UK underperforms as Publicis Groupe posts strong revenues

The UK was an unexpected soft spot for Publicis Groupe as the French marcoms giant posted a revenue increase of 10.7 per cent to $1.29bn with organic growth of 6.5 per cent in its first quarter 2011 figures.

Publicis Groupe, which owns Leo Burnett, Saatchi & Saatchi, Fallon and Zenith Optimedia as well as Publicis Worldwide, saw revenue in the UK rise by just 2.4 per cent against an average in Europe as a whole of 10.8 per cent.

North America was up 9.2 per cent, Asia Pacific up 13 per cent and Latin America up 23 per cent. In Europe Germany was the strongest performer followed by France.

CEO Maurice Levy said that digital and emerging markets, the company’s two main focuses, accounted for 47.8 per cent of revenues. The company’s medium term target is for 65 per cent to come from these two areas.

PG has already invested heavily in digital with the buys of Digitas and Razorfish and has been making a number of acquisitions in emerging markets, increasing its stake in Brazilian agency Talent from 49 per cent to 60 per cent earlier this week.

There was no profit guidance for the first quarter (or not yet anyway) so it’s unclear if Levy’s boast that Publicis has the best margins in the business is being justified.

Levy, 69, also declined to confirm that COO Jean-Yves Naouri, who recently gained the additional job as CEO of the Publicis Worldwide agency, would definitely be his successor although he did praise his number two’s experience.

Earlier this week Omnicom also reported good growth figures (revenue up 7.9 per cent) with profits up 23 per cent. Omnicom’s strategy is less dependent on acquisitions than either PG or market leader WPP so revenue hits the firm’s bottom line faster.

As for the blip in the UK, the company’s agencies – Leo Burnett, Publicis, Fallon, Saatchi & Saatchi and 49 per cent owned Bartle Bogle Hegarty have had mixed fortunes recently.

Burnett has performed strongly, rising to fourth place in the Campaign/Neilsen top 20 with billings of 232m (its highest ranking in years) but Publicis decided it needed to bring in a new CEO in Karen Buchanan from The Red Brick Road and Saatchi Fallon was hit by the breakaway of Richard Flintham, Laurence Green and Richard Elwood who quit to form new agency 101 with former Cadbury marketing director Phil Rumbol.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.