Havas: First Half Results 2006
September 28 2006 - 12:46PM
PR Newswire (US)
Revenue of EUR719 Million, up +2.8% on First Half 2005, With
Organic Growth Stable Over the First Half at +0.2% SURESNES,
France, September 28 /PRNewswire-FirstCall/ -- Fernando Rodes Vila,
CEO of Havas, stated: "The Group continues firm in its strategy of
investing in creativity and quality by bringing in new talents to
serve its clients. Senior executives of the Havas Group are
focusing on these two factors to drive organic growth on a
sustainable basis, while giving the fullest consideration to the
needs and expectations of all the Group's clients and partners.
This is a strategy that can only be implemented over time and its
effects, while already perceptible, will become increasingly
apparent in the future." 1. Highlights of first half 2006 - Growth
confirmed with Group revenue up for the first half of 2006. -
Stable organic growth: stronger in Q2 2006 than in Q1. This return
to revenue growth has been accompanied by additions to the Group's
talents and New Business teams, impacting operating income and net
income (Group share) for first half 2006 by comparison with the
same period in 2005 in terms of personnel expenses and other
operating expenses. - A significant surge in net new business of
EUR900 million for first half 2006 compared to EUR500 million in
the first half of 2005, an increase of 80%. This figure does not
include the recent wins of Reckitt Benckiser worldwide by Euro RSCG
Worldwide and Progressive Direct by Arnold in the United States. -
A continued high level of creativity. - Voluntary delisting from
Nasdaq: in the first half of 2006, the Group moved to delist from
Nasdaq with effect from July 7, and would shortly submit an
application for deregistration from the S.E.C. 2. 2006 interim
results and financial position at June 30, 2006 The Board of
Directors at its meeting on September 28 approved the interim
results for the period ended June 30, 2006. - Revenue was up +2.8%
on first half 2005, due largely to a positive exchange rate effect
in the first quarter of 2006. Group organic growth was +0.2% over
the first 6 months of the year. - At EUR64 million, income from
operations was down 18.1% on first half 2005, taking the income
from operations from 11.2% to 8.9%, as a direct result of
recruitment of new talents and reinforcements for the New Business
teams. - Other operating income and expenses consisted of goodwill
depreciation of EUR8 million, compared to EUR3 million for first
half 2005. - Operating income was therefore EUR56 million euros,
giving an operating margin of 7.7% compared to 10.8% for first half
2005. - Net financial expense improved by EUR3 million, primarily
as a result of the reimbursement of the OCEANE 2000 on January 2,
2006, totaling EUR219 million. - Net income (Group share) fell from
EUR34 million in first half 2005 to EUR21 million in first half
2006. - Net debt at June 30, 2006, stood at EUR648 million,
compared to EUR492 million at June 30, 2005. Average net debt for
the period[2], however, was lower than in both first and second
half 2005. Appendix 1: New Business The main accounts won in the
first half of 2006 are as follows: - Traditional Advertising:
Disneyland Resort Paris (France, Spain, Great Britain, Belgium,
Germany, Italy, the Netherlands and Scandinavia) ; Veolia and
Cogedim (France) ; INNEOV (France and Belgium) ; News Magazine
(Great Britain) ; Granini (Spain) ; LG Electronics (Russia) ; The
Austrian Post (Austria) ; IKEA (Czech Republic) ; Thomapyrin de
Boehringer Ingelheim and NTV (Germany) ; Bongrain and Brendon
Babystore (Hongria) ; Inci (Turkey) ; ExxonMobil, Lee Jeans, USA
Today, Culligan Water, Assurant Health, Barilla, Cabot Wood Stain,
and Bombay (USA) ; Tourism Western Australia and Hutchison Telecom
(Australia) ; Radio Mitre (Argentina) ; Telmex (Mexico) ;TVB Pay
Vision (Honk Kong) - Media: Veolia Environnement (pan-European) ;
GoodYear Dunlop (France, Spain, Italy, Portugal, Greece, Belgium,
the Netherlands and Luxemburg) ; Masterfoods, PACA, Sarbec, the
Accor group's > hotels, Point S, Gerble and Umbro (France) ;
Eidos (Great Britain, France and Germany) ; De Agostini, Hotel.com
and Garlik (Great Britain) ; Agencia Tributaria, Guia Campsa, Fnac,
Viajar.com, Ayuntamiento de La Coruna, Fagor, Mango, Osborne, Union
Crediticia Immobiliaria, Gennoma Lab and la Caixa (Spain) ; La
Redoute and BAW International (Portugal) ; Dialog (Poland) ; La
Costena, Sanborns and the Chivas Regal, Martell, Stolichnaya,
Presidente and Don Pedro brands owned by Pernod Ricard / Casa Pedro
Domecq (Mexico) ; webmotors (Brazil) ; ExxonMobil and Celebrity
Cruises (USA) ; the Ministry of Health and Ministry of Citizenship
and Immigration (Canada) - Marketing Services: Sixt (pan-European),
Marriott Hotels, Bausch & Lomb and Concern Worldwide (Great
Britain), Iveco and Seb (Spain), Hotel Sheraton (Mexico) -
Corporate communications: Orange (BtoB) worldwide; Caisse d'Epargne
Group (France) Appendix 2: Financial Information In EUR Millions
1st Half 2006 2nd Half 2005 Variance Revenue 719 700 2.8% Income
from operations 64 78 (18.1%) Operating income 56 75 (26.1%) Net
income, Group share 21 34 (39.1%) In EUR Millions 30/06/2006
30/06/2005 Total equity 901 925 Net debt 648 492 About Havas Havas
(Euronext Paris: HAV.PA) 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 more than 75 countries through its networks of
agencies and contractual affiliations. 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. (a) 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. [1] Net account wins, expressed in
estimated annual billings. Full definition given on the last page
of this press release. [2] Average Net debt (quarterly or annually)
is calculated for the main 4 countries (France, USA, UK and Spain),
as the difference between structured gross debt (oceanes, credit
lines, etc...) and treasury in bank measured on a daily basis;
concerning the other countries, the average net debt is the debt
accounted as of each quarter. Contacts: Communications: Anne Marsan
Tel: +33-1-58-47-90-33 Solenne Anthonioz Tel: +33-1-58-47-90-27
Investor Relations: Herve Philippe Directeur Financier du Groupe
Havas Tel: +33-1-58-47-91-23 DATASOURCE: Havas CONTACT: Contacts:
Communications: Anne Marsan, Tel: +33-1-58-47-90-33, . Solenne
Anthonioz, Tel: +33-1-58-47-90-27, . Investor Relations: Herve
Philippe, Directeur Financier du Groupe Havas, Tel:
+33-1-58-47-91-23,
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