Publicis Groupe (France)

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Publicis Groupe has forced its way into the top ranks of the world's leading marketing organisations through a string of canny and transformational acquisitions. Having learned painful lessons from a disastrous alliance with FCB during the 1990s, CEO Maurice Levy's acquisition of Saatchi & Saatchi in 2000 proved far more harmonious. Even more impressive was the agreed takeover of Leo Burnett two years later. Other jewels in the Publicis crown include multi-hub creative networks Bartle Bogle Hegarty, wholly owned since 2012, and Fallon. After a shaky start, Publicis has shown itself to be a worthy rival to established giants WPP and Omnicom. The group is especially strong in digital marketing. It acquired US-based Digitas in 2006, and broadened that network's footprint significantly. A deal to acquire rival digital agency Razorfish in 2009 allowed Publicis to overtake Interpublic as the world's third largest marketing services group. A series of further small and medium-sized acquisitions followed between 2010 and 2012, capped in 2013 by what was intended to be CEO Maurice Levy's crowning glory, a transformational deal whereby Publicis and larger rival Omnicom would merge to create the world's #1 marketing services giant. Despite securing most regulatory approvals, the deal eventually foundered on disagreements over the final structure of a combined group and was called off in May 2014. Instead, Levy unveiled a new deal a few months later with an agreement to acquire digital group Sapient for $3.7bn. However, the group's performance slumped dramatically following the collapse of the Omnicom deal, prompting a mammoth structural reorganisation during 2016. It fell to Levy's successor as CEO, former creative chief Arthur Sadoun, to restore Publicis to solid growth. That has been a slow process, but there was finally a return to consistent positive uplift during 2018. In 2019, though, Publicis announced its biggest ever acquisition, agreeing to pay $4.4bn for US data and CRM giant Epsilon.

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Publicis Worldwide
Leo Burnett
Saatchi & Saatchi
Starcom MediaVest
Publicis Healthcare

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Recent stories from Adbrands Weekly Update:

 Adbrands Daily Update 25th Jun 2019: Nick Law, poached from R/GA only 18 months ago to be Publicis Groupe's global chief creative officer and president of Publicis Communications, is leaving in September to take an as yet undisclosed senior role at Apple.

 Adbrands Daily Update 15th May 2019: With all results now in, Interpublic was clear champion of 1Q with 6.4% organic growth, followed by Omnicom at 2.5% and Havas at 0.1%. MDC was negative -0.9%, ahead of Dentsu at -1.6%, Publicis at -1.8% and WPP at -2.8%.

 Adbrands Daily Update 15th Apr 2019: Publicis Groupe announced its biggest ever acquisition: US-based data and CRM giant Epsilon. The French group has agreed to pay a whopping $4.4bn for the business, a little over twice Epsilon's annual revenues last year, and almost half Publicis's own income. It's not just the biggest-ever acquisition by Publicis but also the second biggest in the advertising industry (after Dentsu-Aegis). Epsilon controls a huge database of demographic and contact information, behavioural, transactional, online and offline data. This is an exceptionally bold move by Publicis and further cements that group's shift away from traditional creativity towards data-driven marketing. The group also agreed a strategic alliance with Epsilon's vendor Alliance Data, which continues to operate credit card processing and loyalty card services for third-party clients. Publicis CEO Arthur Sadoun called it "a one-time opportunity" to make the group a "leader in this data-led, digital-first world". Epsilon will operate as a separate group-wide entity, parallel with Publicis.Sapient. It will continue to be led by current CEO Bryan Kennedy. The deal coincided with another set of weak financials for 1Q. Publicis reported an organic decline of 1.8% to reported revenues of €2.1bn. The Americas fared worst, with North America down by a shock 4.6% and Latin America by 6.3%. That offset decent though hardly exceptional growth in Europe (0.8%) and Asia (1.2%). Individual markets that did well included India (9.3%), the UK (5.1%) and France (4.2%), but Germany plunged by over 10%. The big challenge facing Publicis in the year ahead will be to process its huge new acquisition without distracting management and existing agencies from turning around new business performance.

 Adbrands Daily Update 1st Mar 2019: With all 4Q results except MDC Partners now in, Interpublic leads with organic growth of 7.1%, while Havas jumps into second place with a dramatic turnaround of 4.8%. They are followed by Omnicom 3.2%, Dentsu 0.9%, Publicis -0.3% and finally WPP with -0.7%.

Adbrands Daily Update 6th Feb 2019: As usual, there was no shortage of hyperbole in Publicis Groupe's 4Q and annual results announcement. "We clearly led the change in our industry," claimed CEO Arthur Sadoun , "demonstrating that we have the model to win today and tomorrow." Yet the numbers showed only the weakest of growth; it remains to be seen whether Publicis will have out-performed its rivals. For 4Q the groupe actually reported a 0.3% organic decline in revenues as a result of continued poor performance by the PHS outsourced healthcare sales unit, divested in early 2019. Excluding PHS, 4Q organic growth was 0.5%. Full year organic growth was just 0.1% (0.8% excluding PHS). Despite Sadoun's protestations of a "record year both commercially and financially", reported net revenues slipped back to €8.97bn as a result of currency headwinds. Net attributable income rose 7% to €919m, but at an operating level before financial expenses and tax, the comparable figure was down slightly year-on-year. The disappointing figures shocked analysts, prompting a dramatic slump in Publicis' share price. Separately, Publicis Media chief Steve King was promoted to group COO under Sadoun. Lloyds Banking Group marketer Ros King joins Publicis as EVP global clients.

Adbrands Weekly Update 25th Oct 2018: Publicis Groupe announced a series of further changes to its portfolio to strengthen its offering. Leo Burnett's shopper marketing agency and its cross-group sister Saatchi & Saatchi have joined forces to open a new office near key client Procter & Gamble's Cincinnati HQ under the name PG One Commerce, offering in-store/shopper marketing, retail design, display, digital, ecommerce, data, analytics and quick turn production. Separately, the Groupe announced the acquisition of French IT consultancy Xebia for an undisclosed sum. The business will be absorbed into the local office of Publicis.Sapient to strengthen its technology capabilities.

Adbrands Weekly Update 18th Oct 2018: The recovery at Publicis Groupe continues. However, organic growth came in at just 1.3% despite a string of recent big account wins. CEO Arthur Sadoun put much of the blame on the under-performing contract sales unit Publicis Health Solutions, which has now been officially marked for sale. Excluding PHS, organic growth was a more satisfactory 2.2%. The biggest dent from PHS was in North America, still negative at -0.6% (but +1.0% excluding PHS). Europe was strongly positive at 4.4% (including 10.4% in the UK, 9.2% in Italy and 5.7% in France). Asia Pacific delivered 2.5% overall. Gains in several markets were offset by a 3.3% decline in Australia. On a reported basis including currency fluctuations and M&A, group revenue edged up 0.5% to just under €2.2bn. No profit figures were disclosed.

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