* Levy to talk strategy at investor day on Thursday
* Company has underperformed industry peers
* Failed merger brings back CEO succession issue
* Publicis Worldwide head Sadoun seen current favorite
* $3.7 bln Sapient acquisition gets mixed response
By Gwénaëlle Barzic
PARIS, Dec 3 (Reuters) - Eighteen months after celebrating acorporate marriage with U.S.-based Omnicom that was todominate the world of advertising, Publicis and itsboss Maurice Levy are single again, and face some awkwardquestions.
Chairman and chief executive Levy on Thursday facesinvestors worried that clients are deserting the French groupand disappointed by a performance that lags the sector. (http://bit.ly/1yeEhpJ)
The $35 billion Omnicom-Publicis pairing would haveovertaken WPP as the world's biggest advertisingcompany. It fell apart over leadership conflicts and delays totax and antitrust approvals.
Investors want to see the rebound Levy has promised.
"The only credible response will be a return to organicgrowth in 2015. That will need to be visible in the figures. Themost important thing is to stem client losses, at Razorfish inparticular," said Conor O'Shea of analyst Kepler Cheuvreux.
Razorfish is Publicis' digital advertising arm making adstargeted at the Internet, which is the industry's growth area.
But online giants like Google are moving to cut agencies outand capture ad spending directly, hitting players likeRazorfish, which has lost business from clients includingMotorola and Blackberry.
Levy has blamed his company's problems in part on anover-enthusiastic focus on the merger, but Publicis' organicgrowth was just 1 percent in the third quarter of 2014, whileex-merger partner Omnicom managed 6.5 percent.
At the investor day on Thursday, investors expect an updateon profitability targets set out in September and also on thecompany's performance in emerging markets.
They also want clarity on a cash handout they have beenhoping for now that funds have been spent on U.S. digitalspecialist Sapient, which Levy bought last month for$3.7 billion in a bid to kickstart a recovery.
The deal has received a mixed response.
"We would have preferred Publicis resolve its operationaldifficulties first," said Exane BNP Paribas in a research note.For 72 year-old Levy, who has been at the helm for 30 years, thethorny subject of his succession was something the Omnicom dealwas supposed to solve.
Arthur Sadoun, head of one of its main divisions PublicisWorldwide, is seen as the current favorite, but Levy - who isdue to go in 2017 - has a reputation for outmanoeuvring rivals.
Chief operating officer Jean-Yves Naouri left in a Septembershake-up.
"Maurice Levy has been organising his non-succession foryears," said one industry source. (Additional reporting by Leila Abboud; Writing by AndrewCallus; editing by Geert De Clercq)