Publicis Posts 3.1% Organic Growth in First Quarter

No News on Who Will Succeed Chairman-CEO Levy in 2012

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LONDON (AdAge.com) -- Publicis Groupe announced 3.1% growth in organic revenue for the first quarter of 2010, doubling the 1.5% organic growth reported by French rival Havas earlier this week. Overall, consolidated revenue grew by 8.1% over the first quarter last year.

Maurice Levy
Maurice Levy Credit: Julio Piatti
Maurice Levy, chairman-CEO of Publicis Groupe, said in a statement, "The numbers exceed even our most optimistic forecasts; [it] is truly satisfying. Digital activities grew more than 15% and now account for 27% of our revenues."

The marketing communications group, which owns the Leo Burnett, Saatchi & Saatchi and Publicis Worldwide networks, delivered revenue of $1.5 billion and new business wins totaling $1.2 billion.

One of the hottest topics -- not addressed in today's results announcement -- is what will happen when Mr. Levy, now 68, retires as chairman-CEO of Publicis Groupe at the end of his current four-year contract on Dec. 31, 2011. When he signed that deal several years ago, he made it clear that it would be his final term before retiring.

Mr. Levy told Ad Age recently that Publicis has not chosen his successor yet and that the group will begin looking at this issue later. But within Publicis Groupe, there is speculation that the leading candidate to succeed him is Jean-Yves Naouri, exec VP-group operations, and a member of the five-person management board that also includes Mr. Levy.

Succession
Mr. Naouri joined Publicis in 1993 as a founding partner of Publicis Consultants, and he become president of the group's main French agency Publicis Conseil in Paris in 2000. In his current role, he has also been tapped to oversee the group's health-care business and has been in charge of developing platforms to consolidate and manage different functions at group companies on a more global basis.

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Mr. Levy's successor will take on a big legacy. Publicis has had only two leaders in its 84-year history -- Marcel Bleustein-Blanchet, who founded the agency in 1926, and Mr. Levy himself, who has worked at Publicis for 39 years and has run the group for two decades. One influential shareholder who is likely to have a say in the decision is Mr. Bleustein-Blanchet's daughter, Elisabeth Badinter, a Publicis shareholder and member of the group's supervisory board, which she has chaired since 1996 (her son Simon Badinter and niece Sophie Dulac also sit on the 15-person supervisory board). Although Mr. Levy has made it clear he plans to retire, there is still speculation that he might remain in some role, especially because he has such strong relationships with some of the group's biggest clients such as Nestle.

One of Mr. Levy's remaining goals for 2010 is for 50% of Publicis group revenue to come from digital activities and emerging markets -- not far from the 47.1% of revenue that came from those markets in the first quarter of this year.

In today's results announcement, Mr. Levy attributed first-quarter growth to both new business and increased spend from existing clients -- including financial services, automotive, retail and package goods. In North America, organic growth was up 4.8% over the first quarter of 2009 to $771 million, helped by digital and the stabilization of the automotive sector.

The strongest growth was seen in Latin America, where Publicis Groupe achieved 9.8% organic growth. Only Europe reported negative figures, with a decline of 1.5% despite growth in France.

Mr. Levy said in his statement: "It is too early to say that the global economy has put the crisis completely behind it. The recovery is still fragile and subject to a complete recovery of the global financial system. Without yielding to undue optimism, the year has started in a way that bodes well for a 2010 financial period that will be closer to our usual level of performance."

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