Publicis expects rebound after Q2 slowdown

Reuters: Publicis last week reported a 13 per cent hike in first-quarter sales and the French advertising agency said it expected growth to pick up in the final six months of 2012 after a slower second quarter.

The company is predicting a subdued second-quarter as clients shift their advertising budget to the second half of the year to coincide with the London Olympics and the US presidential election.

“We should see a deceleration of growth in the second quarter and a stronger second half compared with the first half,” Chief Executive Maurice Levy told reporters during a conference call. Levy also said he aims to match in 2012 last year’s operating margin, which improved by 0.2 point to 16% after the company sharply reduced costs.

Publicis, which is the world’s third-largest ad group by revenue and competes with WPP and Omnicom, reported a 13 per cent rise in first-quarter sales to 1.45 billion euros ($1.90 billion), driven by the U.S. and fast-growing emerging markets as well as digital advertising worldwide.

Organic growth in the quarter was 4.1 per cent, the company said. Market research group Zenith Optimedia, a unit of Publicis, forecast in March that the global advertising market would grow by 4.8 per cent in 2012, up from 3.5 per cent in 2011. Levy said the company planned to buy more small and medium-sized firms, but ruled out large M&A deals.

“We don’t have these types of plans,” he said.

Publicis has made several acquisitions since the start of 2012, including Pixelpark, Germany’s largest independent digital communications company.

Levy is set to collect 16.2 million euros ($21.6 million) in deferred pay this year after the advertising agency hit some performance targets and based on the length of his service as chief executive. The bonus was condemned by unions and some politicians.