Third Quarter Hammers Havas' Growth, Revenue

Holding Company Cites Weakening U.S. Market for Poor Results

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NEW YORK ( -- Havas today reported organic growth of 5.8% for the first nine months of 2008, but growth dropped to 1.5% in the third quarter, and fell by 1.5% in the U.S. during the third quarter as the U.S. led the worsening global economic slump.
Fernando Rodés Vilà

Havas' revenue was up by 1.8% for the first nine months of the year to $1.4 billion, but fell in the third quarter, to $452 million from $460 million for the same period in 2007.

Cut its forecast
The company cut its forecast for 2008 organic revenue growth.

"We forecast 5% to 6% growth in January and we see today we will land at 4.5% to 5%," said Havas CEO Fernando Rodés Vilà. "Our Q3 last year was very strong, so we knew we would be flat Q3 this year. We've been hit by the slowdown like everybody else."

Last year, Havas posted a 9% jump in organic revenue growth for the third quarter.

Analysts were quick to react, and Havas shares fell. Reuters reported that Exane analysts said in a note this morning: "We assume the synchronized global ad slowdown will continue in the coming quarters and expect Havas' organic growth to come at [minus] 5% in 2009."

Mr. Rodés said the U.S. and the U.K. have led the downturn.

No optimism for '09
"November and December are very important, [with] lots of client decisions and battles for next year," he said. "We are now in slowdown but we don't have evidence yet that it will go down by 5% or 6% although we know 2009 will be a bad year compared to [the last three]."

He said that travel and finance advertising have been hit hard, and that most of those clients are postponing or cutting investment.

Havas had a bad third quarter in both the U.S., and Asia, where the company lost the Dell account. In Latin America, Havas reported double-digit growth due to a strong performance in Mexico and Brazil.