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Acquisitions help Publicis report robust revenue growth

MUMBAI: Paris-based global media communications group, Publicis Groupe, has reported a 19 per cent rise in profit to 275 million euro in the six months ended June 30, 2012 from 231 million a year earlier.


Publicis‘ revenue grew by 14.3 per cent to 3.08 billion euro in the first half of 2012 from 2.69 billion euro a year earlier. The robust growth in revenues was despite the impact of the slowing down of the global economy, especially in the second quarter.


The growth in organic revenues (excluding revenues from businesses acquired during the six months) was just 2.8 per cent, which was also lower than in the first half of 2011.


During the first six months of 2012, digital services accounted for 33 per cent of total revenues (up from 29 per cent in 2011), while advertising contributed 30 per cent (31 per cent in 2011), 19 per cent came from the SAMS (20 per cent in 2011) and 18 per cent from media (20 per cent in 2011).


Publicis Groupe saw the highest organic growth in the BRIC+MISSAT countries at 8.9 per cent, where India grew by 15.1 per cent, second only to South Africa where organic revenue grew by 20.8 per cent. Organic revenue in Brazil grew by 12.5 per cent, in Russia by 5.9 per cent, in China 7.8 per cent and in Mexico 8.9 per cent.


In the European region, the growth in organic revenue in the UK was 4.1 per cent, while the growth was flat at 0.9 per cent in France. The other western European countries (Germany, Italy and Spain) too slowed down resulting in the overall growth in the region falling to 0.6 per cent.


North America recorded an aggregate growth of 2.6 per cent in organic revenue, thus continuing to show resilience despite the loss of the GM Media and Search account and the sluggishness in the healthcare sector. Organic revenue in the the rest of the world, which includes Australia and Japan, grew by 3.9 per cent, Publicis said.


The group‘s inorganic growth was fueled by a spate of acquisitions around the world including full-service Indian agency Indigo Consulting. Another notable acquisition by Publicis was that of Britain based global independent BBH and Brazilian agency Neogama/BBH. Other agencies/entities acquired by the French communications giant include BBR Group in Israel, Beijing based Longtuo, Flip Media in the Middle East and the Creative Factory in Russia.


For the second quarter of 2012 ended 30 June 2012, the Publicis Groupe reported revenue of 1.63 billion euro, a 15.5 per cent rise from 1.41 billion euro a year earlier. As in the case with the half yearly revenues, the BRIC+MISSAT economies witnessed maximum organic growth at 7.8 per cent. Organic revenue in Europe on the other hand shrunk by 1.7 per cent. In North America, the organic revenue growth was 1.8 per cent in the first six months. The rest of the world organic revenue grew by 3.9 per cent.


In a statement, Publicis Groupe Chairman and CEO Maurice Lévy said, "Just as we announced in our February forecast, organic growth has leveled off in the second quarter. This standstill results essentially from non-recurring events. Our third quarter should see a return to much higher growth, at rates far closer to our usual performance."


At 13,5 per cent, Publicis‘ margin is the same as last year‘s, notwithstanding weak growth in the second quarter. "This performance confirms our forecast for the year. The world economic situation is both volatile and uncertain. We need to maintain the greatest possible vigilance regarding our costs and investments," said Levy.

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