Revenues earned by the largest publicly listed marketing groups around the world recovered by nearly 9% last year, and post-tax profits grew by 23.3%, as agencies began to emerge from the latest recession.
According to our survey of the most recent accounts of companies which between them generated revenues of $57 billion, two-thirds of those companies reported a profit rise or a reduction in loss. Operating profit margins before amortisation charges improved to 13.3% from 12% in the previous period.
The survey, available only to subscribers to Marketing Services Financial Intelligence from today (see below), points out that a large part of the reported revenue growth arose from acquisitions made in 2009 or thereabouts, reflecting opportunities seized during the recession to absorb weaker competitors.
The acquisition activity contributed to a $100 million rise in interest costs at the companies in the survey (or 11.5% year-on-year). Nevertheless the expanding operating profits more than absorbed that increase.
One of the best performers in the survey was the French based Publicis Groupe. “While still little more than half the size of WPP or Omnicom in terms of revenues, it delivered a much better operating profit margin than its bigger rivals with the result that its post-tax profit for the year of $725 million was only 12% behind that of Omnicom”, the report says. “Publicis is now firmly ensconced as the third biggest group, leaving Interpublic quite a long way behind.”
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