NEW CEO A NO-SHOW AT HAVAS MANAGEMENT MEETING

With Fernando Rodes Absent, Former Chief Discusses 2005 Results

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NEW YORK (AdAge.com) -- Fernando Rodes, named last Friday as CEO of French holding company Havas, was nowhere in sight this morning at a management meeting with financial analysts and journalists.
The absence of Mr. Rodes -- Havas’ second CEO in nine months -- in many ways set the tone for the disappointing, sparsely attended corporate event.
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A disappointing event
The absence of Mr. Rodes -- Havas’ second CEO in nine months -- in many ways set the tone for the disappointing, sparsely attended event, which was held to discuss the company’s 2005 results. Only a handful of the holding company’s executives showed, and strangely enough, departing CEO Philippe Wahl, with Chief Financial Officer Herve Philippe at his side, led the discussion for most of the meeting.

“Today we are talking about 2005,” Mr. Wahl said in response to an audience member’s query about Mr. Rodes’ whereabouts. “The person who has managed the group for the past six months is me. Fernando will have another occasion to present the future of the group.”

Though Mr. Wahl took responsibility for Havas, calling the second half of 2005 “a period of transition,” he also made it clear that he’s no longer the man in charge. “As of 5 p.m. today,” he announced to the audience, “I’m taking a job at the Bollore Group as VP, in charge of media and communications. I’ve got an office and an e-mail.”

Mr. Wahl called 2005 “difficult” and said the first half of 2006 would likely be, too. “It is important for us to be honest,” he said, and repeated twice that “the group in the past has produced many strategic speeches and little results, and we want to do the opposite.”

Revenue down
Revenue declined 2% from the prior year to $1.7 billion, though net income rose to $70.3 million, up nearly 8% over the prior year. Operating profit dropped 28% in 2005 to $152 million. Organic growth for the year was up 2%. But Mr. Wahl said maintaining that level for the first half of 2006 would be optimistic.

On a positive note, Havas reduced expenses at its New York and London offices as well as at its Paris headquarters, and the impact of those reductions will be seen in mid-2006. Asked by an analyst to give more detail on those reductions and the amounts, Mr. Wahl declined to do so.

The company has also set aside $13 million to cover costs of possible litigation regarding the exits of former executives, and said it incurred $11.9 million in costs related to the termination of Alain de Pouzhilhac, the company’s former chairman-CEO, who was ousted in July.

’Creativity, growth, results’
Mr. Wahl strove to emphasize management’s new focus. “The group [in the past] has also produced dreams of a holding company with many networks and we only have one network now. Our aim is to produce more creativity, more growth and more results.” Havas is now focused on one sole worldwide network, Euro RSCG.

Asked several times whether there are discussions between Aegis Group and Havas (Havas' chairman, Vincent Bollore, owns 25% of London-based Aegis), Mr. Wahl said, “At the moment, there is no discussion between Aegis and Havas, between Aegis and MPG, and between Aegis and its shareholder Mr. Bollore. It is not impossible that this non-discussion stops.” Then he added, while smiling, “This is English understatement.”

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