Publicis raises growth target after Sapient deal

Wednesday, 17 December 2014 01:12 - - {{hitsCtrl.values.hits}}

Reuters: Advertising group Publicis pledged last week to grow revenue faster than rivals and expand margins in a four-year plan building on its $ 3.7 billion acquisition of digital specialist Sapient.

Helped by Sapient’s strength in e-commerce and technology services, the French group said it would target organic revenue growth two percentage points above the industry average, starting in 2016. It also aims to raise the operating margin by two to four percentage points from its 2012 pro-forma level of 15.3%, with Sapient taken into account. Publicis Chief Executive Maurice Levy is trying to win back investor support after a tough year in which a mega-merger with US peer Omnicom fell apart and the company’s growth lagged behind competitors. Publicis shares are down 11% this year, while larger rival WPP is about 2% lower and US-based Omnicom and Interpublic are up 5% and 16% respectively. The four-year plan unveiled on Thursday would increase shareholder returns, raising the dividend payout ratio from 35% in 2015 to 42% in 2018. The early repayment of convertible bonds will also return 700-800 million euros ($ 861-$ 984 million) to investors, the company said.