French advertising giant Publicis reported third quarter revenue fell 1.5 percent to 1.105 billion euros (£883 million), hit by a 71 million euro (£57 million) negative impact from the weak dollar and the pound against the euro, the company said today. Had exchange rates remained constant, the group would have booked a 5.1 percent increase in sales. Still, revenue just about hit analyst estimates of 1.113 billion euros (£889 million). Organic growth was up 3.9 percent, which CEO & Chairman Maurice Levy noted was “higher… than we expected, and finished better than we might have feared, given the turmoil in the world-wide financial system.” Levy warned, however, that the global financial crisis has pushed the mature economies into “a zone of turbulence,” and that the ad industry is facing “a difficult end of 2008 and a marked slowdown in 2009.” Still, Levy said that Publicis was holding a “number of strong trump cards,” including its foray into digital and emerging markets, the two sectors he believes will show strong growth in 2009. “These initiatives should allow us to compensate the growth weaknesses in mature markets or traditional sectors,” said Levy. Reuters reports that Levy told reporters that he was “sticking” to the group’s forecasts for an operating margin of 16.5 percent this year and organic sales growth higher than the 3.1 percent achieved in 2007.
– Digital Activities: For the first nine months of 2008, digital activities generated 18.9 percent of the group’s revenue, compared to 13.6 percent for the first nine months of 2007. Digital activities was especially good to the North American unit, as the third quarter’s organic growth (at constant exchange rates) of 5.3 percent, or 481 million euros (£384 million), was driven by them.
– Europe: A mixed bag for Europe. Publicis reported “good” results in France, Central and Eastern Europe, and Russia, but weaknesses in the UK, Spain as well as in Germany, now starting to show signs of a slowdown. Organic growth at constant exchange rates was up 0.9 percent to 411 million euros (£329 million).
– Emerging markets: Emerging markets represented 22.7 percent of revenues for the first nine months compared with 20.9 percent for the same period in 2007. Publicis singled out China and India as having particularly high growth rates, but didn’t break out by country.