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Executives

Maurice Lévy – Chairman and CEO

Jean-Michel Etienne – EVP and CFO

Analysts

Charles Bedouelle – Exane BNP Paribas

Tim Nollen – Macquarie

Patrick Wellington – Morgan Stanley

Tom Singlehurst – Citigroup

Julien Roch – Barclays

Will Mairs – Nomura

Brian Wieser – Pivotal Research

Dan Salmon – BMO Capital Markets

Publicis Groupe S.A. (OTCQX:PUBGY) Q1 2013 Sales Conference April 15, 2013 12:30 PM ET

Operator

Good day and welcome to the Publicis Groupe Publication Revenue First Quarter 2013 Conference Call. Today’s conference is being recorded. And at this time, I would like to hand the conference over to Mr. Maurice Lévy, Chairman and CEO. Please go ahead.

Maurice Lévy

Thank you. Bonjour, good evening for the European, good afternoon for the Americans, and good night for the Chinese. I am with Jean-Michel Etienne and with Martine Hue and Stephanie Atellian, and some of the members of our staff and we are going to go through a presentation. The presentation is on our website. By the way, my understanding is that it has been consulted ahead of time unfortunately. So you go to the website and there is a disclaimer that I have been told to remind you to read. And I will consider that it is already done. It is the same as the previous one.

As most of you know, we have published our numbers and the Q1 organic growth for the group is ahead of our internal objective despite the fact that the growth is relatively modest. The context is the following. Europe has a very strong negative growth, 6.5% in Q1, which make an imbalance of 10 points compared to last year, which was up by 3.6%. The pharma and healthcare is still negative in Q1 and we expect, as planned, the recovery in the second half and we have no reason to believe that this is not going to happen. And we have unfavorable comps in Q1 2012.

So if we move to the following slides, you see that the revenue is at €1.563 billion, up by 7.6% compared to last year, €1.452 billion, and organic growth is 1.3%. Foreign exchange currency has a negative impact of €19 million, i.e., 1.2%.

On the following slide, we see that the spread by geography – as a split by geography, sorry, and we see that Europe has been showing a revenue of €442 million compared to €412 million, up by 7.3%, and organic growth is down by 6.5%.

North America, we have a revenue for the first quarter of €776 million, which compares to €724 million, up by 4.4% organically, and 7.2% versus last year published number.

BRIC and MISSAT slightly ahead of €200 million – €201 million compared to €176 million on a published comparison, up by 14.2%, organically, 5.5%. Rest of the world, €144 million compared to €140 million, organically up by 3.2%, and compared to last year published number, 2.9%, which gives a total of €1.563 billion compared to €1.452 billion, up by 7.6% on a published number, and 1.3% organically.

In the following slide, there is a selection of countries with organic growth by categories. We have rate above 10% in which we find Greater China, India, New Zealand and Switzerland. 5% to 10%, we find the Netherlands, Russia and U.S.A. 0% to 5%, we see Australia, Canada, Turkey. And below 0%, there is a few European countries such as France, Germany, Greece, Italy, Portugal, Spain, UK.

There is a new table that we are presenting to you something which is fresh from the bakery and which is showing the growth by region and by activity. So the split is between digital and analog, and you have the various region as we publish. So we see that Europe, the 6.5% down is made of minus 8.3% in analog and almost stable in digital at 0.4%, negative.

In North America, analog is down by 1.1% and digital is up by 10.2%. BRIC and MISSAT, analog is up by 4.4% and digital by 15.1%. Rest of the world, analog is up by 1.1%, digital by 16.4%. Total digital is up by 8.5%, analog is down by 2.3%.

On the following slide, you see that our digital revenue represent roughly 37% in Q1 2013, exactly 36.9% with €576 million, which compared to 33.2%, and €482 million, up organically, by 8.5%. Part of this jump is made of the partial integration of LBi in our numbers in the first quarter.

In the fast growing markets, we see that the share of the group is exactly at the level of last year, 23.6%, €369 million, which compared to 23.6% at €343 million, and organic growth is at 4.4%. We had a better share of our business coming from the fast growing markets. The reason why we are at this level is also the impact of LBi, which as you know, is mostly on the western countries, the U.S. and mainly Europe, and a very small slice in fast growing markets.

