Publicis Predicts Faster Growth Spurred by Sapient Acquisition

Publicis Groupe SA, which cut its 2014 sales forecast following a failed merger with Omnicom Group Inc., said it will start to recover next year helped by the acquisition of U.S. digital agency Sapient Corp.

Revenue will grow at 2 percentage points above the industry average each year from 2016, reflecting the integration of Sapient, Paris-based Publicis said in a statement today. Publicis, the third-largest advertising company, predicted its operating margin will rise to between 17.3 percent and 19.3 percent of sales in 2018 compared with 15.3 percent in 2012.

“We have the scale we’ve been targeting now in digital,” Chief Financial Officer Jean-Michel Etienne said in a webcast. “A transformed Publicis will allow us to streamline costs and increase our profitability.”

The company, which in May abandoned a $35 billion merger with Omnicom that would have created the world’s largest ad company, last month agreed to buy Sapient for $3.7 billion. With Sapient, Publicis expects to achieve half of sales from digital operations next year, rising to 60 percent in 2018, it said today.

“For eight years we’ve been investing in digital and we believe that digital will change the world and we’ve been investing in that massively,” Chief Executive Officer Maurice Levy said in the online presentation.

Publicis shares were little changed at 59.37 euros at 3:42 a.m. in Paris.

The company will also increase its ratio of dividends to profit from 35 percent in 2015 to 42 percent in 2018.