Omnicom PR revenue up 1.2% in first quarter

Omnicom Group reported Tuesday morning that its PR agencies achieved 1.2% organic revenue growth in the first quarter compared with Q1 2013.

NEW YORK: Omnicom Group reported Tuesday morning that its PR agencies achieved 1.2% organic revenue growth in the first quarter to $325.4 million, compared with Q1 2013.

Omnicom owns and operates FleishmanHillard, Porter Novelli, Ketchum, and Marina Maher Communications, among others.

Overall revenue was up 4.3% organically in the period to $3.5 billion, including a 4.8% increase in North America to $1.9 billion. US revenue grew 5.6% organically to nearly $1.9 billion.

Omnicom’s PR function had the lowest revenue growth rate among its major disciplines. Advertising was up 4.9% organically in Q1, CRM increased 4.2%, and specialty communications grew 5.2% year-over-year.

FleishmanHillard exceeded Omnicom’s PR growth rate, according to the firm’s president and CEO Dave Senay. He did not give exact figures, but explained that, adjusting for the sellback of PR specialist firm Stratacomm to its partners earlier this year, FleishmanHillard would have registered high-single-digit growth.

"[FleishmanHillard] had been resurgent in this market since December, when we grew [revenues] more than 6%," he said. "We attribute this to clients embracing [the agency’s] approach to fully integrated communications, with social at the heart of everything."

Ketchum entered this year with strong momentum after finishing 2013 with high-single-digit growth, according to the firm’s CEO, Rob Flaherty.

"We continue to see tremendous opportunity in the PR sector, leading to increased demand for our services," he said. "This reflects both the changes that are taking place in our industry as well as the pressure our clients are under to deliver results. It also underscores how our discipline is increasingly collaborating with others at the marketing table."

Operating income was up 3% to $382.7 million, and the holding company’s 10.9% operating margin was unchanged compared with Q1 2013. Net income increased by 0.2% to $205.5 million.

Broken down by region, European revenue increased 2.3% organically to $1 billion. Revenue from the Asia-Pacific region jumped 5.7% to $359.1 million, while Latin American revenue increased 7.4% organically to nearly $91 million. Omnicom’s revenue in Africa and the Middle East was up 6.6% year-over-year to $55.7 million.

The results included $7 million in pre-tax charges related to the holding company’s pending merger with Publicis Groupe.

Publicis last week reported a 3.3% organic revenue increase in the first quarter, though it did not break out PR revenue.

Executives from Porter could not be immediately reached for comment.

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

This story was updated on April 22 and 23 with additional information about the performance of FleishmanHillard and Ketchum, respectively.

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