Havas - Third Quarter 2005 Revenue
November 09 2005 - 1:26AM
PR Newswire (US)
Organic Growth of +3.9% in Third Quarter 2005, Versus +3,0% in
Second Quarter 2005 PARIS, November 9 /PRNewswire-FirstCall/ -- 1.
Third quarter 2005 revenues of EUR 341 million reflecting organic
growth of +3.9% Havas (Euronext Paris: HAV.PA ; Nasdaq: HAVS) today
announced third quarter 2005 revenues of EUR 341 million, versus
EUR 338 million in third quarter 2004. Organic growth came to
+3.9%, up from +3.0% in the second quarter and +1.4% in first
quarter 2005. The improvement in organic growth this quarter is due
primarily to the good performance of traditional advertising
activities and an improvement in marketing services (CRM). Revenue
for the first nine months of 2005 came to EUR 1,041 million,
compared to EUR 1,086 million for the same period last year in
IFRS, a 4.1% decline in published figures. The net impact of scope
of consolidation changes came to - EUR 62 million versus - EUR 50
million for second half 2005. The impact of exchange rate
variations decreased to - EUR 11 million for the first nine months
of 2005 from nearly - EUR 14 million in second half 2005. Nine
month 2005 organic growth rose to +2.8% from +2.2% for the first
half 2005. 2. Analysis by region: good performance in North
America, but Asia continues to suffer from the loss of the Intel
account By region, the principal conclusions regarding organic
growth are as follows: - Organic growth in France came to +2.6% in
the third quarter and +0.9% for the first nine months of 2005
following +0.2% for the first half 2005. This notable improvement
was fueled by good performance in media (MPG), healthcare and
corporate/finance (Euro RSCG C&O) activities. - UK organic
growth was essentially flat at +0.1% for the third quarter and
+0.3% for the first nine months of 2005. Good performance from the
traditional advertising business offset a disappointing quarter in
media and healthcare. - Organic growth in Europe (excluding France
and the UK) came to +2.3% for the quarter and +6.6% for the first
nine months of 2005, a marked slowdown from the +8.5% organic
growth in first half 2005. This stems primarily from a higher basis
of comparison, given the Group's +11.1% organic growth in this
region in third quarter 2004. - In North America, Havas posted
+7.0% organic growth in third quarter 2005, and +2.6% for the first
nine months of 2005. This is a marked improvement over the +0.4%
organic growth of first half 2005. Although this region was hurt
most by the loss of significant clients, the growth in revenues
from clients won by Arnold and Euro RSCG New York in late 2004 and
early 2005 made it possible to post a good performance for the
quarter. - Organic growth in Latin America (excluding Brazil)
surged to +24.3% in the third quarter and +20.9% for the first nine
months of 2005. Including our main Brazilian subsidiary,
consolidated according to the equity method as of January 1, 2005,
the region's organic growth would have been +8.2% for the first
nine months of 2005 compared with +4.2% for first half 2005.
Mexico, Argentina and Columbia continued their strong performance,
achieving high organic growth. - Asia-Pacific once again posted
negative organic growth at -8.6% in third quarter 2005 and -6.9%
for the first nine months of the year after -5.9% for first half
2005. The region is still suffering from the loss of the Intel
account. 3. Net New Business of nearly EUR 760 million for the
first nine months of 2005 Havas reports Net New Business of nearly
EUR 760 million for the first nine months of 2005. It should be
noted that the progression during the quarter reflects a
significantly higher proportion of budget renewals following a
competition than for the same period last year. This demonstrates
the capacity of the Group's teams to build long-term relationships
with clients. Among the principal accounts won during third quarter
2005, are the following: - Advertising: Joker and Le Figaro
(France), Palmers (Austria, Germany, Central and Eastern Europe),
Hershey's (United States), and Ebay (China) - Media: Peugeot
(Germany), Napster (Germany), BAE Systems, Interparfums (Burberry,
Lanvin and Lacroix) and Weston (France), Hotel.com (Italy), BBVA
(Mexico and Argentina), Santander Central Hispano Bank (Mexico),
Esurance and Hershey's (United States) - Marketing services: Danoe
(France), HSBC (United Kingdom), DirectBuy (United States) and
Easymobile (Netherlands, Germany and United Kingdom). -
Corporate/finance: Previade-Mutouest (France) - Healthcare: Flomax
CR (Boehringer - Ingelheim) (United States) The losses include
Volkswagen (United States) and Argos (United Kingdom) in
advertising, Peugeot (France) and Nestle (Spain) in media. In
October 2005, MPG won the Danone media account in France beginning
in 2006 and Euro RSCG won the Alice advertising account (Telecom
Italia) in Italy. 4. Creativity The following campaigns won awards
in third quarter 2005: The Citroen campaigns, "Birds" by Euro RSCG
Amsterdam and "Carbot" by Euro RSCG London, received awards
respectively at the New York Festival (print outdoor & design)
in July and at the Shark Awards, an international advertising
festival held in September in Ireland. At the "Long Xi Awards", one
of the most prestigious in China, held last August, the Euro RSCG
China and Euro RSCG Beijing agencies won awards for the Fitilite
and EMBA films "Nail Polishing" and "Classroom/Library/
Forum/Club". BETC Euro RSCG shined once again by winning two
Silvers for the Peugeot film "Toys" at the Euro Effie Awards which
recognizes advertisers and agencies for the effectiveness of their
campaigns. The WebAwards, which recognize the creativity of
internet sites by industrial category, honored the Arnold Boston
and Euro RSCG 4D agencies in the United States and Palm Arnold
Communication in Canada, by granting 16 awards among the three of
them. Finally, devarrieuxvillaret won three awards at the "Grand
Prix de l'Affichage", including the Grand Prix, for its campaign
"Bache" for the SNCF Transilien. BETC Euro RSCG also won an award
for its campaign "Les doudous" for Petit Bateau. 5. Outlook
Regaining market share remains Havas' priority objective. However
this objective will not necessarily be reached in a linear manner.
