PARIS, April 21, 2011 /PRNewswire-FirstCall/ --
- Good start of the year
- Revenue: 1,286 million euros
- Growth (as reported): +10.7%
- Organic growth: +6.5%
- Net New Business: USD 1.9 billion
Maurice Levy, Chairman and Chief Executive of Publicis Groupe, stated:
Following up on its outstanding performance in 2010 Publicis Groupe confirms robust growth, with revenue up by 10.7% in the first quarter of 2011.
Our 6.5% organic growth in the period is particularly impressive in light of the challenging base effect we are facing - since we have been outperforming the market, quarter after quarter.
Our investments in digital are paying off, and the signals we are getting from emerging markets are highly encouraging. As before, China has priority status; we expect our business there to double by 2013.
Our net New Business wins - worth close to 2 billion US dollars - highlight how attractive Publicis is, with our boldly contemporary style, enjoying a healthy lead when it comes to gauging advertisers' needs in digital and social network communications.
All this strengthens our resolve to keep investing in digital (to increase our lead) and in emerging markets. We will also be maintaining our targeted acquisition strategy.
The global economic picture includes uneven growth rates and rising commodity prices, so the situation calls for cautious optimism. But as far as Publicis is concerned, we are confident that we will meet our growth targets in 2011.
I. Revenue
Consolidated revenue in the first quarter of 2011 was 1,286 million euro, up 10.7% from the 1,162 million euro earned in the prior-year period.
As expected, performance was better in the first quarter of 2011 than in the first quarter of 2010.
Organic Growth
Against a backdrop of recovery in the advertising market, Publicis Groupe achieved organic growth of 6.5%, up from 3.1% in the first quarter of 2010. This increase, superior to market growth, can be attributed to the upturn in the global economy, continued growth in the United States and good performance in certain European countries.
II. Business in the 1st quarter of 2011
Publicis Groupe took advantage of the return to normal market growth rates in the first quarter to confirm its ability to outperform the market. The primary drivers of this positive trend were continued business momentum in the United States and Europe, particularly in France, a return to growth in Germany and strong performance in a number of fast-growing economies. The Group's digital business, which accounted for 28.2% of total revenue (versus 27.0% in Q1 2010), was likewise a major contributor that validated the strategic choices made by the Group a few years ago.
In the first quarter of 2011, 32% of total revenue was generated by advertising (34% in Q1 2010), 49% by Specialized Marketing Services (SAMS), which include all digital services (47% in Q1 2010) and 19% by media activities (19% in Q1 2010).
Digital business and business in emerging economies accounted together for 48.3% of consolidated revenue in the first quarter of 2011, a result in line with the Group's medium-term target of earning 65% of total revenue from these two growth segments.
Publicis Groupe has a balanced customer portfolio, and all business lines posted growth in the first quarter of the year.
Breakdown of 1st quarter 2011 revenue by region
(millions of euros) Revenue
1st quarter 1st quarter Organic growth Q1 2011/Q12010
2011 2010
Europe 409 369 +6.2% +10.8%
North America 632 579 +8.1% +9.2%
Asia-Pacific 148 131 +1.5% +13.0%
Latin America 68 55 +8.7% +23.6%
Africa and the
Middle East 29 28 -0.5% +3.6%
Total 1,286 1,162 +6.5% +10.7%
Europe: Growth was satisfactory on the whole despite uneven performance from country to country. In France, business grew by an impressive 8.2%; in Germany, the return to growth was confirmed with a double-digit figure. Business in the United Kingdom was up 2.4%. In Southern Europe, Publicis was back on the path to growth in Italy, whereas the figures were still negative in Spain. The growth rate in Russia and Central Europe together was a full 7%.
North America: Publicis enjoyed sustained, 8.1% growth in the region, including 8.4% growth in the United States which once again shows the digital dynamics.
Asia-Pacific: In the region as a whole, business was up by just 1.5%, since the 8.2% growth in the Greater China region was not high enough to offset the negative numbers of Japan, Australia, Thailand or Korea the later is suffering from of a punctual phasing issue.
Latin America: Despite negative results in Colombia and Mexico, Publicis achieved 8.7% growth in the region, a performance driven by Argentina (up 24.8%), Brazil (up 20.1%) and Venezuela (up 15.7%).
Africa and the Middle East: The recent events hurt business in the region, except in the United Arab Emirates, where Publicis posted 7.0% growth.
Organic growth in China, Russia, India and Brazil reached 11.4% in the first quarter.
A major focus at this stage is China, a geography of strategic importance to Publicis, along with Brazil and India.
Stated in US dollars, the Group's revenue in the first quarter of 2011 would be US$1,758 million.