The revenue by activity shows on the following slide that 37% is coming from digital, coming from 33%. Media is stable at 17%, and SAMS are down, moving from 19% to 17%. Advertising is also down, creative, if you prefer, mostly the analog, moving from 31% to 29%. So the strategy that we have put in place is working. We have seen that the share of digital is now dominant and if not dominant, at least the most important one and we expect it to be dominant in the future. We will come back to this, and the growth has been at 8.5% in this segment. So all seems okay on that front.

On the following slide, and based on roughly 1,500 clients, we have the breakdown by sectors and we see that things have not changed dramatically. Most important change is TMT, which moved from 14% last year to 16% and thus impacting slightly the FMCG as well as the healthcare. So all this is roughly in the same picture as last year.

Some finance indications on where we are. We had a net debt last year – a net debt at the date of March 31, 2012, €1.158 billion. Net debt at a year later, 31st of March 2013 is at €847 million. Average net debt moved from €663 million to €380 million this year.

The gross debt by maturity and the split by maturity is detailed on the following slide and I think that there is not much to say, all this is available to you. And as you see, we have no big pressure on these maturities. And we can, without any issue, cover these obligations. I remind you that there is no covenants.

The liquidity which is available at the end of the first quarter is €2.407 billion. You have all the detail and if we are the uncommitted facility, we are slightly ahead of €2.5 billion. This is so much for the information regarding what happened in the first quarter.

And if you don’t mind, we will move to the outlook with something which is quite new in our presentation, which is on the first slide of this section, a graphic representing the trend for the full year. And an indication on our internal objectives which, as we said, are above the growth of last year and what we consider will be the growth of the advertising agency sector. Our internal objectives are showing a growth for the full year between 3.2% and 3.6%. You will see in a minute that we are confirming this, and the Q1 was expected to be up 0.3%.

In the following slide, you see the new trend, instead of 0.3% organic growth, we have 1.3% for Q1 and we confirm that the full year will be between 3.2% and 3.6% with some slight changes in the trend.

If we look at the reason why we feel confident about delivering these numbers, you have on the following slide a very important information, which is about the net new business for Q1, which is already at $2.1 billion. As you know, having new business at the beginning of the year is extremely important to feed the rest of the year with newly generated revenue. It’s much better to win at the beginning of the year rather than the end of the year, except if it is for the following year.

So we have bagged $2.1 billion, net of losses, with some nice names – Net of losses is – Martine was thinking that I had slipped but no, it’s net of losses, and we have some nice names, the full detail is attached on the press release, that you see some names like HSBC, Honda, Pfizer that we joined the roster of agency, PlayStation, PayPal, Adobe and Kohl’s, Mondelez International and some other names. So it’s a nice list.

We have what we consider being a realistic ambition, our internal objective for organic growth are higher than sector average and higher than last year. This is what we said when we announced our numbers and why we said that 2013 will be difficult. We said that we will face those difficulties and we will deliver a higher growth than last year, and the higher growth than the average of the agencies and the curve of our trend is showing this and we feel good about that.

Regarding new business, not only we have some good new business wins, as you have been able to see, but also a solid new business pipeline with full of opportunities and we are very confident.

We are expecting, as last year, a low growth in H1 and a better growth in H2. We will have – we have for H1, unfavorable comps. We have healthcare and pharma which will see the recovery in H2, and we have all the indication that this will happen. And we plan, we expect and we will deliver an improvement in our margin starting in 2013.

And we will see you soon as we have our Investor Day in April 23 in LBi offices in London, and we will be showing a few of our capabilities and giving you some details on how we expect to outperform in growth and improve our margin markedly.

So this is all for my presentation. And I am all yours with Jean-Michel, Martine and Stephanie to answer your questions. So operator, please, can you turn to the audience and we are ready to take the questions.

Question-and-Answer Session

Operator

Thank you, sir. (Operator Instructions) We will now take our first question from Charles Bedouelle of Exane BNP Paribas. Please go ahead.

