Publicis Groupe expects 'bumpy ride' after US FMCG brands cut spending in Q4

Publicis Groupe boss Arthur Sadoun

Advertising holding company Publicis Groupe has posted organic revenue growth of 0.8% in 2018 but warned of a "bumpy ride" to come in the first quarter of this year after US FMCG brands slashed spending.

In the company's annual results announcement, chief executive Arthur Sadoun touted a record year commercially and financially for the Paris-headquartered ad giant which he attributed to a "disproportionate share of new business wins".

But the celebrations were tempered by the group's fourth-quarter performance when spending cuts from US FMCG brands led to organic revenues falling 0.3%.

"We clearly have a revenue attrition on traditional advertising from fast-moving consumer goods in the United States," Sadoun said.

The holding company will feel the effects in the first quarter of this year, according to its latest results report.

"We have begun 2019 with optimism even though we expect a bumpy ride in the first quarter due to the prolonged effects in the first months of the year of the FMCG client attrition of Q4 2018," it said in its statement.

"However, the ramp-up of the significant accounts won towards the end of 2018 should lead to improved organic growth as of the second quarter."

As well sharing its financials, Publicis Groupe also used results day to announce the promotions of Nigel Vaz to global chief executive of Publicis Sapient and Steve King to chief operating officer of the group. This is in addition to their current roles: Vaz will continue as EMEA chief executive at Publicis Sapient and King remains chief executive of Publicis Media.

Sadoun also took the opportunity to reflect on Publicis's "transformation" during 2018.

"First, the move that we are operating from being a communication partner to a marketing and business transformation partner for our clients is making a massive difference commercially."

Additionally, its model "connecting data, dynamic creativity and technology" is working "beautifully", he claimed, saying it helped it win pitches for Daimler, Campbell's, Marriott, Carrefour, Cathay Pacific, Smucker's, and billion dollar accounts like GSK and Fiat-Chrysler.

For 2020, it has set an objective of 4% organic growth, more than four- times what it achieved in 2018.

In the last week, the group acquired Blue 449 for £25m from M&C Saatchi after buying an outstanding 24.9% stake in the business for £25m.

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