Publicis: Q1 Organic Revenue Up 3%

BOSTON Publicis Groupe today reported a 6.5 percent rise in first-quarter revenue to approximately $1.5 billion, a nearly 12 percent improvement at constant exchange rates.

In organic terms, excluding exchange fluctuations and the impact of acquisitions (such as Boston-based i-shop Digitas), Q1 growth was 3 percent.

Maurcie Lévy, chairman and CEO of the Paris-based holding company, said in a statement, “The first half of 2006 took into account the revenue of accounts lost at the end of 2005 and beginning of 2006, thus reducing the relevance of comparisons with this period: this explains Q1 organic growth at close to 3 percent, a figure which does not truly reflect the dynamism of our operations, or the organic growth we expect for the year as a whole.”

He pointed to Q1 net new business of $2.5 billion, the “smooth integration” of Digitas (and its 16.8 percent revenue growth in the first three months of the year) as positive signs for the rest of 2007, with overall projected organic growth of 5 percent.

Publicis completed its $1.3 billion Digitas acquisition at the end of January, a move designed to bolster its interactive capabilities worldwide. This week, Digitas spun off Prodigious, a production company dedicated to handling the creation of banner ads, e-mails and parts of Web sites for Publicis shops and other agencies.

Even so, Lévy conceded that buying Digitas will result in integration charges and cost-cutting for the year, though he did not go into detail. (The holding company today made major changes in the alignment of its digital agency portfolio.)

Other Q1 acquisitions for the holding company included U.S. shops Pharmagistics (a medical marketing specialist) and the McGinn Group (a strategic consultancy) and China’s Yong Tang, a marketing-services company.

Key recent new-business additions include Fox Filmed Entertainment, GlaxoSmithKline, Oral-B, Newell Rubbermaid, General Mills, Wal-Mart and Wendy’s.

The company did, however, take some noteworthy Q1 hits, including losses of assignments from Sprint and Macy’s.

Publicis’ larger rival Omnicom last week reported an 11 percent rise in Q1 revenue to $2.85 billion. The improvement was 7.5 percent in organic terms.

In accordance with French accounting practices, Publicis will report its net income at mid-year.