Publicis Posts 2.8% First-Half Growth, and Maurice Levy Is Still Here

Chairman-CEO Says He'll Stay As Long As Needed, and Predicts Pickup in Growth in Q3

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Publicis Groupe Chairman-CEO Maurice Levy signalled his life-long commitment to the company he has run for 25 years, confirming during a webcast today that he will be a part of the Publicis for as long as it needs him.

Speaking at Publicis Groupe 's first-half results announcement, Mr. Levy said, "It's my life and I don't intend to simply leave the company. Whatever happens to me I will always support Publicis and help Publicis as long as Publicis will need me, in whichever capacity Publicis will need me, and that is clear."

Maurice Levy
Maurice Levy

Publicis, the world's third-biggest ad group, reported organic growth of 2.8% and a 19% rise in net income for the first half of 2012, despite the loss of General Motors and slowdowns in both Europe and the U.S. Mr. Levy said the GM loss had an impact of about 0.5% to 0.6% on total group revenues, which were up 14.3% to $3.7 billion. Organic growth, which doesn't include acquisitions, was 4.1% in the first quarter and just 1.6% in the second quarter.

However, the 70-year-old Mr. Levy did not imply that he would remain as chairman and CEO indefinitely. He emphasized the importance of a succession plan, and somewhat contradicted himself when he said, "The first and most important thing is the depth and breadth of the teams at Publicis is such that my presence is almost non-important. I think it's very important that there's a succession plan and I'm doing everything I can, with a fantastic team, to make sure that no one who entrusts us with their confidence will be disappointed -- our clients, our people, our investors."

Mr. Levy's likeliest potential successor is believed to be Publicis Groupe Chief Operating Officer Jean-Yves Naouri, with Arthur Sadoun, president-CEO of Publicis France, as a possible dark horse.

Growth in North America was 2.6% in the first half and 1.8% in the second quarter, with revenue of $1.8 billion. As well as the GM loss, Mr. Levy blamed a decline in the health-care sector, accelerated by patents running out and some disappointments on FDA approval for new pharmaceuticals.

Publicis claimed $1.8 billion in new business for the first half of the year, but excluded the GM loss, because -- Mr. Levy said -- the exact figure was too difficult to calculate.

In what Publicis calls the BRIC and MISSAT (Mexico, Indonesia, Singapore, South Africa and Turkey) countries, growth was 8.9% in the first half, with Brazil up 12.5%, India up 15.1%, South Africa up 20.8%, Mexico up 8.9% and China up 7.8%.

Europe declined 0.6% to $1 billion in the first half, dragged down by a 1.7% fall in organic growth for the second quarter. The U.K. posted the biggest growth in the region at 4.1%, but in the second quarter, Germany joined Italy and Spain in a revenue decline, while Publicis Groupe 's home territory of France also shrank in the second quarter and grew only 0.9% in the first half of 2012.

Digital, which accounts for 33.2% of group revenues, grew 9.6%. Mr. Levy promised that the digital businesses will return to double-digit growth in September, and maintain that pace for at least the next two years. He also predicted that the downward trend between the first and second quarters will halt, and said he expects much higher growth in the third quarter that started this month.

Commenting on Dentsu's planned acquisition of Aegis Group, Mr. Levy said that Publicis Groupe will not make a counter bid. "The price is extremely full," he said. "It's a nice acquisition for Dentsu. We are acquisitive but at a very good level of control. We are very pleased with what we've done with BBH and we have a few ideas, but nothing of a very big magnitude."

In February, Publicis Groupe ended its own alliance with Dentsu, spending $845 million to buy back a block of 18 million of its own shares from the Japanese advertising giant, which helped Dentsu pay for the Aegis deal.

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