'Difficult year' ahead for Publicis Groupe amid lower first-half profits
Publicis Groupe has reported a six month pre-tax income of 376m euros, down from 444m euros last year due to lagging economic growth in Europe and a slow business take-up in developing nations.
Publicis Groupe is the world's third biggest comms firm
Although revenue increased to 3.36bn euros, from 3.35bn euros last year, without factoring in exchange rates, revenue growth sits significantly lower than the reported 4.8 per cent.
The communications firm, which tightened its belt this year, prioritised cost control measures and performed stronger than it anticipated despite seeing “unsatisfactory” returns.
Publicis Groupe, which expanded earlier this month with the purchases of Prima, Lead2Action, and a major stake of AG Partners, in addition to brand consultancy firm SalterBaxter, saw digital growth of 8.8 per cent.
The firm predicts a stronger second half.
Maurice Lévy, chairman and CEO of Publicis Groupe, said: “The first half-year was heavily impacted by exchange rates which had an adverse effect on revenue of 148m euro. At constant exchange rate, revenue would have increased by close to five per cent during the period.
“As we predicted last fall, growth stalled in the second quarter. However, it should be underscored that weakness was stronger than expected mostly due to the cancellation or postponement of campaigns and lagging economies in Europe and in emerging countries. Our organic growth was up 1.8 per cent for the first half-year. Our margin remained strong, though fractionally down, as a result of accounting treatments and lagging growth.”
He added: “Although 2014 will be a difficult year, it does not undermine our mid-term prospects. Our business plan between now and 2018, as announced [last year], is currently being revised to factor in market developments and the investments required to reach our transformation goals ahead of schedule.”
Publicis Groupe employs 62,000 people across 108 countries.
Earlier this year the group announced that its planned merger with Omnicom had collapsed.
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Publicis Groupe is a French multinational advertising and public relations company. One of the oldest and largest marketing and communications companies in the world,...
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