Advertising and marketing behemoth Publicis Groupe has delivered some bad news for its Australian operations in the company’s financial results for the first half of 2018.
Publicis’ Asia-Pacific business division saw its net revenue decline 15.2 per cent to $669.8 million in the six months to 30 June 2018, and its organic growth drop 3.3 per cent.
The company said these negative results were “largely attributable” to Australia’s revenue dropping 10.8 per cent due to its loss of the Qantas call centre contract.
The APAC region is the third largest revenue-raiser for Publicis, behind the US and Europe. However, it was the worst performing region by a country mile.
Overall, Publicis’ net revenue fell 8.2 per cent in the first half of 2018 to $6.8 billion, with organic growth down 0.4 per cent.
Commenting on the results, Publicis chairman and CEO Arthur Sadoun (pictured above) said the company experienced a slowdown in the second quarter of 2018 mostly due to two conjunctural challenges.
One was the “tougher basis of comparison and uncertainty relating to GDPR implementation impacting our net revenue in Europe, but also to one specific operational bump with our volatile health sales representatives business in the US,” he said.
“This bump represents the biggest share of our negative growth, as the overall impact of our Publicis Health business was around 30 million euro.”
However, Sadoun said Publicis’ overall first-half results, combined with its new business wins gives the company confidence that it can deliver its full-year objective of improving growth and margin compared to 2017.
“I reiterate, if necessary, that our market has been facing major challenges and transformation has become a necessity for all,” he said.
“Initiatives we launched very early and acquisitions we made are bearing fruits: we are able to overcome unavoidable budget cuts and changes in marketing plans thanks to our assets and our organisation that position us in the most competitive way possible.
“No doubt, during H1, we have set the foundations to deliver our full-year objectives and, even more importantly, our three-year transformation plan. It will not be an easy journey as we must transform ourselves while facing some strong market headwinds.
“There could be some unexpected bumps in the road like the one we just experienced in the health sector.
“But, we have an outstanding team, unmatched capabilities in data, creativity and technology, and a proven winning model that make us very confident for the future.”