Publicis Sees 'Modest' Growth Ahead After Difficult Year
February 11 2016 - 1:50AM
Dow Jones News
PARIS—Publicis Groupe SA said Thursday that it expects to post
"modest" growth this year, after the French advertising group
finished a difficult 2015 on a more positive note.
Publicis Chief Executive Maurice Levy said he had asked his
lieutenants to focus on an internal reorganization and efforts to
continue to integrate Sapient Corp., the U.S.-based digital agency
that it bought last year.
"It's a transition year, so we will be very prudent," Mr. Levy
said. "We're in an economy characterized by low growth and low
inflation, and we've given ourselves a certain handicap by asking
our people to focus on our transformation."
Mr. Levy said he is aiming for Publicis to post "modest growth"
in 2016, without elaborating. The company would be "firing on all
cylinders" by 2017, he said.
The cautious outlook came as Publicis disclosed a
better-than-expected performance for the fourth quarter.
"We've had some difficulties but, paradoxically, we're posting
some very good numbers," Mr. Levy said.
The company said organic revenue—a key measure in the
advertising industry that strips out acquisitions, disposals and
currency swings—rose 2.8% in the fourth quarter, allowing Publicis
to post organic growth of 1.5% for the year. Although still below
its rivals, it topped analyst expectations of organic growth of 1%
for 2015.
"The fourth quarter was far better than expected," Mr. Levy
said. "We won a lot of business, and clients invested more than
expected."
Publicis in the fourth quarter was seeking to bounce back from a
challenging year. The company was hard-hit by a wave of big
advertisers reviewing their agency contracts in a bid to cut costs.
Publicis was a net loser of the reviews as a number of
long-standing clients such as Procter & Gamble Co. and
Coca-Cola Co. switched their accounts to competitors.
Mr. Levy said he expected the wave of reviews to continue—albeit
at a slower pace.
In December, the company overhauled its structure and shuffled
its leadership ranks in a bid to make it easier for clients to
navigate its myriad agencies.
The CEO said organic growth from the company's "digital
activities" was particularly strong, up 8.8%. He said Sapient was a
bright spot, growing 5% in the quarter.
For the year overall, Publicis reported a 25.1% rise in net
profit to €901 million ($1.02 billion), due largely to positive
currency effects. Full-year revenue rose 32.3% to €9.60 billion,
driven by North America and some emerging markets and helped by a
number of small acquisitions.
Publicis said it would pay a dividend of €1.60 a share, a 33.3%
increase on last year.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
February 11, 2016 01:35 ET (06:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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