After witnessing a modest growth in the last quarter, Publicis Groupe’s consolidated revenue for the first quarter of 2016 totaled USD 2.6 billion, which was up 8.9 percent from USD 2.38 billion in Q1 2015.
“We have made a promising start to 2016 – both in terms of performance and our own transformation. Organic growth in the first quarter of 2.9 percent was higher than expected and largely driven by accounts won at the end of 2015 and the good momentum in the media market. I would like to emphasize the very good performance of Sapient whose 10 percent growth provides confirmation of its growth potential,” stated Maurice Lévy, Chairman and CEO, Publicis Groupe in the company’s press release.
Organic growth rose to 2.9 percent over 2015 Q1 period, buoyed by digital (+7.6 percent) and good performance levels in Europe and North America, where the loss of media accounts in 2015 during the so-called ‘Mediapalooza’ had only a moderate impact on Q1 2016 . However, the impact is expected to be bigger in quarters to come. Publicis Sapient that has been included in the calculation of organic growth since February, posted organic growth of slightly above 10 percent. Healthcare and media activities performed well over the period similar to Q4 2015.
“With 55 percent of our revenue coming from digital, we are confident about our future but must remain cautious about the next two quarters which will be more impacted by losses that occurred in the 2015 media account reviews. Our strategic exercise has led us to an adaptation of our organization to the fourth industrial revolution and our 2016 priority remains the finalization of our own transformation. Our clients’ interests have always been in our culture. We have known how to adapt regularly in order to better serve our clients and help them in the new digital environment,” stated Mr Lévy.
Digital Growth In MEA
The Groupe saw a double-digit growth in its digital activities in all regions except North America where the Groupe is still encountering difficulties with Razorfish. The digital growth in Middle East and Africa (MEA) region was 13.2 percent. However, the analog activities continued to decline in all regions with a decline of 2.8 percent in MEA.
On the basis of regions, revenue growth in MEA was seen to be 11.5 percent which is higher than Europe, Asia Pacific and Latin America. While the growth recorded by Europe and Asia Pacific was 7.3 percent and 4.1 percent respectively, Latin America saw a revenue fall by 21.1 percent. This was mainly due to Brazil and Mexico, where the situation remains difficult. Revenue increase in North America was 12.9 percent.
“Over the last ten years, we have been acquiring all the assets necessary to provide an end-to-end offering, from consulting to technology, in order to help our clients in the transformation of their own marketing and business models. To that end, we have deeply changed our own model. By this summer, this major undertaking should be finalized, with the complete disappearance of silos and holding company status. Publicis Groupe is becoming a “connecting company”, one that combines creativity and technology in an offering that is integrated, open-ended and flexible, thanks to its modular design. Our objective remains achieving our three priorities: the completion of our organization by the end of the first half of 2016 , the return to more usual levels of growth , and the continued improvement of our profitability,” stated Mr Lévy on future plans of the Groupe.
