Bullish APAC results drives Aegis Q1 growth ahead of rivals

In today's interim trading update, Aegis, which also owns research division Synovate, said it had ended the period with "significant undrawn available credit".

Aegis Media delivered an organic revenue growth of 10.1 per cent during the first quarter, while Synovate reported a 7.3 per cent boost.

The report stated that Q1 revenue growth was "driven by continued strong performances from our businesses in faster-growing regions, North America and a number of Western European markets."

In faster-growing regions, the strongest performances reportedly came from Aegis’ businesses across Asia-Pacific, particularly China, and from Brazil and Russia.

The first-quarter results include a full contribution from Aegis’ acquisition of Australian marketing communications group Mitchell, which it bought for US$300 million in July last year.

The Mitchell acquisition was said to have "delivered a good performance during the period, in line with our expectations."

In Western Europe, Aegis said there were "particularly good results from our businesses in the UK, Germany and the Nordic region. Our Spanish business also performed well, in spite of the continued challenging economic environment in Southern Europe."

The company said North America continued to deliver strong performance improvement, supported by "ongoing positive new business momentum". 

Aegis Media claimed it had secured total net new business wins of US$1.6 billion during the first quarter of the year, compared to US$0.8 billion in 2010.

Wins include The Home Depot and Disney in North America, Enel in Latin America, Ergo, Findus, Asda, Red Bull, the Scottish Government and eBay in Western Europe, and Kellogg’s digital creative business in Asia-Pacific.

During the first quarter, Aegis acquired Clickthinking, a South African performance marketing business, and Riber, a US-based sports and entertainment marketing agency.

In March, Aegis reported its lowest profits in five years when it revealed a 25 per cent drop in profits to US$110 million, down from US$150 million in 2009, and US$200 million in 2008. The group had been affected by US$60 million in bad debt resulting from the financial problems of a Spanish client.

Jerry Buhlmann, chief executive officer of Aegis Group, said, "Aegis Media delivered another excellent new business performance and Synovate started the second quarter with a healthy orders-on-hand position."

Buhlmann said he was positive about the future, "Aegis remains well placed to build on this performance and achieve further revenue and profit growth in 2011, in spite of macro-economic uncertainties."

"We remain on track to deliver organic growth for 2011, at least in line with the level achieved last year."

It's organic revenue growth trumps WPP, which recorded a 6.7 per cent rise year-on-year for the first quarter, as well as Havas (6.8 per cent), Publicis (6.5 per cent) and Omnicom (5.2 per cent).

However, IPG – home to McCann Erickson, Draft FCB, UM and Initiative – delivered 9.3 per cent organic revenue growth for its first quarter.

This article was first published on mediaweek.co.uk.