Organic growth down in 2019 for Publicis

The acquisition of Epsilon gave Publicis an overall lift in revenue, and Canada also posted organic growth.

Agency holding co. Publicis Groupe has posted its revenues for the fourth quarter and full fiscal year of 2019. While the group posted an overall increase in revenue for the year and quarter, organic growth was down.

Revenue for 2019 came to €11 billion, approximately CAD $16.6 billion, representing a lift of 10.6%. Net revenue was €9.8 billion (CAD $14.3 billion), up 9.3% year-over-year. The biggest growth driver, according to the company, was the acquisition of data and marketing firm Epsilon in the second half of the year. Other acquisitions included Xebia, Soft Computing and Rauxa.

However, organic growth for the holding co. – growth excluding acquisitions – was down 2.3%, in line with the outlook Publicis provided with the release of its Q3 in October.

The company’s operating margin rate was up to 17.3%.

In its letter to shareholders Publicis described the year as a “transition” for the company; beyond the acquisition and integration of Epsilon it made a change to Publicis Sapient’s global management and repositioned its operations. It acknowledged that the numerous changes within the organization “had a negative impact” on its growth. “Our reported growth of 9.3% with Epsilon reflects the shift in our revenue profile,” the report stated. It also pointed to recent wins across much of Disney’s portfolio and pharma giant Novartis.

North America posted the largest increase in reported growth for the year out of all regions for Publicis; with €5.5 billion (CAD $8.1 billion) in revenue for the year, that showed a reported lift of 15%. However, when factoring out acquisitions, organic growth was down 3.5%. Publicis noted that Canada itself posted organic net revenue growth of 8.3%, although it did not state how much revenue specifically went to Canada for the year. Only two regions (APAC and MEA) posted positive organic growth.

Media agencies in Canada for Publicis include Starcom, Spark Foundry and Zenith.

As for Q4, Publicis posted a net revenue of €2.9 billion (CAD $4.2 billion), with reported growth up 15.2% and organic growth down 4.5%. North America once again posted positive reported growth (30.1%) and negative organic growth (down 4.2%) for the quarter.

All financial conversions as of Feb. 6.