Publicis faring better than rivals as revenues fall

PARIS - Publicis Groupe, the French advertising group that owns Saatchi & Saatchi, said it was performing better than the market as a whole as it reported that revenues had fallen by 3.6%.

The 3.6% fall in revenues was on a fully comparative basis, which compares well with the 6% industry slowdown average estimate.

First-half revenues increased by 2.4% to €1.2bn (£767m) compared with €1.1bn last time. Shares in Publicis responded well to the news and closed up 0.5% in New York last night at $20.35.

In a statement, chairman and Publicis CEO Maurice Levy said: "We had indicated at several points that there was little visibility in the advertising market. This was confirmed by the marketplace's behaviour in the second quarter, when the slowdown accentuated to a level of about 6% for the full first half of 2002."

The group said that the global advertising market had been more difficult than forseen, and pointed to the end of contracts between Publicis and Frito-Lay and Saturn in the US for a fall in organic revenues of 6.2% in North America. New business for the group totalled €130m.

"Yet despite the losses, our group fared better than the market as a whole. Our recent strong new business performance demonstrates our ability to win in a particularly flat market. The impact of the wins will start to be felt in October/November. We believe the high level of 2001 margins is almost secured for 2002," Levy said.

Publicis is set to complete its merger with Bcom3 in the second half of the year, a move that will make it the fourth largest advertising group in the world, with revenues of more than €4.5bn.

At the same time, rival French ad group Havas has denied reports that it is facing a credit squeeze as "pure speculation".

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