Tuesdata: How the holding companies stack up after reporting season

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It’s reporting season. Today we take a look at how the global holding companies have performed in the first half of 2022. 

In this article we will look at the performance of WPP, Omnicom, Havas, Interpublic, Publicis, Dentsu, and our very own Enero.

Last time we produced such a piece (you can read it here), S4 Capital was part of the group we reported on. It isn’t included this time as its second quarter report has not yet been released. However the company has already downgraded expectations for the rest of the year.

Practicalities and caveats 

There are a lot of complications when it comes to creating these comparisons. For consistency, we will use similar methodology as we did in the last report Unmade produced on this topic. 

It’s more complicated to make direct comparisons than it might seem.

For one thing, the holding companies report into different global accounting regimes depending on where they are headquartered. So they work to slightly different accounting conventions.

This list includes US, UK, Japan and Australia based businesses.

We’ll use revenue as the first guide to performance. We’ll then drill down to EBITDA (earnings before interest taxation, depreciation and amortisation) to get a more accurate look at profitability. 

And finally we will graph the market cap of each business. As we’ve mentioned previously when reporting market caps, this doesn’t give as full a picture as enterprise value, which also factors in debt levels, but it’s readily available and transparent. 

The biggest caveat of all is that different businesses report in different currencies. This list includes those that report in US Dollars, Great British Pounds, Australian Dollars and Japanese Yen.

Being that we are based in Australia and report for Australian audiences, we have converted all monetary values into Australian dollars based on the current (volatile) exchange rate.

There has been significant fluctuation in currency values recently. The conversions for this report were done on August 15. If we had done the calculations a month ago, the numbers would have been slightly different.

Those are all of the obvious caveats. Time to take a look at the numbers. 

WPP tops the revenue chart while Omnicom dips

In terms of ranking, WPP comes home first with Omnicom, Publicis, Dentsu, Havas and Enero in that order. 

UK-based WPP, which now controls the Australian operation previously listed on the ASX, includes agencies like VMLY&R, Hill & Knowlton, Kantar, Ogilvy and of course, the GroupM agencies EssenceMediacom, Mindshare, Wavemaker and more. 

It recorded $11.5b in revenue for the first half of 2022. A solid start to the year which saw it with margin to second placed Omnicom, reporting $9.8b. 

Omnicom, however, was the only group in this list whose first half results were down YOY. This time last year it had reported a marginally higher figure. To a single decimal place it would still be $9.8b, however it was $9.83 against this year’s $9.81. 

Publicis takes the profit win

EBITDA numbers show different rankings, with Publicis taking the number one position after a significant rise. The French holding company is followed by Omnicom, WPP, Dentsu, Havas and Enero. 

Publicis records, by far, the biggest gain YOY, which sees it leap from reporting $1.5b to just under $1.9b for H1 this year. Meanwhile, Omnicom follows the trend it set in the revenue rankings by being the only holding company to drop YOY from H1 2021.

It went from $1.5b to just over $1.3b, which puts it very close to WPP. The UK-based holding company reported just under $1.3b profit.

Each holding company has shown significant gains from H1 2020, when we were in the midst of the pandemic.

Market capitalisation 

The most valuable global holding company according to market caps is Omnicom, at $20.9b. It’s the only one that tops the $20b mark using the Australian dollar conversion.

Its next closest rival is Publicis, coming in at $18.7b, while WPP is a more distant third with a valuation just over $15b.

That is only marginally ahead of Dentsu, at just under $15b, despite reports yesterday of the Australian business chalking up substantial losses. 

This is one area we can compare S4 Capital. It sits between Havas and Enero in market cap with a market cap of $1.5b. It has suffered significant drops over the last six months, down 69.73% in market value. In the main this has been as a result of a fall in confidence in the company’s reporting protocols.

A special mention to Enero, which is down about 12% over the last six months. A solid effort that beats everyone in this list aside from Dentsu, which has shed just 1.84%, a minor miracle in the current climate. Enero’s share price has jumped up around 9% since unveiling a good set of numbers on Friday.

Heads or tails?

The Unmade Index remains above the 700 point mark with a 1.39% climb yesterday, but it was 50/50 as to whether or not Australia’s listed media and marketing companies registered a positive result.

Nine, Domain and Seven West Media all climbed slightly, between 0.97% and 2.39%, while HT&E, SCA, Enero Group and Pureprofile fell.

The dip has greater ramifications for some, with SCA’s drop bringing it perilously close to falling back under a market cap of $300m.

Onwards and upwards

That’s it for this Tuesdata – enough numbers to last you at least the week.

A quick thanks to my colleague Tim Burrowes for holding down the fort on the Start the Week podcast yesterday morning. As he alluded to, much of my weekend and part of yesterday was taken up with a fairly serious family illness, but thankfully it seems like things are on the up now. I knocked on wood just after I finished that sentence.

If there is one thing I have learnt from the experience, it’s that if you think something is wrong, go and seek medical attention straight away, no matter how minor you may think it is. Don’t waste time.

Speaking of time, it’s time to let you get on with your Tuesday.

Stay safe,

Damian

damian@unmade.media