Publicis FY net profit beats consensus on record opg profitability, lower debt

Publicis FY net profit beats consensus on record opg profitability, lower debt

	Published : Wed, 28 Feb 2007 09:47 By : Agencies Print this Story

(adds further detail and strategy)

PARIS (AFX) - Publicis Group SA said net profit for 2006 rose 15 pct to 443 mln eur, from 386 mln eur in 2005 and ahead of consensus estimates thanks to record operating profitability and a sharp reduction in net interest and related expenses.

Operating profit for the full year was 713 mln eur, up 10 pct from 649 mln eur a year earlier, and again exceeding consensus estimates.

A consensus of 18 analyst estimates compiled by Thomson Firstcall put Publicis' 2006 net profit at 415.30 mln eur and operating profit at 684 mln eur.

The operating margin for 2006 increased by 60 basis points to 16.3 pct, which the group said was a record for the industry. The rise was attributed to a reduction in operating expenses, achieved through the Horizon rationalisation programme.

Over the year, the group managed to cut its net debt by a third to 636 mln eur, leading to a 46 mln eur reduction in net interest and related expenses.

Based on its 2006 results, Publicis said it will recommend a 39 pct increase in its 2007 dividend to 0.50 eur per share at the annual general meeting on June 4.

For 2007, Publicis said sales growth in Europe and the US should be comparable to levels recorded in 2006 which saw respective rises of 5 pct and 5.1 pct in these regions.

It also expects a further acceleration in emerging markets, where it will continue to make acquisitions as opportunities arise, aiming to derive 25 pct of annual sales from these regions by 2010.

Net new business levels for January 2007 also point to a promising outlook for 2007, amounting to 2 bln eur for the month compared to a full year total of 3.3 bln eur in 2006.

Going forward, the group intends to focus on its worldwide digital communications activities, building on the purchase of Digitas through additional targeted acquisitions in Europe and Asia.

The group is aiming to generate 25 pct of sales from digital, interactive and mobile activities by 2010.

In terms of profitability, Publicis reiterated its operating margin target of 16.7 pct for 2008.

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