Publicis Reports 31% Profit Growth in 2010 After Turnaround in North America
LONDON (AdAge.com) -- Publicis Groupe today reported a 31% rise in profit to $722 million for 2010, boasting an "exceptional final quarter" of the year as well as "sharp recovery in all regions in the second half of the year."
Third-quarter organic growth was 12.5%, boosting full-year growth to 8.3%, with revenue of $7.38 billion. However, Chairman-CEO Maurice Levy is still setting tough targets for the group: During the next three years, he wants to double the size of operations in China, which accounts for only 3.7% of the group's revenue, and to grow digital services' share of the business from 22.7% to 30%.
"The figures speak for themselves," Mr. Levy said in a statement. "Our financial situation is extremely robust and enables us to look ahead to the future with serenity."
North America, the group's statement said, "achieved a remarkable turnaround, posting growth of 9.9% in 2010, after strong resilience in 2009 thanks to the high contribution of digital services to the region's revenue." Thanks to Publicis' ownership of the two largest digital agencies by U.S. revenue, Razorfish and Digitas, digital businesses accounted for 42% of North American revenue in 2010.
After a bad 2009, Europe returned to organic growth of 6% in 2010. (Organic growth strips out acquisitions, disposals and currency effects.) France, a big market for Publicis, was the best performer in the region with growth of 11.2%.
Asia-Pacific recorded 7% growth, while Latin America's growth rate was 13.7%, due to strong performances in Mexico, Argentina, Venezuela and Colombia. Africa and the Middle East grew 4.8%.
The Paris-based group, which owns Saatchi & Saatchi, Publicis, Leo Burnett and ZenithOptimedia, plans to continue on the acquisition trail. Last year Publicis Groupe bought two agencies in the hot Brazilian market, digital shop AG2 and Brazil's biggest remaining independent, Talent Group, and two in China --integrated agency G4 and W&K Beijing Advertising) -- and even three agencies in Romania. This year, Publicis has already acquired U.K. agency Chemistry, for $23.27 million.
Major new business wins in 2010 included Nokia, French Connection, Chrysler, Arla Foods, Reckitt Benckiser, Merrill Lynch, and Siemens.
Mr. Levy is expected to stay on as chairman and CEO of Publicis after his contract expires at the end of this year, it is not known for how long he will remain. He agreed in June 2010 to stay on until the end of 2011.
Mr. Levy's current employment contract expires at the end of this year, but he's unlikely to retire then as chairman and CEO and may continue in his current role indefinitely. The succession issue was raised last June and Mr. Levy said then "To the question put to me by the supervisory board, I said that I would stay on board as long as needed."