.62 euros)

The title of the advertiser has signed its third consecutive session of rise. He benefited from cheap buybacks after a very difficult period. The share fell more than 14.5% in the only session of October 11 after a profit warning.


Publicis – Things to Remember

– Third largest global advertising group behind WWP and Omnicom;

– Activities of € 8.97 billion split between digital for 54%, advertising for 22%, SAMS (Specialized Agencies and Marketing Services) for 13% and media for 11%;

– Strong position in the Americas (57% of revenues) and Europe (29%), ahead of Asia-Pacific (10%) and Middle East-Africa;

– Expected global market up 4% annually until 2020;

– Reorganization of the “Power of One” group, between 4 “Hub Solutions” for the 20 main markets -Publicis Communications (creative networks), Publics Media, Publicis SapientNitro (digital and consulting) and Publicis Health- then Publicis One for the others markets;

– Quality and strategic vision of management recognized by professionals and investors, particularly in the supply of digital transformation services (12% of sales);

– Reinforcement in the knowledge of the consumers with the purchase for nearly 4 billion € of the American Epsilon, specialist of the treatment of the data on the customers (250 million American profiles);

– Governance under control, Arthur Sadoun having replaced Maurice Lévy at the head of the group;

– Very healthy financial situation hence a rise in the 2018 dividend to € 2.12 and a share buyback program of € 400 million.

Publicis – Things to Watch Out For

– Increased competition from new players – ESN (digital service companies, new name for IT services companies), Internet operators, consulting companies – with price pressure;

– Decline in growth during the first quarter;

– Negative impact on sales and results of the high cost of the euro (15% of revenues, versus 52% for the dollar and 10% for the pound sterling);

– High sensitivity to the US economy and the greenback;

– Stock market sensitivity to the statements of its competitors, such as Omnicom or Interpublic;

– Advances of the “Sprint to the future” strategic plan presented in April 2018, aimed at supporting companies in their digital transformation;

– Operational integration of Epsilon and Soft Computing and realization of the ambitions to resume revenue growth from the 2nd quarter;

– Open capital, the largest shareholder of Publicis prior to merger being Elisabeth Badinter, up to 7.58%.

Communication – Advertising

The global advertising market is undergoing unprecedented change. From the 1990s to the 2000s, industry giants (such as WPP, Omnicom, or Publicis) multiplied redemptions to form large networks. With the Internet and data expertise, the market has shifted from the “mass media” to the “one to one”, brands seeking to address each individual. Consulting and data specialists such as Accenture or Deloitte have their place on the market.

The advertising giants must now rationalize their activity and evolve their organization to face the new deal. The coexistence of multiple networks is costing too much. That's why WPP and Publicis have chosen to merge their networks to save money and make their offer more readable for advertisers.


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