III. Cost Control
With economic growth back on the agenda, Publicis Groupe began as early as the second quarter of 2010 to invest once again at a pace that was better suited to its expansion requirements, most notably by hiring new talent. That trend is expected to reach cruising speed during the course of 2011. Publicis Groupe intends to maintain its strict cost control policy and to regularly and progressively improve margins, year after year.
IV. New Business: Net Wins Totalling 1.9 Billion USD
Publicis Groupe booked 1.9 billion US dollar in net New Business during the first quarter of 2011 (see enclosed list).
V. Net Debt at March 31, 2011
Net financial debt totalled 286 million euro at March 31, 2011, down from 707 million euro at March 31, 2010.
VI. Outlook
The advertising market trends observed since the end of 2010 came into sharper focus during the first quarter of 2011, bearing out the impression that things are getting back to normal - i.e. long-term growth in the advanced economies and ongoing growth conditions in the emerging and developing countries.
In its latest Advertising Expenditure Forecast, ZenithOptimedia has anticipated 4.2% global market growth in 2011. This forecast is in line with the latest estimates released by the IMF, which has kept its world GDP growth forecast unchanged at 4.4% since January 2011.
In this environment, Publicis Groupe has leveraged its major presence in the United States - still far and away the world's largest advertising market - and its strength in the country's fast-growing digital communications business to turn in solid growth. The Group has also made progress in Europe, its second leading market, with noteworthy success in France and a return to growth in Germany.
Publicis Groupe intends to carry on with a tried-and-tested global growth strategy that rests on two pillars: first with digital activities, a business expected to outpace the market as a whole with the expansion of social networks and mobile communications, second with fast-growing economies. Among those economies, the Group will be focusing most heavily on China, but also in India and Brazil, with the clearly-stated aim of doubling revenue earned in China within three years' time.
Publicis Groupe also reaffirms its goal of deriving 65% of total revenue from high-growth businesses three years down the line, with digital accounting for 35% and emerging and developing countries for 30%.
Regardless of actual business levels, the Group will be paying constant attention to its cost structure in order to raise its operating margin, year after year.
Publicis Groupe has maintained an extremely healthy balance sheet.
The substantial amounts represented by New Business wins in 2011 confirm the sense that the Group has a relevant offer, real drive and a pulse on customer needs. For all these reasons, Publicis Groupe can confidently look forward to outperforming current market estimates and further improving its operating margin.
Next General Meeting of Shareholders on June 7, 2011, 10 a.m., at publiciscinemas
About Publicis Groupe
Publicis Groupe [listed on the Euronext Paris Exchange - FR0000130577 - and part of the CAC 40 index] is the world's third largest communications group. With activities spanning 104 countries on five continents, Publicis Groupe employs approximately 49,000 professionals and offers local and international clients a complete range of advertising services through three global networks: Leo Burnett, Publicis, Saatchi & Saatchi, and numerous agencies including Fallon, 49%-owned Bartle Bogle Hegarty, and Kaplan Thaler Group. VivaKi combines digital and media expertise, allowing clients to connect with consumers in a holistic way, with Starcom MediaVest Group and ZenithOptimedia worldwide media networks; and interactive and digital marketing led by Digitas and Razorfish networks. VivaKi develops new services, tools, and next generation digital platforms. Publicis Groupe offers healthcare communications with Publicis Healthcare Communications Group (PHCG, the first global network in healthcare communications). And with MSLGROUP, one of the world's top five PR and Events networks, also provides expertise in corporate and financial communications, public affairs, branding, and social media marketing.
Website: http://www.publicisgroupe.com | Twitter: @PublicisGroupe | Facebook: http://www.facebook.com/publicisgroupe
"Certain statements in this report, apart from historical facts, may constitute forward-looking statements or unaudited financial forecasts. These forward-looking statements involve certain risks and uncertainties and may prove to be materially different from actual future results. All forward-looking statements are expectations as of the date of this report, and Publicis Groupe undertakes no obligation to update them for new events or for any other reason except as required by law. Publicis Groupe encourages you to study carefully all information concerning factors that may impact its business, as described in the Reference Document filed with the French market authority (Autorite des Marches Financiers)."
