Publicis Groupe share price falls as communications giant misses growth expectations

 
Joe Hall
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Publicis Groupe CEO Maurice Levy (Source: Getty)
The only way is digital for French communications giant Publicis Groupe, as digital increasingly makes up a bigger slice of the company's overall revenue.
In its third-quarter results released today, Publicis Groupe missed expectations for organic growth, yet claimed the fact that 42% of its overall revenue came from digital operations (a nine per cent increase on the same period last year) was a testament to the company's "vitality".
However, a failed merger with fellow "big four agency" Omnicom earlier this year has hurt. Publicis has its sales forecast after missing out on revenue estimates.
Overall sales growth stood at one per cent for the quarter. In response, Publicis has adjusted its full-year organic sales projection to 1.5 per cent - a big drop from the four per cent predicted in February.
The company's share price has dropped in early morning trading, and is currently down around two per cent.
Maurice Levy, chairman and CEO of Publicis Groupe, said the company's clients would be confronted with a "shock wave of the digital transformation on their business models".
In a statement he said:
Organic growth has slightly picked up compared to the second quarter of 2014 but does not match our expectations.
There are a number of factors behind this, mainly the fact that management was too focused on other plans and not enough on the short-term performance and growth.
We are at the end of this cycle and very confident in the future. Very important decisions have been made including management teams and organization.
There are much positive news that testify to the vitality of the Group and are very encouraging. Starting with digital, which now accounts for 42% of our revenue and is growing by more than 9 per cent, as well as the great victory of the Samsung competition.
We are ready to provide them with the innovative services that will drive them into the future.

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