Publicis Groupe reports 15% hike in first-half profit

Group's performance was held aloft by strong results in Europe, Asia and Middle East.

Publicis Groupe: Sadoun described first-half growth as 'healthy'
Publicis Groupe: Sadoun described first-half growth as 'healthy'

Publicis Groupe has reported a boost in the first six months of 2019, increasing its net revenue by 1.7% to €4.35bn (£3.85bn) compared with the same period last year.

The French-owned advertising holding group – which owns agencies including Publicis, Leo Burnett, Bartle Bogle Hegarty, Saatchi & Saatchi, Starcom and Zenith – performed strongly in Europe, Asia and the Middle East, but less so in the US and Latin America.

Its performance resulted in significant profit growth for the six months ending 30 June. Group profit (net income) was €354m, a 14.6% increase year on year.

While growth across Europe was modest, with net revenue up 3.3% to €1.30bn, the group posted the strongest upsurge in the Middle East and Africa, where net revenue grew 23.6% to €152m. Asia-Pacific recorded 5% growth to €444m.

Publicis said that France and the UK continued to perform well, with growth of 3.1% and 4.8% respectively. Italy recorded double-digit growth of 11.4%, thanks to strong new-business wins and an increase in existing customer spending.

On the downside, Germany experienced a decline of 9.6%.

However, business was less buoyant across the Atlantic. In North America, revenue was down 0.2% to €2.32bn and in Latin America it fell 8.9% to €144m.

Looking further ahead, Publicis expects to "post a sequential improvement" in the second half versus first-half organic growth.

New-business wins for Publicis' creative agencies included Barclays in the UK and Samsung in the UK and US, while digital agencies under the Publicis Sapient umbrella won Heathrow Airport in the UK.

Arthur Sadoun, Publicis chairman and chief executive, said the group's performance was helped by a more fruitful second quarter compared with the first, "with organic growth returning to positive territory".

"This growth is healthy and built on solid foundations, with the ramp-up of our Q4 new business and continued double-digit growth of our strategic game changers (+24% in H1).

"But our progress has been slowed down by the ongoing fee reduction on traditional advertising that continued to impact our overall US operations by around 300 [basis points] in the quarter. We have taken a major organisational step by accelerating the implementation of our country-model, which helps generating growth through cross fertilisation."

He singled out the UK and France for "where this model is already working very well".

Publicis has been busy on the acquisition front in the past six months. Its biggest-ever deal was concluded this month when it finalised the purchase of data marketing company Epsilon for $3.95bn.

It said the deal would "turbocharge its creative, media and technology operations to accelerate growth".

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