Investors Send Holding Company Stocks Down After Disappointing Publicis Results

Publicis Groupe's 2018 top-line financial results are a tale of two outcomes: results that include the recently disposed of Publicis Health Solutions (PHS) and the Groupe's alternative set of numbers that exclude PHS because they drag down results. 

Excluding PHS, the Groupe’s financial picture is rosier, while the actual results were disappointing according to investors, which sent stock prices of ad industry holding companies down after Publicis Groupe issued results earlier today. 

Oddly, the Groupe issued results, but isn’t holding an analyst call to discuss them until tomorrow. 

WPP is down 3.5%; Interpublic Group is down 5.8%, and Omnicom Group dropped 4.9%. Publicis itself is down -7.1%. 

The Groupe's organic revenue was down 0.3%, well below analysts’ expectations of 2.5%. 



The Groupe's full-year 2018 net revenue was 8.7 billion euro ($9.9 billion), down 3.9% from 9.33 billion euro ($10.61 billion) in 2017. Net acquisitions contributed 5 million euros. 

However, when the Groupe eliminates the now divested PHS, the numbers paint a rosier picture, with organic revenue up 0.8% driven by account wins Daimler, Campbell's, Marriott, Carrefour, Cathay Pacific, Smucker's, GSK and Fiat-Chrysler.

The company also announced a share buyback program of 400 million euros ($455 million). 
Arthur Sadoun, chairman and CEO of Publicis Groupe stated, "Our model connecting data, dynamic creativity and technology is working beautifully and fits the current and future needs of the clients. 

The company said that revenue attributable to data, dynamic creativity, and business transformation services grew by 28%, and represent 12% of the Groupe's net revenue. 

These three verticals are what Sadoun calls "strategic game changers" and as a result, Publicis is elevating two key executives to oversee their deployment globally. 

Steve King, CEO of Publicis Media, is promoted to the role of chief operating officer of Publicis Groupe to build those “game changers” across all the Groupe’s operations and countries. He'll retain his Publicis Media role. 

Nigel Vaz is promoted from CEO Publicis.Sapient, EMEA/APAC to global CEO Publicis.Sapient to be responsible for further development of the business transformation industry verticals in automotive, consumer products, energy & commodities, retail, financial services, health, media & telecom, and travel & hospitality. 

Current Sapient CEO Alan Wexler is moving to chairman and will work directly with Sadoun on selected key clients’ transformations.  

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