Publicis, Aegis On Rise

Buoyed by an improving European economy, France’s Publicis Groupe and England’s Aegis Group last week reported positive earnings results for the first half of 2004.

Publicis said its overall net income in the first half increased 23 percent to about $98 million, while net new business for the period was just shy of $2 billion.

Though the Paris-based holding company said first-half revenue was flat at approximately $2.3 billion based on the current rate of exchange, it added that excluding the impact of foreign exchange and acquisitions, organic growth in the first half was 4.5 percent. Publicis noted that the negative impact of exchange rates, with the U.S. dollar down 10 percent over the past six months, took some $120 million from its revenue tally.

“Strong first-half results confirm steady progress towards our goals for profitability and finances,” said Publicis chairman and CEO Maurice Lévy, in a statement.

Referring to an Aug. 20 announcement by the CAC 40 expert committee (which controls the index members on the Paris bourse) that Publicis is to join as a component stock, Lévy said in his statement that the news was encouraging. But he added that it came with an understanding of the high expectations for the company to deliver return on investment.

Meanwhile, London-based Aegis Group said its first-half revenue for the six months ended June 30 was $413 million, up 21 percent at constant currency, while organic revenue growth was 7 percent.

In a statement, Aegis CEO Doug Flynn said the group’s performance “is the result both of strength of our businesses as well as improving economic conditions.” He added that “our media businesses are winning significantly more than their share of new business and Synovate [the group’s market-research network] is carrying forward a comfortably higher order book than at the same stage last year.”

Combined, Aegis’ media group saw revenue growth of 7.4 percent to $263 million during the first six months, netting new business worth $1.2 billion in annualized billings—more than double what it realized in 2003. The most notable new-business win, however, was in the U.S., where Aegis’ Carat split Procter & Gamble’s $2.5 billion North American communications-planning business with Publicis’ Starcom MediaVest Group. Carat won an estimated 20 percent of the packaged-goods giant’s account, with SMG handling the rest.

The results from both companies were in line with or exceeded statistics from Eurostat, the European Union statistics office, which reported that economic growth in the 12-nation Eurozone was 0.5 percent in the second quarter and 2 percent on a 12-month basis. In a statement last week, EU commissioner for economic affairs Joaquin Almunia said he intends to raise growth forecasts next month.