Publicis Q1 organic growth helped by currency effects

PARIS, April 20 (Reuters) - Advertising agency Publicis (Paris: FR0000130577 - news) posted forecast-beating organic sales growth in the first quarter helped by the weak euro and the contribution of its recent acquisition of smaller peer Sapient.

Organic revenue growth was 0.8 percent on sales of 2.1 billion euro ($2.25 billion) in the quarter, the company said in a statement on Tuesday.

Organic growth slowed from the 3.2 percent seen in the last quarter of 2014, but came in above analysts' forecasts for revenue to shrink by 0.5 percent or rise 0.5 percent.

The world's third-largest advertising agency, which competes with Britain's WPP (LSE: WPP.L - news) and America's Omnicom, is trying to turn things around after a difficult 2014 in which its financial performance dragged rivals and its much touted 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 in the second half.

"The priority this year is clearly organic growth and getting the machine going again."

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, and WPP is set to report on Thursday. Smaller French peer Havas (Other OTC: HAVSF - news) will publish sales on May 5.

Publicis shares closed down 0.7 percent on Monday to 72.34 euros, giving the group a market capitalisation of 16 billion euros.

Its shares have risen 21.3 percent this year, compared with a 20.5 percent rise for the European media index, a 15 percent rise for WPP, and a 0.5 percent rise for Omnicom.

($1 = 0.9313 euros) (Reporting by Gwenaelle Barzic; Writing by Leila Abboud)