Aegis Group (LSE:AGS)
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From Apr 2019 to Apr 2024

After finishing 2010 with very strong--some even record-- organic revenue growth figures, European media agencies are expected to return to more normal growth figures at the start of the year.

First-quarter organic revenue growth, a key industry measure, should still be robust, with agencies posting growth in the region of around 7% on average, analysts say, boosted mainly by a strong U.S., digital and faster-growing regions such as China and Latin America.

Agency executives are also expected to maintain their positive outlook for the rest of the year, even caution may creep in due to the political turmoil in the Middle East and recent earthquake in Japan that have added to macroeconomic concerns.

Last week, ZenithOptimedia, a unit of Publicis Groupe SA (PUB.FR), cut its forecast for global advertising spending for this year as a result. It estimates that these one-off events have knocked about $2.4 billion off this year's global ad expenditure, and it lowered its forecast for 2011 to 4.2% growth compared with the 4.6% growth it previously expected.

Still, analysts say much of this has already been priced in.

Publicis remains a preferred stock for many due its high exposure to the U.S. and digital and its recent ability to outperform peers on revenue growth and margins. WPP PLC (WPP.LN), the world's largest ad group by revenue, is also a top pick for many analysts, again due to its high exposure to digital and to faster-growth regions. Its share also looks to be in an attractive buying range right now, according to Deutsche Bank.

--- Publicis Groupe SA (PUB.FR) --- (April 21)

MARKET EXPECTATIONS: Analysts expect Publicis to post organic revenue growth of around 6.7% in the first quarter, down from 12.5% in the fourth quarter 2010 but still strong compared with the 3.1% posted a year ago, again driven by the U.S. and other regions such as Latin America. Some analysts note that there is room for Publicis to surprise on the upside and that the share will likely react positively if the group manages to post growth in the region of 10%. Even though Publicis' ZenithOptimedia unit has cut its ad spending forecast for this year, management is expected to remain optimistic on revenue growth, which the group has forecast to be above market growth for the year.

MAIN FOCUS: The market will closely eye comments on outlook and advertising market trends from Chief Executive Maurice Levy. Analysts will be keen to hear comments on how the recent earthquake and following tsunami and nuclear crisis in Japan may impact the advertising budgets of carmakers, which account for around 15% of group revenue. They will also pay close attention to any comments about possible plans for the company to buy back the 11% stake Japanese ad firm Dentsu Inc. (4324.TO) still holds in the French group.

--- WPP PLC (WPP.LN) --- (April 28)

MARKET EXPECTATIONS: WPP is expected to post good organic revenue growth in the first quarter after saying in March that organic revenue was up over 8% in January, and February seems to have continued the positive trend. WPP has budgeted organic revenue growth to come in at around 5% in 2011 and has also said that prospects for 2012 are encouraging and most analysts expect the CEO to broadly stick with that view at this stage.

MAIN FOCUS: Analysts will closely watch CEO Sir Martin Sorrell's take on the recent geopolitical events and Japan disaster and whether these events have changed his view of the market for the rest of the year. In March, Sorrell already said the situation in the Middle East seems more serious in terms of business risk than the tragedy in Japan, given its unpredictability.

--- Aegis Group PLC (AGS.LN) --- (May 12)

MARKET EXPECTATIONS: Aegis is also expected to post a good quarter. Analysts feel confident about the turnaround of the group's U.S. business and the performance of market research business Synovate. In March, CEO Jerry Buhlmann said Aegis was starting the year with increased confidence and that 2011 organic revenue should grow at least as fast as 2010 as clients are expected to continue to spend more on advertising and marketing throughout the year.

MAIN FOCUS: Outlook will be the key focus. Analysts will also look for more details on M&A plans since the group said it wants to step up acquisitions to strengthen its digital and emerging market businesses.

--- Havas SA (HAV.FR) --- (TBC)

MARKET EXPECTATIONS: Havas will present its first revenue performance under the leadership of its new chief executive, David Jones. However, as the company rarely holds any meetings with management for quarterly sales reports, not much new is expected in terms of outlook or the recent strategy refocus. Chairman Vincent Bollore in March already said that the group's organic revenue growth was 7.7% at the end of February, which gave analysts some comfort after the company missed expectations for fourth-quarter growth.

MAIN FOCUS: Analysts will be watching organic revenue growth in search of confirmation that the group performed better at the start of the year than in the last quarter of 2010 and is closing the gap with rivals. Close attention will also be paid to the group's performance in the U.S., where Havas also posted growth below that of peers.

-By Ruth Bender, Dow Jones Newswires; +33 1 40 17 17 54; ruth.bender@dowjones.com