Publicis Posts 83% Rise in Net Profits, Eyes Japan, Seals Zenith Deal

19 March 2001

As predicted [WAMN: 15-Mar-01], Paris-headquartered Publicis Groupe this weekend posted record results for 2000, with net profits (excluding minorities before amortization of goodwill and exceptionals) of $139m – 83% up on 1999. Net earnings per share rose 49% to $1.29.

Said chairman Maurice Lévy: The past year was a turning point for our group, which has emerged as one of the top global companies in its industry group. While remaining faithful to our culture and roots, we now operate on six continents, building on our innovative approach and creative flair.”

“Our figures take into account signs of slowing observed to date in the United States,” Lévy said. But he remained in bull mode: “Backed by our client portfolio, our flexibility and our entrepreneurial spirit, we can look forward to organic growth and earnings growth higher than projections for the global advertising market".

Publicis is also adopting a "moderate, cautious" acquisition strategy, the bridgehead for which will be an acquisition in the Japanese market some time this year. According to Lévy, the group will seek a substantial holding – ranging from 40% to a controlling interest – in a shop ranked 15-20 in the Japanese league table.

However, he has no illusions about the closed nature of the Japanese market and the predilection of local clients for domestic agencies: “Our dream is to control an agency but I am extremely cautious,” Lévy said.

He also expects Publicis to outperform the ad market as a whole this year, for which the current consensus among entrail-rakers is 4.6% or less growth in the USA, 6.7% in Europe and 7.3%, elsewhere.

Separately, Publicis is poised to agree a deal with UK-headquartered Cordiant Communications, with which it jointly owns Zenith Media. This will see ownership of Zenith transferred to a newly formed holding company in which Publicis will hold 75% of the stock and Cordiant 25%. The exact terms of the deal will be announced later this month.

News source: Wall Street Journal