SURESNES, France, April 5 /PRNewswire-FirstCall/ -- This result breaks
down as follows:
- Operating income of 121 million EUR in 2006, versus 128 million EUR
- Net financial expense reduced by 5 million EUR
Taking into account an Income tax expense up from 14 to 25 million EUR,
the net income, group share was 46 million EUR in 2006, after 59 million
EUR in 2005.
- Sharp rise in Net New Business in 2006, up to 1.931 billion EUR
from 1.055 billion EUR in 2005. Havas ranked No. 1 by Lehman Brothers for
- Net debt stood at 382 million EUR at December 31, 2006, down from 417
million EUR at year-end 2005 and from 648 million EUR at June 30, 2006
- 2006 dividend unchanged
Main features of 2006:
- For the first time in five years, Havas experienced actual growth in
its annual revenue in 2006.
- Excellent performance in net new business combined with acclaimed
- Euro RSCG Worldwide was elected "Global Network of the Year" by
Campaign, and "Global Agency of the Year" by Advertising Age
- BETC Euro RSCG elected best agency of the year by CB News.
- MPG France ranked top media agency in the French market by the Recma
- Optimised international organisation: a solid worldwide Integrated
Communications network with EURO RSCG and a global media expertise network
in Havas Media. In 2006, Havas brought all the MPG media agencies together
under "Havas Media" brand. Arnold focused on its North American clients and
market (USA and Canada).
- Proposed launch of a new communications agency in France around Scher
Lafarge and Devarrieux Villaret.
- Delisting from the NASDAQ and deregistration from the SEC. The NASDAQ
delisting came into effect on July 7, 2006. Furthermore, on October 10,
2006, Havas filed notice with the SEC to deregister its shares with
immediate effect under the 1934 Securities and Exchange Act.
- Great success of the Redeemable equity warrant issue:
- In December 2006, the banks (Banque Federative du Credit Mutuel,
Natixis, and HSBC France) subscribed a 270 million EUR bond issue with
redeemable equity warrants attached.
- In early 2007, the redeemable equity warrants were then
oversubscribed 1.35 times by the Havas group's managers, i.e. some 42
million redeemable equity warrants, which will only be listed in late 2010,
for a total of nearly 15 million EUR.
1. Increase in annual revenue and 2006 results performance marked by
recruitment in H1 and a more positive performance in H2
Under the chairmanship of Vincent Bollore, the Havas Board of Directors
approved the 2006 accounts at its meeting of April 5. These accounts are in
compliance with IFRS, the standards that have been in force as of December
- 2006 revenue totalled 1.472 billion EUR, up 0.8% from 1.461 billion
EUR for the previous period. At constant exchange rates, revenue growth was
1% for the year. On a like-for-like basis, organic growth was 0.6% in 2006.
Foreign exchange rates in the fourth quarter of the year, especially
the weakening of the US dollar, had a 13 million EUR negative impact on the
group (at September 30, 2006 the currency impact was still positive).
- Income from Operations totalled 140 million EUR in 2006, compared
with 152 million EUR in 2005, i.e. a 2006 margin of 9.5% versus 10.4% in
2005 as a result of the talent recruitment campaign and reinforcing of New
- Operating Income stood at 121 million EUR in 2006, but was adversely
affected an 11 million EUR goodwill impairment and 8 million EUR in special
- The Net financial expense of 38 million EUR was nonetheless a 5
million EUR improvement on 2005.
- The tax burden rose from 14 to 25 million EUR, thus reducing Net
Income (group share) from 59 million EUR in 2005 to 46 million EUR in 2006.
- Earnings Per Share, whether basic or diluted, were 0.11 EUR in 2006
(0.14 EUR in 2005).
2. Improved Net debt
Net debt stood at 382 million EUR at December 31, 2006, down from 417
million EUR at year-end 2005 and from 648 million EUR at June 30, 2006.
It should be noted that the average net debt for the year was 522
million EUR in 2006, compared with 543 million EUR in 2005.
The debt repayment schedule was considerably lengthened by the bond
issue with redeemable equity warrants attached, the total amount of this
270 million EUR issue being repayable in thirds maturing at the end of
2011, 2012 and 2013.
3. 2006 dividend unchanged
The Board of Directors will propose that the Annual Shareholders'
Meeting, on June 11, approve a dividend of 0.03 EUR per share, i.e. exactly
the same amount as for 2005.
4. Sharp rise in Net New Business1 in 2006
Net New Business reached 1.931 billion EUR in 2006.