Charles Bedouelle – Exane BNP Paribas

Good morning, afternoon, everyone. This is Charles from Exane. So I have a couple of questions if I may. The first one is you said during the Q1 that the performances at the start of the year was satisfactory. Do you mean by this that it was better than the zero percent you planned or it’s something that happened in terms of monthly performances, let’s say, between March and the start of the year?

The second question is when I look at your emerging market performance and you disclosed India, Russia and China. If I look at the BRIC + MISSAT, I – my calculation, it means that you had just really no growth in the rest of all the other countries for MISSAT and BRIC to be at 5.5%. So maybe if you can give us some color here. And second, because you give us your – third, because you give us your internal forecast for Q1, can you tell us what is your internal forecast for Q2? If it’s not too much to ask. Thank you.

Maurice Lévy

We will give you internal forecast for Q2 in July. The more we give, the more you ask for. That’s just incredible.

Regarding the first quarter, why are we considering that it is satisfactorily, it’s simply because we planned for 0.3%, and we have a growth of 1.3%, and this is based on some interesting growth that we had either with new clients that we have been able to win, or with an acceleration of some invoicing with our clients. So we are something – we are ahead positively and this is something for which we are quite satisfied, nothing very special, but 100 basis points, and this is something, which is much better. Regarding Q2, I would tell you that what we are expecting is something between 1.8% and 2%, no reason to hide that.

Regarding MISSAT, yes, you’re right. Your calculation is almost right, so we will not discuss all the detail. There are some markets which are slightly up, some which are slightly down. It’s mostly a phasing issue and we don’t anticipate on those markets any major problem or anything which would create any peculiar problem. So it’s – we have a phasing issue and we don’t believe that this will be a major problem.

On top of that, there is clearly a reorganization that we are thinking about to take maximum advantage of some of our operation in some markets, which will drive more growth. So we feel good about those markets and we don’t believe that there will be any major problem or any unanticipated problem. And we move to the next question please, and we hope, Charles, to see you in London.

Charles Bedouelle – Exane BNP Paribas

Of course.

Operator

We will now take our next question from Tim Nollen from Macquarie. Please go ahead.

Tim Nollen – Macquarie

Good afternoon. Thanks for hosting this on U.S. time this time, Maurice, I appreciate that. A question for you...

Maurice Lévy

We will do it more often if you wish. We are ready to do a lot for our U.S. investors.

Tim Nollen – Macquarie

Every time reporting in the afternoon, your time, is great for me. Just a question on Europe, please. Were you surprised at how weak the numbers came in for Q1? Because I certainly was and people I’ve been speaking with today certainly were. And do you have an indication, was there something particular at Publicis, a client loss or something we’re not quite aware of that might have hurt that, or is this an industry-wide situation?

Maurice Lévy

I don’t know if it is an industry-wide situation. We have been surprised by the magnitude of the downturn in Europe. There has been some investment which has been delayed. We have not lost anything significant in Europe. We have, even better, won a lot of accounts. So the issue is not win or loss. We were expecting to be down between 3% and 4% and 6.5% is much more than anticipated.

Tim Nollen – Macquarie

And is there a reason to think Q2 will look better or what confidence can we get that it will improve as the year goes on at least?

Maurice Lévy

I will give you our estimation based on what we know. We are quite cautious because the situation in Europe is not extremely good, to say the least, and we see that unemployment is raising. We see also that everything which is South Belgium is not doing very well. So we are quite cautious, but you hardly see a major country with a positive number. So we have to be very cautious.

We believe that the situation will improve for a lot of reason, including some product launches which are forecasted. But I cannot guarantee you that the improvement will be very strong. So we are quite cautious. Obviously, there are some aspects which will ease the comparison which is the first quarter last year, which was up. Then situation has started to decline a little bit in Europe. So the comparison will be much better. If you look, the organic growth of last year in Q2, we had already negative number. And it was 1.8% in – 1.6%, sorry, and in Q3, that was a big surprise of September and we had a negative growth of 3.5% in Europe.

So I’m tempted to say that we reached the peak of the bottom, if I may. So we’ve reached the – really, the bottom of what we can expect in term of decline in Europe, and we are quite confident that things will improve in the quarter to come.

Tim Nollen – Macquarie

Good, hope so. Thanks and see you next week.

