Publicis posts €527mn net loss

Publicis Groupe posted a net loss of €527 million despite increasing annual revenues by 1.4% to €9.7 billion.Ongoing "serious issues" at its digital agency, Razorfish, which it merged with SapientNitro late last year as part of a North American restructuring, led the the French advertising and communication company to book a €1.44 billion depreciation charge that led to a net loss of €527 million.Publicis purchased Sapient for €$3.7 billion in 2015 to expand its digital assets. However, the digital arm posted negative growth for the first two quarters after the deal was completed.https://youtu.be/4WkZRHYs8acIn a briefing with reporters, Publicis chief executive Maurice Lévy said that the company had expected Sapient to post stronger organic growth than the 7% increase it posted last year.He said Sapient wouldn't reach the "very aggressive" targets it set, and that "we had a business plan that was probably too ambitious."Lévy and Publicis chief financial officer Jean-Michael Etienne also attributed the slow growth to issues at Razorfish, including the high turnover of executives and duplicative offerings between Razorfish and SapientNitro. Razorfish posted a 15% drop year on year.Publicis acquired Razorfish in 2009. It then merged SapientNitro and Razorfish in November 2016 to streamline the redundant offering.Hard hit in North AmericaPublicis has reported -2.5% growth for Q4 and 0.7% growth for the full year.North America, the region that accounts more than half of Publicis' total revenue, was the weakest region, its growth rate reported to be -6.9% for the year. The loss of several media-buying accounts in 2015 and 2016, including Procter & Gamble and Walmart, had hurt sales, and lead to a third quarter of negative growth in the region, Publicis explained."We had a fourth quarter that was pretty bad," Lévy said. He added that reaching the company's 2018 objectives was still attainable, but would be difficult.