Publicis Groupe has recorded a net revenue increase of 1.7% from 2018, according to its first quarter earnings report. This comes as it announces its US$4.4 billion acquisition of Alliance Data's Epsilon business to accelerate the implementation its strategy to become the preferred transformation partner for its clients. Chairman and CEO of Publicis Groupe Arthur Sadoun (pictured) said the strategy has been delivering good results, as evidenced from the net revenue 27% growth from "game changers" combining data, dynamic creativity and business transformation.
"Our first quarter net revenue is in line with expectations, confirming our take on what we anticipate for the year. The Groupe is continuing to deliver on its transformation path, thanks to Power of One, to the rollout of our Global Client Leader organisation and to the progressive implementation of our country-led model," added Sadoun.
While North America net revenue has been particularly affected by the attrition, business fared well in the Asia Pacific region with 4% growth in net revenue on a reported basis and 1.2% on an organic basis. Singapore, specifically, saw a 7% jump.
Meanwhile, organic growth took a tumble by 1.8%, mainly due to the attrition of FMCG clients. However, the company expects the attrition to be mitigated by a "marked improvement" in the retention of its clients and still expects to see a higher organic growth in 2019 compared to the previous year. According to the financial report, Publicis aims for a higher outlook in 2019 compared to 2018, a 30 to 50-basis point increase of its operating margin rate and an increase in headline diluted EPS between 5% and 10% at constant exchange rates and excluding "BEAT" tax.
On the acquisition of Epsilon, Sadoun said that the move will fully equip the company with end-to-end suite solutions to address the increasingly complex needs of its clients in a fast-changing, data-driven marketing environment. "The Publicis Groupe will be stronger, with a balanced revenue mix across diversified expertise. We will be in a position to grasp a larger share of the marketing and business transformation market, which will significantly expand our growth opportunities," he said.
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