Publicis Groupe reported second quarter results today and the impact of the pandemic was quite clear. The Groupe’s organic revenue (which strips out M&A and currency shifts) fell 13% in the period. The first half decline was 8%.
However, the company says these results are “significantly better” than the 23% decline in global advertising expenditures predicted by Zenith and the 30% decline mentioned by WFA for Q2.
“The results we are publishing today demonstrate that Publicis has strong fundamentals to weather the crisis,” stated Arthur Sadoun, Chairman/CEO, Publicis Groupe. He acknowledged that “There is no doubt that we will all have to live with the virus and its economic and social consequences for a while.”
Publicis Groupe’s net revenue for the first half of the year was approximately $5.56 billion up 9.7% compared versus the first half of 2019. Net revenue in Q2 was up 2.6%.
In North America organic revenue was down -3.6% in the first half. Europe declined by 16.5% for the period with the biggest drops in the UK (14%) and France (17%).Asia Pacific was down 3.9% while Latin America dropped 15.7%. Middle East and Africa fell 11.8%.
The Groupe’s hiring freeze, pause in internal promotions, shorter work week and voluntary salary cuts helped cut personnel costs by $70 million. And the Groupe decision to limit the use of freelancers helped cut costs further.
Looking forward, the Groupe states the full impact of the current crisis on the economy remains “largely unknown.” This creates uncertainties which make it difficult to provide any specific guidance for the second half of 2020.
“As we head into the second half, we are focusing on limiting the impact of the downturn, accelerating our new offering for our clients, while continuing to adapt our cost structure,” says Sadoun.