Publicis Groupe hails return to growth

Publicis Groupe, the French owner of ad agency networks including Saatchi & Saatchi, has lifted its global hiring and salary freeze after returning to growth for the first time since 2008. The 3.1% revenue increase in the first quarter was hailed by chief executive Maurice Lévy as "exceeding even our most optimistic forecasts". Publicis reported revenues of €1.16m (£1bn) for the first quarter, up 3.1% year on year on an organic basis. The performance is a remarkable turnaround given that Publicis experienced a 5.4% organic revenue decline in the fourth quarter. "It is too early to say that the global economy has put the crisis completely behind it," Lévy cautioned. "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." Lévy said that the company would look to make a "cautious exit" from its hiring and salary freezes, in place since late 2008. "These measures will be discontinued gradually as the group's entities progress," the company said. Publicis Groupe reported organic revenue growth in every world region except Europe, in which revenues fell 1.5% in the first quarter. North America grew by 4.8%, Asia Pacific by 6.7%, Latin America by 9.8% and the Middle East and Africa by 7.2%. In Europe the UK returned to growth with revenues up 1.4% on an organic basis. Publicis used growth bands to indicate how well, or poorly, most individual countries it operates in performed in the first quarter. The US grew by 5.6% and France by 8.4%. Top growth countries were India, at 32%, and Korea and Turkey at over 10% growth. The worst performers, in the "below negative 5%" bracket, were the Netherlands, Switzerland, Poland, Germany and Denmark. Greater China, Russia, Spain, Australia, Japan and Canada fell in the zero to 5% growth bracket. Publicis attributed the return to growth to the decision to invest heavily in digital services in mature markets such as the USA, and to expand operations in fast-growing countries such as China, India and Brazil. Organic revenue from digital services grew 15% in the first quarter and now accounts for 27% of total group revenue. Emerging markets account for 21.7% of total revenue. In a presentation to analysts Lévy said that the company was on track to derive 50% of its total revenue from a combination of digital and operations in emerging markets by the end of this year. • To contact the MediaGuardian news desk email [email protected] or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. • If you are writing a comment for publication, please mark clearly "for publication".