Publicis Chief Sadoun's Belief in Continued Growth and Reacting to the War for Ukraine

Despite a start to the year that has introduced several economic tailwinds, Publicis Groupe is confident of its prediction to reach around 5% organic growth for the full year after a first quarter that has achieved a “strong” return in new business and a vibrant performance within its European presence. With total net revenue of $3.04 billion (2.8 billion euros) for the period, the company has performed especially well around new business in media, having won the global media accounts with AB InBev, Norwegian Cruise Line and the Singapore Tourism board alongside McDonald’s in the U.S., LVMH in France and Pepsi in China. The group has also brought in the global creative account for Siemen’s in the first three months of the year. This has helped the company reach +10.5% organic growth year-over-year fueled by recovery across Europe of nearly 15%, U.S. of 8% and APAC of 14.4%. Despite the ongoing invasion in Ukraine by Russia and the continued impact of the pandemic, not to mention elections which may see a new right wing president introduced in its homeland of France, the company believes it will achieve its targeted growth. Reasons for confidence Arthur Sadoun, chief executive and chairman of Publicis, cites several reasons for that belief including the performances of Europe and of digital consultancy Publicis.Sapient which is on a continued growth trajectory as clients continue to look for digital transformation solutions, up 18.5% on Q1 in 2021 alone. In Russia, we also took people-first approach and not a PR-first approach.Arthur Sadoun, CEO and chair of Publicis Groupe Citing the performances in France (+12.3%) and the U.K. (+12%) as being behind the growth across Europe, Sadoun also reveals that he expects Sapient to grow in “double digits” this year and that data business Epsilon, which together with Sapient makes up around 30% of the company’s revenue, will be at the center of its media growth, too. “The first reason why we feel confident despite the uncertainty is the strength of our model and the second thing is our new business performance,” Sadoun outlined. “Uncertainties will have a negative impact but we know we will be able to mitigate that. And when you see salary inflation, our platform organization and the fact that we can allocate resources differently thanks to Marcel [the company’s A.I. internal platform] make us confident that we can maintain the 17.5% margin despite the level of investment we will have to make in terms of talent and capabilities.” Responding to the situation in Ukraine As with most businesses, the invasion of Ukraine led to many difficult decisions being made at speed, including whether to continue to operate in Russia and if not, how to retreat. Publicis continually highlighted its focus on “their people” including the 350 people it employed in Ukraine. The company promised to pay all affected in each country until the end of the year with their full salary, including some who had already resigned, Sadoun revealed. “We believe that it was our duty to be there for our people,” he stated, adding that Publicis leadership continues to monitor and communicate with each of them daily, whether they remained in the country or not. “In Russia, we also took a people-first approach and not a PR-first approach,” he continued, explaining that in making its decision to exit from the country, it handed ownership of its agencies to local management under the founding chairman of Publicis in Russia, Sergey Koptev, in order to “ensure a future” for its 1,200 employees there. But he is adamant that the company no longer operates from that moment, at a cost of 87 million Euros. That part of the business was “deconsolidated” on April 1, according to the financial results. “I felt that it was absolutely essential to find possible paths for their future, I felt it was my responsibility and so although we had a lot of pressure to act, I decided that I would not just send an email to everyone saying basically, “you have lost your job, good luck.” He continued to say that he believes things will change “radically” in Russia over the coming years but that he found it “difficult” to predict how things would end and that he condemned the invasion “strongly.” On the imminent return of Cannes Lions in June, Sadoun highlighted the importance of proving the creative success of the business at the annual awards festival—which has not been held in real life for two years due to the pandemic—but added that he expects to see change from its return. “I genuinely believe that Publicis is not the same company as it was in 2019 and I am expecting Cannes Lions to show that they are different too.” Publicis Groupe Exits Russia as Attack on Ukraine Escalates