Publicis upbeat on 61% rise in revenues

Publicis Groupe SA of France, the world's fourth- largest marketing and advertising company has registered a 60.7 per cent rise in second-quarter sales. Publicis, which owns agencies such as Saatchi & Saatchi and Leo Burnett, has reported a raise in revenues for the first time in a year and a half.

This substantial boost in revenues is being attributed to last year's client additions of McDonald's Corp, which Publicis acquired through the purchase of Bcom3 Group Inc last September. The acquisition catapulted the group from number five to the fourth spot last year. Also, the company has recently won new brands worth 915 million euros, including Eurotunnel of UK, the Greek Olympic Committee and Virgin Credit Cards.

Boosted by strong performance in the US, organic sales for the second quarter registered a growth of 1.6 per cent after factoring out acquisitions and currency fluctuations, a first time hike since the fourth quarter of 2001, said chairman and CEO Maurice Levy during an analysts' conference.

The French advertising group has thrown up mixed results in different markets. Even though revenues declined markedly in France and Netherlands, Germany and Italy have shown some improvement, the group said.

Improvement in the North American and Asia-Pacific regions turned out to be the most distinct, where the group said the effects of Sars had been temporary and limited. The North American region, Publicis' largest revenue source, posted an 80 per cent growth in revenue, which translates into 4.6 per cent on organic basis.

Organic revenues in Europe, however, have continued to fall, slipping by 3.7 per cent to ?520 million in the first half of the year. Conditions in Brazil were again difficult during the second quarter, the group added.

Pointing out the unsettled and uncertain advertising markets, chairman and chief executive Maurice Levy said, "While forecasts still call for a general recovery in early 2004, many uncertainties remain."

Its larger rivals include Omnicom Group Inc., Interpublic Group of Cos, and WPP.

Publicis, which already owns three-fourths of ZenithOptimedia, is trying to buy the remaining 25 per cent of market researcher ZenithOptimedia from WPP Group Plc. It may have to cough up as much as ?85 million ($136 million) for the acquisition out of which 75 million pounds would be for the 25 per cent stake and 10 million pounds for franchises, Levy said. The deal is expected to go through by January.

With the US markets looking up, the outlook for the company is upbeat.


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