February 6, 2019 / 5:00 PM / 5 months ago

Publicis lifts full-year profits despite sluggish sales

* Q4 organic growth far below consensus

* Operating margin and EPS above targets

* CEO doubles down on strategy to move toward consulting

By Mathieu Rosemain and Gwénaëlle Barzic

PARIS, Feb 6 (Reuters) - France’s Publicis booked record earnings per share in 2018 by squeezing costs and simplifying its organisation as it races against time to convince clients it has the right business model in a world that is going digital.

The world’s third-biggest advertising company said fourth-quarter net revenue fell 0.3 percent to about 2.49 billion euros ($2.83 billion), excluding the impact of acquisitions and foreign exchange, far below market expectations of growth of 2.5 percent.

Yet the Paris-based company managed to beef up its full-year operating margin rate by 0.60 percentage points to 16.7 percent, above its self-set targets, thus strengthening its position as the most profitable ad group compared to rivals WPP and Omnicom.

Rigorous cost management and greater collaboration between a myriad of creative agencies worldwide helped increase profits, as Publicis strives to move away from traditional advertising and closer to digital transformation and consulting via its arm Publicis.Sapient.

“We’ve made structural efforts to simplify things, get people to work together, cut the number of profit and losses statements so that we all work more like a platform and not like a holding company,” Chief Executive Officer Arthur Sadoun told reporters ahead of the results. (Reporting by Mathieu Rosemain and Gwenaelle Barzic)

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