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Publicis registers surge in profits and predicts good 2005 performance

LONDON - Publicis, which owns the advertising agencies Leo Burnett and Saatchi & Saatchi, has increased full-year net profits by 40% to €210m (£145.5m) and achieved organic growth of 4% thanks to a strong new-business performance.

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The group pulled in new business worth €3.5bn during 2004, thanks to wins around the world. It also improved its operating margin from 14.3% in 2003 to 15.4%.

Maurice Levy, chairman and CEO, said: "We will be accelerating our drive for added competitive strength through appropriate investments in media buying and consultancy, healthcare communications and holistic communication.

"We should logically see the positive impact of the record levels of new business won, a trend that continued through the first two months of this year. So 2005 should be another good year for Publicis Groupe, whatever the worldwide economic situation."

The group has started 2005 by claiming a share of Schering-Plough's $400m (£207.2m) advertising account as well as capturing Nestle's US media buying business.

Significant new business for Publicis last year included ZenithOptimedia's win of O2's £33m media planning and buying business in April.

Starcom MediaVest picked up Oracle's $50m global media planning and buying account in July. However, this was counterbalanced by Starcom Motive's loss of the £35m Lego account to Carat near the end of 2004.

The increase in net income was brought about by reducing the group's debt repayments and reducing its tax exposure. Debt was halved from €1.8bn at the end of 2003 to €563m at the end of 2004.

Saatchi & Saatchi in the US was recently hit by the defection of 18 staff on the General Mills account and its hold on the business is in question.

In September, Publicis created a new management structure, Publicis Media Groupe, to strengthen its media buying networks Starcom MediaVest Group and ZenithOptimedia.

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