Publicis Groupe's UK revenue declines 2.6%

Publicis Groupe's UK revenue declined by 2.6 per cent on an organic basis in the third quarter, while the group's worldwide revenue growth was hit by the a "sluggish" global economy.

Maurice Lévy: chief executive of Publicis Groupe
Maurice Lévy: chief executive of Publicis Groupe

The group, which comprises Saatchi & Saatchi, Leo Burnett, DigitasLBi, Bartle Bogle Hegarty, ZenithOptimedia, Publicis Worldwide and Starcom MediaVest Group in the UK, said it had weaker than expected results for the third quarter.

The UK was the second-worse performing market within Europe and across the world behind Southern Europe, which reported a 3.8 per cent organic revenue decline.

The decline resulted in Europe overall experiencing the worst performance on an organic basis (down 0.5 per cent year on year) across the world markets. On a reported basis Europe’s revenue increased by 6.4 per cent year on year.

Meanwhile, central and eastern European countries reported organic revenue growth of 4.1 per cent. France and Germany’s revenue grew by 2.8 per cent and 3.8 per cent respectively (on an organic basis).

The group's overall revenue for the quarter was €1.75 billion (£137 billion), up 4.4 per cent on the same period last year.

Publicis Groupe said its poor result was due to advertisers downsizing their investments as a result of sluggish global economic growth and because of digital agency Razorfish underperforming in North America, due to the loss of big accounts Motorola and Blackberry.

North America grew by only 1.5 per cent, while the rest of the world, which includes emerging markets such as Brazil and China, grew by 3.1 per cent.

Maurice Lévy, the chief executive of Publicis Groupe admitted the quarter had not matched expectations and hinted that the failed Omnicom merger attempt was also to blame.

He said: "Management was too focused on other plans and not enough on the short-term performance and growth."

For the year to date, revenues are €5.1 billion, with organic growth at 1.5 per cent. The company reports that digital activity now accounts for 42 per cent of revenues.

Lévy said the company was facing the future with confidence. Alluding to recent changes in senior roles and structural adjustments, he said: "Very important decisions have been made including management teams and organisation."

In contrast, earlier this week, Omnicom reported a 6.5 per cent rise in organic growth for the third quarter.

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