By Leo Marchandon
(Reuters) -French advertising group Publicis upgraded its organic growth guidance on Thursday after beating expectations for the second quarter, driven by its Epsilon and Media branches and market share gains.
Its shares rose 6% in early trading in Paris, leading gains on France’s blue-chip index CAC 40.
Publicis’ recent strong performance runs counter to a general slowdown in the advertising industry, which is seen as a bellwether for broader economic health.
The world’s largest advertising group by market value now expects its organic revenue to grow between 5% and 6%, compared to its previous guidance of +4% and +5%.
“We are not immune to the macro pressure, but we are winning market share,” CEO Arthur Sadoun told analysts in a call.
Sadoun said he was confident that the group’s implementation of AI would further drive its business, adding Publicis had many projects in the pipeline waiting to be released once market conditions improve.
Publicis expects to reach the higher end of its guidance if clients end their “wait and see” attitude and increase spending in digital transformation, allowing its IT consulting unit, Sapient, to bounce back.
“There are many (clients) today who are waiting because of macroeconomic uncertainties and who are reluctant to spend capex to put this in place,” Sadoun said, adding the unit’s performance in the U.S. in the past six months was a good sign.
The parent company behind agencies such as Leo Burnett and Saatchi & Saatchi reported a net revenue of 3.46 billion euros ($3.78 billion) in the second quarter, with organic growth of 5.4%, above a consensus of 4.8%.
Its Epsilon unit, which provides targeted advertising capacity, continued to drive the group’s performance thanks to individualised consumer profiling, Sadoun said. The group has 250 million individualised profiles in the U.S., he added.
Its performance in the Asia-Pacific region outpaced that of North America and Europe, achieving 7.7% organic growth, including 10.5% in China alone.
($1 = 0.9151 euros)
(Reporting by Leo Marchandon and Dagmarah Mackos; Editing by Sandra Maler)
