Publicis Groupe says that it’s ‘well armed’ to weather the financial storm fuelled by COVID-19, after reporting a 9% rise in half-year net revenues and a 4.3% increase in pre-tax profits for the first six months of 2020.
Unsurprisingly, the company’s organic revenue growth fell dramatically to €2.29billion in the second quarter due to the global lockdown.
However, its recorded revenue fall of -13% was significantly better than the 23% decline in global advertising expenditures predicted by Zenith and the 30% drop forecast by the World Federation of Advertisers for Q2.
Publicis Groupe, chairman and CEO, Arthur Sadoun cited numerous factors as having helped to reduce the impact of the coronavirus crisis. These included new client wins, (Sephora in North America, McDonald’s in China and Française des Jeux in France), its acquisition of data firm Epsilon in July last year, plus the global roll-out of Marcel – a collaborative platform that has helped the agency’s 60,000 employees around the world to share their expertise and contribute to client assignments remotely.
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He said: “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%, despite the sudden drop in net revenue since March. 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.”
Overall, Publicis Groupe’s like-for-like organic revenue growth for the half-year was down -8%. Across the U.S, it was only down by -3.3% (-6.8% for Q2), with creative and media activities ‘still positive’ at the end of May.
Europe posted organic like-for-like growth of -23.5% in Q2, as the lockdowns impacted most of the second quarter. In Asia, the performance was at -5.7% in Q2, with China improving from a Q1 lockdown but remaining negative and volatile.
“We have a very solid financial backbone and a strong liquidity position that will get us through these uncertain times,” Sadoun continued. “As we head into the second half, we are focusing on limiting the impact of the downturn, accelerating our new offering for our clients, while continuing to adapt our cost structure.”
