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UPDATE 1-Publicis targets recovery after Omnicom deal breakdown

Thu, 12th Feb 2015 11:42

* Publicis sees stronger second half to year

* CEO Levy aims to regain support after Omnicom deal failure

* Shares rise 5 percent (Adds shares, analyst)

By Leila Abboud and Gwénaëlle Barzic

PARIS, Feb 12 (Reuters) - France's Publicis promised business would pick up in the second half of this yearas the advertising agency recovered from a tough 2014 marred bya failed mega-merger with U.S. peer Omnicom.

It reported fourth-quarter organic sales growth of 3.2percent on revenue of 2.15 billion euros ($2.4 billion), helpedby a rebound in emerging markets like Brazil and China, as wellas higher demand from advertisers across all sectors from carsto consumer goods.

The strong finish to the year brought annual organic salesgrowth to two percent on revenue of 7.26 billion euros, slightlyahead of analyst expectations.

Publicis Chief Executive Maurice Levy is trying to win backinvestor support after the agency's growth lagged behindcompetitors because of the fallout from the failed Omnicom deal.

The shares rose more than five percent to 70.58 euros by1140 GMT. They had already increased nearly 13 percent this yearto make up for a 10 percent fall in 2014.

"This is a reassuring set of results. The outlook isencouraging and growth picking up. We are optimistic about2015," said a Paris-based trader.

Key to the promised recovery is building on the $3.7 billionacquisition of digital ad specialist Sapient, which wascompleted last week.

Levy said Publicis was already hard at work on theintegration and would soon benefit from the added strength ofSapient in on-line ads and consulting.

"Around the end of this year, we will begin out-performingour rivals again," he said at a press briefing.

OUTPACING THE PACK

Levy said that he expected Publicis to grow faster than the3 to 3.5 percent sales growth forecast for the advertisingagencies globally.

Omnicom on Tuesday issued a relatively cautious forecast fororganic growth this year of about 3.5 percent, slowing from 5.7percent last year, saying the stronger dollar would dentprofitability.

Publicis, which is the third-largest global advertisingholding company after WPP and Omnicom, plans to pay adividend of 1.20 euros per share, up from 1.10 euro in 2013.

Asked about the prospects for the global economy, Levysounded upbeat despite the brewing standoff between Greece andthe European Union over its debt and the conflict in Ukraine.

"Business leaders in Europe are relatively calm about Greeceand believe that a solution will be found. They are more focusedon the tentative signs of a growth recovery in the region," hesaid.

But the real motor of global economic activity this yearwill remain the United States, the veteran CEO said.

"The U.S. is setting the rhythm with solid growth rates andlower unemployment, and this should benefit us since about halfour business is there."($1 = 0.8819 euros) (Editing by Keith Weir)

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