Publicis claims further progress in Q1 2018 but it’s patchy – good in the US, poor in Asia

Did Arthur Sadoun’s Publicis Groupe have a good first quarter of 2018? It says it did, reporting organic growth of 1.6 per cent (compared to minus 1.2 per cent in 2017) but the numbers are skewed by the adoption of accounting standard IFRS15 which alters last year’s numbers too.

Under the new regime 2018 Q1 revenue was €2.28bn, down 8.4 per cent from a restated €2.49bn. Its new definition of organic growth strips out acquisitions, disposals and currency swings plus pass-through costs billed to clients. It therefore becomes more like WPP’s net sales.

Reported growth fell in nearly all its regions including Europe, North America, Asia Pacific and Latin America although it claims organic growth of 0.3 per cent in Europe (with the UK one of the standouts), 2.8 per cent in North America and 11.5 per cent in Latin America. Asia Pacific is clearly a weak point with reported growth down 16.4 per cent and organic growth down 4.6 per cent.

CEO Sadoun (below) says: “The first quarter of 2018 was a very intense period for Publicis Groupe. We had three objectives. Firstly, to continue to deliver solid performance while we transform ourselves. Secondly, to demonstrate the attractiveness of our model through our ability to convert pitches into wins. Lastly, to present our strategy and execution plan “Sprint To The Future” to our teams, our clients, and to the financial community. Overall, the outcome on each of these three objectives has been positive, sometimes beyond our own expectations, making this quarter a key milestone in our transformation journey.

“In terms of performance, our net revenue grew organically by 1.6 per cent in the first quarter. This is a satisfying result as it is a much better start than last year (first quarter 2017 was -1.2%). As we pointed out when we released our annual results, we were expecting positive growth in the first quarter with a noticeable swing compared to 2017.

“The good news came from North America which grew 2.8 per cent. It is satisfying to see the good dynamic of 2017 continue into 2018, particularly in the region where our transformation is the most advanced. Another source of satisfaction is Europe with 0.3 per cent growth despite the fact that the comparable period was very difficult.”

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