EuroBusiness Media (EBM): Publicis Groupe, the world’s third largest communications group, has just released its first half results for 2016. I’m here to discuss them now with CEO, Maurice Lévy. Mr. Lévy, a pleasure to see you again. Now you’ve just released, as we said, earnings for H1 2016, you’ve got better-than-expected organic growth for Q2. Let’s talk about the key highlights and where that better-than-expected performance came from?
Maurice Lévy: Clearly new business. New business and the possibility of extending our relationship with some existing clients, so it has been a very good first half. We were expecting a slowdown in the second quarter due to the losses of last year and in fact we have been able to post, for Q2, 2.7% organic growth and for the full first half, 2.8% organic growth. So all in all we are extremely pleased and I would like to thank our teams because they have done a very, very good job. It is worth noting that some of our operations have posted stellar growth, such as Sapient or ZenithOptimedia, Publicis Worldwide, Publicis Health, so we are extremely pleased with the way the first half has been conducted.
EBM: Let’s talk now about some of the key trends in terms of geography. So you’ve got some weakness in North America and strength in Europe?
Maurice Lévy: Yes, in fact the losses of last year had a very serious impact on the US because it was mainly losses in the US market. So the growth in the US market has been much lower than we should be posting. By the same token, we have some very good news. The key European markets have been delivering very good growth; the UK, France, Germany and even Italy and Spain have been delivering good growth, so Europe as a whole has been an excellent quarter and first half. In APAC, we are pleased with the numbers and the growth in India as well as in China, the two largest markets. When we go now to LATAM, we must say that situation is still uncertain. There are still some issues and some challenges, but there is still a clear improvement in our numbers.
EBM: Let’s talk now in terms of outlook, how do you see the rest of 2016 playing out? The reorganization is also over. Do you expect to start to see the benefits in 2017?
Maurice Lévy: The geopolitical situation is uncertain in our days and we have to take this into account. We have seen recently the failed coup in Turkey, the unfortunate terrorist attack in Nice, the Brexit in the UK. Very different situations, but generating uncertainties in terms of economic terms. Nevertheless, we feel extremely comfortable. Not only our transformation has been completed and the silos have been eliminated for its majority, we have designed or nominated the global client leaders, there are enthused, they are extremely satisfied with the possibility that offer the new organisation. Our clients are also extremely pleased and we feel very good about the second half of the year, despite the fact that we do expect a slowdown in Q3 due to the fact that the most important impact of the client losses of last year will be felt in Q3. We believe that we will deliver on all our indicators a very nice increase as we already declared to the market. As you mentioned, clearly the big wins will be in 2017 and the years to come. Simply because we will reap the fruits of all our reorganization without being impacted by the losses that we had last year. So, we feel extremely good, not only about the end of this year, but mostly the years to come and particularly 2017.
EBM: Can you elaborate a little bit for us on the benefits of the reorganization for your clients?
Maurice Lévy: Without going into many details, what’s happening today is a transformation of the businesses due to digitalisation. All our clients are facing very serious challenges due to the change in the habits of the consumers, the empowerment and the fact that everything has changed, including e-commerce. For our clients, the solution that we are proposing, which is an end-to-end solution, is something that they love and we have been able to deliver to some new clients, this has been the case with Asda, it is the case also with Walmart in the US and a few other clients that have been attracted by the solution that we are offering and that we are the only communication group capable of delivering such a wide and complete range of services. Starting with concerting, adding technology to the classic communication and marketing services. So I believe that we have a killer app, if I may, with this transformation of our organisation and the addition of Sapient to our array of services.
EBM: Now, as you know, the Association of National Advertisers recently released a report on rebates. What did you make of it?
Maurice Lévy: We have been all very much surprised by the way the ANA has decided to deal with this issue. We complained to AAAAs because this report has been based on rumours, on anonymous testimonies, things which are unverifiable. No-one can verify if it is true or untrue because all this is based on anonymous declarations. So we have been a bit surprised because the relationship between advertisers and agencies is based on trust and it is based on contracts. As far as Publicis Groupe is concerned, we have decided, since the beginning of our history, that we will be extremely strict and rigorous on the application of our contracts. And we are revisiting all the aspects with all our clients, which, by the way, disapprove to a large extent the way ANA has been dealing with this issue. But, nevertheless, what is important is that we look at the future and the best way to look at the future is to sit down with our clients to look at what is currently the contract, how they do want to see it evolving and obviously to come to an agreement based on great services which help them building their growth, building their future in a totally agreed contract with something which is fair and agreed between the parties.
EBM: 2016 wasn’t just a good year for Publicis Groupe, it was a special one. It’s your 90th anniversary, so Happy Birthday. How did you celebrate?
Maurice Lévy: It’s not really my 90th anniversary. It will come soon. It’s the 90th anniversary of Publicis and we have decided to celebrate this anniversary instead of doing the coffee table book or the movie or a big celebration in a stadium or in the opera or whatever, a big party. We decided that we will look at the future. And the future is what? Youth, it’s start-ups. How can we help young start-ups to scale up and how can we help young people to achieve their dreams? So we have decided, for 90 years of existence, to finance and help 90 start-ups or projects. It has been a staggering answer. We got incredible applications and we celebrated the awards at Viva Technology which is an event we organised with Groupe Les Echos which has been a tremendous success, with 5,000 start-ups, 45,000 visitors, something quite unique. So we are extremely pleased with the way we are concluding our 90th anniversary.
EBM: So, Happy Birthday again to Publicis Groupe, let’s be clear. A pleasure to see you again Maurice Lévy.
Maurice Lévy: A bientôt!
