French advertising group Publicis announced a 16.9 percent fall in first-half net profit to 260 million euros ($352 million) on Tuesday and warned on its prospects for sales growth in 2014.
The company, which recently emerged from a failed merger with U.S.-based Omnicom, said that the first half of the year was heavily impacted by exchange rates. It also said that the cancellation or postponement of advertising campaigns and lagging economies in Europe and in emerging countries had adversely affected revenues. Shares slipped nearly 6 percent as European bourses opened on Tuesday.
"These figures are not satisfactory by our standards. They are not consistent with what our operations can achieve," Maurice Levy, the chairman and CEO of Publicis Groupe said in a press release on Tuesday.
Ongoing weakness in Europe and the the "slow pick-up" in the emerging economies prompted Publicis to warn it was being "extremely cautious" on its growth prospects for this year and would prioritize cost control. Levy confirmed to CNBC that no job cuts would form part of this cost-cutting drive. He also said that it was already on track for higher growth in the second part of the year, adding that 2014 would not undermine its mid-term prospects.
Analysts at Liberum maintained their "hold" rating on the company on Tuesday morning but said that the larger players in the sector might be coming under some pressure after high growth in previous periods.
U.S.-based Omnicom and France's Publicis announced in May that they were calling off merger talks due to challenges they described as being insurmountable. It would have created the world's largest advertising agency but problems begun in late April, when Omnicom CEO John Wren expressed doubts about the deal, citing tax complications.
Read More Omnicom, Publicis deal was driven by ego: WPP
Martin Sorrell, the CEO of rival firm WPP told CNBC at the time that the merger had been driven by ego and emotion and ultimately failed because of tax issues.
"It was turning into a bit of a soap opera because both companies in their (first quarter) statements were saying they were good on their own," he told CNBC back in May.
Levy told CNBC that it would be fair to say that the company had been too focused on the merger and it had generated a distraction from its day to day business.
"We are back on the business. We are back to managing our business very seriously, and you can make sure we are doing our very best in order to have a very good second half of the year," he said.
Follow us on Twitter: @CNBCWorld