Lévy Warns Terrorist Attacks Will Affect Ad Industry as Publicis Posts Buoyant First-Half Results

14 September 2001

Publicis Groupe chairman/ceo Maurice Lévy warned that Tuesday’s attacks on the US will probably affect the ad industry, as the marketing services giant posted a rise in first-half results.

Speaking to the French press, Lévy said it would be “at least ten days” before the effects of the tragedy became clear, though he thought “a small impact” the most likely result.

Lévy added that the current state of affairs could not be compared with the recession following the Gulf War. “It is very difficult to draw a parallel between the two situations … [Tuesday’s attack] is much more brutal, but the effect could be more limited,” he said, adding that the “considerable wealth” and “superior capacity for reaction” of the US economy should help it pull through.

However, unveiling results for the first six months of 2001, Lévy remained cautious about the imminent outlook for the ad industry: “The most recently published forecasts suggest further deterioration of world advertising markets in the second half of this year, followed by weak growth in 2002. Recent events on the international scene make for additional uncertainty.”

Nevertheless, Publicis posted sharp rises in first-half revenues and profits, buoyed by the acquisitions of Saatchi & Saatchi and Nelson Communications [WAMN: 30-Aug-00; 14-Nov-00].

Revenues climbed 67% year-on-year to $1.034 billion, with organic growth accounting for 5.5%, while net profits jumped 57% to $79 million. Billings including the group’s acquisitions jumped 65% to $6.791bn; excluding acquistions they rose 6.3%. Publicis business continued to be divided fairly evenly between the US and Europe, accounting for 43.7% and 44.3% of global revenues respectively.

Despite the ad downturn Lévy stressed that he expected the group to perform well over the full year: “Provided there are no exceptional developments, we should thus achieve healthy levels of business, with organic growth well above the market average. We expect earnings before interest and tax to reach 14% of full-year revenues for 2001.”

News sources: AdAge Global; Publicis website