Publicis Announces Global Revenue Down 8.6%

Europe and Asia Hit Hardest; Company Says Recovery Expected Soon

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LONDON ( -- Publicis Groupe is pinning its hopes for recovery on growth in 2010, after announcing today that global organic revenue was down 8.6% in the second quarter of 2009.

Maurice Levy
Maurice Levy Credit: Christophe Bertolin
North America, where organic revenue (which excludes currency fluctuations, acquisitions and disposals) was down 3.8% in the second quarter of 2009, has proved to be a more resilient market for Publicis than its homeland of Europe (-15.8%) and the Asia Pacific region (-9.9%).

Organic revenue in Latin America suffered the least, with a 0.4% decline, while Africa and the Middle East were down by a relatively modest 1.2%.

Overall profit for the first half of the year fell 13.6% to $245 million, with organic growth down by 6.6%. Revenue from digital activities, which account for 20.8% of total revenue, grew 5.7% in the first six months. Group CEO Maurice Levy said he expects a "slow recovery beginning in September" but that there will be no growth until next year.

"We've reached the bottom, and it will stay relatively stable and go progressively up, and we'll have a positive number somewhere in the summer next year," Mr. Levy said. He anticipates an improvement in the third quarter, he said, but those numbers will be artificially boosted by comparison with last year's weak figures.

The group's operating margin dropped to 13%, and Mr. Levy said during the press conference that he expects to make more staff cuts this year in order to try to maintain margins. Already 2,000 jobs -- about 4% of the company's work force -- have disappeared this year.

Publicis claims to be the top new-business performer worldwide, with $3.2 billion in net new business for the first half of the year, including Carrefour, China Mobile, Wrigley, TGI Friday's and MillerCoors. Mr. Levy said he anticipates that the benefits of those wins will kick in next year.

"The falloff in advertising spending worldwide is estimated at between 13% and 15% for the first half of the year. ... We ended the first half of the year with organic growth down 6.6%, a result that reflects our expanding market share, driven by digital, health care and emerging markets," Mr. Levy said.

He referred to the problems surrounding General Motors and said Publicis' $13 million provision for exposure to GM will be sufficient.

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