India's strong showing in Publicis Groupe's global growth in Q1

MUMBAI: India continues to be a driving force for France-based global media conglomerate the Publicis Groupe in 2013. The group‘s business in the country grew at 10.7 per cent in the first quarter of 2013. It was the region to record the second highest growth after China that grew at 15.2 per cent.

Publicis Groupe‘s consolidated revenue for the first quarter of 2013 was Euro 1,563 million, up 7.6 per cent from Euro 1,452 million for the same period in 2012. The group registered overall organic growth of 1.3 per cent for the first quarter (8.5 per cent organic growth in digital and -2.3 per cent in analogue/non-digital business).

The growth by geographies was led by the BRIC+MISSAT (Brazil, Russia, India and China + Mexico, Indonesia, Singapore, South Africa and Turkey) regions at 14.2 per cent. The two combined territories grew from revenue collection of Euros 176 million in Q1 2012 to Euros 201 million in the first quarter of 2013. Russia grew at a rate of 5.7 per cent.

While North America contributed to nearly 50 per cent of the revenue, majority regions in Europe saw significant negative organic growth. Publicis‘ revenues in North America grew from Euros 724 million in Q1 2012 to Euros 776 million in Q1 2013, an increase of seven per cent. The region saw organic growth of 4.4 per cent.

Europe (excluding Turkey and Russia) registered organic de-growth of 6.5 per cent. It saw advertising investments decline sharply, mainly in the non-digital segment (analogue). The vast majority of countries in this region recorded negative growth, including Germany (-4.8 per cent), the UK (-6.1 per cent), France (-11.3 per cent), Spain (-13.1 per cent) and Italy (-13.7 per cent) while Central Europe grew by 3.8 per cent.

The group has maintained its thrust on India with its only acquisition in the quarter coming in the form of full service digital marketing and consulting agency Convonix. It is expected to align with Starcom MediaVest Group (SMG) in India to provide search engine optimization, paid search engine marketing (SEM), social media marketing and online reputation management to an extensive roster of clients.

Major account wins for Publicis Groupe in the country in this period included HP (DigitasLBi), Eureka Forbes (DigitasLBi) and Subway India (Publicis Worldwide).

Publicis has also recently made it known that it plans to make more acquisitions in the country. A technology services firm is said to be the next target on the group‘s mind which will be merged with its digital entity Razorfish on acquisition. Details of the agreement are expected over the next month.

Other major investment for the group in Q1 2013 was the completion of the share purchases of digital agency LBi International and the buyback of shares (approx. 3.9 million for a total price of 181 million euro) from Japanese media giant Dentsu.

The Groupe expects its revenue stream to grow slowly in the first half-year, then gathering pace in the second half-year, with annual growth for 2013 exceeding the market and its own performance in 2012. The Groupe‘s internal objective is between 3.2 per cent and 3.6 per cent.

Publicis chairman and CEO Maurice Levy said, "As I predicted, 2013 is turning out to be a difficult and contrasted vintage, with on the one hand the United States consolidating its growth and on the other hand Europe suffering. Our first quarter ended satisfactorily, and while 1.3 per centorganic growth may seem modest, it is above our internal objectives and compares with the strong growth recorded in the first quarter of 2012. This is particularly true for Europe with a 10 points gap between 2012 first quarter (+3.6 per cent increase) and 2013 (6.5 per cent decrease). The Groupe‘s transformation continues apace: digital activities now represent 37 per cent of total revenue, and strongly stands as our first activity. When combined with revenue from the so-called "emerging" markets, our business in these high-growth segments generates close to 60 per cent of our total revenue, in keeping with our five-year goal of 75 per cent from these segments. North America accounted for 50 per cent of our revenue in the first quarter of 2013. This rebalancing is very encouraging in order to meet the challenges of 2013 and 2014. They bear fruit as shown by our performance in net new business wins surpassing the high level of $ 2 billion. The pipeline remains solid and comforts us in the Groupe‘s ability to reach its objectives for 2013, namely to improve its margin and to outperform the market and our own 2012 in terms of organic growth."

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