Publicis stuns market with strong Q2 underlying sales growth

Monday, 25 July 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters: France’s Publicis impressed investors on Thursday with quarterly figures that flagged the success of a sweeping reorganisation and the integration of its last big acquisition in the United States.

Despite the expected departure in 2017 of Maurice Levy, the CEO credited with the turnaround, shares in the world’s third-largest advertising group were at an 11-month high at 1130 GMT, rising 4.5% to 67 euros.

Second-quarter sales rose 2.7% on an organic basis to 2.46 billion euros ($2.71 billion), beating a Reuters poll of 1.72% organic growth for the period.

Publicis called 2016 a year of transition when it reported 2015 results, as it digests the $3.7 billion acquisition of U.S.-based digital business Sapient and reorganises its businesses to foster greater collaboration between the many agencies it has bought over the years.

The group is already attracting new clients such as Glaxo Smith Kline and Asda, it said on Thursday.

The financial benefits will be seen as soon as 2017, Publicis said, while the integration of Sapient helped boost revenue in the digital business by 6.3% in the first half.

Chief Executive Officer Levy, who has led the company since 1987, said the reorganisation had been one of his toughest challenges.

He confirmed his successor as CEO will be presented by the board between December 2016 and February 2017. Publicis’ board is looking at internal candidates only so far, he said.

He also said that the loss of large media accounts in 2015 in the United States, Publicis’ top market, will likely have a “significant impact” in the current quarter. These accounts included Procter & Gamble, Coca Cola, and Mondelez et General Mills.