Publicis Groupe Q3 Revenue Drops 5.3%

10/27/2009 4:17 AM ET

(RTTNews) - Communications group Publicis Groupe Services (PUBGY.PK: News ) Tuesday reported a 5.3% decline in its revenues for the third quarter.

The company's third-quarter consolidated revenues were EUR 1.05 billion, compared with EUR 1.10 billion in the same quarter last year. Organic revenue was down 7.4% in the quarter.

According to Publicis Groupe, as expected, the third quarter improved compared to the second quarter of 2009. For Publicis Groupe, the bottom was reached in June. The regular deterioration of the market has stopped and that a slow and progressive recovery is under way, the company noted.

European revenue declined 9.5% in the quarter to EUR 359 million from EUR 411 million last year. North America generated revenues of EUR 488 million, down 5.3% from EUR 481 million in the prior-year quarter. Asia-Pacific revenue was EUR 114 million, a decline of 12.4% from EUR 124 million in the same quarter last year.

Latin America's revenue totaled EUR 58 million in the quarter, a drop of 3.1% from EUR 62 million a year earlier. Africa & Middle East revenue edged down 0.2% to EUR 28 million from EUR 27 million in the previous year.

For the nine-month period, the company's consolidated revenue was EUR 3.26 billion, down 2.3% from EUR 3.33 billion last year. Organic revenue dropped 6.9%. Net New Business reached US$4.8 billion in the period.

Commenting on the results, Maurice Levy, Chairman and Chief Executive Officer of Publicis Groupe, stated, "As announced, the advertising market reached its lowest point during last summer. After a fall superior to 13% at the end of June, forecasts now show a decrease by an average 10% for the full year."

Publicis Groupe also said that in 2010, its share in digital should exceed 25% of its revenue. "The advertising market is starting its recovery which will be slow and progressive. First positive growth numbers should be established during the second half of 2010. Publicis Groupe should continue to outperform the market," the company noted.

The company also confirmed that a gradual recovery with a few more negative quarters and a return to growth is likely to occur around the middle of 2010. During the upcoming period, the company anticipates a better performance than the market and will maintain its cost reduction actions.

Publicis Groupe also stated that its financial position remains very satisfactory, with strong liquidity and an expected decrease of the average net debt.