Europe needs swagger

Publicis CEO: Beat estimates in Q1, headwinds ahead


French advertising giant Publicis on Tuesday reported organic sales growth of 2.9 percent for the first quarter, beating its own estimate, but remained cautious about the quarters ahead.

Many large companies put their advertising contracts up for review in 2015, adding to pressure on the big agencies who are grappling with a shift from traditional TV-based advertising to online.

Publicis CEO Maurice Levy
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Chief Executive Maurice Lev told CNBC that he expected the impact of losses from the 2015 media account reviews to be felt in the second and third quarters mostly. While he expects a good 2016, he forecast a much better 2017. He did not expect the same kind of contract review in 2016 as witnessed in 2015.

"We have been quite fortunate with a few very good acquisitions of accounts," Levy said of the first quarter. The company's 2014 acquisition of Sapient had also helped the company's results.

The group said 55 percent of its revenue now came from digital, a figure Levy expects will be "slightly above 60 percent" by the end of 2018.

The impact of digitization leading to very serious transformation of clients' business models, he said. As a result, the group needed to offer "a kind of alchemy" of consulting, technology and creative services, he said.

"We are very confident about the future of our services and the fact that we are lagging behind since two years is neither a surprise nor a very big concern," he said, citing a transformation that is underway at the company as a key reason.

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