Wednesday, May 03, 2006

Publicis Groupe: 1st Quarter 2006, Revenues

Publicis Groupe: 1st Quarter 2006

Revenues: EUR994 million

Up + 12 %

Organic Growth + 6.3 %

Maurice Levy, Chairman & CEO of Publicis Groupe (NYSE: PUB), comments:
" The year has gotten off to a very good start, with first quarter
organic growth at 6.3%. New business has remained on a very firm track. The
global advertising environment is favourable, benefiting from strong growth
in the US and China, as well as the Football World Cup, the effects of
which will be most apparent in the second quarter. In these circumstances,
we confirm our full-year organic growth and earnings forecasts. "
12% rise in revenues
Revenues showed a year-on-year rise of 12% to EUR994 million in the
first quarter. The dollar's appreciation against the euro had a positive
impact of EUR52 million on revenues, while the net impact of variations in
the scope of consolidation was practically negligible.
Organic growth was a healthy 6.3% compared with 4% in the same period
of 2005, reflecting both the steady flow of business from existing clients
and the positive effects of new accounts.
Business in all geographical areas saw organic growth, which remained
strong at close to 7% in North America and over 10% in the Asia-Pacific
area, Latin America, Africa and the Middle East, and a little over 3% in
Europe in a period that is traditionally sluggish in advertising.
Media and healthcare communications agencies continued to outpace the
average for the Groupe.
Revenues by Geography

(EURmillion)

1Q 2005 1Q 2006 Organic Growth YoY Change

Europe 360 374 +3.1% +3.9%

North America 388 445 +6.6% +14.7%

Asia-Pacific 89 108 +12.0% +21.3%

Latin America 36 47 +10.1% +30.6%

Africa / Middle East 15 20 +23.4% +33.3%

TOTAL 888 994 +6.3% +12%


Strong New Business performance
Gross new business booked in the first quarter totalled a very strong
$2.2 billion. Wins included the Orange advertising and marketing services
account for Europe, a McDonald's worldwide advertising project, Macy's and
Comcast media accounts in the US, and the Pfizer/Lipitor advertising
account in the US. Net new business came in at $1.1 billion, despite some
negative developments. The relationship with Hewlett Packard continues and
is being extended in some areas, but the Personal Solutions Group division
is to limit its association with Publicis Groupe to the Asia-Pacific area.
In addition, several projects for Cadillac were entrusted to another agency
in the US as was the media portion of the Sprint account.
1st Quarter 2006 highlights
Along with strong revenues, other highlights of the first quarter
included:
- Continued balance-sheet streamlining
At the beginning of January, Publicis Groupe made a public offer for
all outstanding warrants issued in 2002 on the occasion of the Bcom3
acquisition. Nearly 80% were tendered in response, allowing the elimination
of potential for the creation of 22 million shares.
Potential for the creation of a further 1.1 million shares was
eliminated with the exercise of the January put by holders of the 2018
OCEANE convertible bond issue.
- Successful deployment of the strategy of targeted acquisitions in
SAMS in selected high potential markets
Acquisitions included:
- Solutions, India's leading marketing services agency
- Betterway, one of the top agencies for marketing services in China,
with a presence in 29 cities
- Duval Guillaume, Belgium's largest independent advertising and
marketing services agency.
Finally, Publicis Groupe announced the launch of Denuo, an entity
specialized in new technologies and digital communications. Its mission is
to advise advertisers, monitor deployment of the solutions adopted and
build partnerships including financial ones with digital communications and
new media start-ups.
Publicis Groupe (Euronext Paris: FR0000130577 and member of the CAC40
Index - NYSE: PUB) is the world's fourth largest communications group, as
well as world's second largest media counsel and buying group. Its
activities span 104 countries on five continents.
The Groupe's communication activities cover advertising, through three
autonomous global advertising networks: Leo Burnett, Publicis, Saatchi &
Saatchi, as well as through its two multi-hub networks Fallon Worldwide and
49%-owned Bartle Bogle Hegarty; media consultancy and buying through two
worldwide networks ZenithOptimedia and Starcom MediaVest Group; and
marketing services and specialized communications including direct
marketing, public relations, corporate and financial communications, event
communications, multicultural and healthcare communications.
Web sites: http://www.publicisgroupe.com and http://www.finance.publicisgroupe.com

Contacts

Pierre Benaich - Relations Investisseurs : +33-1-44-43-65-00

Eve Magnant - Communication Corporate : +33-1-44-43-77-70

Appendix

1st Quarter 2006 New Business

MAJOR WINS
Publicis:
Cord Blood Medical Services and National Pork Marketing Board (Hispanic
Comm.)(US) - Deutsche Bahn/Transport and Logistics (Germany) - Comunidad de
Madrid (Spain)
Leo Burnett:
McDonald's/project (Global) - Ladbrokes and Del Monte (UK) - MTS
(Russia) - Centurion Bank (India) - Sanofi-Aventis (Korea) - Dragonair
(Hong-Kong) - GM/Chevrolet (Germany) - Coca-Cola/Naturaqua (Hungary) -
Kellogg's (Ireland) - Brasil Telecom (Brazil) - Procter & Gamble/Gillette
(Brazil) - Orange (spain)
Saatchi & Saatchi:
Cyprus Tourism Organisation (Global, out of Greece & UK) - BenQ
(Singapore & Malaysia) - Banca Intesa (Italy) - Domino's Pizza (UK) -
Generali Insurance (Austria) - EMAP/Closer Magazine (UK) - BASF (North
America) - Pere Dodu (France, Spain) - Lenscrafters (China, Hong-Kong)
Other advertising networks and agencies:
- Fallon: France Telecom/Orange & Wanadoo (in cooperation with Marcel),
EMAP/project Jackie, Ask.com (London) - Heineken (Tokyo),
Avene/Personal care & Cosmetics (Sao Paulo)
- Kaplan Thaler Group (US): Pfizer's/Lipitor
Starcom MediaVest Group (media buying and consultancy):
St. Paul Travelers Insurance, EDS, Comcast, Luxottica, Washington
Mutual, Macy's, California State Auto Assoc. (USA) - Cyprus Bank (Greece) -
Beam Global Spirits (Spain) - Waitrose (EMEA) - LG Electronics (Russia) -
Digi Telecom (Malaysia)
ZenithOptimedia (media buying and consultancy):
L'Oreal Paris (China) - Digiturk, Media Digital TV (Turkey) - Hyundai
(India) - Bolton Alimentari (Italy) - Nestle/Food (India) - TNT (UK,
Germany, Netherlands, France, Italy)
Specialized Agencies:
- ARC: Monster.co.uk/Online advertising/CRM (UK) - Post
Office/Strategy/In-
Store Comms (UK) - Several Procter & Gamble brands (Mexico)
- PRCC: Arcelor (France) - P&G/FemCare (USA) - Novartis/OTC (Global)
- PHCG: AstraZeneca/Crestor, P&G/Claratin and Gillette Oralcare, Schering
Plough/ Garanoxicin, Serrono/Cladribin (USA) - Sinuforte (Spain) -
Janssen Cilag/Topamax (Australia).
MAIN LOSSES
Publicis:
Hewlett-Packard/PSG-Personal Solutions Group (US, EMEA, LATAM)
Saatchi & Saatchi:
Old Spice (P&G) (Global)
Starcom:
Sprint (US) - Showtime (US) - Barclay's (UK)
ZenithOptimedia:
Nokia (APAC)