Havas Posts Revenue Growth of 4.2% in Fourth Quarter 2016
Havas reported organic growth of 4.2% in the fourth quarter of 2016, up from 2% in the third quarter of the year. Revenues were $2.4 billion for the year, up from $2.3 billion the previous year.
The positive numbers disguise some large discrepancies between the regions. Europe grew at 7.3% (after a 1.2% decline in the third quarter) and North America saw organic growth of 5.4% in the fourth quarter, but Asia Pacific was down by 8.7%, and Latin America by 12.8%.
The U.S. posted strong growth thanks to good performances from Havas Media, Havas Chicago and Havas Health.
Speaking on a call with analysts, Havas CEO Yannick Bolloré admitted, "The challenge has come more from the New York agency. I'm spending a lot of time in New York, working directly to optimize the turnaround of the agency."
Following the sudden departure a month ago of Andrew Benett, a thirteen-year veteran of the agency who was the New York-based global CEO of Havas Creative Group and Havas Worldwide, Mr. Bolloré took on the role of global chief executive for Havas Creative Group.
Mr. Bolloré added that the positive effects of the GSK win have not yet been felt, and said that Havas is currently working to combine its consumer and professional health divisions in a bid to win more business in that field.
For the full year, organic growth at the Paris-based communications group was 3.1%. Havas' poor 2016 performance in Asia Pacific was attributed to a high baseline comparison to the previous year and tireduced investment from clients, particularly in China, Japan, Thailand, Malaysia and the United Arab Emirates. Plummeting revenue in Latin America was blamed on client losses in Mexico.
Mr. Bolloré said that most of Havas' clients have kicked off media audits over the last year. He predicted, "At the end of the day I think we will come back to replicate in digital what exists in the traditional sector, which I think is very healthy, so it's a positive thing from those discussions."
He added, "The tough discussions are behind us now. Clients, especially on the media side, are not really talking about transparency – it's really the quest for modernity and new things. A huge majority visit the new big players in Silicon Valley and come back suggesting they want to change the way they advertise."
Havas made five acquisitions last year: Target Media (U.K.), Lemz (The Netherlands), TP1 (Canada), Mr Smith (New Zealand), and Beebop (Germany). The group now has 20,000 employees, up from 10,000 three years ago.
The creative group accounts for 63% of revenues and the media group for 37%. Europe is the biggest region, accounting for 51% of the group's revenue, followed by North America at 35%.