Commentary

Publicis Anticipating Q3 2016 Declines Following Loss of Accounts in 2015

Following the loss of Procter & Gamble, Coca-Cola, Mondelez and others, Publicis expects a negative effect on sales in the 3rd quarter of 2016. Although a negative, this follows a period of better-than-expected growth during April-June of this year. 

The agency reports quarterly organic sales rose 2.7 percent to 2.46 billion euros with overall growth reported at 0.9 percent. For comparisons sake, Omnicom has reported a 3.4 percent growth in quarterly sales. 

While things are not dire, CEO Maurice Levy said the loss of accounts in 2015 will have a "significant impact" on the current quarter and added: "We're still expecting a difficult third quarter, as it's the least productive of all. We're expecting it with some apprehension. Organic growth will be weak in the third quarter, but it won’t be a negative number." Levy does, however, expect things to "clearly improve" in 2017, the year he hands the reigns over to his successor.

Also affecting things is the $3.7 billion acquisition of digital shop Sapient in 2015 which is expected to have a ripple effect throughout 2016 as Publicis absorbs Sapient and the dust from that acquisition settles. 

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