Media Headliner: Buhlmann looks beyond Aegis takeover saga
campaignlive.co.uk, Friday, 02 April 2010 12:00AM
The newly appointed group chief executive, Jerry Buhlmann, is committed to an independent future, Ian Darby writes.
Despite having stepped off a plane from the Far East several hours earlier, Jerry Buhlmann, the new chief executive of Aegis plc, appears to be alarmingly focused. Talking to Campaign at Carat's London Parker Tower HQ, he says he packs his running gear for each trip and, through a combination of pounding the streets and eschewing alcohol, shrugs off the effects of jet lag.
Buhlmann, 50, may now be spending more of his days in the air following his promotion to the group role from his previous posting as the chief executive of Aegis Media. The promotion caps a long career with the group that began when it acquired BBJ, the media agency he co-founded, in 1998.
The role is a high-profile one, partly due to the almost constant speculation that surrounds Aegis' relationship with its largest shareholder, Vincent Bollore, who also happens to be the Havas chairman.
However, the announcement of Buhlmann's promotion, along with a £170 million bond issue to enable Aegis to invest in acquisitions, has dampened some of the speculation that Bollore is again considering a takeover bid. Buhlmann is adamant that Aegis' future is not dependent on this situation. He says: "There is a clear strategy for us to operate as an independent - we have had a long and successful past and we'll have a long and successful future."
But what of the board's relationship with Bollore, especially given that he has consistently tried, and failed, to secure stronger representation on that board? Buhlmann says: "Bollore is a big shareholder and he's a supportive shareholder. Some of the issues in the past are now gone - John Napier (the Aegis chairman) has sorted those out and there is now a more open, supportive relationship, and investors, our shareholders, are happy."
City observers seem confident that Buhlmann can handle this and other issues. Paul Richards, an analyst at Numis Securities, says: "From a City perspective, he's come across very well. Aegis has always fielded a strong front bench at presentations - we've always had broader exposure to the Aegis senior management team and he's well regarded."
Buhlmann's reputation in the media industry is another matter. Some have found him lacking in warmth and charm - "cold" and "clinical" are words that come up when people describe him - yet his image as a ruthless ball-breaker may not be entirely deserved.
Senior management at Aegis Media indicate that his style is more open and less dictatorial than some would expect. One says: "He's a good businessman and builds fantastic teams, and is great at letting people do their own thing and giving you the freedom to get on with your job." Yet there seems little doubt that this team-building ability is underpinned by burning ambition. Buhlmann has survived longer than many other senior managers at Aegis (see box) and some who have worked with him argue that this ambition can become all-consuming.
For the time being at least, he will have two jobs - continuing as the Aegis Media chief executive, as well as taking on the group responsibility. "It's a tough, tough job.
Nobody else in media has an equivalent role," one rival says. But Buhlmann says there are no plans to change this structure. A situation perhaps made easier because possible internal candidates for promotion, such as Aegis Media's Northern Europe chief executive, Nigel Sharrocks, and Isobar's chief executive, Mark Cranmer, are not said to be overly keen due to the extensive travel involved.
Aegis' strategy is unlikely to change significantly following Buhlmann's elevation. Some analysts feel that Aegis should dispose of its Synovate research business once economic conditions are favourable but Buhlmann maintains that it remains committed to the business and that there is a two-year development strategy in place. Aegis Media will continue to invest in its media networks Carat and Vizeum and its digital arm Isobar, a collection of digital acquisitions that brings in 31 per cent of Aegis Media revenue. Observers predict that it will be a tough job to create a coherent network out of these diverse businesses but feel that Cranmer is up to it.
More worrying, the critics suggest, is Aegis Media's reliance on Europe, especially Western Europe, for its revenues. Yet, Buhlmann argues, Aegis is well placed to grow in emerging Asian markets and is sorting out its much publicised troubles in the US. Last May, he appointed Isobar's Nigel Morris as the chief executive of Aegis North America as it attempted to stem a tide of account losses and move on from a period of job cuts and restructuring.
In China, Buhlmann says Carat is the third-biggest agency and that its 18 per cent stake in Charm Communications, a significant player in China's TV industry, also lends it weight. He adds: "Aegis is a very young holding company and only came into media in the States and Asia in around 1998. But in Asia in particular, the last year has been a fantastic year."
Buhlmann says that the downturn, which saw Aegis dispense with the services of 5 per cent of its global workforce, and an ensuing period of "discontinuity and convergence" will provide Aegis with opportunities, and he refutes suggestions that networks such as Carat have set traps for themselves by ruthlessly competing on price while adding little in the way of value for clients. He says: "I tend to see things in terms of opportunities - there is a real trend for agencies and clients toward a much greater element of performance-related pay which is very healthy. Procurement forces agencies to demonstrate they can deliver this value, so I'm not negative about the situation at all - there's a large element of agencies having to become more accountable."
Accountability is an issue for Aegis Media in Germany, with the former client Danone seeking reparation through the courts for a sum of money relating to supposed media owner discounts between 2003 and 2006. Buhlmann argues that it does not have wider implications for the group: "We don't face conflict with clients very often but I'm sure this one will be resolved."
Buhlmann prefers to focus on more positive elements of the Aegis story, not least its "very good footprint in the digital space". This, he argues, means that the group is well set for strong growth: "The transformation of the media market is happening so fast that it's hard to stay ahead and, if you look at Aegis, we have around 16,000 staff compared with hundreds of thousands at, say, WPP, so agility has to be part of our suit - we have to operate like a challenger."
Aegis certainly has issues to address and, in a consolidating world, continues to be surrounded by takeover speculation. That said, in Buhlmann it has a tenacious and determined leader who is adamant that the strongest lap of its race is yet to be run.
THE AEGIS MERRY-GO-ROUND
November 2003: Aegis Media's joint chief executives in Europe, Bruno Kemoun and Eryck Rebbouh (nicknamed "The Twins"), leave to launch their own agency in France. Jerry Buhlmann, then the chief executive of Carat International, is promoted to replace them. His main rival for the job, Aegis Media's UK chief executive, Mark Craze, leaves four months later after being overlooked by the group chief executive, Doug Flynn.
February 2005: Flynn, a big supporter of Buhlmann's, is poached to become the chief executive of Rentokil Initial. Aegis' non-executive director Robert Lerwill is appointed as his replacement. The subsequent announcement that Mainardo de Nardis will be arriving from Mediaedge:cia as the global chief executive of Aegis Media seems to dent Buhlmann's immediate ambitions.
May 2008: De Nardis announces he is leaving. He is thought to have become frustrated after a supposed agreement that Lerwill would step aside to allow him to become the group chief executive fails to be realised. However, his departure clears the path for Buhlmann.
November 2008: Lerwill leaves after reportedly being ousted by the Aegis chairman, John Napier, over strategy disagreements. Napier will caretake the chief executive role while Aegis takes cost-cutting measures to battle the downturn.
March 2010: Buhlmann steps up to group chief executive, capping a 13-year Aegis career. He will also continue as the chief executive of Aegis Media.
This article was first published on campaignlive.co.uk
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