PR earnings outpace overall Q1 growth at Publicis

PARIS: Publicis Groupe's MSLGroup PR network saw organic revenue growth of between 2% and 3% in the first quarter of this year, according to a source at the company.

PARIS: Publicis Groupe's MSLGroup PR network saw organic revenue growth of between 2% and 3% in the first quarter of this year, according to a source at the company.  

The Paris-based holding company's overall organic revenue growth was 1.3%, compared with the prior year, reaching $2.04 billion. That rate was above its internal expectations.

However, the results failed to meet analyst expectations. It blamed the disappointing period on economic difficulties in Europe and an unfavorable comparison with the prior year.

North America accounted for half of Publicis' revenue in Q1, with organic growth up 4.4% on a like-for-like basis.

Organic growth in the BRIC and MISSAT (Mexico, Indonesia, Singapore, South Africa, and Turkey) countries was highest, at 5.5%. In Europe, the holding company saw an organic revenue decrease of 6.5%.

Publicis said digital accounted for 37% of total revenue in the quarter, up 8.5% compared with the prior year.

Speaking on an earnings call, Publicis chairman and CEO Maurice Levy said the jump in digital revenue was a result of the integration of agency LBi. Publicis merged digital agency LBi with digital network Digitas to create the DigitasLBi network.

The combined revenue of digital activities and revenue from emerging economies was close to 60% of consolidated revenue in Q1 2013. Net new business wins in the quarter amounted to $2.1 billion.

Publicis cited MSLGroup's account wins of PayPal, Emirates Airlines, and LaSalle Investment Management in the new business section of the earnings statement.

“Regarding new business, we have had some good new business wins and solid new business pipeline full of new opportunities, and we are very confident,” said Levy. “We are expecting lower growth in H1 and better growth in H2. We plan, we expect, and we will deliver an improvement in our margins starting in 2013.” 

Olivier Fleurot, CEO of MSLGroup, said the agency expects revenue to grow between 4% and 5% organically this year.

While growth in Europe is expectedly slow, MSL has seen strong earnings in China, he said.

“Because of the Chinese New Year, the first quarter is usually the slowest of the four; we think we can do a bit more,” he said. “Last year, we grew 4.6% organically, and we are confident we can do that again this year.”

Organic growth represents change in revenue without taking into account the impact of acquisitions or disposals. 

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