Aegis Reports Revenue up 5.8% in 2010 Thanks to U.S., China

CEO Buhlmann Confirms Deal With Rival Holding Company Havas Not in the Cards

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Aegis Group today reported that revenue increased 5.8% to $2.32 billion in 2010, driven by success in the resurgent U.S. advertising market and in China.

For the first time, the Asia Pacific and the Americas regions accounted for more than half of the U.K.-based holding company's revenue, and more than half its total new-business billings. Across the group, Aegis claimed $2 billion in new billing last year.

Aegis Group CEO Jerry Buhlmann said Aegis Media was "on a roll" in the U.S. "It's a big market and we have shown how competitive we are there. We won Home Depot [$800 million] and Disney Parks [$500 million] and retained Pfizer."

The group owns the Carat and Vizeum media-buying networks, which make up Aegis Media, and research arm Synovate.

Asked to respond to new Havas CEO David Jones' assertion to Ad Age that a much-vaunted deal with Aegis is not on the cards, Mr. Buhlmann essentially confirmed that the company isn't pursuing any merger activity with rival holding companies.

"I don't anticipate any big deals at this stage. We are focused on small- and medium-sized acquisitions, looking for scale, infill and innovation, which is the history of this group. We have proved that we can compete successfully with everybody."

Australia-based Mitchell Communications, which Aegis bought for $370 million in November, was the group's largest acquisition in more than a decade. Aegis also acquired an 18% stake in Chinese company Charm to create a joint venture.

The company's balance sheet showed a 25% fall in pre-tax profits from $147 million to $109 million, mainly due to the $40 million debt owed by former Spanish client Nueva Rumasa. Without this, profits were up 7% to $260 million.

Aegis Media, which accounts for 60% of group revenue, showed organic growth of 5.7% last year to $1.4 billion, with 7.4% growth in the last quarter.

In the Americas, Aegis Media's revenue of $305 million was up 14.5% on 2010. Aegis Media's Asia Pacific revenue was up 34.5% to $190 million, or 20% excluding the Mitchell Communications acquisition. In the Europe, Middle East and Africa region, Aegis Media revenue increased only 0.4% to $936 million, mainly due to patchy recovery in Western Europe. The Middle East was strong, and Nordic and Central and Eastern Europe performed well, particularly Russia and Turkey.

Carat has also published forecasts for global advertising spending. It predicts a rise of 5.7% this year, with 3.7% in the U.S. and 15.3% in China. Latin America and Russia is expected to show 13% growth in 2011, with Western Europe lagging behind at 3.5%. Mr. Buhlmann said, "We are in a two-speed world, with developing countries growing in double digits, and developed countries in single digits."

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