* Q2 sales reach 1.63 bln eur, organic growth 1.6 pct
* Compares with 4.1 pct organic growth in Q1
* CEO rules out counter-offer for UK's Aegis
By Gwénaëlle Barzic
PARIS, July 20 Advertising agency Publicis
predicted a rebound in its business in the third
quarter after posting weak growth in the second, dragged down by
Europe's economic woes and the loss of an important contract
with General Motors.
The world's third-largest ad group by revenue, which
competes with WPP and Omnicom, posted
second-quarter revenue of 1.63 billion euros ($2.00 billion).
Organic growth was 1.6 percent, a marked slowdown from the
4.1 percent seen in the first quarter.
"We had predicted back in February that the second quarter
would be slower, and that is what happened," Chief Executive
Maurice Levy said in a briefing with journalists.
"We should have a third quarter that now seems like it will
be better than the first quarter."
Levy also confirmed Publicis' annual targets to grow revenue
faster than the overall advertising market and achieve roughly
stable margins versus last year's 16 percent.
Its profit margin stood at 13.5 percent for the first half
of the year.
Publicis had expected demand to be lower in the second
quarter as some major advertisers delayed spending to coincide
with the Olympic Games in London and the U.S. elections.
Its competitors predicted a second quarter in line with the
first. Omnicom on Tuesday posted higher revenue and profit, and
organic growth of 5.1 percent in the second quarter on the same
level as the first.
Held back by Europe's ongoing debt crisis, global ad
spending is set to grow by 4.3 percent to $502 billion this
year, a slightly slower rate than previously predicted,
according to Publicis-owned market research group
Ad spending generally tracks economic growth, so hiccups in
world markets tend to hit advertising agencies.
The sector is also in a period of consolidation, with
Publicis and WPP inking acquisitions in recent months to expand
in emerging markets and beef up their digital ad offerings.
Japanese ad giant Dentsu has made an offer to buy
marketing group Aegis for 3.2 billion pounds ($5
billion) as it seeks to expand outside its home market.
Asked if Publicis would consider making a counter-offer for
Aegis, Levy ruled out such a move.
"We have certainly looked at Aegis a few times. Putting $5
billion on the table to buy Aegis seems out of proportion with
our needs," he said.
Levy also confirmed that Publicis intended to increase its
dividend payout ratio this year as promised at the last