Predicting continuing flat growth for the rest of this year, Cordiant has revised its 15% operating margin target to 2004 from the original deadline of 2003. Cordiant, owner of Bates Worldwide and 25% owner of newly merged Zenith and Publicis Groupe-owned media buying unit Optimedia, is the world's ninth-largest global marketing communications group.
"Trading conditions are likely to remain difficult, with the slowdown in North America now affecting economic growth in Europe and Asia/Pacific. We see little immediate prospect for growth in our markets and consequently, underlying revenues are expected to be flat at best for the year as a whole," said Cordiant CEO Michael Bungey in a statement.
Mr. Bungey added that the "severe downturn in our markets" have forced to the company to cut staffing levels. Cost savings would translate to "one percentage point on the operating margin in 2002."
North America was the region most badly hit, with revenues falling by 6% on an underlying basis, followed by Asia/Pacific and Latin America with underlying basis revenues down by 1.6% in the first six months.
With new business earlier this year, Continental Europe saw revenues grow by 8.7% on an underlying basis. -- Ali Qassim
Copyright August 2001, Crain Communications Inc.