Publicis was top-performing agency stock in 2023 with 41% share price

Investors backed Arthur Sadoun, the chief executive, after the French agency group raised its annual revenue forecast three times and took market share during 2023 – even as some of its peers, including Dentsu, IPG and WPP, cut guidance, which they blamed on a slowdown in spend by tech clients.

 

Publicis shares hit an all-time high above €84 at the end of December 2023, giving the company a stock market capitalisation of about €21.4bn (£18.4bn or $23.4bn).

 

Total shareholder return (TSR) – a key measure for investors because it includes dividends and share buybacks – was up 47%, according to data compiled by Bloomberg.

 

Omnicom was the next best performer of the large agency groups, with its share price up 4% at about $86 and its TSR up 10% in 2023.

 

The US-listed group was valued at $17bn, which was roughly in line with a year earlier when it was the world’s most valuable agency group, but it slipped to second place in terms of market cap because of Publicis’ stronger performance in 2023.

 

IPG’s stock price ended the year in negative territory with a 3% decline to about $32, although TSR increased 1.6%. The US group was valued at over $12bn.

 

Britain’s WPP had another underwhelming year as the share price fell nearly 10% to 753p and TSR was down 4%.

 

In a sign of the changing fortunes of the big four groups, WPP is worth less than half of Publicis Groupe, with a market cap of about £8bn or around $10.5bn.

 

WPP, which used to be the world’s most valuable agency group – with a £24bn market cap and a £19 share price in 2017 – has dropped to fourth place.

 

Publicis first overtook its rivals to become the most valuable agency group in 2021 and it has subsequently vied with Omnicom for the crown.

 

Several other groups had mixed fortunes in 2023.

 

Japan’s Dentsu suffered a 12% share price decline to about ¥3,600 after posting the worst organic revenue growth of the peer group in the first three quarters of 2023.

 

By contrast, the stock price of Vivendi, the owner of Havas, ended the year up 7% at €9.70 as investors welcomed the French conglomerate’s announcement in December that it plans to break itself up and spin off assets, including its agency business.

 

US-based Stagwell, one of a new breed of “challenger” agency groups, saw its stock price increase 6% to about $6.60.

 

But Britain’s S4 Capital, another challenger business, had a poor year as the share price plunged 72% to 53p after Sir Martin Sorrell, the founder, cut forecasts.

 

S4 Capital’s valuation has nosedived from about £4.5bn at its peak in autumn 2021, when the stock was trading above 800p, to around £300m by the end of 2023.

 

Analysts say investors have shunned London-listed stocks in recent years in the wake of Brexit and other economic factors.

 

The UK stock market has “lagged” global peers and “suffered from sustained equity market outflows”, according to Panmure Gordon, a stockbroker, in its outlook for 2024.

 

(This article first appeared on CampaignLive.co.uk)