Publicis, Havas Report H1 Growth Standstill

27 July 2007

PARIS: French marketing services conglomerates Publicis Groupe and Havas (respectively fourth and sixth among the globe's agency holding companies) each reported lacklustre results for the year's first half - the former posting year-on-year organic growth of just 0.5%, the latter 1.3%.

  • Publicis said its results reflected client losses and slow performance in the USA, although overall revenues rose 6% to €2.25 billion ($3.43bn; £1.68bn). Net revenue was not revealed, as is the practice with French-listed businesses.

    Says chairman/ceo Maurice Lévy: "Organic growth in the second quarter, and for the first half as a whole, does not reflect what Publicis Groupe has regularly achieved nor its potential.

    "Given current trends, growth for the second half-year should be much stronger than the first half, and growth for the entire year, as things stand now, is likely to be between 4% and 5%."

    The group's organic growth in north America in Q2 was 1.2%, bettering Europe's meagre 0.2%. Asia Pacific returned growth of 5.1%; Latin America 5.4%; and 10.4% elsewhere in the world.

    Undeterred by the H1 standstill Lévy is sticking to his guns over Publicis's 2008 operating margin target of 16.7% in 2008, from a base of 16.3% in 2006.

  • Havas, although posting 4.4% organic growth during Q2, saw this whittled down by €20 million in revenue terms, due to the strength of the euro versus the dollar, leaving net organic growth languishing at 1.3%.

    However, the group went into overdrive during the second quarter, returning its strongest growth in six years at +5.4%.

    While for H1 as a whole, net new business was up 38% to €729m, spurred by a number of major account wins that included Reckitt Benckiser, Sanofi-Aventis, Pfizer and Exxon Mobil.

    Latin America led the growth curve, surging 16.8% to €36m, followed by Asia-Pacific (+9.7% to €30m), Europe excluding France and UK (+8.7% to €167m ) and North America (+1.6% to €251m).

    France rose 2.4% to €160m while the UK edged up 1.7% to €88m.

    Data sourced from multiple origins; additional content by WARC staff