EuroBusiness Media (EBM): Publicis Groupe, the world’s third largest communications group, has just released its third quarter revenue for 2016. Here to discuss this with me, CEO Maurice Lévy. Hello Mr. Lévy. You have just released Q3 revenue, with organic growth at +0.2%, could you elaborate on the weak performance in the US and the strong growth in Europe?
Maurice Lévy: Q3 has been affected by what we call the Mediapalooza and the account losses of last year, and therefore we have a headwind of 300 basis points. The resulting growth is 0.2% which is on the one hand a negative situation in the US, where all the losses happened and this is -4%, while in Europe we are enjoying very strong growth at 7.6%. The good news, when you look at all these details, is the fact that the underlying trading operations are doing extremely well.
EBM: What can you tell us about the performance of some of your digital activities, more specifically Razorfish and Sapient?
Maurice Lévy: Sapient has a very strong growth for the 9 first months, high single digit, and Razorfish is facing, since a long time, a difficult situation. Helped by Sapient and in the context of the Power of One, Razorfish had its best ever quarter in terms of new business. So we feel very good about our digital operation, even though, if Q3 is not exactly where we would like it to be. All our digital operations represent 54% of our total revenue, which is a very strong number. And our digital operations have grown by 5% during Q3.
EBM: Q3 was negatively impacted by several accounts. Could you quantify the impact and what can we expect in Q4?
Maurice Lévy: Q3, as I said, headwind was 300 basis points and these were the losses of last year, and Q4 we are expecting to have a tail of the headwind for about 250 basis points. All this has been announced to the market during the last quarters and in particular in full detail in our July meeting. So I consider that this is exactly as we are expecting the situation to be and we feel pretty good about the way our operations are facing the current situation.
EBM: What about organic growth for 2016?
Maurice Lévy: We have said, since the end of last year, of 2015, that the growth for 2016 would be weak, due to the fact that there have been these account losses of last year. So we maintain our position and we believe that we will increase our numbers in terms of absolute dollars or euros. Now, with the currency exchange rate and some issues that some countries are facing, I don’t know exactly what will be the impact, but all in all, our plan is executed as we expected it to be, with some very positive news.
EBM: You mentioned the Power of One. Is that why you have had some contract wins recently? Tell us about those wins.
Maurice Lévy: The Power of One is up and running. That is the most important news and this is something that is extremely important because we are demolishing all the silos and we have killed the holding company in order to make Publicis Group a much more operational company with the client at the core. And the end result of this reorganisation is that we are unleashing all our power under the name of Power of One and all our assets to best serve our client. And this has translated into some very strong winds. This has been Walmart, it has been GSK, HPE, Hewlett Packard Enterprise, it is Coty and USA Air recently so we feel extremely good. What has to be noted also, is that when we have an operation of Power of One, not only we have one leadership which is somebody coming from any of our operations, but it is Publicis Communication, Publicis Media, Publicis.Sapient acting together to unleash all the power of the group for the benefit of the client. So it is a very attractive solution that the clients love.
EBM: Succession has been a hot topic recently. Is there anything you’d like to say in terms of the calendar, the next CEO and your role in the organisation going forward?
Maurice Lévy: We have a process in place where the nominating committee will start working in about two or three weeks on the organisation, the people who will be there for the future. The succession will be organised and worked out by the nominating committee. When the nominating committee will have a clear opinion of what would be recommended to the board, then the full board will make its own decision. So, this will start, as I said, let’s say in a few weeks and the process will be relatively fast and I believe that at the latest during February we will have a decision.
EBM: Thank you very much indeed Mr. Lévy.
Maurice Lévy: Thank you.
