Havas Q3 Revenues Fall as CEO Warns of Two-Year Slump

15 November 2001

Havas Advertising did not offer the ad industry much cheer when it posted third-quarter results Wednesday.

Adjusted for acquisitions and currency fluctuations, Q3 revenues fell 4% globally, and 8% in the crucial US market, which accounts for 42% of the group’s business. Revenue from traditional advertising fell 7%, while that from marketing services and media business dipped 1%.

For the first nine months of 2001, organic revenue growth stood at 2.9%, while billings increased by the same margin to E10.3 billion. Organic growth excludes acquisitions, such as the $2.1 billion purchase of Snyder Communications – which, when factored in, lift revenues 43% year-on-year to E1.6bn. Marketing services yielded 6% more over the period, but income from advertising sank 1.1%.

Analysts noted that Havas is more exposed to the ailing tech industry than many of its rivals, and said the group had so far had difficulty integrating its acquisitions.

Chief executive Alain de Pouzilhac warned there would be no imminent let-up to ad weakness: “The recession is likely to continue through 2002, and it could be the first time for fifty years in the history of worldwide advertising that the progression is negative for two consecutive years.”

As a result, Havas warned that full-year organic growth for 2001 would be “close to 0%”, rising to 2%–4% next year, boosted by a reorganisation of its business.

News sources: Financial Times; AdAge Global