Publicis reports 8.1% Q1 growth

Paris-based holding company Publicis Groupe reported an 8.1% year-over-year increase in its first-quarter earnings, casting 2010 into a more positive light than the economic hardships of the last year. Total Q1 revenues were $1.55 billion.*

Organic growth, an indicator that omits currency fluctuations and acquisitions, increased 3.1%. This contrasts with repeated declines for the sector in 2009.

Solid recovery in the US, as well as growth in emerging markets, China in particular, propelled the Q1 growth. North America produced 4.8% in organic growth for the quarter, while the US saw 5.6%, excluding Razorfish.

Publicis’ agency roster also includes Publicis Modem, Publicis Dialog, Leo Burnett and its Arc Worldwide marketing services arm, and Digitas.

“North America experienced an excellent recovery…thanks to digital services and good performance in retail, financial services and healthcare, as well as the stabilization of the automotive sector,” the company said in its earnings statement released April 22.

Europe, however, lagged behind, experiencing a 1.5% decline during the period. Some regions, such as France, performed well, and the UK returned to positive growth, but Northern parts of the continent, including Germany, saw declines.

Separately, Maurice Levy, the holding company’s CEO, told the UK’s Guardian newspaper that he will not renew his term as CEO of the company when it expires in late 2011. The Guardian noted that Levy joined the firm in 1971.

Publicis’ leadership has been vocal about its desire to strengthen the holding company’s digital offerings. It noted that digital business accounted for 27% of its total revenue for the quarter, an increase over the 20% earned a year ago. The holding company acquired digital agency Razorfish last year.

Rounding out the rest of its portfolio, advertising generated 34% of total revenues; the Specialized Marketing Services (SAMS) division, which includes all digital and PR, increased to 47%; and media activities declined to 19%.

“Without yielding to undue optimism, the year has started in a way that bodes well for a 2010 financial period that will be closer to our usual level of performance,” Lévy said in a statement.

Lévy previously said he expected to return to growth by the halfway mark of this year. Fellow holding companies Omnicom and Havas have also reported positive results for the quarter.

Publicis said it brought in $1.2 billion in net new business for the quarter, which ended March 31.

*All figures were converted from Euros to US dollars using the Xe currency converter.

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