(Corrects quote in third paragraph to make clear Dentsu would
sell, not buy back the stake)
By Georgina Prodhan
BARCELONA, Spain Nov 16 French
advertising agency Publicis will return cash to
shareholders by other means if its largest shareholder, Japan's
Dentsu, does not sell its 11 percent stake back to
Publicis, its chief executive said on Wednesday.
Publicis has said it will cancel the shares currently held
by Dentsu, worth about $1 billion at current market value, if
the Japanese advertising group decides to exercise its option to
sell the stake in a window that runs until July 2012.
"If Dentsu doesn't sell the stake, we'll return cash to
shareholders in another way -- through a buyback or dividends,"
Maurice Levy told reporters on the sidelines of the Morgan
Stanley Technology, Media and Telecoms conference in Barcelona.
Levy said he was encouraged by conversations with clients
about their spending plans for next year, although the current
quarter is expected to be weak as advertisers trim budgets to
meet financial targets amid a global economic crisis.
"The crisis exists and it's touching everyone," he said. "I
don't expect that we will have a fantastic end of the year,
unfortunately, but I also don't expect we will have a terrible
end of the year."
Levy said advertising budgets were not being slashed
dramatically, as they were in 2008, but incremental cuts from
many clients were adding up.
"I'm confronted with the news of the cuts of the clients on
an almost daily basis -- not huge, not enormous, nothing which
taken in an isolated way should create any worry, but the
accumulation is having an impact," Levy said.
"We are expecting small growth in the fourth quarter," he
added, without elaborating. He also said he expected full-year
margins to be flat or slightly up.
Asked about longer-term profit ambitions, Levy replied: "I
have a dream, not the kind of dream that Martin Luther King had
-- I'm very modest, I'm just thinking about my margins.
"I do not see why we should not reach one day 20 percent,
and a level of margin starting with a 2," he said. "It will take
a few years but it will happen."
Publicis, which has been quick to invest in emerging markets
and digital advertising expertise, had an operating profit
margin of 16 percent last year, ahead of many rivals with
typical margins in the low teens.
(Editing by Mike Nesbit)