Publicis revenues down 5.3% in Q3

27 October 2009

PARIS: Publicis Groupe, the marketing services conglomerate, posted a 5.3% decline in revenues in the third quarter of this year, to €1.05 billion ($1.6bn; £953m), but predicted trading conditions would begin to improve going forward.

The Paris-based firm reported a decrease in sales of 7.4% on a like-for-like basis in Q3, measured against a drop of 4.4% from January to March, and 8.4% from April to June.

Within this, European totals were down by 9.5% in organic terms, to €359m, with North American sales shrinking by 5.3%, to €488m.

Revenue levels in Asia Pacific depreciated by 12.4%, to €114m, with Latin America off by 3.1%, to €58m, and Africa and the Middle East by 0.2%, to €28m.

More specifically, the company said in a statement that "all activities in the United Kingdom and Southern Europe show sharply declining numbers."

In North America, the "positive trend in healthcare and digital communications partially offset the decline in all other areas," while Asia is presenting a mixed picture, with some mature markets "severely hit," while others, like China, remain "promising".

Sales for the first nine months of this year stood at €3.26bn, a 2.3% decline year-on-year, and a 6.9% slide like-for-like, but new business during this period also reached €4.8bn.

For the year-to-date, organic totals in Europe have fallen by 10.9%, to €1.10bn, with the rate of contraction slowing to 4.2% in North America, or revenues of €1.55bn.

Asia Pacific has also slipped by 9.6%, to €352m, between January and September, as has Latin America, by 0.3%, to €167m. Africa and the Middle East, by contrast, delivered a net gain of 0.3%, to €92m.

Maurice Lévy, ceo of Publicis, said "I think the fourth quarter will be better than the third, both for Publicis and the market. The recovery will be slow, but all the signs we have are going in the right direction."

"As far as Publicis is concerned, the trough has been reached … in the month of June, which has been one of the most terrible months we have ever seen and since that period we have seen an improvement month after month in our numbers."

"I believe that advertisers will spend more next year, will stop cutting and that we will have a slow recovery. Probably a very small rate of growth, and probably the first six months will continue to be negative and the second half will be positive."

Earlier this year, Publicis bought Razorfish, the digital advertising agency, from Microsoft, and it now predicts that new media will deliver around 25% of its revenues in 2010.

With regard to future acquisitions, Lévy argued that major purchases were not on the agenda, with the target areas including online and companies based in key emerging markets.

"There are a few attractive targets that are very precious for their characteristics, but they are all relatively modest in size," he said.

Havas reported a 9.3% reduction in organic revenues during Q3, with Omnicom also seeing figures diminish by 10.7% on this measure.

Data sourced from Publicis/Euro Business Media; additional content by Warc staff