Organic Revenues, New Business Soar At Publicis

17 December 2003

The fourth quarter at Publicis Groupe is set to top a year of growth, both by new business and organic criteria, reported the world's fourth largest agency holding company on Tuesday.

Chairman/ceo Maurice Levy was in ebullient mood, proclaiming his expectation that Publicis will lead the global agency business in terms of profitability. "We are ahead of the industry so far this year in terms of operating margins," he preened.

New business has flowed into the group during 2003 -- in Q4 to date Publicis has announced global client gains such as Coca-Cola and pharma giant Sanofi Synthelabo, plus substantial local wins such as Electricité de France.

"We had roughly $2.7 billion (€2.19bn; £1.54bn) net new business for the first nine months," said Mr. Levy. "December is the month that will make the balance [for the full year]."

Organic growth is expected to outperform most of the group's global agency rivals, both in the fourth quarter and full year, despite a Q1 slippage of 1.2%. This blip was reversed in the second quarter with a gain of 1.6%, and a further increase of 2% in Q3.

But Publicis was outshone in the organic growth firmament by world agency number one Omnicom Group, which posted organic revenue growth [ORG] of 5.2% in the three months to the end of September.

ORG, which excludes acquisitions and currency fluctuations, is seen as a key performance yardstick for agencies. Another such benchmark is operating margin, which Levy claims will meet Publicis' second-half target of 15% -- a figure equating to 14.1% for the full year and already comfortably up on the 13.3% achieved in 2002.

Looking ahead to 2004, Levy did not share the optimism exuded by the media-guru consensus at the UBS Media Week Conference in New York earlier this month [WAMN:09-Dec-03].

He doubted their forecasts of 3%-4% growth in global adspend. "The reality might well be different. Europe will be troubled," he said.

And 2005? That, said Levy, will depend on the US economy. "Once we could look ahead to the next eighteen months. Today, even for the next month, it's difficult to predict."

Data sourced from: The Wall Street Journal Online; additional content by WARC staff