Publicis to slash costs, dividend as coronavirus hurts Q1 sales

[PARIS] Publicis said on Monday it planned to slash costs by US$545 million by cutting management pay and halving its dividend after the coronavirus pandemic hurt first-quarter revenue.

Sales at the world's third-biggest advertising company, which had originally planned to publish its quarterly figures on April 23, were down 2.9 per cent in the first quarter to 2.48 billion euros (S$3.82 billion).

The decline was better than forecasts by five banks provided by the company for a drop of between 3.5 per cent and 8.4 per cent.

Revenue was down 9.2 per cent in Europe and down 1.9 per cent in the Asia Pacific region while up 0.5 per cent in North America.

Publicis, which competes against bigger rivals WPP and Omnicom, said it was still unable to give financial guidance due to the fallout from the pandemic

"We had a sound start to the year which confirms our business model," Chief Executive Arthur Sadoun told reporters. "But in March, we started to face big difficulties, notably in Europe."

The cancellation of major sporting events and the decimation of the luxury, entertainment and travel industries are delivering a hammer blow to a global advertising industry that was already reeling from years of tech-led turmoil.

Last month, WPP pulled its dividend and share buyback and withdrew its 2020 guidance.

On Monday, Mr Sadoun said Publicis would put a freeze on new hires, reduce use of freelancers, delay promoting staff and review contracts with suppliers to save money.

REUTERS