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Omnicom Group's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Stocks in this article: OMC

Organic growth for the first 3 months was a very strong 5.1%. Revenue growth in the quarter was driven by very positive results in developing markets, and solid performances in the U.S. and the U.K. This was balanced at the euro markets, which experienced only nominal growth. Our advertising business performed very well, while our PR businesses showed improvement for the first time in several quarters.

Looking more closely at revenue by geography, we saw a continued strength in the U.S. with organic growth of 4.4%. U.S. growth was driven by strong results in brand advertising, media, and sports and event marketing and was offset by a decline in our healthcare specialty business.

The U.K. experienced organic growth of 4.1%. While the U.K. growth slowed versus the fourth quarter, the market remains relatively favorable despite the broader challenges in Europe and our individual agencies are performing very well. Euro region growth overall was relatively flat, although the performance by market varied. Germany turned in a solid quarter, France was only slightly negative, and the Netherlands underperformed due primarily to the effects of a client loss.

In the more troubled European markets, Greece and Ireland were negative for the quarter, while the southern European markets had positive growth.

Outside the euro currency area, Russia and Turkey had very strong performances with double-digit growth.

In the first quarter we again had strong performances across Asia, particularly Australia, China and Singapore. In Japan, we are happy to say that we had positive organic growth for the first time since the third quarter of 2010. We again experienced growth across almost all of our industry segments. Revenues during the quarter were particularly strong in auto, food and beverage, retail and technology, while only health care had a negative performance.

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