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Follow on Google News | Profits decline further among global marketing groups - "hare and tortoise" mergers analysedSurvey of 28 largest global marketing groups shows: • 4.2% overall increase in revenues. • 4.4% overall decline in post-tax profits. • Finance costs pruned by 4.7%. • Despite tough economic climate, operating profit margins improved.
By: Fintellect Ltd Earlier this year the Japanese based group Dentsu bought the UK media buying and digital business Aegis Group for almost $3.2 billion. More recently the French based Publicis Groupe announced a $35 billion plan to merge with the US based Omnicom Group. According to the annual “Global Greats” survey published by Marketing Services Financial Intelligence (www.fintellect.com/ “What mergers never show is which underlying management team has the staying power for the long-term race”, commented the survey’s editor Bob Willott. “It will be interesting to see how the carefully laid plans for succession play out when Publicis chairman and chief executive Maurice Lévy hands over the chief executive role to Omnicom’s John Wren.” Looking at the overall performance of 28 of the largest marketing groups in the world that were examined in the survey, the main conclusons drawn were: · There has been a small 4.2% overall increase in revenues and a similarly small 4.4% overall decline in post-tax profits, reflecting the impact of the economic chill. · Finance costs have been pruned back by 4.7% since the previous year’s survey - probably under pressure from nervous bankers – and have eaten into a smaller proportion of operating profits. · Despite the tough economic climate, operating profit margins improved slightly to 14.2%. The top 10 groups measured by revenue remained unchanged (see table) although Aegis Group lost ground to Hakuhodo and Acxiom Corporation slipped behind Sapient Corporation. The fastest growing groups measured by revenue were Velti, Value Click, Cheil Worldwide, MDC Partners and Responsys. But revenue growth did not always lead to profit. Sadly both Velti and MDC Partners were also among the groups recording the biggest post-tax losses for the year. ENDS Further information from: Robert Willott (editor), Marketing Services Financial Intelligence. Tel: 01386 700361. Mobile 07887 943697. Email: End
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