Havas Reports Organic Growth of 6% for Third Quarter

Integration, Leadership and Family Ties Cited as Reasons for Strong Figures

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Yannick Bolloré
Yannick Bolloré Credit: Havas
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Havas announced organic growth (excluding acquisitions) of 6% for the third quarter of 2014, with revenues of $555 million. For the first nine months of the year, organic growth was 5.8%, for total revenue of $1.6 billion.

In North America -- Havas' biggest market -- growth reached 4.7% in the third quarter and 4.6% for the first nine months of the year, with Havas claiming strong performances from all its businesses in the region, particularly healthcare.

In a conversation with Ad Age after the earnings announcement, Havas CEO Yannick Bolloré attributed the results to integration and leadership. He said, "We've done a great job organizing collaboration locally and globally. And we have a great leadership team which means the clients are happy so don't leave us, and we've had a fantastic new business year."

Mr. Bolloré – fresh from running the New York marathon in four hours sixteen minutes on Sunday ("the conditions were awful," he laughed, as he excused his time) -- also spoke about the group's investment of time and money in "transforming big data into smart data," achieved by its growing ranks of mathematicians, data scientists and econometric specialists.

Commenting on the recent move to gain a majority stake in Havas by his family's Bollore Group, Mr. Bolloré insisted, "It's good news for shareholders and clients and talent. Belonging to a family group gives us a precious advantage long term, because we're not super-stressed by quarterly earnings and we can develop long-term strategies, which is key in the market. On a personal level, the fact that the group that belongs to my family wants to invest in Havas is testimony to their trust in me and in the whole group."

In a conference call earlier with analysts, Mr. Bolloré acknowledged that Arnold Worldwide hadn't done well, although he said the U.S. agency's recent Century Link telecoms win indicates signs of improvement for the fourth quarter. He promised, "Next year will see Arnold back on track."

In Europe, Germany and Italy are showing double-digit growth, while the U.K. was up 8% in the third quarter. In France, organic growth was up just 2.8% for the third quarter. "I believe the U.K. market will remain dynamic," Mr. Bolloré said, pointing to the acquisition of digital agency Work Club in the second quarter, which he said would be "a big part of our success in the coming years in the U.K."

Asia Pacific grew 9.5% in the third quarter. In Latin America, growth slowed to 4%, mainly due to a weaker performance in Mexico.

Looking ahead to the fourth quarter, Mr. Bolloré warned that comparisons with the same period for the previous year might negatively impact growth, but added, "Globally we are very satisfied with our performance and we remain confident this will continue to the end of the year. We have no bad news in the pipeline and we remain focused on creating the most integrated agency group."

Asked on the call with analysts about the deal announced this week by rival Publicis Groupe to acquire Sapient Corp. for $3.7 billion, and whether tech consultancy is the future of the ad industry, Mr. Bolloré said, "We never comment on the competition. We are pursuing a different strategy -- to integrate – because we believe the customer journey is not different in a digital world. We need to be able to deliver networks who are completely fluent in traditional, digital and mobile to meet our clients' expectations and so far we are very satisfied with the results of our strategy based on integration."

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