In the owner of Saatchi & Saatchi and Leo Burnett's results released this morning, operating income, or profit before interest and taxes, dropped 99% to €9m. For the fourth quarter, the group reported a 2.5% year on year drop in revenue to €2.67bn. The overall business was hit by "serious issues at Razorfish" over the beginning of the year, and the loss of media accounts at the end of 2015 which included Procter & Gamble. The report added that Publicis Groupe had a non-cash depreciation charge of €1.4bn made up mainly for Publicis.Sapient. It also noted restructuring costs of €73m which the group put down to "implementing its reorganisation and adjusts to an environment that is increasingly digital-oriented, while continuing to generate synergies from the Sapient acquisition". The group acquired SapientNitro in 2015, and merged Razorfish with it in late 2016. In the UK, revenue increased 5.9%, with organic growth of more than 8% in the second half of the year. Outgoing chief executive Maurice Lévy was positive about the group’s performance, adding that operating margin was up in amount and as a percentage of revenue. The group posted operating margin of €1.5bn, up 2%. Lévy said: "2016 was devoted to the implementation of Publicis Groupe’s new organisation and transformation from an 'advertising holding company' to a 'connecting company' with the creation of a completely new approach called 'the power of one'. "The results of this have been excellent since they were first felt in the summer of 2016, with remarkable client successes such as Asda in the UK, Walmart in the USA, account wins including Merck, KFC and, more recently, HSBC, but also the return of Special K and the retention of Mars with a budget extension and the recent retention of GMC after a lengthy review. "This new approach is still in the very early stages but, given the results already achieved, strikes me as very promising." Arthur Sadoun will replace Levy in June. City analyst Liberum said: "Whilst Publicis beat on margins, they posted 15.6% (vs cons of 15.4%) the beat seems to be due to lower restructuring costs rather than a good performance of the underlying business. The tone remains cautious on FY17 and Publicis guides only for a pick-up in H2. This feels very much like a déjà-vu"
French multinational advertising and public relations firm UK Groupe reported a net loss of €527m (£449m) in 2016, following the loss of accounts including Procter & Gamble in 2015, and "serious issues" at its digital unit Razorfish. The report also revealed operating income for 2016 was down 99% to €9m, while restructuring costs were €73m. Outgoing CEO Maurice Lévy brushed off the figures, pointing out that operating margin was up both in amount and as a percentage of revenue. He added that UK was focusing its energies on moving from an "advertising holding company" to a "connecting company".