Publicis posts 2.3% decline in organic growth in 2019

Publicis Groupe has announced a 4.5% fall in organic growth for the fourth quarter of 2019 following what chairman and chief executive Arthur Sadoun described as "a challenging year".

The full results for the year showed a decline in organic growth of 2.3% and net revenue – which included a contribution in the second half from the group's purchase of data specialist Epsilon – up 9.3% to €9.8bn (£8.3bn). Operating margin for the year was up 30 basis points to 17.3%.

The group's share price was up by 4% this morning when the London Stock Exchange opened.

Europe reported a fall in organic growth of 2.0% to €2.63bn. France and the UK posted slight declines of 0.8% and 0.2% respectively. Germany fell 10% organically, primarily impacted by the loss of media budgets in 2018.

Net revenue in North America on an organic basis registered a drop of 3.5% to €5.52bn,with the US reporting a fall of 4.1% over the year and Canada posting growth of 8.3%. Asia-Pacific organic net revenue was up 0.8% to €1bn.

Sadoun said 2019 had been "a transition year when we completed our model", with the acquisition of Epsilon, the repositioning of Publicis Sapient to offer business transformation and the creation of a country-centric group model.

He admitted: "All of these necessary changes, combined with the effects of our transition, had a negative impact on our organic growth in 2019."

However, he insisted that "our model is already delivering concrete results that make us confident for the future", citing the fact that Publicis was top among the holding companies in the new-business league table for the second year in a row, following wins such as Disney and Novartis.

The results statement stated that the "priority in 2020 is to focus on the execution of the strategy and on the recovery of its organic growth".

It added: "The Groupe is well-positioned and now has the assets and the talent that its clients need. The Groupe has now taken all the necessary actions to recover profitable and sustainable growth, which should enable it to return to positive growth over time.

"A sequential improvement will be visible fairly rapidly. However, half-year performance should remain negative, most notably in the 1st quarter."

Sadoun spoke to Campaign as the results were announced and discussed why he is optimistic that the worst is now behind the company.