Publicis Groupe outlines integration plans post Epsilon acquisition

Commenting on the latest financial report, Publicis Groupe chairman and CEO Arthur Sadoun said the company has a “clear integration plan” in place following the acquisition of Epsilon. Publicis Groupe also has 25 dedicated teams working towards the objective of accelerating growth. “This plan will be executed swiftly,” he said.Facing disruption created by data and technology, Sadoun said the need for transformation is pressing, and the group has responded by investing in the talent (US$169 million) as well as expertise of the future, such as with Sapient and Epsilon. The acquisition of Epsilon, according to him, was closed “in record time at a compelling price”.Publicis Groupe recorded a sequential improvement in Q2 compared to the previous quarter, with organic growth returning to positive territory, said the statement. However, Sadoun said the “profound transformation” of the group has “penalised” it in the short term. “Our clients are suffering from various pressures leading to budget cuts, and fee reductions in sectors where we have a disproportionate share of market,” he added.However, Sadoun is confident that the company will generate strong growth in the long term, on the back of a robust business model. In the second part of the year, it looks to deliver sequential improvement versus H1 on organic growth. Due to continued spending cuts, he said the company will take a “conservative approach” for the full year, forecasting a broadly stable net revenue on an organic basis. It is aiming for a 30 to 50 basis points increase in operating margin and a headline earnings per share increase by 5% to 10 % at constant rates and including Epsilon.He explained: “Our unique set of assets in data, creative, media and technology that can deliver personalised experiences at scale to help our clients accelerate their sales while reducing their costs.”Overall, for the first half of the year, Sadoun said the group has posted strong financial results, with an operating margin improvement of 40 bps supported by its ongoing cost savings plan, half of which was reinvested in its talents and expertise. “This growth is healthy and built on solid foundations, with the ramp-up of our Q4 new business and continued double-digit growth of our strategic game changers (+24% in H1),” he said.