Publicis raises 2023 sales target again as Q3 beats estimates

By Olivier Sorgho

(Reuters) – Publicis, the world’s largest advertising group by market value, on Thursday increased its 2023 sales and margin forecasts as it beat expectations in the third quarter, defying a general slowdown in the ads industry.

The maker of marketing campaigns for the likes of L’Oréal (EPA:), Walmart (NYSE:) and Heineken (AS:) now expects organic net revenue to grow by 5.5% to 6% this year, against around 5% guided previously.

Publicis previously raised its sales guidance in July.

The upbeat sentiment and strong performance runs counter to a general slowdown in the advertising industry, seen as a bellwether for broader economic health. Rivals WPP (LON:) and Interpublic earlier this year cut their full-year targets, citing a slash of marketing spending by clients in the tech sector.

“We are seeing budget cuts in classic advertising,” said Chief Executive Arthur Sadoun in a call with journalists, also pointing to a slowdown in IT consulting. He added however that Publicis’ diversified services and ability to gain market share meant it could offset this.

Besides making traditional ads, Publicis is well invested in data and tech through its units Epsilon and Sapient, which employ online consumer data to help clients build marketing strategies.

“Our goal is to continue to outperform the market in 2024,” Sadoun said, saying it was too early to give figures.

On Thursday, Publicis posted third-quarter net sales of 3.24 billion euros ($3.43 billion), up 5.3% organically on the same period last year and beating the 3.6% expected in a company-provided consensus.

The owner of Leo Burnett and Saatchi & Saatchi also raised its 2023 profitability target, now expecting an operating margin of 18%, against “close to 18%” guided previously.

The group will also ask employees to work more from its offices, it said.

($1 = 0.9447 euros)