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February 14, 2013 12:38 pm
Publicis, the world’s third-largest advertising group by revenues, increased its dividend by almost a third on Thursday even as it signalled a gloomy outlook for the global advertising market.
The company announced a 28.6 per cent increase in its dividend to €0.90 per share as it announced results for the year to the end of December. Organic revenue grew by 2.9 per cent, in line with consensus expectations, following industry-wide downward revisions for growth expectations in 2012.
Maurice Lévy, chairman and chief executive of Publicis, said growth had been adversely affected by lacklustre advertising income from Euro 2012 and the London Olympics, which had both been “well below expectations”.
He said: “While 2012 was a more difficult year than expected, 2013 looks like it will be even more difficult, between economic uncertainty, the weakness of Europe, where whole sectors of industry both lack competitiveness and face consumers’ concerns.”
Referring to Europe as the “sick child”, he noted that there was good news coming out of the US where growth is up, even though this upward trend was still fragile. Publicis guided for top line growth to be higher in 2013.
Digital activities and high-growth economies accounted for most of the revenue growth over the period, with both recording organic revenue growth of 6.6 per cent. Digital revenues now accounted for 32.9 per cent of group revenues, the company said.
In Europe, organic revenues fell 0.3 per cent over the period, hurt by the southern European economies and eastern Europe.
The company reported pre-tax profits for the 12-month period of €1.02bn, a rise of 18.7 per cent year-on-year.
The company’s profit margin stood at 16.1 per cent for the year, a rise of 0.1 of a percentage point from a year earlier, despite previous warnings from the company of a September slowdown.
Mr Lévy said that progress was being made on the appointment of his successor in a development that would end his reign of more than 25 years as head of the company. He said that the company’s nominating committee had already held five meetings to discuss the appointment of the next chief executive and that it had met with several internal candidates.
But he said this process would be “relatively long” and indicated that the announcement of a successor could also coincide with a transition process.
The most likely candidate to succeed Mr Lévy – and become only the third head of Publicis in its 86-year history – is Jean-Yves Naouri, the company’s chief operating officer and also chief executive of Publicis Worldwide.
In an interview with the FT last year, Mr Lévy said that Mr Naouri “is clearly in a leading position for winning the race”.
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