Publicis earnings flat in Q4, up 2.6% for full year

Publicis Groupe reported $2.6 billion in revenue in the fourth quarter of last year, representing an organic increase of 0.7% compared with Q4 2012.

PARIS: Publicis Groupe reported $2.6 billion in revenue in the fourth quarter of last year, representing an organic increase of 0.7% compared with Q4 2012.

For the full year, the holding company earned $9.2 billion in revenue, growing 2.6% organically compared with the prior year.

Net income increased 11.5% year-over-year to $1.1 billion in 2013, and the group added $4.5 billion in new business during the year. Operating margins were 15.9% for 2013.

The French company, which owns the MSLGroup PR network, did not break out PR revenue.

Revenue in North America in the fourth quarter grew 2.4% organically, while Europe showed 0.1% organic growth and the BRIC and MISSAT regions dropped 5.9%. Revenue from the rest of the world grew 4.8% on an organic basis.

For full-year 2013, North American revenue was up 4.7% organically, far outpacing the BRIC and MISSAT regions, which reported 1% growth, as well as Europe, which saw a 1.6% decline. Publicis reported 6.8% organic growth for the rest of the world for full-year 2013.

Digital activities within Publicis represented 38% of total revenue in 2013 and 40% in Q4. In 2013, digital revenue grew 13.9% organically, including a 20.1% jump in the fourth quarter. North American digital revenue was up 13.1% in 2013, while analog revenue was down 3.1% in the period.

“Our performance was outstanding and ahead of schedule for our 2018 targets,” Publicis CEO Maurice Lévy said in an earnings statement, citing the holding company's shift in emphasis to digital. “The only cloud on the horizon was our organic growth in the fourth quarter, which was affected by campaigns being cancelled or postponed, particularly in the emerging markets.”

On its earnings call on Tuesday, Omnicom executives said its planned merger with Publicis, which would create the world's largest marketing and advertising services company, could be pushed back to the third quarter of this year. The two former rival holding companies announced plans to merge last July.

Publicis said in its earnings report Thursday morning that the merger is still under review in China after gaining approval in the US, Europe, and 12 other countries around the world. It said it is conducting more than 70 work streams in preparation for the combination.

Omnicom reported an organic revenue drop of 3.7% in the fourth quarter of 2013 to $340.8 million. The PR unit, which includes agencies FleishmanHillard, Ketchum, and Porter Novelli, saw organic growth of 1.5% to $1.3 billion for full-year 2013. Omnicom's results for the fourth quarter included $13.3 million in pre-tax charges related to its combination with Publicis. For the full year, Omnicom's merger-related charges totaled $41.4 million.

Publicis is also looking for a new North American leader for its MSLGroup PR network. At the end of last month, Renee Wilson said she is stepping down from her position and moving back to the role of chief client officer. She will continue in the post until a successor is named.

Earlier last month, MSLGroup boosted its footprint in the Washington, DC, market through the acquisition of Qorvis Communications.

Organic growth represents change in revenue without taking into account the impact of acquisitions or disposals.

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