JCDecaux yet to see sustained ad market upturn
* Q3 sales 431.8 mln euros
* Q3 underlying sales down 12.1 pct
* Ad mkt bottomed in Summer, no signs of sustained recovery
* Expects 2009 operating margin slightly ahead of that of H1
By Dominique Vidalon
PARIS, Nov 4 - JCDecaux <JCDX.PA> on Wednesday said revenue and profitability would fall this year and it had yet to see sustained signs of a recovery, although the worst might be over for the battered advertising sector.
The world's No. 2 outdoor advertising group, behind Clear Channel Outdoor <CCU.N>, made the forecast after closely-watched underlying sales fell 12.1 percent in the third quarter to 431.8 million euros , ahead of company's guidance.
"We believe that the advertising market bottomed out in the Summer and while some further improvement is anticipated in the fourth quarter, in part due to comparables, we are not yet seeing sustained signs of an advertising recovery and business continues to be volatile," co-Chief Executive Jean-Francois Decaux said in a statement.
JCDecaux, whose clients include luxury giant Louis Vuitton <LVMH.PA> and Samsung Electronics <005930.KS>, predicted 2009 underlying revenue would fall by around 12.5 percent.
The 2009 operating margin as a percentage of revenue would be slightly ahead of the 18 percent achieved in the first half, thanks notably to cost cuts, but still below the 25.4 percent achieved in 2008.
The CM-CIC brokerage raised its rating to "hold" from "sell" on Wednesday, saying the margin outlook was "reassuring".
"Risk is improving but we are keeping a scenario of a progressive recovery of the advertising sector in 2010," the note said.
By 0807 GMT, JCDecaux shares were off 0.82 percent at 14.54 euros, underperforming a 0.2 percent rise in the European media sector <.SXMP>.
Last week, global advertising giants France's Publicis <PUBP.PA>, and Britain's WPP <WPP.L>, also offered some hope for the advertising sector. [ID:nLQ257018] [ID:nLT331913]
Publicis said the worst of the economic downturn was over, forecasting a better fourth quarter and a return to growth in the second half of 2010. WPP, the world's largest advertising group, said a decline in ad spending was moderating and corporate confidence was picking up.
JCDecaux's 12.1 percent quarterly revenue fall reflected lower sales in the group's three divisions and in most regions, though France and China slightly improved in September.
Goldman Sachs analysts said the performance was in line with its forecast of a 12 percent decline and a market consensus of 12.2 percent. It called the implied fourth-quarter revenue guidance "cautious".
Analysts noted that JCDecaux beat its own guidance, having forecast a third-quarter sales fall in line with the 13.8 percent drop suffered in the first half.
In September, JCDecaux, which has a market capitalisation of 3.2 billion euros, raised its holding in German outdoor advertising group Wahl AG to 90.1 percent from 40 percent.
Asked about acquisitions, co-CEO Jean-Charles Decaux told BFM radio that the next months would be "critical", adding he banked on a "slow and gradual" recovery in Europe and an upturn "maybe a bit stronger in the United States". (Reporting by Dominique Vidalon; editing by Marcel Michelson; editing by Simon Jessop)