Maurice Lévy

We work on, which is much better than hoping. Thank you, Tim. See you next week.

Tim Nollen – Macquarie

Thanks

Maurice Lévy

We move to the next question.

Operator

We will now take our next question from Patrick Wellington from Morgan Stanley. Please go ahead.

Patrick Wellington – Morgan Stanley

Yes. Good afternoon everybody. Maurice, I’m just fascinated by your new chart showing the quarterly trajectory. If one could – compares the new and original chart, it looks as though you’ve become more optimistic about Q3. So the question is, which quarter in the future have you upgraded your forecast for?

And then going back to your point about comps, if I look at two year comps, you did 4% growth in Q1 last year and 1.3% this year, for a total of 5.3%. You did 1.6% in Q2 last year, and you’ve just given us a range of 1.8% to 2%. So if you take the upper end, that would be 3.6%. So that doesn’t look like much of a strengthening against a weak comp in Q2. Is that a fairly pessimistic figure for Q2?

Maurice Lévy

These are the numbers we have and we are quite cautious, and we try to give you something which is reasonable and accurate. So we are quite cautious. Obviously, we are working to accelerate the growth in Q2. But for the time being, the second half should be much higher. So we – this is how we see the things for the time being. I want to be cautious and to do not give indication which may disappoint you. So I prefer to take the things with the right level of caution.

Patrick Wellington – Morgan Stanley

And geographically, where should we look for that Q3 pick-up to occur? Your BRIC and MISSAT, for instance, I think you talked about doing – growing faster in 2013 than in 2012. And you did 10% growth in 2012, you’ve done 5% in the first quarter. So do we presume that that is one of your big areas of pick-up as the year goes on?

Maurice Lévy

We expect – in fact, when you look at BRIC and MISSAT, what you see is that – and this has been a very good comment which has been made previously by Charles – you have three markets which are doing the bulk of the growth. And the overall market will pick up part of the second quarter and mostly in the third quarter due to the client launches, the client campaigns, the phasing of the expenditures, and the indication that we have is that we will have a good growth and we should be confident that this will be achieved. So we have, honestly, absolutely no warning that this will not happen.

Patrick Wellington – Morgan Stanley

Thank you.

Maurice Lévy

Thank you. We move to the next one.

Operator

Our next question comes from Tom Singlehurst from Citigroup. Please go ahead.

Tom Singlehurst – Citigroup

Good evening, Maurice. Tom here from Citigroup.

Maurice Lévy

Hi, Tom.

Tom Singlehurst – Citigroup

Hello. So the question I had was on the payoff, I suppose, between growth and margins, because we have some of your sort of U.S. peers at a much lower level of margin sort of basically saying that margin expansion’s going to be difficult without sacrificing growth. You guys are towards the upper end of peer group, talking a lot about margin expansions and, lo and behold, growth is relatively lackluster. I acknowledge that actually both – mid single digit growth overall is relatively good. But I just wonder whether you are worried in any way that this is not a temporary phenomenon and whether this might be indicative of too much focus on trying to improve the margin.

Maurice Lévy

You will have more answers that you need at the upcoming Investor Day next week, because we will make a full presentation on where the improvements are coming from and what is the relation between margin improvement and growth. So you will get a full presentation and you will have also the possibility of putting Jean-Michel on the grill. And he is looking forward to it. He is impatient to see that. So as we are on a...

Jean-Michel Etienne

I can’t stand more.

Maurice Lévy

As we are on revenue for the Q1 call, I will not insist. The only thing I would like to tell you is that based on what we know and what we have in hand, we think that we will deliver on our growth and we will deliver on our margin as we have indicated.

And you remember there was last year huge skepticism regarding our ability to deliver on the growth after our Q3 number and including after Q2, we said we will and we did. And this is something, Tom, that you know quite well because we know each other since so many years, we will retire probably at the same age or at the same time, not exactly same age, sorry, but at the same time. There are so many years that you are following us and we never let you down and when we say that we are going to see a beginning of improvement of our margin this year, we will, as we will for the growth deliver what we intend to deliver.

So I give you the rendezvous, as we say in French, which is slightly different from the English, next week, at LBi offices for the Investor Day, and we hope that you will be there and you will have a full presentation with your colleagues.

