Publicis organic growth helped by currency effects

By Gwénaëlle Barzic PARIS (Reuters) - A weak euro helped Publicis to report forecast-beating organic sales growth in the three months of 2015 and the advertising agency also enjoyed an initial boost from its recent acquisition of smaller peer Sapient. Organic revenue growth was 0.9 percent on sales of 2.1 billion euros (£1.51 billion) in the quarter compared with a year ago, the company said on Tuesday. That was above analysts' forecasts that revenue would be in a range between 0.5 percent lower or 0.5 percent higher. The world's third-largest advertising agency, which competes with Britain's WPP and America's Omnicom , is trying to turn things around after a difficult 2014 in which its financial performance lagged rivals and its planned merger with Omnicom fell apart. Key to the promised recovery is building on the $3.7 billion acquisition of digital ad specialist Sapient, which was completed in February. "This is an encouraging start to the year," said Publicis Chief Executive Maurice Levy, who had previously warned investors that growth would pick up only in the second half. "The priority this year is clearly organic growth and getting the machine going again." Shares in Publicis jumped 4.8 percent on Tuesday at 0740 GMT in heavy trading volumes, making it the biggest gainer on the French blue-chip index CAC 40 <.FCHI>. Advertising tends to track global growth, since multinational companies increase marketing spend when they see better demand for their products or services. Publicis-owned ZenithOptimedia thinks the ad market will grow around 4.4 percent this year. Publicis has promised to match or outperform rival ad agencies. Europe was a surprising bright spot with sales growing 1.7 percent, while the "US, Brazil and Russia were weak," wrote UBS analyst Tamsin Garrity. Publicis got a 215 million euro boost from favourable currency exchange rates in the first quarter from its exposure to the U.S. and Britain. The beneficial effect from the stronger dollar against the euro is expected to continue especially since Sapient earns 55 percent of sales in the United States. Publicis is the first ad agency to report results. WPP is set to report on Thursday, and Interpublic on Friday. Smaller French peer Havas will publish sales on May 5. David Reynolds, analyst at Jefferies, said the "positive momentum" seen in the Publicis figures might not be replicated at other agencies since the French group was in a unique situation after its difficulties in recent quarters. (This version of the story was refiled to correct organic growth figure in paragraph 2 to 0.9 percent from 0.8 percent) (Additional reporting by Leila Abboud; Writing by Leila Abboud)