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Publicis Groupe points to India and China as weak performers as revenue up 2.2% on 2013

Publicis Groupe, one of the world’s biggest advertising firms, has highlighted India, China and other emerging markets as the weakest parts of its balance sheet as the company reported 2.2 per cent revenue growth between Q1 2013 and Q1 2014.

The group, which owns ad agencies Leo Burnett, Publicis Worldwide and Saatchi & Saatchi and media agencies Zenith Optimedia and Starcom, reported a fall of 5.5 per cent in revenue in its BRIC (Brazil, Russia, India and China) and MISSAT (Mexico, Indonesia, Singapore, South Africa and Turkey) markets over the past year, blaming a slowing economy in those regions.

In the first quarter of this year, Publicis Groupe saw Greater China revenues grow by just 0.2 per cent up, after shrinking by almost 11 per cent in the first quarter of 2013. In India, Q1 2014 revenues tumbled by 18 per cent.

Publicis Groupe earnings

 

Digital now generates over 40 per cent of Publicis Groupe’s total revenue, which the company says is in line with its target of digital making up half of total revenue by 2018.

Publicis Groupe revenue split by medium

Publicis Groupe chairman and CEO Maurice Lévy said: “After a fourth quarter well below our expectations (+0.7%) in 2013, the Groupe is now back to more satisfactory organic growth of +3.3% (+6.8% before the impact of exchange rates). The emerging markets contracted at the end of last year, particularly China which ended the quarter at -10.8% (Q4), but are now back to growth. The good news in Q1 2014 is Europe, where long-awaited growth was registered, though it does remain fragile.”

“Germany is buoyant, but the most interesting news comes from Italy and Spain which  have both recorded positive quarterly growth for the first time since 2011. France is also  beginning to show encouraging signs. Added to the double-digit growth in digital activities and the marked improvement in  healthcare, these are good reasons that allow us to feel confident about 2014,” he said.

Publicis Groupe plans to merge with Omnicom, which owns agency brands DDB, BBDO and OMD, subject to approval by the shareholders of both firms as well as various regulatory approvals.

Approval has been passed from all anti-trust authorities prior to the agreement, with the exception of China where the case in under review, the company said.

The merger is expected to close in the third quarter of this year.

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