Good results from Publicis, but Levy says war on Iraq could halt recovery

PARIS - Publicis Groupe has said that revenues rose by 2.4% to €1.18bn (£740m) for the first half of the year, but chairman and CEO Maurice Levy has warned that a war with Iraq could dent any chance of economic recovery.

Earnings before interest, tax, depreciation and amortisation were up by 2% to €194m for the six months ending June 30 2002, and total billings were up by 28.8% to €9.7bn.

However, in a results presentation, Levy said: "A war in 2003 could lead to a new oil shock, with prices of $60-$65 a barrel, and disruption to the world economy that could take one or two percentage points off the global GDP.

"A serious terrorist attack on the September 11 anniversary or in the coming days would also have a negative psychological effect for consumers, so we are in a period of uncertainty and must be cautious."

Levy went on to predict that when Publicis merges with Bcom3, it will be able to achieve a profit margin of 15% in 2003, but qualified this by saying: "This scenario is based on there being no war, because if there is a war, who will care? We will be in a mess, the economy will be in a mess."

The merger is due to be formalised at a meeting on September 20.

Publicis, owner of agencies including Saatchi & Saatchi and Fallon Worldwide, has attributed its success in bucking the market trend to its cost-cutting strategies undertaken in 2001.

Shares in the group, listed in New York and Paris, rose in morning trading on the Paris bourse, up 0.56% to €21.76.

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