Havas Announces 5% Revenue Growth for First Half of 2011

CEO David Jones Has $1 Billion to Spend on Acquisitions but Thinks Digital Shops Are Pricey

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David Jones, CEO, Havas
David Jones, CEO, Havas
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Havas announced 5.6% organic growth for the first half of 2011, with group revenue rising 5% to $1.1 billion, up from $1.05 billion in the same period last year.

That's lower than other holding companies that have recently reported financial results. Last week WPP Group announced revenue was up 6.1% for the first half of the year, and Aegis Group reported organic revenue grew by 7.3%.

Havas's performance appears to be deteriorating. For the first quarter, Havas reported organic growth of 6.8%, slowing to 4.5% in the second quarter. In North America, however, growth rates have been improving steadily, climbing from 7.2% in the first quarter to 9% in the second quarter.

David Jones, CEO of Havas, said in a conference call today that he can't predict the group's performance for the second half of the year. "Major clients are not as optimistic as they were seven to eight months ago, particularly in the North American market," he said. "It's like hurricane Irene -- we won't know how it will affect us until it happens. There's little visibility."

Mr. Jones confirmed that Havas is actively looking for acquisitions, particularly in the digital world, but cautioned, "We want to spend our money wisely. I've had 30 meetings with heads of companies but the valuation of digital businesses is extraordinarily high. I don't want to wish this on the business, but if the economy takes a downturn it could mean that our $1 billion goes a lot further."

Paris-based Havas includes Euro RSCG, Arnold Worldwide and MPG. Latin America was the group's fastest-growing region, with organic growth of 24.6%, down from 25.2% in the first half of 2010. Asia Pacific grew by 9.2%, up from 0.7%; North America grew 8.1%, up from 4.9%; and Europe was up 1.3%, a return to growth after a 2.6% drop in organic growth in the first half of 2010.

Europe remains Havas's biggest territory, with revenue of $585 million for the first half of 2011, up from $572 million last year, followed by North America, with $363 million in revenue (up from $353 million). Revenue for Latin America was $95 million (up from $76 million), and Asia Pacific revenue stood at $59 million (up from $9 million).

Havas claimed new business wins totaling $1.35 billion in the first half of 2011, including Dell, Pfizer, Durex, Pernod Ricard, Bosch, Dove digital, Eurostar, Volvo, Nescafe, and Coca-Cola.

Havas expects to invest more than $200 million to acquire a new corporate headquarters in France this year.

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