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Publicis Groupe sees slowdown in Europe

Weak European markets have driven down Publicis Groupe’s organic growth in the region to 1.6% during the second quarter of 2012, according to its latest financial report.

Overall, the Groupe posted a 15.5% year-on-year increase in revenue during Q2 to €1.63bn ($1.99bn) and still maintains its forecast of 13.5% growth for the full year despite the weak quarter.

The slowdown in Europe has been attributed to volatile European markets and the Groupe’s loss of the General Motors media contract. However, Europe still contributed the second highest amount of revenue with €468m ($573.7m), representing a smaller year-on-year increase of 2%.

North America produced the most revenue with €782m ($958.7m), a year-on-year increase of 22.4% from €639m ($783.4m). However it was the BRIC and MISSAT regions that showed the strongest growth in the quarter, with a year-on-year increase of 26.7% to €209m ($256.2m). Operations in the rest of the world contributed the remaining €173m ($212m), increasing from the same period in 2011 by 15.3%.

“The world economic situation is both volatile and uncertain. We need to maintain the greatest possible vigilance regarding our costs and investments. Our priority in this respect is to strengthen the competitive profile of the Groupe, in terms of our operations, our product and our penetration of certain markets,” says Publicis Group chairman and chief exeutive Maurice Lévy “In order to ensure the best possible service to our clients and thus the future of our teams, our constant objective will continue to be above-market growth in conditions of profitability.”

For the first six months of 2012, Publicis Groupe saw a 14.3% rise in revenue to €3.08bn ($3.77bn). Income for the Groupe rose by 12.3% to €392m ($480.5m).

Despite losing the GM media business, the holding company was awarded new business totalling $1.8bn in the first half of the year. Lévy adds that new business saw a particularly strong take up in digital.

Earlier this month, Publicis Groupe took full ownership of BBH by acquiring a 51% stake in the agency. The Groupe also recently announced that it will merge the Kaplan Thaler Group with Publicis New York to form the group’s flagship US agency.

David Hing, London