Publicis’ Levy Sees Growth by Mid-2010

Publicis Groupe said organic revenue dropped 7.4 percent in the third quarter, but CEO Maurice Levy predicted the company would begin experiencing organic revenue growth in the middle of next year, becoming the first industry executive to say a recovery has started. 
“The advertising market is starting its recovery, which will be slow and progressive. First positive growth numbers should be established during the second half of 2010,” Levy said in a statement. “Publicis Groupe should continue to outperform the market.”
Revenue in the quarter declined 5.3 percent to $1.56 billion from the year earlier period. Asia Pacific reported the largest revenue drop, 12.4 percent, where China’s growth was not enough to offset declines in some of the region’s more mature economies like Japan, Australia and South Korea. In Europe, revenue dropped 9.5 percent, where results were particularly impacted by operations in the U.K. and in Southern Europe. Revenue in North America slipped 5.3 percent, an improvement because healthcare and digital helped offset declines in other categories. In Latin America, revenue dropped 3.1 percent and in Africa and the Middle East, 0.2 percent.
Revenue in the first nine months dropped 2.3 percent to $4.8 billion. Organic growth was off 6.9 percent in the period and was lower than an estimated industry drop of about 13 percent because of strength in the company’s digital communications, where organic revenue climbed 5.5 percent, Publicis said. Levy said the company, which closed on its acquisition of interactive agency Razorfish in the third quarter, would generate more than 25 percent of its revenue from digital in 2010.
Publicis rung up $4.8 billion in new business in the first nine months of the year compared to $3.7 billion in the year-earlier period.
In the second quarter, Publicis registered an 8.6 percent decline in organic revenue. Levy said revenue declines bottomed out at the end of June, when it dropped 13 percent, but has improved in the months since.
“The Groupe’s organic growth in the third quarter signals the end of the continuous deterioration that has been observed month after month since the summer of 2008,” he said. “Although overall visibility is low and there is still considerable uncertainty about the state of the economy, Publicis Groupe confirms a gradual recovery with, however, a few more negative quarters and a return to growth likely to occur around the middle of 2010. During this upcoming period, Publicis Groupe anticipates a better performance than the market and will maintain its cost-reduction actions.  

Publish date: October 27, 2009 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT