LONDON (AdAge.com) -- Aegis Group beat its first-half expectations, fueled by growth in the Asia Pacific region, and has committed to bolstering the group through acquisitions.
Its organic revenue grew 3.2% to $1 billion in the first half of 2010 and its pre-tax profits rose 8.3% to $75 million, driven by a solid second quarter. While Western Europe was up only 0.1%, Asia Pacific rose 18.4%. North America and South America are reported as one region, with growth of 3.1%.
"The U.S. is a very important market, even if it is slow-growing, and the turnaround is on track," said Jerry Buhlmann, who took over as CEO of U.K.-based Aegis Group in May. "We've upgraded the business with high-quality people and created a clear structure around our power brands. New business has been strong -- we've won Wyeth, Beiersdorf and Sears' search business. A few have popped out the other way, but you have to move on."
The group's priorities going forward include a return to focus on acquisitions, Mr. Buhlmann said, adding "we have the firepower." He also stressed that organic growth -- particularly by increasing the range of international business -- and increasing operating margins are both important for the group, whose five "power brands" are Carat, Vizeum, Posterscope, Isobar and iProspect.
While Mr. Buhlmann said all of Aegis's businesses are moving forward, he remains cautious about future prospects. "Economic uncertainties remain in certain regions around he world, most notably North America and Western Europe," he said. "We are seeing signs of a rebound in most markets, but it is too early to predict a sustained recovery. Advertisers are still cautious and although they are spending more in the short term, the positive trends have to be seen in context."
Aegis has been rumored to be a takeover target for Havas; Vincent Bollore, CEO and chairman of Bollore Group, has a controlling stake in Havas and is also the largest shareholder of Aegis. However, Mr. Bollere dismissed that earlier this summer, telling Ad Age he was happy with the performance of Aegis and it is no longer his view that Havas's media-buying division would benefit from the scale of Aegis.
Aegis claims $1 billion of new billings this year including Deutsche Bank, De Agostini, China Telecom, Kraft-Cadbury, Kellogg and ING. Aegis Group's digital business, comprising Isobar, iProspect and online media, now accounts for 32% of revenue, up from 31% at the end of 2009, and is expected to increase in the short and medium term.
Also today, Aegis Group's Carat published new forecasts, predicting global ad-spending growth for 2010 of 3.9%, up from its March forecast of 2.9%. U.S. ad-spending growth is expected to increase 1.1% for the year. For 2011, Carat is forecasting 4.7% growth globally and 1.7% in the U.S.