Iraq Attack Would Wreck Ad Recovery, Warns Publicis Boss

11 September 2002

Publicis Groupe chairman Maurice Levy was in Cassandra mode on Tuesday when unveiling the agency giant’s numbers for the half-year to June 30.

Referring to the Iraq situation, he warned: “A war in 2003 could lead to a new oil shock, with prices of $60-$65 per barrel, and disruption to the world economy that could take one or two percentage points off global GDP.”

Levy also voiced concern over renewed terrorist activity: “A serious terrorist attack on the September 11 anniversary or in the coming days would also have a negative psychological effect for consumers, so we are in a period of uncertainty and must be cautious.”

Upbeat for a brief moment, Levy reiterated his belief that the merged Publicis/Bcom3 group could achieve operating margins of 15% in 2003. But, he reiterated: “This scenario is based on there being no war, because if there is a war, who will care? We will be in a mess, the economy will be in a mess.”

Meantime, there was some cheer in the H1 numbers. Operating margins at Publicis remained stable at 13%; while at Bcom3 they hover between 12%-13%, although this is expected to improve on the back of cost savings.

Publicis Groupe operating profits rose 2% to €152m ($148.26m; £93.37m), while net profit after amortisation of goodwill also increased, by 2% from €54m to €55m. The group had also benefited from several substantial new business wins, among them Hewlett-Packard, and Allied Domeq.

Data sourced from: Financial Times; additional content by WARC staff