* Group confirms 2018 targets despite weak quarterly
* Underlying sales growth to return to market average in
* CEO Maurice Levy to hand over reins to Arthur Sadoun on
By Mathieu Rosemain and Gwénaëlle Barzic
PARIS, Feb 9 France's Publicis
reported weaker-than-expected underlying sales in the last
quarter of 2016, closing a challenging year that led it to
write-down the value of its digital business.
The world's third-largest advertising group, which underwent
an internal reorganisation to foster greater collaboration
between its myriad of agencies and win back big clients it lost
in 2015, will see its veteran chief executive Maurice Levy, 74,
hand over the reins of the group to 45-year-old Arthur Sadoun in
Fourth-quarter revenue amounted to 2.67 billion euros
($2.85 billion), reflecting an underlying drop of 2.5 percent
compared with the same period a year earlier, as the market
conditions in North America, Publicis' number one region in
sales, worsened over the three-month period ending in December.
A Reuters poll had forecast an underlying sales drop of 0.63
percent over the period.
Full-year earnings were also impacted by 1.44 billion-euro
($1.54 billion) non-cash depreciation charge, essentially for
the group's digital division Publicis.Sapient, resulting in a
net loss of 527 million euros.
The business unit's assets and financial forecasts had to be
revised, following the weaker performance of Razorfish, the
digital marketing agency that Publicis acquired in 2009.
Still, Levy confirmed the targets he set out under the
group's strategic plan for 2018, including a yearly operating
margin in the range of 17.3 to 19.3 percent. Last year,
Publicis' operating margin stood at 15.6 percent.
"It's true that we are running behind by a year (on that
plan)," Levy told reporters. "It's clear that it's a little bit
more difficult... but it's not unachievable," he added,
referring to the 2018 targets.
Levy also said that the challenges Publicis faced in 2016
will probably continue to weigh on sales in the first half of
2017. The group should see its underlying sales growth return to
market average in the second half, he added.
($1 = 0.9357 euros)
(Reporting by Mathieu Rosemain and Gwenaelle Barzic; Editing by