Publicis Q1 numbers keep the wolf from the door but questions remain over Levy’s “transformation”
Is Publicis Groupe clinging on to its position as the third biggest marcoms company behind WPP and Omnicom – supported mainly by the extra revenue from its $3.7bn acquisition of digital consultancy Sapient – or ahead of expectations in its recovery from account losses in 2015 and ongoing root and branch reorganisation into four ‘hubs?’
Publicis shares have fallen 15 per cent over the past year, lagging its rivals, but they recovered today after CEO Maurice Levy (below) announced better than expected first quarter numbers. Sales grew 8.9 per cent to €2.3bn (£1.81bn), organic sales (stripping out acquisitions, disposals and currency movements) grew 2.9 per cent – hardly brilliant (at least by Publicis’ historic standards) but not disastrous either.
But Levy warned that the next two quarters would be tougher as the impact of losing Coca-Cola, Procter & Gamble and Walmart media in the US would begin to hit. On business as a whole Levy says: “We have made a promising start to 2016, both in terms of performance and our own transformation.”
Levy says that, post-Sapient, digital now accounts for about 55 per cent of group revenue, which is in line with his strategy of making Publicis the favoured agent of clients seeking “digital transformation.” The problem for Publicis is what does it do with the rest of its sprawling empire?