Tom Singlehurst – Citigroup

I definitely will be. One quick follow-up. Some of the media owners in Europe have talked about weak trends in FMCG in the 1Q. Can you – I know you talked about healthcare and – well, healthcare/pharma, was FMCG a problem area for you? I know it’s on page 11, the percentage of...

Maurice Lévy

Yeah. It’s not due to FMCG, it’s due to the fact that we had a sharp increase, 2%, 200 basis point on TMT, particularly telco and IT. So we have a very good increase. We moved from 12% to 14% – no, 14% to 16%, and this is making the difference and impacting the rest. So it’s not that FMCG is weakening, is that when you look at – I cannot mention the clients because I have not the right to tell you what’s happening with some of our clients, but they are overinvesting in some areas, some of our clients, and we feel very good.

Tom Singlehurst – Citigroup

That’s very clear. Thank you very much. See you next week.

Maurice Lévy

See you next week. Thank you, Tom. And we move to the next question.

Operator

Our next question comes from the Julien Roch of Barclays. Please go ahead.

Julien Roch – Barclays

Yes. Good evening, everybody. I’m looking forward to Jean-Michel on the grill next week. My question has been asked in several guys already, but if I look at the chart you’ve put on page 17, 18, you can infer the growth rate you are expecting for the rest of the year. And to get to your budget, you basically need to do about 4.5% in Q3 and 5% in Q4, and Q4 has actually tough comps on 3.9%.

So I know, Maurice, you said several times that we will deliver our growth, we will deliver everything, trust us. But could you give us some more confidence on why you’re going to do 5% in Q4, be it the end of the GM headwinds or a fading in pharma. So if we could get some numbers around that, that’s my first question.

And then the second one is you’ve delivered a very good cash generation in Q1 and you are clearly under-geared. So could you give us some color on what you expect to do with the cash?

Maurice Lévy

Okay. Let’s start with the growth because this is a very important question for which we have to be extremely clear. If you look at last year, we had a net new business win representing roughly $800 million, I think it was $811 million, the right number, net, in Q1 last year. Q1 this year, it’s $2.1 billion, okay? And last year, in the first half, we still had GM revenues that will no longer be in Q2...

Jean-Michel Etienne

In Q3.

Maurice Lévy

In H2, sorry. So when you have this kind of revenue so much ahead of the time and you have a very strong pipeline, and you have a very strong pipeline also in digital, you know what will be your year and how you will deliver the things. So it’s not impossible that we have a better Q2, but we feel that based on those numbers that we will deliver what we plan. The only thing you can imply from what I’m saying is that we may well be closer to the higher number than to the smaller number on our objectives, okay?

Julien Roch – Barclays

Yes.

Maurice Lévy

Now regarding cash, long time that we have not had this question, but it’s a very good question. There is many aspect, the first one is that we have markedly augmented our dividend, which will be paid this year. And we have also made a very strong commitment to increase the payout ratio. So we will – you can expect that we will raise the dividends coming for the future.

The second aspect is that we have some acquisitions which are in the pipeline. For the time being, nothing dramatic and nothing of the magnitude of what we have seen with LBi. And the last aspect that I would like to point out is obviously that we have bought back the shares from our friends of Dentsu.

So when you look at all these aspects, you see that, on the one hand, we are quite cautious on how to build the acquisition for the future. And we know that it is in the interest of the shareholders and the company that we invest in the two key areas of growth, which are the fast growing market and digital, so we do that. We also committed to increase the dividend policy and, obviously, if we have a very good cash generation and we don’t see any major acquisitions to be made, we will consider some of the solution aspects which will bring a smile to the face of our investors.

Julien Roch – Barclays

Very good. Maybe just a precision on the first question, would it be possible to have how much revenue was GM in the first of last year or what was the negative contribution to Q1 organic this year?

Maurice Lévy

We are not going to disclose this number. But what has been already said by some people who seem to be quite well informed that it does represent roughly 70 basis points, 70 basis points, 80 basis points. This is roughly what has been already published and we stick to this number. We cannot give any other number.

The relationship with GM is doing well and it has been published that we have been invited to pitch for Cadillac, and I confirm that this is an information which is with solid ground.

