Publicis Group net revenue and organic growth take a beating in Q2 2018

Publicis Groupe has reported a slowdown from a good Q1 to a negative Q2 partly due to health sector. The group’s net revenue fell by 8.3% in the second quarter of 2018 over the corresponding quarter of previous year. The advertising and communications giant reported 2.1% fall in organic revenues that saw its Europe, North America and Asia Pacific regions all reporting falls.

The Asia Pacific region overall saw its net revenue decline by 14% while its organic growth dropped 2.1% over the second quarter.

Breakdown of Q2 net revenue by region

Publicis Groupe’s net revenue in H1 2018 was 4,280 million euro, down 8.2% from 4,664 million euro in H1 2017. Organic growth was -0.4% in H1 2018.

Breakdown of H1 net revenue by region

CEO Arthur Sadoun blamed the disappointing global results on GDPR implementation costs in Europe and the US healthcare business. He said, “We saw a slowdown from our good first quarter of +1.6% to a second quarter at -2.1%, mostly due to two conjunctural challenges – tougher basis of comparison and uncertainty relating to GDPR implementation impacting our net revenue in Europe – but also to one specific operational bump with our volatile health sales representatives business in the US.

“This bump represents the biggest share of our negative growth as the overall impact of our Publicis Health business was around 30 million euro.

“Despite the environment, we showed a 60 basis point margin improvement and 40 basis points on a comparable basis at constant restructuring charges. This 40 basis point expansion actually includes +70 basis points thanks to cost savings and investment in our game changers representing 30 basis points.

“These reflect two important points: first, we are making progress in delivering on our efficiency plan, demonstrating our ability to reduce costs while providing more high value products and services to our clients. Second, we are investing in our key strategic capabilities to build the growth of the future.”

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