Publicis Groupe has reported 14.8% growth in profits for 2006 to €443 million, and a record operating margin of 16.3%.
2006 revenue of €4,386 million were up 5.6% at constant scope of consolidation and exchange rates (i.e., organic growth).
All geographical regions contributed, with organic growth 5% in Europe, 5.1% in North America, 5.3% in the Asia-Pacific area, 9.3% in Latin America and 20% in Africa-Middle East.
Net new business won in 2006 came to $3.3 billion, with new accounts including Renault (extension to seven new markets in Latin America and the Baltic countries), Sanofi – Aventis/Pasteur Vaccines (global) and Orange (Europe).
Publicis said that it has made “winning a leading position in digital communications worldwide a top strategic priority”. This means integrating digital capabilities at every level of the Groupe’s activities, with action focused on, amongst other things, deriving 25% of total revenue from digital, interactive and mobile activities by 2010.
It added that “under the leadership of David Kenny, Digitas CEO and a member of the Publicis Groupe executive committee, worldwide growth in digital and interactive business will be driven by training and recruitment of new digital talent, and an active policy of targeted acquisitions, particularly in Europe and Asia.
Commenting on these results, Publicis Groupe Chairman and CEO Maurice Lévy said: “Publicis Groupe teams have not only kept all their commitments, but-once again-surpassed them. Our 2006 results are further confirmation of the effectiveness of the strategy we have pursued over recent years. Strong organic growth and net new business are especially satisfactory as they follow the extraordinary records set in 2005. Operating margin came in at 16.3% of revenue, a record high for our industry, while vigorous cash generation resulted in free cash flow of over €500 million.
“The strength of our financial performance has allowed Publicis Groupe to engage in major strategic moves, notably marked by the acquisition of Digitas. This vaults us to a leading global position in digital and interactive communications. Beyond the performance of the Digitas business itself, this new segment will be a driver for future growth through additions to our worldwide offering and consolidation of our strengths as a world leader in media services and healthcare communications.
“Finally, we are well placed to make the most of robust growth in emerging markets, where we will be continuing acquisitions as opportunities arise. The bulk of our revenue is now drawn from segments where growth is significantly higher than in the worldwide advertising market. I am thus confident about the future of our Groupe, and in particular about the 2007 fiscal year.”
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