News

Publicis Groupe returns to profit as global and APAC revenue continues to slow

Global holding group Publicis has reported a fall in revenue for 2017 despite improved margins and a return to profit, in what CEO Arthur Sadoun described as “a generally difficult context” in its annual report released overnight.

The company reported global revenues were down 0.4% over last year to €9.69 billion, while the Asia-Pacific operations reported the biggest regional fall of 2.3% to €1.06 billion. Group profits were €872 million.

The results, which saw a major profit turnaround from last year’s losses, come as Sadoun attempts to focus the company on its Marcel technology platform.

Publicis contracted the AI platform out to Microsoft last month.

In the annual report, Sadoun wrote: “We are transforming ourselves from a holding company to a client-centric connecting platform, breaking down silos at country level and accelerating our own digital transformation.

“With Marcel, the future platform dedicated to all of Publicis Groupe’s talents and named after the Groupe’s founder, Marcel Bleustein-Blanchet, we are radically changing the way our people share, create and participate in Groupe projects. As we recently announced, we are also delighted to have Microsoft as partner for this ambition.”

China was cited as the main cause for the Asia-Pacific’s region’s poor performance, with agency problems dragging the country’s performance down by 7.6% from 2016. In contrast, Singapore grew by 4.4% and India showed strong growth through the year.

As part of its restructuring drive, the group reduced its personnel costs by 1.4% over the year, from €6.059 billion in 2016 to 5.977 billion. Freelancer budgets saw a 16% cut from 444 to €374 million. Overall, the group’s operating expenses fell slightly from €8.051 billion in 2016 to €8.024 billion.

The group is staking further costs cuts around “operational efficiencies” of its Power of One platform along with increased use of shared service centres across the organisation, with Sadoun stating: “In an industry that is experiencing a fundamental upheaval, we need to further demonstrate the singularity of our model and why we are ideally positioned to partner our clients.”

The company made headlines in 2017 after it annouced a one-year hiatus from all award shows and marketing events, as part of its bid to seek “2.5 percent cost synergies for 2018”.

ADVERTISEMENT

SUBSCRIBE

Sign up to our free daily update to get the latest in media and marketing