Tuesday , November 24 2020

Publicis: 2018 growth below expectations

Paris (awp / afp) – French giant Publicis recorded revenue of EUR 8,969 billion in 2018, a decrease of 3.9% (+ 0.1% organic) suffering from the difficulties of traditional US advertising in the last quarter.

Publicis points out that organic growth reached 0.8% in 2018, excluding the activity of PHS medical sales, whose sales were completed in January, according to its statement released Wednesday. One year ago, Publici expected organic growth to accelerate in 2018 compared to 2017 (+ 0.8%).

Publicis generated 919 million euros of net profit in 2018, despite the difficulties with traditional advertising in the US in consumer goods.

In the fourth quarter, the Group's revenue fell by 0.3% in the organic sector, the key figure for the sector, a figure far below consensus of + 2.5% of the analysts Factset.

Publicis estimates its loss in traditional advertising to about 150 million euros over the past year, mainly due to US consumers of mass consumption.

"We have customers in the US who cut their budgets, (…) and we suffer with them," chairman Arthur Sadoun admitted during a conference with journalists. "We don't make them accountable, we understand, and we assume, and besides, we believe that at some point it will turn itself".

This setback strengthens the group's conviction to focus on its strategy of positioning itself as a communications specialist and a digital business transformation.

In 2018, Publicis won the offering for the global media budget for the UK drug group GSK. Unlike him, he had his usual competitors, like Omnicom, but also a consulting company on the digital side.

Arthur Sadoun therefore focuses on what Publicis has called "game changers", these new data offerings, personal content and technology advice, to ensure the group's future and better organic growth.

"With our + game changers +, today representing 12% of our revenue, we have been able to find 28% growth or 250 million euros of new business," he said.

"But it is only 12% of our business because we have not yet developed this expertise and know-how globally," he added.

Steve King will now be responsible for this irrigation in all parts of the group. Currently a board member and managing director of Publicis Media, he will be the operations director on Wednesday, number 2 in the group.

Publicis has confirmed its organic growth target of 4% by 2020.

afp / al

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