Havas CEO: Scale At Odds With Creativity, Innovation

Jones Addresses Omnicom Publicis Merger While Announcing Third Quarter Results

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Havas Group CEO David Jones defended his integration strategy and talked up the agility of the group in the face of potential competition from a merged Publicis and Omnicom during a call with analysts about third-quarter results today.

David Jones
David Jones

In answer to a question about the threat posed by the potential Publicis Omnicom merger that passed the antitrust test in the U.S. this week, Mr. Jones kept to his much-repeated line that clients are looking for an "innovative, agile, entrepreneurial" culture from their agencies.

"One of our global clients said to me recently that innovation and creativity sit at the opposite end of the spectrum to scale, and we share that view," he said.

The French group, whose agencies include Havas Worldwide, Arnold Worldwide, BETC, Havas Media and Arena Media, reported organic revenue up 1.2% to $556 million in the third quarter, bringing total growth to 0.7% for the year to date.

Havas Group saw North American revenue shrink 1.9% to $184 million in the third quarter, bringing growth down by 1.8% in 2013 so far. Mr. Jones blamed this on several "one-off" client losses, mainly at Arnold Worldwide, as well as healthcare clients cutting spending in the quarter.

Mr. Jones warned that the final quarter is likely to be "flat or down" in the region, due to tough comparisons, but said, "Following 2011 and 2012 where Havas was at the top of the class in North America in organic growth, 2013 has been a slow year, but momentum in the business is excellent in terms of both new business and talent additions and the 2014 forecasts for the major divisions in North America are very encouraging."

Asia Pacific grew at 2.5% to $40 million in revenue in the third quarter, averaging out at 5.2% for the first nine months of the year. China and Australia were the holding company's strongest markets, particularly in healthcare, advertising and direct marketing.

Latin American organic revenue growth, running at 3.7% for the quarter and 9.1% for the year to date, was described as "satisfactory" despite the fact it is slowing down. Mexico and Peru are still achieving double-digit growth, with overall revenues for the quarter in the region at $57 million.

In Havas' European homeland, France grew 5% in the third quarter, bringing in revenue of $105 million, and the U.K. was flat, with revenue of $65 million.

Havas generated $105 million in revenue from the rest of Europe, resulting in organic growth of 2.1% for the region. Results were boosted by double-digit growth in Germany and a return to growth in Spain, Italy, Belgium and Portugal. However, organic growth was -0.9% for the first nine months of the year in the region.

Havas has spent only $27 million on acquisitions so far this year -- well below its budget of $70 million to $135 million-- but there are still a couple of deals that are expected to be finalized before 2014. "Our policy on acquisition is to be prudent," Mr. Jones said.

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