Publicis boss Sadoun says new model is complete – but growth still proves elusive

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Is Publicis (finally) turning the corner or is it still stuck where it was?

The French-owned holding company’s results for 2019 show revenue up ten per cent to €11bn and operating margin to to 17.3 per cent (ahead of the market) but organic growth of minus 2.3 per cent, better than the -2.7 per cent it forecast, still hardly indicates a business on the move.

$4.4bn data acquisition Epsilon is said to have made a contribution in the second half of the year.

Under pressure CEO Arthur Sadoun (below) says: “2019 was a transition year when we completed our model. We acquired and integrated Epsilon. We changed Publicis Sapient’s management and repositioned its operations around business transformation through industry verticals.

“We put in place a country model to foster cross-fertilization across our expertise in creativity, media, data and technology. And while we were implementing our model, we continued to promote a new generation of leaders in strategic positions, in our most iconic brands, our biggest countries and for our top clients…

“Now that we have completed our transformation in terms of assets and organization, we are in position to deliver what our clients really need to thrive in a world increasingly dominated by the platforms, as we demonstrated in our recent wins with Disney and Novartis.”

And there’s much more besides about Publicis’ strong financials but the message is clear: Publicis is still a work in progress.

In interviews Sadoun also referenced the growing challenge from Accenture, in particular its likely move into large-scale media buying after closing its media auditng business.

On the face of it Sadoun is doing the right things – trying to match the likes of Accenture in tech and consultancy – but, as for the UK’s WPP, the US remains a worry. It will be interesting to see how US rivals Omnicom and Interpublic fared in their home market.

These results should buy Sadoun some time although he is forecasting a further year of low or no growth in 2020 which will stretch shareholders’ patience.

Some of that new business – Saatchi & Saatchi is doing well in the UK. Leo Burnett in the US – should help as should a number of big media wins. If they don’t help Publicis turn the corner then shareholders might think they’re in the wrong business.

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