(BFM Stock Exchange) – The British advertising group launched a heavy warning on results this Wednesday, July 9. In the same sector, Publicis contains its decline. The group has demonstrated for several quarters that its growth exceeded that of its competitors and that it managed to win new contracts.

WPP wiped out the major stock market correction of the day in Europe. The British advertising group collapsed by 17.8% on the London Stock Exchange at the end of the session.

The company across the Channel issued a heavy warning on results this Wednesday, July 9. WPP announced that its adjusted income of certain costs would drop from 4.2% to 4.5% in data comparable in the first half, with a fall of 5.5% to 6% in the second quarter alone. Even if this activity is “penalized by exceptional elements, it is less than our expectations”, recognized the company. The company cited “a difficult economic context” to justify this poor performance.

“Since the beginning of the year, we have been faced with a difficult commercial environment, with an intensification of macroeconomic pressures and a drop in new contract gains,” said the Director General of the Company. “While we expected the second quarter to be similar to the first, the results of June were worse than expected and we expect this trend to continue during the second half,” he added.

The British company therefore expects the economic uncertainty to continue to weigh on the expenses of its customers. Consequently, WPP has lowered its forecasting of variation in its adjusted income for 2025. The group anticipates a withdrawal between 3% and 5% against a variation between -2% and 0% previously. The company also expects its operating margin to drop from 50 base points (0.5 percentage point) to 175 base points this year, while it was tab for a stability of its profitability, previously.

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Publicis limits the breakage

If WPP pays Rubis on nail This heavy disappointment, the contagion effect on Publicis is very measured.

The advertising group, of course, accuses one of the most marked folds on CAC 40 on Wednesday, but its drop remains contained at 1.5%.

“Read-across” (“cross-reading”), a market mechanics that leads investors to worry about the entire sector when a company in this sector announces bad news, therefore does not take enormously.

“Mechanically the whole sector of advertising groups decreases by ‘sympathy’ for WPP (Omnicom fell 2.7% in New York and Intepublics sold 2.5%, editor’s note. But WPP falls essentially for their own reasons. And for its publicis signs good commercial performances for several quarters,” explains a financial intermediary.

“In terms of contract gains, the two big success recently won by Publicis, namely Coca-Cola and Mars, were also taken at WPP,” he continues.

“The perverse effect is that Publicis is exchanging with a stock market premium compared to its sector. As its competitors fall on the stock market, the title must also decrease because this premium cannot grow too much at once. Basically what is most negative at Publicis is its sector,” explains this financial intermediary.

Growth that overshadows competition

Publicis has been growing growth higher than its competitors for several quarters now. In 2024, its income increased by 5.8% in comparable data, compared to 5.2% for OMNICOM, 2.3% for WPP and 0.2% for Interpublic. Its cadence remained high in the first quarter of 2025 (+4.9%), while that of Omnicom experienced a brake (3.4%), when WPP (-2.7%by excluding certain costs) and Intepublic (-3.6%) suffered.

Publicis had then indicated that he had won records of record contracts, with in particular 12 major commercial successes. Quoting a note from JPMorgan, Publicis put forward $ 2 billion in net contracts gleaned in the first quarter, which placed it far ahead of his closest competitor (Interpublic with 200 million euros).

His CEO, Arthur Sadoun, has on multiple occasions, underlined the positioning of his group and the convergence of his professions, between creation, data analysis, and advice in digital transformation, to explain the outperformance of Publicis.

The leader thus quoted “the combined offer (of the group) in data and media” which allows to offer his customers “a large -scale personalization”, last year.

“We believe that Publicis has the right management team in place to navigate the changes necessary for the business model, and we believe that Publicis can continue to provide expansion of the medium -term margins by benefiting from the efficiency of the AI,” said UBS.

The results published next week

Investors will soon be able to note whether Publicis’s activity is still as dynamic. The company will deliver its accounts of the first half on July 17, next Thursday therefore, and will also inaugurate the BAL des publications semi -annual CAC 40.

Publicis had indicated that its growth in the second quarter would be in its annual range, that is to say an increase ranging from 4% to 5% in comparable data. UBS awaits a figure of 4.8%.

In a note published last week, Bank of America noted that market expectations had become higher on this publication, with potentially stronger income than expected by analysts to see an increase in perspectives.

“However, most American investors doubt the sustainability of its ‘new’ income growth algorithm, because the deflationary risks linked to the generative AI, in particular in the field of creation, remain a major problem,” added the bank.

“Uncertainty about pharmaceutical advertising budgets has also been cited as a short-term risk. On the other hand, investors based in Europe are generally optimistic about history and often refer to the low valuation of advertising compared to its unconventional peers (Capgemini, Accenture …)”, she continued.