PARIS, July 21 (Reuters) - France’s Publicis said the loss of large accounts in the United States last year will likely hamper sales in the third quarter after reporting a better than expected underlying growth over the April-June period.
The world’s third-biggest advertising agency, whose growth has been lagging that of competitors such as WPP and Omnicom in recent quarters, confirmed on Thursday that it would improve all its financial indicators this year.
Publicis said quarterly sales rose 2.7 percent on an organic basis to 2.46 billion euros ($2.71 billion). Reported growth was 0.9 percent.
Analysts polled by Reuters had on average expected an underlying growth of 1.72 percent in the second quarter. The amount of the quarterly revenue was in line with the poll.
“We’re still expecting a difficult third quarter, as it’s the least productive of all. We’re expecting it with some apprehension,” Chief Executive Officer Maurice Levy told reporters ahead of the publication of the results.
The loss of large media accounts in 2015 in the United States, Publicis’ number one market, will likely have a “significant impact” in the current quarter, Levy added. These accounts included Procter & Gamble, Coca Cola, Mondelez et General Mills.
Publicis called 2016 a year of transition when it reported 2015 results, as it digests the $3.7 billion acquisition of U.S.-based digital business Sapient and reorganises its businesses to foster greater collaboration between the myriad agencies it has bought over the years.
Levy also said the company’s supervisory board will announce the name of his successor between December 2016 and February 2017. The announcement will mark the end of a life-long career for Levy, who has led the group since 1987.
Omnicom said last week that its second-quarter organic sales growth was 3.4 percent. WPP, the top advertising company in the world, will report first-half earnings on Aug. 24, while Havas will do the same after market close on Thursday. ($1 = 0.9088 euros) (Reporting by Mathieu Rosemain and Gwenaelle Barzic, editing by David Evans)
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