Havas' Organic Growth Slows to 2.7% in Second Quarter 2016

CEO Yannick Bollore Denies Talks Between Vivendi and Havas, But Emphasizes Synergies

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Yannick Bolloré
Yannick Bolloré Credit: Havas

Havas' organic growth (excluding acquisitions and currency fluctuations) reached 2.7% in the second quarter of 2016, down from 3.4% in the first quarter of the year. Revenues for April through June were $645 million, up from $562 million in the first quarter.

In North America, organic growth was 0.3% in the second quarter, slowing from 1.2% in the first. Revenues, however, were up to $218 million from $208 million, boosted in part by the acquisition of Montreal digital agency TP1. In a statement, Havas blamed the U.S. slowdown on the comparison with strong growth for the same period last period last year, and said that recent new business wins such as Tracfone, Wallapop, Pfizer and Sears should improve numbers for the second half.

While Havas said North American growth slowed, the comapny rated peformance in Europe and Latin America as "satisfactory" and Asia as "excellent." Organice growth rates for Europe and Latin Americaa were 3.4% and 2.6% respectively, but both slowed from 4.1% and 11.4% in the first quarter. Asia Pacific and Africa, however, picked up in the second quarter, with organic growth of 8.9% compared to 4.3% in the first.

Overall the first half of 2016 saw growth of 3%, with group revenues up 5.2% to $1.2 billion.

Havas claimed net new business of $1.76 billion in the first half, of which $888 million was generated in the second quarter, including Havas Worldwide New York's appointment to handle global digital, advertising and content duties for five consumer healthcare categories of GSK.

Other wins include the global social media account for Telecom Italia, thanks to a collaboration between Havas Media Brazil and Havas Worldwide Italy; and a successful pitch for Teva from Havas Worldwide New York and Conran Design group.

Havas also announced the launch of a third media network, FullSIX Media, to sit alongside Havas Media and Arena Media within the group. FullSIX Media will be merged with another existing Havas network, Forward Media, and will have a presence in Europe, Latin America and the U.S., the company said. Havas bought French digital agency FullSIX Group for $75 million last year, one of Havas's biggest deals.

Speaking on a call with analysts, Havas CEO Yannick Bolloré said the outlook for 2017 was very positive.

Mr. Bolloré was asked a question about a long-rumored tie up between Havas and Vivendi, following an interview with Mr. Bolloré's father, Vincent, in Les Echos newspaper in April. Vincent Bolloré, the biggest shareholder in both Vivendi and Havas, told the French newspaper that one day there would be something between the two companies. But Yannick Bolloré said, "There is no official discussion between Vivendi and Havas. We have a common shareholder and maybe we could evolve in the content and data world where there is lots of convergence."

Asked about the impact of Brexit, the U.K.'s vote in a referendum last month to leave the European Union, Mr. Bolloré said, "There is no big change. We will wait and see the results of the negotiation between the U.K. and continental Europe, it's hard to know. We are sad about the result of the vote, it's a big disappointment for our 2,000 U.K. staff."

Havas' French rival, Publicis Groupe, also reported its second quarter results today. Publicis' posted organic growth of 2.7% on revenues of $2.7 billion.

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