Following an organic growth of +2.8% during the first nine months
of the year, a strong slowdown is estimated for the last quarter
due notably to the high basis of comparison with fourth quarter
2004 (+4.6%) and the impact of the year's account losses. The Havas
Group needs to continue to build its recovery in 2006. The
Executive Committee confirms that it will unveil its strategic
orientations to the financial community and press before the end of
2005. The aim of these strategic orientations will be to provide
the Group with the means to accomplish the next stages in its
development beginning in 2006. APPENDIX 1: PERFORMANCE ANALYSES Q3
2005 ANALYSIS Q3 2005 / Q3 2004 Performance by region Revenue
Organic growth Q3-05 Q3-05 vs Q3-04 (EUR millions) France 63 +2.6%
United Kingdom 43 +0.1% Europe (excl. France and UK) 59 +2.3% North
America 145 +7.0% Latin America (excl. Brazil) 16 +24.3% Asia
Pacific 15 -8.6% TOTAL 341 +3.9% YTD SEPTEMBER 2005 ANALYSIS YTD
September 2005 / YTD September 2004 Performance by region Revenue
Organic growth YTD September -05 YTD September-05 vs (EUR millions)
YTD September-04 France 210 +0.9% United Kingdom 131 +0.3% Europe
(excl. France and UK) 195 +6.6% North America 422 +2.6% Latin
America (excl. Brazil) 39 +20.9% Asia Pacific 44 -6.9% TOTAL 1 041
+2.8% APPENDIX 2 : YTD SEPTEMBER 2005 ORGANIC GROWTH EUR Million 1.
YTD September 2004 Revenue (French Gaap) 1 088 2. YTD September
IFRS Impact (2) 3. YTD September 2004 Revenue (IFRS) 1 086 4.
Exchange rate impact (11) 5. YTD September 2004 at YTD September
2005 exchange 1 075 rates 6. Changes in scope of consolidation :
acquisitions, (62) disposals, closures and others 7. YTD
September-04 at YTD September-05 exchange 1 013 rates and structure
8. YTD September-05 Revenue 1 041 9. Organic change +2.8% About
Havas Havas (Euronext Paris: HAV.PA; Nasdaq: HAVS) is a global
advertising and communications services group. Headquartered in
Paris, Havas has three principal operating divisions: Euro RSCG
Worldwide which is headquartered in New York, Arnold Worldwide
Partners in Boston, and Media Planning Group in Barcelona. A
multicultural and decentralized Group, Havas is present in 77
countries through its networks of agencies located in 44 countries
and contractual affiliations with agencies in 33 additional
countries. The Group offers a broad range of communications
services, including traditional advertising, direct marketing,
media planning and buying, corporate communications, sales
promotion, design, human resources, sports marketing, multimedia
interactive communications and public relations. Havas employs
approximately 14,400 people. Further information about Havas is
available on the company's website: http://www.havas.com/
Forward-Looking Information This document contains certain
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements relate to expectations, beliefs, projections, future
plans and strategies, anticipated events or trends and similar
expressions, concerning matters that are not historical facts.
These forward-looking statements reflect Havas' current views about
future events and are subject to risks, uncertainties, assumptions
and changes in circumstances that may cause Havas' actual results
to differ significantly from those expressed in any forward-looking
statement. Certain factors that could cause actual results to
differ materially from expected results include changes in global
economic, business, competitive market and regulatory factors. For
more information regarding risk factors relevant to Havas, please
see Havas' filings with the U.S. Securities and Exchange
Commission. Havas does not intend, and disclaims any duty or
obligation, to update or revise any forward-looking statements
contained in this document to reflect new information, future
events or otherwise. Net New Business : Net new business represents
the estimated annual advertising budgets for new business wins
(which includes new clients, clients retained after a competitive
review, and new product or brand expansions for existing clients)
less the estimated annual advertising budgets for lost accounts.
Havas' management uses net new business as a measurement of the
effectiveness of its client development and retention efforts. Net
new business is not an accurate predictor of future revenues, since
what constitutes new business or lost business is subject to
differing judgments, the amounts associated with individual
business wins and losses depend on estimated client budgets,
clients may not spend as much as they budget, the timing of
budgeted expenditures is uncertain, and the amount of budgeted
expenditures that translate into revenues depends on the nature of
the expenditures and the applicable fee structures. In addition,
Havas' guidelines for determining the amount of new business wins
and lost business may differ from those employed by other
companies. Contacts: Communications : Peggy Nahmany Tel:
+33-(0)1-58-47-90-73 Investor Relations: Stephane Houri Tel:
+33-(0)1-58-47-91-35 (1) Net New Business reflects the estimated
annual advertising budget of accounts won less the estimated annual
advertising budget of accounts lost. DATASOURCE: Havas CONTACT:
Communications: Peggy Nahmany, Tel : +33-(0)1-58-47-90-73, ,
Investor Relations: Stephane Houri, Tel : +33-(0)1-58-47-91-35,
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