Publicis Groupe is on the upswing with what the company called "very good" 2.7% organic revenue growth (which factors out acquisitions, asset sales and currency fluctuations) in Q2 2016. That was boosted by 5.1% growth in digital activities.
The Groupe's consolidated revenue for second-quarter 2016 was $2.71 billion (2.46 billion euro), up 0.9% from $2.69 billion (2.44 billion euro) year-over-year. Net acquisitions contributed $48.49 million (44 million euro) in the second quarter, up 1.8% from second-quarter 2015.
"As you can see, good numbers," Maurice Levy, CEO, Publicis Groupe, told analysts Thursday morning during a conference call to discuss second-quarter results.
Over the first half-year, Publicis' consolidated revenue totaled $5.24 billion (4.75 billion euro), up 3.6% compared with $5 billion (4.54 million euro) in 2015. Organic growth was up 2.8% and net acquisitions were up 4.2%. Growth at constant exchange rates was up 7.1%. These results were aided by the healthcare sector and the sustained momentum in first-quarter 2016 from the media business despite the impact of several lost accounts in 2015.
After this "particularly active and productive first half-year," the Groupe expects third-quarter 2016 to be more difficult due to the full impact of the account losses of 2015, although this should not jeopardize the upward trend of all the Groupe’s overall results for the full year, Levy told analysts.
North America reported overall growth of 5.9% in the first six months of 2016, with 1.4% organic growth driven largely from media and health businesses. Organic growth in the region was impacted by the “Mediapalooza” 2015 media account losses, (which included pieces of business from Coca-Cola and Procter & Gamble) says Levy.
The Groupe’s performance in the first six months of 2016 continued to be driven by digital activities with 6.3% organic growth thanks to double-digit growth in all regions except North America -- where the Groupe is still experiencing difficulties with Razorfish.
The Group should not be heavily impacted from the Brexit. "Since we operate in the UK in local currency, as we do in all the countries in which we have operations," says Levy. "I personally am very sorry for our friends" from the United Kingdom and can only respect the decision "even if they haven't answered the right question with the right vote," he says. "That's life and we have to deal with this." Ultimately Levy feels this vote will serve as a "wake up call" to bring together a stronger Europe.
As to the firm’s recent “Power of One” overhaul, Levy said "Our new organization is already bearing fruit," noting the recent business wins including Walmart and Tencent.
The Groupe is celebrating its 90th year not with a "coffee table book or party" but rather its “Publicis90” project that rewarded 90 start-ups with financial support. "This was our way of celebrating Publicis’ 90th anniversary in a constructive and forward-looking manner,"" says Levy. "It should also be noted that 25 of the 90 winners came from within the Groupe, further evidence of the entrepreneurial spirit that reigns within the Groupe."
On the succession front, a new company CEO is likely to be a familiar face within the holding company, said Levy. His successor will be announced between December and February. "For the time being, as far as I know, we are working only internal candidates," he says.
Levy had little new to say regarding the so-called transparency report by the ANA (Association of National Advertisers) that incriminates business practices by media agencies in their dealings with advertisers. "We can only be surprised by the ANA’s choice in particular as this report is based on allegations and situations that refer to undisclosed companies and individuals and are then used to make very broad-based and unverifiable accusations."