David Jones, most recently executive vice
The changes at the New York office come shortly after management changes at Euro's other major U.S. location, Chicago. In June, Steffan Postaer, formerly of Publicis Groupe's Leo Burnett USA and its now-defunct creative outpost LB Works, joined as chairman and chief creative officer. Mr. Postaer reports to Ron Bess, CEO of Euro RSCG Chicago and regional director for North America; Mr. Bess himself arrived only in May after several years at WPP Group. Euro's Chicago office had significant losses earlier this year, including the departure of its largest client, Darden Restaurants, which moved its $80 million to $100 million Red Lobster account to independent Richards Group, following a review.
The New York office recently won the advertising responsibilities for Schering Plough's allergy drug Claritn, a $100 million account that will be worked on in offices worldwide. Other recent account additions include work for unspecified Aventis brands as well as for Novartis' Nicotinell, an anti-smoking gum.
Euro RSCG Worldwide is the largest of Havas' entities, and improvements in its financial and operating performance are crucial to the success of parent Havas.
The Paris-based advertising holding company, whose other holdings include media buying and planning company MPG as well as advertising agency Arnold Worldwide, has restructured a heavy debt load to deliver stronger financial results. Throughout 2003, Havas restructured its operations by cutting staff and selling underperforming companies. It also scaled back plans to expand Arnold Worldwide into a second global network.
Return to profitability
Speaking to analysts at an investor conference in Paris today, Havas' chairman-CEO, Alain de Pouzilhac, maintained that those efforts are yielding positive results. Operating margins for this year's first half are 12.2%, compared with 8.2% for the same period last year. The company returned to profitability this year, as first-half net income rose to $17 million vs. a year-earlier loss of $70 million, despite a revenue drop of 10.3%, to $911 million from $1.01 billion.
Mr. de Pouzilhac also said Havas intends to issue additional shares and use the proceeds to refinance convertible bonds. Havas has $972 million in net debt.
Havas, the world's sixth-largest advertising holding company, with worldwide revenues of $1.88 billion, lost out to No. 2 WPP Group in a bid to acquire Grey Global Group, the world's seventh-largest ad company with $1.31 billion in revenues. Speculation about Havas' future has been rampant as the WPP acquisition leaves Havas a distant competitor to the larger holding companies, Omnicom Group, WPP, Interpublic Group of Cos. and Publicis Groupe.
What's more, Vincent Bollore, a French corporate raider who as of Sept. 14 has amassed more than 10% of Havas shares. Mr. Bollore, who was reportedly opposed to Havas' decision to bid for Grey, is known for investing in weak or undervalued companies and pushing for change. Because of the size of his stake, according to France's securities commission Autorite des Marches Financiers, Mr. Bollore must by Sept. 21 reveal his plans regarding Havas.
Mr. de Pouzilhac at this morning's press conference said that the company may give two board seats to Mr. Bollore.