Publicis Groupe posted a net loss of €527 million despite increasing annual revenues by 1.4% to €9.7 billion.
The results, against the backdrop of a 1.4% revenue increase, illustrate the problems encountered by the company since acquiring SapientNitro in 2015.
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 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.
While revenue climbed 1.4% to €9.3b, organic growth was only 0.7%.
Fourth quarter organic revenue fell 2.5%, with Publicis partially blaming “unusually negative volatility” for the decline.
In Asia Pacific, 2016 total revenue hit €1.08b, up 1.8% on the previous 12 months, with Q4 revenue up 0.3%
Organic growth for the year in APAC climbed 1.5% but fell 1.5% in the last three months of 2015.
Vietnam achieved one of the sharpest organic revenue increase, rising more than 10%.
South Korea, Australia, Singapore and Thailand grew between 5% to 10%, India climbed between 0% and 5% while China and Japan saw a revenue slide.
Global digital organic revenue climbed 3.2% – and 9.5% in Asia Pacific – while income from analog fell 2% globally and 2.8% in Asia Pacific.
Digital accounted for 53.6% of total Publicis Groupe revenue, up from 52%.
Food and beverage and healthcare sectors generated the biggest percentages of digital revenue for Publicis – 60% against 40% traditional – while leisure, energy, luxury and financial sectors produce more analog revenue.
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.