Publicis beats market expectations for second quarter in a row

By Mathieu Rosemain

PARIS (Reuters) - Publicis <PUBP.PA>, the world's third-biggest advertising company, beat market expectations for the second quarter in a row with a less severe fall in sales than feared as the COVID crisis continues hit ad spending worldwide.

The Paris-based group, which has struggled to convince investors with its strategy to move closer to consulting businesses like rival Accenture <ACN.N>, said clients were attracted by its data-driven new offers.

"We've had some drastic (spending) cuts from some of our clients," chief executive officer Arthur Sadoun told reporters in call. "We've managed to offset some of these cuts thanks to our model that helps customers in their transformation."

Publicis' quarterly underlying sales fell by 5.6% to 2.34 billion euros (2.11 billion pounds), above the average of 20 analyst estimates compiled by the company, which predicted a fall of 8.9% over the period.

The key metric benefited from the addition of new customers over the last 18 months such as Kraft-Heinz, TikTok and Reckitt Benckiser, the company said.

These new accounts helped limit revenue losses in North America, the company's number one region in terms of sales. Underlying sales in this region fell by 3%, significantly less than the 7.1% downturn expected by analysts.

This represents just a third of the fall seen in Europe, where countries such as France, Italy, Spain and Britain imposed strict lockdowns.

Publicis, home to ad agencies such as Leo Burnett and Saatchi & Saatchi, said the results were proof that the recent acquisition of data company Epsilon was beneficial to the group's offering and helped woo new clients.

"We're very cautious about the fourth quarter," Sadoun said with regards to the overall group performance.

But he added that the group would fulfill the 500 million-euro cost reduction plan announced earlier this year, thus helping to yield an operating margin slightly above 14.3% in 2020.

(Reporting by Mathieu Rosemain; Editing by Toby Chopra)