Publicis Groupe, the first of the big ad holding groups to report half-time 2020 figures, is weathering the Covid storm reasonably well it seems.
Reported net revenue was up 9.7% in H1 with a big contribution from newly-acquired data business Epsilon but organic “growth” took an eight per cent hit in Q1 with worse to come (-13%) in Q2 as lockdowns hit.
Second-quarter organic revenue fell 5.7% in Asia, 6.8% in the U.S. and 23.5% in Europe where all major markets went into lockdown.
CEO Arthur Sadoun (above) says: “Thanks to our ability to adapt fast, our country-model and our strong culture in managing costs, the Groupe demonstrated financial resilience in the first half, with an operating margin rate at 13.0%, despite the sudden drop in net revenue since March.
“At the same time, we continued to record significant wins in new business across the world, such as Sephora in North America, McDonald’s in China and Française des Jeux in France, demonstrating our ability to continue to win large pitches with our unique model.
“There is no doubt that we will all have to live with the virus and its economic and social consequences for a while, but Publicis is well armed to weather this crisis.”
On the face of it Sadoun is doing pretty well and he’ll be relieved to see Epsilon, the $4.4bn data acquisition, contributing relatively early.
The problem for Publicis, as with the other holding companies, is that some of the countries that have sustained growth of sorts in the first half – chiefly the US – are now facing another period of lockdown as their premature attempts to escape the virus seem to have backfired.
Europe will surely improve in the second half of 2020 but the massive US ad market – Publicis’ biggest – looks troublesome.