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Publicis’ net profit rises 11.5% to US$1.1b
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Advertising group Publicis reported record profit for 2013 but said yesterday that the steam went out of business in emerging markets, especially China, at the end of the year.
Net profit rose by 11.5 percent from the 2012 level to 816 million euros (US$1.12 billion), from a 5.2-percent rise in sales to 6.953 billion euros.
“Our performance was outstanding and ahead of schedule for our 2018 targets,” chairman and CEO Maurice Levy said.
“Having well anticipated the shift to digital share of revenue, digital now accounts for 38.4 percent of our total revenue and 13.9 percent organic growth for the year.”
The only blot on the picture was the rate of growth in the fourth quarter, he said.
Advertising campaigns had been “canceled or postponed, particularly in the emerging markets,” he said.
This was partly because its client portfolio was overweight in the luxury sector, he acknowledged.
But the company expressed confidence in the outlook as a whole.
Several companies in the luxury products business, particularly in France, have reported difficult trading conditions in China where an anti-corruption drive has curtailed expensive entertainment and the giving of expensive gifts.
The sudden slowing of advertising in China had been “brutal”, Publicis said. This was partly also because the Chinese economy had slowed down.
Publicis said that sales in the last quarter amounted to 1.927 billion euros from 1.899 billion euros in the same period of 2012.
That represented internal growth of only 1.5 percent.
However, Levy assured: “This one-time blip does not call into question our growth plan, particularly for 2014.”
Growth of sales generated within the group for the whole year was 2.6 percent, down from 2.9 percent in 2012. Publicis had banked on growth of 3.6 percent last year.
Levy said the company had been faced with a 10.8-percent fall in sales in China.
But so far, the signs for emerging markets this year remained encouraging, and it was too soon to talk of reversal for the market, he said.
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