PARIS: After one of its worst months in June 2009, Publicis Groupe is seeing an improvement in numbers, causing chairman and CEO Maurice Levy to tell reporters in a webcast, "The worst is behind us."
"I think that the decline is stopped and that we have no further deterioration to expect for the market," Levy said. "It will be a slow recovery and we can expect that 2010 will be positive for the full year, with the first half which will probably show negative numbers and the second half positive numbers."
Revenues for the third quarter 2009 were $1.55 billion, down 5.3% from $1.64 billion during the same period in 2008, while North America contributed $723 million, up 1.4% from $713 million in 2008. But the company noted in its earnings release that "Events and public relations show a very severe decline."
"A reorganization program has been initiated to ensure the relaunch of these activities as soon as the market takes off again," the company said. General Motors' bankruptcy also contributed negatively. Organic growth in the US is down only 2.3% excluding GM, compared to 5.3% including the impact of GM, which is an MS&L client.
The reorganization is within the division the Specialized Agencies and Marketing Services (SAMS) division of Publicis that houses digital activities and PR agencies such as MS&L and Publicis Consultants PR. During the first nine months of 2009, SAMS contributed 42% of revenues, while 37% came from advertising and 21% came from the media division.
For the first nine months of 2009, revenues were $4.82 billion, down 2.3% from $4.94 billion for the first nine months of 2008. In North America, revenues for the first nine months were $2.29 billion, up 8.5% from $2.11 billion in the year-ago period. Publicis also reported a 7% decrease in organic growth for Q3.
In North America, "The positive trend in healthcare and digital communications partially offset the decline in all other areas," the holding company said in a statement. Digital communications continues to grow for Publicis, as the acquisition of Razorfish was completed October 14. Digital accounted for 21.3% of the group's consolidated revenue during the first nine months of 2009, compared to 18.5% of group revenue in the same time period in 2008.
"We said a few years ago that we want to be the human digital agency and we are working to build that human digital agency," Levy said in the webcast. "Human because we are doing communication and we are speaking to people… and digital, because digital is something which is embedded in everything people do."
Levy also said new business contributed to the results, as the company reported $4.8 billion in new business overall during the first nine months of the year.
"If we look at the first nine months of the year," Levy said, "if we compare with what has been published recently, we see that Publicis is still outperforming the market."
The company did not break out profit by discipline or for the company as a whole.