Publicis Groupe stock dives despite sunny forecast
Despite touting an “unprecedented new business run” for the first half of the calendar year, Publicis Groupe’s shares fell overnight after investors were spooked by talk of a client spending slowdown.
Publicis reported adjusted earnings before tax of A$2.2 billion (€1.24 billion) for the first half of the year, and a 5.9% increase in second quarter organic net revenue. Second-quarter net revenue was ahead of the 4.6% estimate, and up from the 5.4% leap in quarter one.
Total second-quarter revenue was up by 10%, with a 5.7% jump in Asia-Pacific. The company saw growth across all territories, with a 5.3% jump in the US, and a 4.6% leap in Europe.
Net income for the half-year was A$1.47billion (€824 million), up from A$1.38 billion (€773 million).
Publicis’ revenue data showed Connected Media contributing the most to growth (click for expanded view)
Due to the stronger than expected second quarter earnings, Publicis upgraded its 2025 organic growth forecast to “close to 5%”, up from the previous forecast of 4% to 5%.
The company credit an “unprecedented new business run of over a dozen material wins in the first six months of 2025″ for the cheery outlook, including netting clients such as Coca-Cola, Nespresso, Lego, Paramount, and Spotify. In total, the group secured A$8 billion in new business over the first half of the year.
“We did not see any deterioration among our customers between the first and second quarters,” Arthur Sadoun, chairman and CEO of Publicis Groupe said in the presentation.
He said”the feeling of uncertainty is still there, but it has not materialised in cuts that could have had a real impact on our organic growth” and warned that client spending might drop off, “particularly at the end of the year.”
Sadoun also warned sales in its digital consulting company Publicis Sapient are likely to be lower this year, and addressed the threat of Meta’s AI-driven ad play, during an earnings call.
Arthur Sadoun was upbeat in the presentation
“When Meta comes along and says that they can do everything themselves, I think that they are completely underestimating the intelligence of our customers, who, moreover, are not fooled,” Sadoun said.
“None of our customers want to leave their data in the world of ‘walled gardens.’ None of our customers want to work with a single platform.
“I’ve been hearing for nine years that the platforms are going to ‘eat us for breakfast.’ Honestly, I think it’s time to stop talking about how platforms are going to replace us, because it’s not a reality.”
Despite Sadoun’s bullish talk, it appears the market was somewhat spooked by the forecast, with shares falling by 6.65% overnight.
This went against Wall Street predictions, with Morgan Stanley analysts saying in a note: “We think the shares will be up low to mid single digits % today”, ahead of the market raising its expectations for the company.
In comparison, Omnicom had a more optimistic Q2, reporting 3% organic revenue growth.
Broken down by discipline, year-on-year growth was 8.2% for media and advertising; 5% for precision marketing; 2.9% for experiential; and 1.5% for execution and support.
This growth was partially offset by declines of 9.3% for public relations, 4.9% for healthcare, and 16.9% for branding and retail commerce.
“Our continued investment in our innovative operating platform, Omni, is driving superior business outcomes for our clients while enhancing operational efficiency across our organisation,” John Wren, Omnicom’s CEO and chairman, said this week.
“We also achieved a key milestone in our transformational acquisition of Interpublic, successfully clearing U.S. antitrust review and moving closer to an expected close later this year. As we look ahead, I am more optimistic than ever about the significant growth opportunities this strategic transaction will create for our people, clients, and shareholders.”
SUBSCRIBE
Sign up to our free daily update to get the latest in media and marketing.
