Publicis puts under-performing Publicis Health Services unit to auction
French-headquartered advertising network Publicis Groupe is pushing on with the sale of its loss-making healthcare subsidiary Publicis Health Services, the company confirmed during its third-quarter results.
Publicis sheds loss making healthcare business
Publicis Health Services was accused of dragging down the net revenue of the Publicis Health network over the first nine months of 2018. Publicis Groupe said buyers have already expressed interest in acquiring the unit.
In its results statement, the company said: "Publicis Groupe is determined to provide its clients with the best possible offering for their digital transformation and will continue to invest in healthcare-related consulting, data and technology. After a strategic review of this activity, the Groupe has decided to proceed with the divestment of PHS and intends to protect the interests of all stakeholders."
Arthur Sadoun, chairman and chief executive of Publicis Groupe, outlined that outwith the performance of the health unit, the financial performance of the group as a whole was "very satisfactory". Its organic growth came in at 2.2%, excluding Publicis Health Services.
“All our geographies reported positive organic growth starting with North America up 1.0%, and Europe returning to growth at +4.2%. It is worth highlighting our organic growth in the US at +1.3%, a market where our new model has allowed us to largely overcome the challenge we are facing in creative activities.”
Overall Publicis benefited from a 1.3% rise in net revenue to £1.93bn over the period once the effect of acquisitions and foreign exchange fluctuations were removed from the equation, a performance broadly in line with expectations.
Nonetheless, the numbers will be viewed with some relief by management following a surprise slump in net revenue in the previous quarter driven by the disappointing performance of its US healthcare communications arm.
In the first quarter of 2018, Publicis saw net revenue grow organically by 1.6%.
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