John Harrington
Jul 21, 2017

Publicis returns to organic growth in second quarter

Organic revenue grew 0.8 percent despite weak FMCG sector.

Arthur Sadoun
Arthur Sadoun

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, which excludes the impact of acquisitions and disposals, rose 0.8 percent in Q2 to €2.52 billion ($2.9 billion, £2.2 billion). It followed a decline of 1.2 percent in the first quarter of 2017.

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

Organic growth in Q2 was 3.2 percent in Europe, 0.2 percent in North America, 2.8 percent in Latin America and 0.2 percent in Middle East & Africa. However, it fell 3.3 percent 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 €4.84 billion ($5.58 billion, £4.28 billion), up 1.9 percent on H1 2016 and representing organic growth of 0.2 percent.

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

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 percent 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.

Source:
PRWeek

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