Sadoun Presents Results for First Time as Publicis Returns to Growth in U.S.

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Arthur Sadoun
Arthur Sadoun Credit: Publicis Groupe

Publicis Groupe's new CEO Arthur Sadoun appeared relaxed as he presented improved quarterly results to analysts for the first time today.

Sadoun took over from predecessor Maurice Lévy – who had earned a reputation as a great storyteller during his 30 years in the role – on June 1.

Luckily, the new CEO had some encouraging second-quarter numbers to present, with group revenue at $2.89 billion. Organic growth (excluding acquisitions) reached 0.8% in the second quarter, compared to the same period last year. That was a marked improvement over the 1.2% decline in the first quarter of 2017.

Publicis also returned to growth in North America, with organic growth of 0.2%, following a 5% decline in the first quarter of 2017.

Europe was the best-performing region in the second quarter, up 3.2% compared to the second quarter last year. Latin America grew by 2.8% and the Middle East and Africa by 0.2%. Only Asia Pacific posted a decline, of 3.3%.

When Sadoun followed the usual procedure of handing over to Chief Financial Officer Jean-Michel Etienne to run through the numbers, Etienne admitted, "After 16 years, it's hard not to say 'thank you Maurice'."

Sadoun replied, "You can call me Maurice." When asked by an analyst about what will and won't change under his leadership, he said, "What will stay for sure is the trust relationship that Maurice Lévy has built. Let's be clear that he is the chairman of the [Publicis Groupe supervisory] board. I am CEO in charge of acceleration."

The immediate priority is to improve organic growth, Sadoun said. "It's a demonstration that we are competitive and able to attract and retain the best talent in the market."

One of Publicis Groupe's biggest challenges is the threat from smaller local rivals who, Sadoun admitted, "are starting to eat the cake in a way that is becoming a threat – and also an opportunity to reinvent."

An analyst questioned Sadoun's commitment to the individual agency brands under the "Power of One" strategy that downplays networks in favor of four solutions hubs – one each for media, creative, digital and healthcare.

Sadoun said, "I believe in the power of the brand for my clients so I believe in the power of the brand for our own company. The question is how can you break the silos – which is an absolute necessity because you can't expect to own the consumer journey for a client if you work with separate P&Ls – while keeping our strongest brands more alive than ever, because this is how you attract talent and how you manage conflict."

Unlike Lévy, who was a solo act, Sadoun brought in back-up in the form of Publicis Media CEO Steve King, in a move that seemed designed to underline King's pivotal role in the group.

King spoke about a new initiative called Precision. He said, "It's our way of scaling our programmatic solutions. [At Publicis Media] the programmatic teams sit alongside the people doing the planning and the client teams. That's the model that delivers the best growth back to clients. We need to create consistent platforms across the entirety of our client base."

Sadoun concluded with a defense of the group's new artificial intelligence platform, Marcel, which he controversially announced in the middle of the Cannes Lions International Festival of Creativity in June. The other part of that announcement, that Publicis Groupe agencies won't enter Cannes or other award shows for the next year, supposedly to fund Marcel, ended up dominating the festival.

He said, "Marcel is a platform that will … bring the best of Publicis to our clients thanks to technology. We have to focus on what really matters and bet our money on it. We did not take this decision lightly … I just want to re-emphasize the fact that Marcel is another proof of our commitment to building a better Publicis at the service of our people, our clients and our shareholders."

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