Havas posts buoyant first half results

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PARIS--Havas Advertising sent markets a sharp signal on the eve of its acquisition of U.S.-based Snyder Communications, unveiling financial results for the first half of 2000 showing strong growth in billings, gross income and net profits.

Billings in the first half of 2000 topped $4.29 billion, representing a 38.8% jump over the first semester of 1999. Similarly, gross income of $646 million represented a 38.8% increase over the first semester of 1999.

The French group's share of net profits for the first half of 2000 jumped to $39.4 million, representing a 45% increase over profits in the first half of 1999.

Havas Chairman Alain de Pouzilhac says the strong results "confirm the excellent health of our group and the wisdom of our strategic choices," mainly a targeted expansion plan that has seen the French group buy up agencies across North and South America and Europe in a bid to increase marketing services revenues.

The $2.2 billion Snyder acquisition, which will move Havas up to No.4 on Advertising Age's global group rankings table, does not figure in the first half results, but is expected to push year-end 2000 results skyward, Mr. de Pouzilhac says. Specifically, Havas expects the fusion with Snyder to result in cost-saving synergies of $35 million to $50 million, while gross income is expected to rise 27% to 32% over the 1999 figure.

The first half results were stoked by account wins topping $1.17 billion in new billings, or a 41% increase over new billings in the same period of 1999. The Euro RSCG Worldwide network, Havas' principal traditional advertising agency, picked up accounts including Subway sandwich shops, the Delta-Air France Skyteam alliance and CNN, while its second agency group, Campus, won important pitches for Toshiba Europea, French retail giant Carrefour and Internet ISP LibertSurf.

Campus is slated to be merged into Arnold Worldwide Partners, one of the main divisions of Snyder Communications, once the Havas-Snyder merger is completed. The new consolidated holding is scheduled to begin trading on the New York-based Nasdaq market Sept. 27.

On the marketing services side, mainly controlled by the Diversified Agencies Group, Havas picked up new clients including IBM Corp., Microsoft Corp., Lucent and French retailer E. Leclerc during the first half of 2000.

Mr. de Pouzilhac noted that marketing services will represent 60% of Havas' billings once the merger with Snyder is completed, while traditional advertising will drop to 40%.

Copyright September 2000, Crain Communications Inc.

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