Julien Roch – Barclays

Merci beaucoup.

Maurice Lévy

Merci beaucoup. We’ll move to the next one.

Operator

Our next question comes from William Mairs from Nomura. Please go ahead.

Will Mairs – Nomura

Hi. Yes, it’s Will Mairs from Nomura here. Just three questions please. Firstly, thank you for giving us the guidance for Q2. I guess now that we are in mid-April, I was hoping you might be able to share the organic number for March. And also, if you’re starting to see an improvement in trend in March versus Q1.

Second question is in terms of digital growth. So last year, you did 6.6% and you highlighted that slowed down due to pharma and GM as well. Now I think those factors are still in play at the moment, but we’re seeing growth re-accelerate in digital. So I’m perhaps wondering what are the drivers behind the improvement in digital.

And thirdly, in terms of one of your new tables with the analog numbers is minus 2.3% for this quarter. Now if I back out what the number was for 2012, it was actually around positive 1%. So I’m just wondering in terms of the midterm, should I be thinking of analog being very low growth or perhaps negative and digital gaining share, just wondering how that would play out over the midterm. Thanks.

Maurice Lévy

The two are unfortunately linked. If analog had not suffered, probably that our numbers with the growth that we have with digital would have gone up. So higher that what we have published. So we have this situation in analog. And by the way, you just need to see what’s happening with some broadcasters, some newspapers, some magazine company while publishing the numbers, there is a lot of issues that, not only in France but in a lot of countries. So analog is down clearly.

And the trend for analog media is a trend which will go, unfortunately, on the downhill at a speed which may vary. But you can expect that this is a segment which will continue to go down. I’m not pleased by saying this because I know that this is creating a lot of issues, particularly for the economics of the press, but that is currently the reality.

Digital is doing well and with a good growth, it’s not without some challenges, and you have seen what’s happened in Europe. So in Europe, where we have a decrease of our revenue by 6.5%, we have digital which is at 0.4% – at negative 0.4%, which shows the strength of digital. So it’s very important that we continue to invest on that field. And this explain our strategy.

Regarding – the question regarding Q2, March and the trend, I’m not going to give detailed month-after-month and I’m not going to intervene in the market all the time with information at the end of each month. But what I can tell you is that we have an average of the three months which is fine, what it is. We – the numbers that we have for March are absolutely in line with our own expectation and our forecast and our internal forecast, so we have no bad surprise. And we are in line to deliver what I said for Q2.

Will Mairs – Nomura

Great. Thank you very much.

Maurice Lévy

Thank you. I don’t know if we have still time for the questions, but what is – maybe operator, we can – you can ask for the next question. We still have two, so we will take the two. Okay.

Operator

We will now take our next question from Brian Wieser from Pivotal Research. Please go ahead.

Brian Wieser – Pivotal Research

Thanks for taking the question. I was wondering if you could actually talk to the growth rates of your various disciplines. If you were to include digital as part of the integrated offering, which is typically how I think the services are sold, so in other words, if you were to just look at the BBH agencies, or just look at Leo Burnett or just look at Saatchi, just wondering if you could characterize what those growth rates are?

Maurice Lévy

So it’s difficult to give numbers by agencies or by network, or to separate or to integrate everything. We have a split of our business the way we have indicated and we stick to this presentation. And the only thing I can tell you is that when you look at the all VivaKi operation, we feel very good about our numbers. Leo Burnett is very strong on his feet and we feel very good. The key issues that we have mentioned are clearly those which we have mentioned. Europe, which has been...

Brian Wieser – Pivotal Research

Those are universal, those are universal across your agencies?

Maurice Lévy

Some have the weight in Europe which is stronger than some others, and they are impacted, more importantly, than some others. For example, when you have an agency which has 20% of its business which is in Europe and another one which has 40% of its business. So these change the percentage by which they are affected. But if you look at the average of their the numbers, with some exception, they are all about in the same bracket. There are some which are doing much better and some which are doing much less.

