Havas Says 'Negative' U.S. Growth Will Improve in Q4

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Havas reported organic growth of 2% to $599 million in revenue for the third quarter of 2016, a slight slowdown from 2.7% organic growth and $1.81 billion in revenue for the first nine months of the year, the Paris-based holding company reported Tuesday.

Yannick Bollore
Yannick Bollore

Havas Group CEO Yannick Bollore said on a call with analysts that he is forecasting organic growth of 2.5% to 3% for the group for the full year.

Mr. Bollore noted that Havas' performance in the U.S. "turned slightly negative" in the third quarter but said he expected the company to do better in the fourth quarter of this year, and in 2017. He attributed the third quarter dip to a major U.S. client, DraftKings, a daily fantasy sports company that was targeted by regulators and had to stop advertising. He said he expects to see growth in the fourth quarter as recent new-business wins kick in, including GSK on the creative side and TracFone for Havas Media.

He highlighted the U.K. as a bright spot, with organic growth of 8.6% for the third quarter. He said the U.K. represented 13% of Havas's global revenue before the drop in the pound following the Brexit vote in June.

"While our competitors are disinvesting in the U.K., we have huge opportunities," he said. "We bought [U.K. entertainment media group] Target Media and Communications Group [in October] and will continue to take a close look at what we can do with acquisitions or investment."

It may seem "counterintuitive" to keep investing in the U.K., Mr. Bollore said, but "The U.K. will continue being part of Europe for us despite the outcome of the vote. And I intend to spend more time there."

In other major markets, Havas said in a statement that there was "a significant slowdown in China, where certain clients cut back on their investments" but that Brazil, which has been mired in a deep recession, is "improving."

Interpublic Group of Cos. on Friday reported organic growth of 3.0% to $1.92 billion in revenue in the third quarter, and CEO Michael Roth raised the group's organic growth target "to a range of 4 to 5%."

Also reporting earnings last week, Publicis Groupe reported organic growth of just 0.2% in the third quarter of 2016, with revenue of $2.6 billion.

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