PARIS, July 29 (Reuters) – Publicis (PUBP.PA), the world’s third-largest advertising group by revenue, posted better than expected first-half results and raised its outlook as the global advertising industry recovers.
Publicis’ outperformance in the first half was fueled largely by a return to growth in nearly all regions, including the U.S., Europe, Asia, and Latin America, as well as by its digital business, the company said.
“The growth came from both new business and existing clients raising their ad spending,” Publicis CEO Maurice Levy told journalists. “We really have the feeling of being at the end of economic crisis, or even having put it completely behind us.”
Publicis, which competes with WPP (WPP.L) and Omnicom Group Inc. (OMC.N), posted first-half revenues of 2.54 billion euros and operating profit of 369 million euros, and had an operating margin of 14.5 percent.
The results exceeded analysts’ expectations of revenue of 2.44 billion euros, operating profit of 326 million euros, and a 13.4 percent operating margin.
Publicis’ strong performance comes after some of the world’s big advertising groups have sounded optimistic notes about the economic recovery lately as blue-chip companies boost their ad spending.
Omnicom posted better-then-expected results last week with CEO John Wren saying growth had returned to the U.S., Middle East, Asia, and Latin America, although Europe remained sluggish. [ID:nN16117713] [ID:nLDE65O1BB]
Analysts at ZenithOptimedia recently upped their forecast for worldwide advertising market growth from 2.2 to 3.5 percent this year.
“Of our 30 biggest clients, the vast majority of them have increased their ad budgets and are doing more business with us than before,” said Levy.
The group also signed new business contracts worth 2.1 billion euros in the first half.
Levy said the situation led Publicis to raise its full-year guidance for organic growth from 3 percent to at least 3.5 percent.
He also said Publicis hoped to exceed the 15 percent operating margin it achieved last year, a change from its earlier target of meeting last year’s level. [ID:nLDE65O1UT]
Levy added that concerns remained over Europe’s sovereign debt crisis and the prospects for the U.S. economy, but that he felt that Publicis would reach its raised targets nevertheless.
“There are indications that the market could slow, and I take them into account,” he said. “But even in a slowing market Publicis will do better than what we have announced till now.”
(Additional reporting by Cyril Altmeyer, editing by Geert De Clercq)