Aegis Posts 1% Revenue Gain for First Quarter

Group Says Growth Likely to Continue for Rest of Year

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LONDON ( -- Aegis Group returned to growth in the first quarter of 2010 and is forecasting that the growth will continue throughout the rest of the year, according to an interim management statement released today.

Total organic revenue for the group -- which owns the Carat, Isobar, Vizeum and Synovate networks -- was up 1.1% on 2009, driven mainly by growth at Aegis Media, whose revenue was up 3%, while research arm Synovate's revenue fell 1.9%. Actual figures were not released.

This is the first time that Aegis has reported growth since 2008. A statement from the group said growth came mainly from developing markets, particularly China, Russia and Latin America. The U.S. delivered a "varied performance," according to the statement, boosted by wins from skin- and beauty-care group Beiersdorf and food manufacturer Smuckers.

Other significant wins in the first quarter of the year include Deutsche Bank and De Agostini internationally and China Telecom in China. Aegis claims to have amassed $800 million in new billing already this year.

Europe has mixed fortunes, with the U.K., France and Italy all showing small growth, while Germany, Netherlands and Nordics remained more "challenging."

Market research arm Synovate, once heavily courted by WPP, saw a 1.9% decline in organic revenue in the first quarter of 2010, compared to a 5.5% decline in the fourth quarter of 2009.

Aegis CEO Jerry Buhlmann said, "Aegis produced a solid performance in the first quarter. There were tentative signs of clients starting to increase their marketing and advertising budgets for the second half of 2010. Despite ongoing uncertainties in the global economic environment, Aegis is well positioned for the coming year with evidence of top-line momentum."

Mr. Buhlmann was appointed CEO in March, 16 months after the departure of his predecessor, Robert Lerwill.

Alex de Groote, media analyst at Panmure Gordon, said, "Organic growth is basically consistent with the rest of the industry, and any issues with Synovate should wash out during the year. The company has some fantastic assets and the management is now sorted. Aegis raised debt in March to fund acquisition, so we know they are on the warpath, probably in the U.S., where they are underweight, and in digital, so share prices are holding off for activity."

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