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Aegis Regroups

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Shoring up operations in the U.S., not surprisingly, is among the top priorities on the to-do list of Jerry Buhlmann, the newly named CEO of London-based media agency holding company Aegis Group, parent of media shops Carat and Vizeum, digital shop Isobar and research firm Synovate.

The latest restructuring effort in the U.S. began last May with the appointment of Nigel Morris as CEO of Aegis North America. The turnaround effort is clearly a work in progress, said Buhlmann.

Last week, the company announced full-year 2009 financial results, posting a 9 percent fall in revenue to $2.05 billion, with an 18 percent revenue decline in the Americas division to $243.4 million.

"We've got a ways to go ... but I think we've got a better product for our existing clients and the right level of focus on growth and creating vitality through new business," Buhlmann said, noting it will take time to get the U.S. operation righted. "To expect it to happen in weeks and months would be naive," he added.

Buhlmann also said there are visible signs of progress at Carat, including last week's consolidated media planning and buying assignment for J.M. Smucker ($125 million).

Other clients, however, are reevaluating their relationship with Carat: both Alberto Culver and RadioShack have called reviews this year, and longtime client Revlon bolted without a review to WPP's MediaCom.

While analysts generally supported the appointment of Buhlmann, some questioned the long-term independence of Aegis itself. In a report issued last week, Numis Securities analyst Lorna Tilbian wrote that "Aegis remains a bid target. We believe in a recovering media environment the strategic logic of a combination with Havas is increasingly convincing."

Despite endless rounds of speculation, Buhlmann confirmed that there have been "no talks whatsoever" with Vincent Bollore concerning a merger between Havas and Aegis. Bollore is both the controlling shareholder and chairman of Havas and the largest single shareholder in Aegis with a just-under 30 percent stake.

Buhlmann noted that Tilbian was "entitled to her view, but our priority is to act in the best interests of shareholders." And at this stage, he said, a merger with Havas "is not a priority in any way, shape or form."

Aegis, after a 16-month search, last week turned inward, to Buhlmann, to fill the CEO position vacant since the departure of Robert Lerwill in November 2008. Interim CEO had been John Napier, who remains chairman of the Aegis board. Buhlmann intends to retain his Aegis Media CEO responsibilities as he takes on the broader corporate CEO job.

Despite the recession and the unit's underperforming U.S. operations, Buhlmann last year led his global unit to a record amount of net new business -- $2.7 billion in billings -- including assignments from Nokia, Kellogg and BMW.

In addition to continuing expansion in Asia, Latin America and Africa, the company will also be back on the acquisition trail financed by a new $255 million convertible bond offering.
 
Acquisitions, he said, will be about filling gaps in the existing network and "making sure we stay on the right side of innovation, particularly digital."