Publicis Groupe CEO Arthur Sadoun publicly took rival Omnicom to task today for reporting its organic revenue growth on a gross basis instead of a net basis like its holding company peers.  

And once Omnicom completes its acquisition of Interpublic, Sadoun said such “apples and oranges” comparisons must stop. He added that Publicis would shift to gross reporting of the numbers if Omnicom does not start reporting net figures.  

Sadoun made his remarks at the Morgan Stanley European Tech, Media and Telecom conference in Barcelona. 

By reporting gross numbers—which are higher than net figures and include pass-through costs such as those related to principal-based trading—Omnicom, Sadoun charged, makes it more difficult to compare performances among the holding companies and can mislead investors. Publicis, WPP, Havas, Dentsu and Interpublic all report net figures. 

The distinction isn’t lost on analysts. Madison & Wall’s Brian Wieser has been calling out the difference for years in his analyses of holding companies' financial performance.  

For example, in July, when Omnicom reported a 3% increase in organic growth for the second quarter—a gross figure—Weiser estimated that Omnicom’s net organic revenue for the period was flat versus a year ago. By comparison, Publicis reported net organic growth of 5.9% in the same quarter. 

Omnicom declined to comment on Sadoun’s remarks. But on quarterly earnings calls Omnicom executives have stated that analysts are free to calculate their own net estimates for the company. 

Earlier in the year, an analyst asked specifically if Omnicom would consider reporting net figures after completion of the IPG acquisition.  

Omnicom chief financial officer Phil Angelastro responded that it was unlikely the company would do. “I wouldn’t expect that to change,” he said, referring to the way the firm reports its numbers. “If people want to make their own estimates, they can feel free to do so,” he said. “We’re going to be consistent in our reporting and we’re going to include the costs that are part of the business.”   

In a note issued after Sadoun’s remarks, Morgan Stanley reported that Sadoun remains confident that the company “will continue to outperform the market mainly due to the large investments in AI (via acquisitions, talent, technology) and business organization (deep integration) they have made over the last years.” 

Sadoun, the investment bank added, “thinks these investments have led to a sustainable product differentiation versus peers, which is underpinned by strong data integration, client stickiness and synergies between Publicis Media and Sapient.” 

Morgan Stanley has an “overweight” stock rating on Publicis Groupe.