Appendix
New Business - Q1 2011
USD 1.9 billion (net)
Key New Business Wins
KAPLAN
Starwood (USA)
Leo Burnett
MAS Institute of Management & Technology (India); Micro Cars Limited (India); POM Wonderful (Japan); Triumph International (Japan); LSH Holding (Kuwait); LibanPost (Lebanon); Petronas Dagangan (Malaysia); Universidad Mexicana (Mexico); McDonald's (UK & USA); Flight Network (Canada); IKEA (Canada); Samsung (Hong Kong); Sun Hung Kai Properties (Hong Kong); Six senses resorts & spas (India); Sinar Mas (Indonesia); Indofood (Indonesia); Allergan (Mexico); Airphil Express (Philippines); Yahoo (Singapore); Dorchester Hotel Collection (UK); Wanke Shenyang (China); Costa Croisieres (France); Stepper Eyewear (Hong Kong); Beit Misk (Lebanon); Red Cross (UK); Giant Bicycles (Australia); DHL (Columbia); APM Terminals (Costa Rica); Sri Lanka Telecom (India); Petronas (Malaysia)
MS&L Group
TAKA (UK & Dubai); Special K (USA); Sodexo (USA); Keurig (USA); Schools Serve (USA); Mass Assn Health Plans (USA); Home Depot (USA); Carrabba's (USA); Clear Ballot Group (USA); UTC (USA); Ancestry.com (USA); AQMD-Incremental (USA); AstraZeneca (China);
Publicis Worldwide
Fresco (Italy); Heineken (Italy); Bernina International (Switzerland); Universita Bocconi (Italy); Ministro del Lavoro (Italy), Jupiter (Spain); Merino (India); LG (Worlwide); PMU (France); RATP (France); Fnac (France); Aeroports de Paris (France); Cortal (France); Playstation (France); Cartier (France); Visa (France & UK); IGN (France)
PHCG
Somaxon (USA); United Therapeutics (USA)
Razorfish
Starwood (USA), Disney (USA), Microsoft (USA)
Saatchi & Saatchi
Lenovo Group Limited (USA); Piaget (France); Assogestioni (Italy); Kavli (Sweden); UNIMED RJ (Brazil); Hanaka kyselka (Czech Republic); Toyota-Aygo and SUV range (Italy); Swissotel (Switzerland); Club Brugge (Belgium); Exellent (Belgium); Vlerick (Belgium); Kellogg (South Europe).
Starcom MediaVest Group
Tourism Malaysia (Malaysia); Heineken (Czech); Dairy Queen (USA); China Telecom (China); SATS (Singapore); Singapore Grand Prix (Singapore), Uniqlo (Singapore); Nyhavn Rejser (Denmark); Full Tilt Poker (Italy); BZWBK (Poland); Lotos (Poland); Upstream (UAE); Dreams (UK); YPF (Argentina); Microsoft (USA); Disney (USA).
ZenithOptimedia
Rioja Wines (Spain); JPMorgan Chase (USA); Wallmart (China); ABB (China); Motorcorp (New Zealand); United Overseas Bank (Singapore); Emporiki Bank (Greece); Banco Financiero y de Ahorro (Spain); Interbrands (Sweden); RecycleBank (USA); Jenny Craig (USA); Autotrader (USA); AZ/Medimmune (USA); C&A (China); Tourism Malaysia (Malaysia); MOM (Singapore); city of Antwerp (Belgium); Nyhavn Rejser (Denmark); L'Oreal (Greece); Khazan (Kuwait); MarCons (Kuwait); Galderma (Sweden); Parship (Sweden); Unum (UK); L'Oreal USA (USA); EDMC Incremental (USA); Reckitt Benckiser (India), Disney (USA)
2011 Press Releases
01-26-2011 Publicis Groupe Proposes to Acquire Chemistry through a Recommended Cash Offer
01-27-2011 Publicis Groupe Increases its Stake in Wefcos - Veronique Morali Appointed Wefcos President
02-10-2011 Publicis Groupe 2010 Annual Results
02-17-2011 Publicis Groupe Acquires London-Based Holler Strengthening Leo Burnett Digital Offer
02-21-2011 Publicis Groupe Launches Publicis Webformance - An Initiative Aimed at Supporting Small and Medium Businesses
02-23-2011 Publicis Groupe Acquires Interactive Communications Ltd. in Taiwan
03-03-2011 Publicis Groupe Acquires Kitcatt Nohr in the UK
03-10-2011 Publicis Groupe Acquires London-Based Airlock in its Latest UK Digital Operation
03-22-2011 Publicis Groupe Acquires India-Based Watermelon
03-30-2011 Jean-Yves Naouri Is Named Executive Chairman of Publicis Worldwide
04-15-2011 Publicis Groupe Sells Its Stake in Freud Communications
04-18-2011 Publicis Groupe Takes Majority Stake in Brazil's Talent Group
For further information: http://www.publicisgroupe.com
Publicis Groupe Contacts
Martine Hue, Investor Relations, +33(0)1-44-43-65-00, [email protected]
Peggy Nahmany, Corporate Communication, +33(0)1-44-43-72-83 [email protected]
SOURCE Publicis Groupe
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