Havas reported 7.3% organic growth in the third quarter of 2011, heralded by CEO David Jones as the company's best performance in three years, with growth in all major markets except France. Group revenue was up 5%, to $541.8 million.
Havas Reports 7.5% Organic Growth; Best Quarter in Three Years
"There's a lot of uncertainty out there among our clients," Mr. Jones said in response to analysts' questions about 2012. He made a distinction between the current situation and advertisers' attitudes in 2008, which he described as "cataclysmic," with across-the-board cuts from clients. Now, he said, Havas is seeing some isolated cases of clients looking to cut, while others are preparing both normal scenarios for next year and backup plans that would involve cuts.
"A lot of people aren't looking yet to cut," Mr. Jones said. "A number of CEOs are saying they think next year will be a tougher year, and they'll see what happens in Q1."
He said he asked one global client what he was expecting, and the client replied, "David, do you really think anyone has any idea?"
Summing it up, Mr. Jones said, "There's a real lack of visibility on how 2012 is going to pan out."
Mr. Jones emphasized Havas is growing not just by acquisition, but through startups and brand extensions. He cited the expansion of Arnold Worldwide's micronetwork, which opened an Arnold office in Shanghai in September and Arnold Furnace in Australia earlier this year. An Arnold Amsterdam office was created to be a global hub for the agency's Volvo client.
The main Havas agency network, Euro RSCG Worldwide, expanded its flagship Paris agency BETC Euro RSCG by opening a U.K. office BETC London in May. With BETC, Mr. Jones said "We're looking to enter markets such as the U.S., Brazil and Asia."
Euro RSCG also started a multicultural marketing agency called Totality, based in Arnold 's New York office.
Havas has made some small acquisitions, including taking a majority stake in Socialistic in the U.S. and acquiring Australian agency Host and its sibling company One Green Bean. The company has had conversations about bigger deals that were ultimately done by other holding companies but didn't pursue them, he said.
"We're doing an enormous number of things in terms of startups and expanding our brands," he said. "We're not going to rush out and spend all our money on two big transactions we believe are overvalued."
Havas reported net new business of $491.4 million in the third quarter, and $1.8 billion for the first nine months of 2011.
Looking ahead, Havas will move from rented space to a Havas-owned building in Paris starting in late 2011 and complete the move in early 2012.