Publicis Groupe SA (PUB), the French company merging with Omnicom Group Inc. (OMC) to form the world’s biggest advertising company, said first-quarter sales rose 2.2 percent as Europe showed a “fragile” recovery and demand improved in emerging markets.
Revenue in the period was 1.60 billion euros ($2.21 billion), Paris-based Publicis said in a statement today. That compared with the 1.61 billion-euro average estimate of seven analysts surveyed by Bloomberg. Stripping out effects from currency fluctuations, which lowered revenue by 67 million euros, sales advanced 6.8 percent.
Publicis, which owns the Leo Burnett and Saatchi & Saatchi ad agencies, said business in China had picked up in the first quarter after contracting late last year. In Europe, there was growth in Spain and Italy for the first time since 2011, it said. While the company confirmed its growth target of more than 4 percent for the year, it cautioned the second quarter would not be as strong because of high comparables from the previous year.
“We have a much improved situation compared to the last quarter, but there are still a few uncertainties and we have to remain cautious regarding all the emerging markets, not only China,” Chief Executive Officer Maurice Levy told Bloomberg Television in an interview. There are positive signals across Europe, though the favorable trend is “still fragile,” he said.
Shares of Publicis rose as much as 4.5 percent in Paris. The stock was the biggest gainer on the leading CAC 40 Index, rising 2.5 percent to 64.63 euros at 10:46 a.m.
Publicis’s merger with Omnicom, awaiting approval only from Chinese regulators, is “slower than anticipated” after receiving clearance in all other jurisdictions including the U.S. and Europe, the company said. China is expected to decide on the combination in the third quarter, it said. The companies initially expected to merge in the first quarter of 2014.
“We don’t see any major hurdles -- it’s only a lengthy process that is taking more time than we expected,” Levy told Bloomberg Television. “Still, we don’t see anything that could come in the way of an agreement. We are absolutely confident that we will get the authorization.”
Plans the company outlined last year to reach an operating margin of 18 percent to 20 percent by 2018, from 16.1 percent in 2012, are on track, Publicis said.
The company had new business in the first quarter from brands including British Airways, Honda, American Express and Puma.
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