* Q1 organic growth 1.3 pct vs consensus 2.9 pct
* Publicis targets 3.2-3.6 pct organic sales growth in 2013
* Publicis shares fall more than 5 pct
* CEO Levy sees improvement later this year in Europe
PARIS, April 15 Advertising group Publicis
said it expected the European market to recover later
this year after posting weaker-than-expected underlying revenue
growth in the first quarter, sending its shares sharply lower.
The group, which had in February warned that 2013 would be
difficult in Europe, said it had been hit by a sharp advertising
slowdown across the continent. Spending by pharmaceutical
companies was especially weak.
Organic sales growth, which adjusts for currency impact and
acquisitions, was 1.3 percent in the first quarter, a slowdown
from 3.9 percent in the fourth quarter of 2012 and short of an
average market expectation of 2.9 percent.
Publicis, which competes with WPP and Omnicom
, nevertheless maintained relatively bullish forecasts
for the year, saying it aimed for organic growth in 2013 of
between 3.2 and 3.6 percent and for margins to improve.
"I think things will improve in Europe, particularly in the
second part of the year," Chief Executive Maurice Levy said,
describing the first-quarter downturn in Europe as worrying but
Sales were especially weak in traditional, non-Internet
advertising. Revenue fell by 13.1 percent in Spain, 11.3 percent
in France, 6.1 percent in the UK and 4.8 percent in Germany.
China and the United States remained strong, however,
posting 15.2 percent and 4.4 percent organic growth
Levy said he expected the group's first-quarter performance
in the United States to be a good indication of what would
happen for the rest of the year. North America accounts for
roughly half of group revenue.
Shares in Publicis, which is the third-biggest global
advertising agency by sales, closed 5.17 percent lower at 51.56
euros. It was the biggest faller in the French blue-chip CAC 40
index which was down 0.5 percent overall. The shares
touched a 13-year high of 56.66 euros on April 4.
Bernstein Research's Claudio Aspesi said Publicis'
difficulties this quarter would not translate into a poor year
overall, pointing out that the 2012 comparisons for the first
quarter were particularly challenging.
"We do not expect this quarter to be representative of 2013
as a whole and do not think it should be cause (for) excessive
concern," Aspesi wrote in a note.
WPP, the world's biggest ad agency, is expected to
publish first-quarter results on April 26. Its shares were down
3.5 percent on Monday.
UBS analyst Tamsin Garrity wrote in a note that the WPP
sell-off was overdone, in part because the British-based group
relied less on the pharmaceutical sector for sales than