For example, healthcare in Europe is suffering more than the average of the agencies, and that there are some reasons for that. And the most important reason is the fact that in Europe, there is a strong fight about – against the costs of healthcare. So social security is fighting very hard, and you have a lot of initiatives regarding the new launches of new product, the new authorization which are drying, and you have also the fact that in some areas, they are not in line with what they are expecting to do. So it’s something which is Europe is more affected in healthcare than in other market. And the two paramount issues that we have indicated are the ones that are transverse to all our operations.

Brian Wieser – Pivotal Research

Okay. Thank you. One other question on the BRIC/MISSAT market growth numbers. I was just wondering if – we saw that there were some major client losses at NEOGAMA in Brazil. I was just wondering, is that all that’s going on in your Latin American numbers or is there anything else that was causing those...

Maurice Lévy

NEOGAMA is not taken into account. Yes, they had two losses, which has been published. One is Unilever and the other one is Bradesco. And they are already pitching for some very good accounts and we feel very comfortable because NEOGAMA is an incredibly good agency, and we are not worried about the future of NEOGAMA. And in accounting terms, they are not yet included for the calculation of the organic growth.

Brian Wieser – Pivotal Research

Got it. So was there anything else in particular in Latin America that caused that growth rate to be too slow than...

Maurice Lévy

No, there is many aspects. You have the devaluation in Venezuela. There are some delays in Mexico. So there are a few issues but nothing which is really big and nothing which should take us back. So this is something which is not a worry for the time being.

Brian Wieser – Pivotal Research

Okay. Thank you very much.

Maurice Lévy

Thank you. So we have the last question before we are exhausting everyone.

Operator

We will now take our final question from Dan Salmon of BMO Capital Markets. Please go ahead.

Dan Salmon – BMO Capital Markets

Hi. Good afternoon, guys. Hopefully, we’ll end on a bit more of a positive note. The question that I had was that, yeah, you’ve noted here that for the quarter, you came in ahead of plan at 1.3% versus 0.3% expectation internally originally, but that there was obviously the weakness in Europe. So clearly, there’s something that’s offsetting and came in a little bit ahead of plan. And I guess I’m trying to understand which one of the regions, North America, BRIC + MISSAT or rest of the world really came in above plan to help offset that and then some?

Maurice Lévy

U.S.

Dan Salmon – BMO Capital Markets

U.S. Okay.

Maurice Lévy

Strongly.

Dan Salmon – BMO Capital Markets

Okay. And then the second question, just I recognized that LBi is not into your organic growth and won’t be for some time here. But in terms of addressing some of the weakness in Europe, do you anticipate – be able perhaps to have some of your other agencies cross-sell with some of the LBi clients a little bit? Is there anything that LBi can help pick up the organic revenue growth rate in Europe itself?

Maurice Lévy

Sure. And obviously, this is something that we are counting very much on.

Dan Salmon – BMO Capital Markets

Yeah.

Maurice Lévy

And this is, for – something that we already have achieved, for example, in Germany with Pixelpark. And Pixelpark is already cross-selling with some of our clients, but the organic growth of Pixelpark is not yet taken into account.

Dan Salmon – BMO Capital Markets

Right.

Maurice Lévy

So we see a lot of positive aspect everywhere and everything is not yet factored in the numbers that we are showing. So on a positive note, I think that what is positive when you look at this is maybe three things. The first one is that we are ahead of our internal numbers. The second is that we are confirming both growth and margin for 2013. The third one is that not only are we confirming this, but we have some strong facts. And one of the strong facts is our new business, not only to wins that we have already registered, recorded, but also the pipeline which is extremely solid.

Maurice Lévy

So I think that if you have to take something out of this meeting this evening or this afternoon or this morning, depending on where you are and where you sleep, I will tell you that Publicis would deliver on its commitment as forecasted. And I look forward with my colleagues and friends to seeing you in London on the 23rd of April at 8:00 in the morning, we will start sharp. So breakfast will be served before 8:00 and we will be at LBi offices. You will have plenty of presentation, don’t miss to be on time and don’t miss this opportunity of seeing all those presentation and to put on the grill many of our executives that you will be able to speak directly to.

Thank you. Good evening for those who are in Europe. Good afternoon for the U.S. friends, and see you in London. Thank you.

Operator

That will conclude today’s conference call. Ladies and gentlemen, thank you for your participation. You may now disconnect.

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