Havas was ranked No. 1 in New Business by Lehman Brothers for the full
In 2006, Net New Business was 30% higher than the average over the last
The main accounts won in 2006 were:
Euro RSCG Worldwide : Sanofi-Aventis (global), Reckitt Benckiser
(global), Boehringer Ingelheim (global), ExxonMobil (USA), Veolia (France),
LG Electronics (11 countries of Latin America), EDF, RATP et Natixis
(France), Orange (B2B) worldwide, Sixt (pan-European), Barclays
- Disneyland Resort Paris (France, Spain, Great Britain, Belgium,
Germany, Italy, the Netherlands and Scandinavia) ;
- Vinci (pan-European)
- Breathe Right(R) (Canada, Japan, Mexico, Great Britain, France,
Spain, Italy, Germany and Poland) ;
- Pierre & Vacances, Groupe Caisse d'Epargne, NYSE (France) ;
- News Magazine, Weight Watchers Meetings et Staples UK Retail
- Culligan Water, Assurant Health, Barilla, Cabot Wood Stain, Bombay,
Boniva de GlaxoSmithKline & Roche et Circuit City (USA)
- Marriott Hotels, Bausch & Lomb, Concern Worldwide, Maison de France
et Practical Action (Great-Britain) ;
- Iveco et Seb (Spain) ;
- Hotel Sheraton (Mexico)
Havas Media : Danone (USA and Canada), GoodYear Dunlop (France, Spain,
Italy, Portugal, Greece, Belgium, the Netherlands and Luxembourg),
Peugeot-Citroen (France), Agencia Tributaria (Spain), ExxonMobil (USA),
Almacenes Paris (Chile), Telefonica (Brazil), LG Electronics (Latin
- Veolia Environnement (pan-European) ;
- Eidos (Great Britain, France and Germany) ;
- De Agostini, Hotel.com et Garlik (Great Britain) ;
- Forte Pharma, Schmidt/Cuisinella, Cdiscount et M6 chaines thematiques
- Osborne, Fnac, Viajar.com, Fagor, Mango, Correos y Telegrafos,
Ministerio de Sanidad Y Consumo, Guerlain, Skoda, BNP Paribas et Orange
- La Redoute, Bwin, Correios de Portugal et Bwin (Portugal) ;
- Dialog (Poland) ;
- Celebrity Cruises (USA) ;
- Casa Pedro Domecq (Mexico) ;
- Transantiago (Chile)
Arnold : Progressive Direct, Lee Jeans, Pearle Vision, Trex Company,
Fitness, Select Comfort, USA Today (USA)
5. Creativity as strong as ever in 2006
At the 53rd Cannes International Advertising Festival, the Havas Group
carried off 18 Lions including three Gold Lions: one in the film category
for "La Marche de l'Empereur" (The March of the Emperor) produced by BETC
Euro RSCG for Canal+, another in the cyber category awarded to Euro RSCG 4D
Sao Paulo for the "Oops" campaign it produced for Reckitt Benckiser, and a
third to Havas Sports in the media category for the design and organisation
of a one-day event on the Champs Elysees entitled "Embracing the Olympic
Spirit" in support of the Paris 2012 Olympic bid. Other award-winning
agencies included Arnold Boston, McKinney & Silver, EHS Brann, Euro RSGG 4D
Amsterdam and Euro RSCG Amsterdam, Euro RSCG Buenos Aires, Euro RSCG Vale,
and Euro RSCG 4D in France.
Moreover, the Havas Group was awarded the Young Creatives Prize, thus
emphasising the permanent influx of new talent at the group.
According to the Gunn Report, the official international ranking of
creativity, two campaigns produced by Euro RSCG Flagship for 11 News
Channel 1 and BETC Euro RSCG for Canal+ are in the Top 10 campaigns in
terms of awards received in 2006.
The Arnold Boston agency came No. 3 in the USA and is one of the very
select club of agencies to have figured in the Gunn Report every year since
it was created.
The CyberWon report (interactive advertising's equivalent of the Gunn
Report) was published in February 2007. Its worldwide Top 10 digital
campaigns in terms of awards received includes one produced by Arnold
Boston and two more by Euro RSCG 4D Amsterdam. In addition, the Arnold
Boston and McKinney agencies are respectively rated 4th and 7th in the Top
10 digital agencies in the USA. Finally, Euro RSCG 4D Amsterdam is No. 10
in the Top 50 digital agencies worldwide on the basis of awards received.
For the very first time, a French interactive production company
(Streampower / MPG) received the prestigious Emmy award for "Best
interactive TV program of the year" for its co-production of "CULT"
alongside PPROD for TV channel France 5.
Havas (Euronext Paris: HAV.PA) is a global advertising and
communications services group. Headquartered in Paris, Havas operates
through its two worldwide networks, Euro RSCG Worldwide headquartered in
New York and Havas Media in Barcelona, and through Arnold Worldwide
Partners. 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:
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.
(1) 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.
Communications : Anne Marsan
Investor Relations: Herve Philippe
Directeur Financier du Groupe Havas
2 allee de Longchamp 92281 Suresnes Cedex, France Tel +33 (0) 1 58 47
90 00 Fax +33 (0) 1 58 47 99 99 www.havas.com
SA au capital de 171 179 760,80 euros - 335 480 265 RCS Nanterre - APE
 Net account gains expressed in estimated annual billings. The
complete definition can be found at the end of this release.
 Average net debt (quarterly and annual) is calculated, in the case
of the four main countries (France, USA, UK and Spain), as the difference
between the gross structured debt (convertible bonds, facilities drawn
down, etc.) and cash in the bank measured daily. For all other countries,
the average net debt is the net debt carried in the accounts at the end of