Publicis Groupe stutters to big loss as ad giant points finger at ‘weak’ Razorfish
Publicis Groupe stumbled to a €527m (AU$736m) net loss in 2016 as the ad giant admitted to “serious issues” at Razorfish.
The results, against a backdrop of a 1.4% revenue increase, illustrates the problems encountered by the company since acquiring SapientNitro in 2015.
Publicis merged SapientNitro late last year to create SapientRazorfish.
The firm reported a write-down of €1.4b in relation to Publicis.Sapient.
“These results have been achieved against the backdrop of a modest organic growth rate, mainly due to lower US revenue as a result of media accounts lost in 2015 and the first half of 2016, but also to serious issues at Razorfish,” the company said in a statement.
“This led us to merge Razorfish and SapientNitro in order to create the world’s first entity dedicated to consumer experience, and to book an impairment charge in our 2016 accounts.”
While revenue climbed 1.4% to €9.3b, organic growth was only 0.7%.
Fourth quarter organic revenue fell 2.5%, with Publicis partially blaming “unusually negative volatility” for the decline.
In Asia Pacific, 2016 total revenue hit €1.08b, up 1.8% on the previous 12 months, with Q4 revenue up 0.3%
Organic growth for the year in APAC climbed 1.5% but fell 1.5% in the final three months of 2015.
South Korea, Australia, Singapore and Thailand grew between 5% to 10%; India climbed between 0% and 5% while China and Japan saw a revenue slide. Specific figures were not disclosed.
Global digital organic revenue climbed 3.2% – and 9.5% in Asia Pacific – while income from analog fell 2% globally and 2.8% in Asia Pacific.
Digital accounted for 53.6% of total Publicis Groupe revenue – up from 52%.
Food and beverage and healthcare sectors generated the biggest percentages of digital revenue for Publicis – 60% against 40% traditional – while leisure, energy, luxury and financial sectors produced more analog revenue.
