Havas Revenue Increases 2.7% in First Half

A Stronger North American Operation Helped Overall Growth

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Yannick Bolloré
Yannick Bolloré

Havas revenue increased 2.7% to $1.14 billion for the first half of 2014, compared with the first half of last year, boosted by a 7.9% increase in the second quarter, the agency holding company said today. Organic growth, excluding the effects of events such as acquisitions, was 5.7% in the first six months of the year, compared to just 0.5% growth in the same period in 2013.

Net new business in the first half was $1.7 billion, and income from core operations was $151.1 million, up 4.5% from the half a year earlier. The company said its income from operations margin was 13.2%, roughly unchanged from 13.1% in the first half of 2013.

Operating income was $139.3 million in the half, up 3.9%, the company said.

North America, which accounts for one third of Havas' business, accelerated from 3.7% organic growth in the first quarter to 5.3% in the second quarter, resulting in 4.5% organic growth for the first six months of the year, with Havas Worldwide's New York and Chicago offices and Havas Media performing strongest. Account wins so far this year include biotechnology company Biogen, Green Mountain Coffee and Dish Network.

"When I took over last year, my main concern was the U.S., but the new team has managed to get some great account winning momentum for us," Yannick Bolloré, Havas chairman and CEO, said in a call with analysts. "Now the challenge is to consolidate the growth and find the right talent at the right price."

Mr. Bolloré said that last year the group was receiving resumés only from people who were out of a job. "Now we get them from people who have great jobs and are interested to see what's going on at Havas," he said.

Asia Pacific reported revenue of $84 million in the first half, with organic growth at 11.5% (16.2% in the second quarter) thanks to wins including LG and Emirates Airlines. Latin America grew at 7% (10.8% in the second quarter), helped by strong performances in Brazil and Argentina, including winning the retailer Grupo Pao de Açucar.

In Europe, where account wins included Disney and Barclays Bank, organic growth reached 8% in the second quarter, driven by 14.8% in the U.K. In the same period, Havas' home territory of France grew 2.5%, while growth in German, Italy and Portugal reached double digits.

Responding to a question about WPP CEO Martin Sorrell's suggestion that he wants to run TV network Canal Plus in France, Mr. Bolloré said, "That's wishful thinking. Unfortunately for our competitors, I'm happy at Havas. It's a great pleasure to serve at the helm and to outperform the market."

Mr. Bolloré apologized for issuing the results on a Friday, admitting it was "not appropriate," and promised to try and time it better next year.

Just back from a trip to Africa, Mr. Bolloré claimed that Havas is the only group to own a pan-African network, as opposed to creating a network of affiliates. "In the last three years we have opened up in 14 African countries, although it is still small -- only 200 people," he said. "You have to understand that Africa is in the Havas DNA, thanks to the Bolloré group." Bolloré started operating in Africa more than 50 years ago.

Havas, which bought U.K. digital agency Work Club in May and Santa Monica-based Revenue Frontier in April, said it expects to announce two more European acquisitions in the near future.

Mr. Bolloré said that Havas will look at the second half of the year "with confidence and serenity."

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