Publicis Groupe has announced its first-quarter financial revenue for 2020, revealing a 2.9% fall in organic growth despite a 17.1% increase in net revenue to €2.5bn (£2.1bn).
Furthermore, the company has introduced cost-cutting measures across the business up to €500m in response to the Coronavirus pandemic which has impacted on economic growth in the last few weeks.
As reported via The Drum and Campaign Live, chief executive Arthur Sadoun announced that the firm will set out a number of measures in the coming weeks in response to COVID-19. Some of these include the senior management team taking a pay cut of 30%; reducing shareholder dividend by 50% to €1.15, to be paid in September and to encourage shareholders to reinvest the dividend in the company by choosing the option of payment in shares. Lastly, a 30% reduction in fixed remuneration for Sadoun and 20% for management board and committee members for the second and third quarters.
“It is slightly awkward to share encouraging news at a time when we are preparing ourselves for tougher days,” Sadoun commented to Campaign Live; “But we actually had a good start to the year, meeting our internal objectives despite the impact of COVID-19.”
Sadoun also added that the first-quarter decline in organic growth was in line with expectations before the global pandemic, but that the results in China and Europe already show the impact of the coronavirus crisis.
Reported growth in Europe for the quarter of 2020 was down 8.7% and organic growth was down 9.2%. France and the UK recorded declines in organic net revenue of 12.9% and 9.6% respectively; Italy and Germany were down 6.1% and 7.1% respectively.
Net revenue for Asia-Pacific was up 5.8% on a reported basis and down 1.9% on an organic basis. China, which was the first country impacted by the Coronavirus pandemic, was severely impacted and down by 15.3%.
North America saw a 36.7% increase in growth as well as a 0.5% increase in organic growth. This was driven by the company\s acquisition of performance data services company Epsilon last year.
Announcing the financial results and measures due to the impact of COVID-19, Sadoun explained:
“First and foremost, we have been focusing on protecting our people. We immediately acted to put in place the necessary infrastructure to enable all of our employees to work safely from home. We took a series of measures for their health and well-being to keep everyone supported.
“Second, we have worked around the clock to help our clients adapt to this situation. We reviewed their current and future commercial and corporate messages. We realigned their media plans to be much more dynamic, deliver short-term ROI and proposed some outcome-based products we have developed for this new market context. We are also helping them accelerate their digital capabilities to drive growth and efficiencies.
“Last but not least, we are taking exceptional measures to face the coming recession and preserve a solid balance sheet.”