Publicis Groupe saw organic revenue grow 0.9% in the first quarter of 2015 — despite significant declines in the UK, Russia and Brazil — with digital now accounting for more than half of revenue.
Overall revenue grew 31.7% to €2.103bn ($2.248 billion), of which 17.2% was attributed to acquisitions, most notably Sapient — the deal for the group was completed in the quarter. Growth was 16.1% stripping out exchange rates.
Digital revenue grew 4.7% and digital now accounts for 50.2% of revenue. Analogue revenue fell 1.5%. Digital growth was strongest in the BRIC and MISSAT countries (24.8%) and the rest of the world (20.5%), with more modest digital growth of 7.7% in Europe and 1.3% in North America.
Overall, organic growth in Europe was 1.7%, led by France and Germany, up 4.2% and 1.8% respectively.
The UK declined by 4.2%, with the country "experiencing challenges in several of its businesses," although the UK market "continued to be vibrant." The southern European countries returned to positive growth (+2.7%).
Publicis said Europe’s "growth outlook remains limited by persistent unemployment," despite benefitting from the strengthening of the dollar, the fall in oil prices and the ECB’s monetary policy.
Organic growth in North America was 0.8%, "a modest increase stemming from digital activities where growth was weak too (+1.3%)."
The BRIC and MISSAT countries recorded negative organic growth of -2.6%. In "difficult economic environments," revenue fell sharply in both Russia and Brazil (-10%). China dropped one% due to a "sluggish luxury goods sector." India grew 5.7% ,and South Africa fell 5.6%.
Growth in the rest of the world was 4%.
Publicis said it expected organic growth to be higher in the second half-year. "The group’s high exposure to digital activities will ensure its future growth and the continued improvement of its margins between now and 2018," it stated.
Maurice Lévy, chairman and CEO, said: "We expected organic growth to be slightly down this quarter, but, on the contrary, it is up almost 1%. This isn’t yet the growth rate we expect to see out of Publicis Groupe, but is nonetheless an encouraging return to growth."
He said the integration of Sapient was already under way "and the prevailing spirit is excellent."
"For now, we are gradually implementing our growth program. The second quarter will be better than the first, albeit with modest growth; as announced, that of the group should be considerably stronger in the second half of the year."
The company made four acquisitions in total in the quarter: Expicient, an inventory and order management systems firm; South African strategic comms agency Epic Communications; press agency Relaxnews; and Monkees, the French digital marketing and social media agency.
Publicis continued its share buyback program in the quarter, acquiring just over 2.4 million shares from the Badinter family for €175.8m ($187.9 million). The price per share was €73.03 ($78.06).
February saw the formal merger of two Publicis PR companies, Capital MSL and Communications Networking Consulting (CNC), creating a new entity called CNC.
This article first appeared on prweek.com.