Publicis Halves Dividend As Covid-19 Takes Toll On Ad Agency
(Bloomberg) -- Publicis Groupe SA said it’s halving its dividend as the French ad agency joins other companies in reducing investor payouts amid the coronavirus-induced economic downturn.
First quarter organic revenue -- a crucial metric for ad companies -- dropped 2.9% compared with a year ago, the Paris-based company said in a statement on Monday, bringing forward the quarterly publication initially planned for April 23.
- Publicis will pay out 1.15 euros a share, down from an earlier target of 2.30. The reduction will save more than 250 million euros ($272 million), Chief Financial Officer Jean-Michel Etienne told reporters in a call on Monday. The payment will be deferred to September from July.
- The agency is also implementing a plan to save 500 million euros for this year. Hiring and internal promotion freezes are some of the measures the company is adopting to save cash.
- Chairman Maurice Levy will take a 30% cut in his annual compensation while Chief Executive Officer Arthur Sadoun will have his fixed pay cut by 30% in the second and third quarters. Other management board members will see a 20% pay cut for the two quarters.
- “We are all facing a crisis that will be unparalleled in terms of magnitude, complexity and probably length,” Sadoun said in the statement.
- The company also refused to give any guidance for the rest of the year as “it’s too early to predict the full impact,” that the measures against coronavirus will have on its clients and Publicis’s business. But Sadoun said the company should brace for “difficult quarters” ahead.
- Publicis shares have lost around a quarter of their value so far this year, in line with the main French index CAC40.
- Publicis’s U.K. rival WPP Plc is also suffering. Its CEO Mark Read told Bloomberg television last week that job cuts couldn’t be ruled out.
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