Publicis Groupe reported organic growth of 7.6% to $2 billion in the second quarter of 2011, up from 6.5% growth in the first quarter, although revenue was up by just 2.7% in the same period, and operating margins fell.
Going beyond the numbers, at today's webcast to discuss the company's financial results, Chairman-CEO Maurice Levy indicated that his heir apparent, Jean-Yves Naouri, may not be the only candidate to succeed him as leader of the French communications group.
Mr. Levy turns 70 in February 2012, but Publicis has not yet named his successor. The group's board of directors recently raised the age limit for board members to 75 in order to give him more time for the search, although Mr. Levy indicated that he intends to retire before turning 75. In answer to analysts' questions, he said, "My board would like me to stay for a full term, which is not something I'm prepared to do. I prefer for it to happen now."
In March 2011, Jean-Yves Naouri, a holding company exec whose responsibilities included growing Publicis in China, was named executive chairman of Publicis Worldwide. This was seen at the time as an indication that he was also heir apparent to Mr. Levy and was gaining broader experience running a global network that he currently lacks. Now it looks like Mr. Naouri may now be facing some competition for the top job.
Mr. Levy said he is spending time with "a few people" without them knowing that he is assessing or even training them for the big role. "I'm training more than one person because I don't want only one horse in the race," Mr. Levy said, "It is my responsibility to give the board many options."
Talking about reaching the end of his career, Mr. Levy said, "If you read between the lines you understand that I'm not the kind of guy who would like to have a bad year and leave with people saying, 'It's about time he's leaving'. I am absolutely committed to making sure we find the right person, someone who understands the culture, is aggressive, entrepreneurial, a good adman and understands the numbers."
For the first half of 2011, Publicis Groupe revenue was up 6.3% to $3.8 billion, but Mr. Levy promised that the "second half will show improvement."
Publicis Groupe 's operating margins (income as a percentage of net sales) fell 1.4% to $520 million in the first six months of the year, which the group said was due to increased investment in new technologies and –- after a two-year pay freeze -- in personnel.
In the second quarter, Africa and the Middle East grew organic revenue by 17.6%, making it the fastest-growing region, despite unrest in North Africa, because of exceptional growth in the United Arab Emirates. Europe was up 11.5%, boosted by 15% growth in France, and Asia-Pacific was up by 5.5%.
Growth in North America slowed to 5.3%, but Mr. Levy, insisted, "It is still a very good growth rate." Latin America grew by 3.7%.