Publicis returns to organic growth in second quarter

Be the first to comment

Listed marcoms giant Publicis saw a return to organic revenue growth in the second quarter of 2017, citing the "lesser impact of residual difficulties" and the "good performance" in North America.

Organic revenue for the MSLGroup owner, which excludes the impact of acquisitions and disposals, rose 0.8 per cent in Q2 to 2.52bn ($2.9bn, £2.2bn). It followed a decline of 1.2 per cent in the first quarter of 2017.

Overall revenue growth was 2.2 per cent in Q2 for Publicis, which does not report on the performance on individual agencies or practice areas.

Organic growth in Q2 was 3.2 per cent in Europe, 0.2 per cent in North America, 2.8 per cent in Latin America and 0.2 per cent in Middle East & Africa. However, it fell 3.3 per cent in APAC.

Publicis said organic growth in Q2 "continued to be hampered by the weak FMCG sector", although it benefited from the "growing contributions" of account wins since the same period last year, particularly retailer Walmart and subsidiary Asda, the tech giant HPE, financial services firm USAA, Motorola and retail chain Lowe’s.

Revenue in the first half of 2017 was 4.84bn ($5.58bn, £4.28bn), up 1.9 per cent on H1 2016 and representing organic growth of 0.2 per cent.

Operating margin rose 3.1 per cent in the half year to 638m ($735.1m, £564.4m), representing a margin of 13.2 per cent.

Arthur Sadoun, who succeeded Maurice Lévy as Publicisis chairman and CEO in June, said: "Our first half results are encouraging. Thanks to the good account win momentum over the last 12 months, resulting directly from The Power of One, organic growth exceeded our own expectations in the second quarter at +0.8 per cent with the US returning to positive territory, and margin improved by 20 basis points in a low growth context."

Sadoun predicted the improvement in organic growth would continue in Q3, "and we should return to a growth rate comparable with peers in the second half of the year".

"For the longer term, my goals are clear: accelerate growth and increase efficiency. We are at the beginning of implementing an action plan with our new governing bodies and we will come back in an articulate and concrete way in the coming months."

Publicis, whose ad agencies include Saatchi & Saatchi, Leo Burnett and BBH, last month revealed plans to pull out of the Cannes Lions and other creative awards over the next year to focus on its AI platform Marcel.