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Publicis has upgraded its full year growth forecasts as the French advertising group capitalised on the weakness of rivals such as UK-based WPP to grow its revenues by more than 10 per cent in the first half.
Arthur Sadoun, chief executive of Publicis, said the growth had been achieved by winning new business, despite a challenging macroeconomic environment. After winning key mandates from US rival IPG last year, Publicis has this year taken work from Coke and Mars, both major WPP clients.
On Thursday the Paris-listed group raised its guidance for full year organic growth to “close to 5 per cent”, up from a range of 4 to 5 per cent previously.
The company reported a 5.4 per cent increase in organic revenues in the first half, compared with last year. Overall revenue rose 10.9 per cent to €8.5bn over the same period.
Its results stand in stark contrast to those of WPP, which was last week forced into a profit warning ahead of the announcement of Microsoft executive Cindy Rose as its new chief executive.
Publicis overtook WPP to become the world’s largest advertising group at the end of last year.
Sadoun said the group’s second-quarter revenue growth was about “800 basis points” ahead of rivals and that Publicis, which owns digital agency Epsilon and Saatchi & Saatchi, was “not buying market share”.
The upgrade to full year forecasts comes despite an expected squeeze on corporate marketing budgets in the second half of the year, as clients face tougher economic conditions and the threat of US tariffs.
Sadoun said he did not see “any improvement in the macro [environment]” but that new business had more than mitigated any impact from reduced spending. Publicis has had 15 “material” new business wins in the year to date, he said.
In a “disrupted industry dominated by cuts, restructuring and succession planning”, Sadoun trumpeted that Publicis was in “a category of one” and was the “only one that is growing”.
Publicis’s chief predicted the company would continue gaining market share, citing the potential for disruption at US rivals IPG and Omnicom, which are planning to combine their businesses in a proposed merger.
Publicis is investing about €1bn in new technology tools and capabilities every year, including using AI.
“It is not a race for scale,” Sadoun said. “It is [a race] for innovation.”
The group’s operating income rose by 9.3 per cent to €1.1bn in the first half and its free cash flow reached €828mn, up from €774mn in the same period last year.