HAVAS: First Half 2006 Revenue

Jul 27, 2006, 01:00 ET from Havas

    SURESNES, France, July 27 /PRNewswire-FirstCall/ --
     - First half 2006 revenue of EUR719 million, up 2.8% on first half 2005
     - Organic growth stable over the half-year: +2.5% in Q2 after -2.4% in
     Havas today announced first half 2006 revenue of EUR719 million,
 compared with EUR 700 million in H1 2005.
     At constant exchange rates, revenue growth would have been +0.5%. The
 exchange rate impact was due mainly to a rise in the US and Canadian
 dollars in the first quarter of 2006 by comparison with Q1 2005; Q2 2006
 showed little variation on Q2 2005.
     Excluding exchange rate variations and changes in scope of
 consolidation, organic growth in the first half of 2006 was +0.2%.
     1. General comments
     After a slight downturn in Q1, at -2.4% on like for like exchange rates
 and scope of consolidation, Q2 showed an improvement with organic growth at
     Net new business[1] was EUR 900 million for the first half, compared to
 EUR 490 million in H1 2005, and does not include the recent win of the
 Reckitt Benckiser account announced on June 30th, the impact of which will
 be reflected in third quarter announcement.
     2. Detailed comments by region
     The figures between brackets indicate revenue in millions of euros and
 organic growth over the first half of the year.
     - France (154, +2.6%)
     Business recovered in Q2 (+6.1%) after a slight downturn in Q1 (-1.4%),
 thanks largely to corporate communication, marketing services and media
     - Great Britain (84, -1.0%)
     Corporate communication made a satisfactory Q2 performance, holding
 business activity in the region steady (+0.5%) after a slight drop in Q1
     - Europe (excluding France and Great Britain) (151, +8.2%)
     All the group's main business activities enjoyed growth.
     By country, the main contributors to Q2 growth were Spain, Italy and
     - North America (274, -5.3%)
     Healthcare communication and media consulting both generated
 significant growth in Q2. Corporate communication also sustained a good
 level of growth.
     However, one of our leading advertising agencies and some of the
 marketing services firms are still having trouble matching their 2005
 business levels.
     - Asia-Pacific (28, -4.8%)
     After a dip in Q1 due to the loss of the Intel account still included
 in the Q1 basis of comparison, Q2 2006 organic growth stabilized at -0.3%.
     - Latin America (28, +16.5%)
     The two main business activities (advertising and media consulting)
 continued to enjoy strong growth.
     3. New Business and creative quality
     Net New Business stood at EUR900 million for the first half of 2006.
     Lehmann Brothers ranked Havas number one for New Business in June 2006.
     The main accounts won in Q2 2006 are as follows:
     - Traditional advertising: Cogedim (France), News Magazine (Great
 Britain), Granini (Spain), NTV (Germany), Bongrain et Brendon Babystore
 (Hungary), Inci (Turkey), Radio Mitre (Argentina), Telmex (Mexico),
 Hutchison Telecom (Australia), TVB Pay Vision (Honk Kong)
     - Media: Veolia Environnement (pan-European), Point S, Gerble and Umbro
 (France), La Redoute and BAW International (Portugal), Viajar.com,
 Ayuntamiento de La Coruna, Fagor, Mango, Osborne, Union Crediticia
 Immobiliaria, Gennoma Lab and la Caixa (Spain), Hotel.com and Garlik (Great
 Britain), Celebrity Cruises (USA), webmotors (Brazil) and the Chivas Regal,
 Martell, Stolichnaya, Presidente and Don Pedro brands owned by Pernod
 Ricard/Casa Pedro Domecq (Mexico)
     - Marketing services: Sixt (pan-European), Marriott Hotels, Bausch &
 Lomb and Concern Worldwide (Great Britain),Iveco (Spain)
     - Corporate communication: Caisse d'Epargne Group (France)
     No significant budgets were lost.
     In Q1 2006, a number of Group agencies won an array of international
 and regional awards.
     At the 53rd Cannes International Advertising Festival, the Havas Group
 carried off 19 Lions including three Gold Lions: one in the film category
 for "La Marche de l'Empereur" (The March of the Emperor) made by BETC Euro
 RSCG for Canal+, another in the cyber category to Euro RSCG 4D Sao Paulo
 for its "Oops" campaign for Reckitt Benckiser and the third to Havas Sports
 in the media category for the design and organization of a one-day event on
 the Champs Elysees entitled "Embracing the Olympic Spirit" in support of
 the Paris 2012 Olympic bid. Other agencies awarded 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
     In addition, Euro RSCG Buenos Aires, Euro RSCG 4D Sao Paulo, Euro RSCG
 Vale, Carillo Pastore Euro RSCG and Euro RSCG in Colombia received nine
 awards at the Festival Iberoamericano de la Publicidad.
     At the International Andy Awards, Arnold Boston, McKinney & Silver,
 Euro RSCG Flagship and Euro RSCG London all took awards for creativity.
     In Spain, MPG won the Grand Prix at the Festival del Sol plus a Gold
 Prize for its media campaign "Revolucion Sin Limites" for Nike. Euro RSCG
 4D in Spain won awards for its promotional marketing campaigns for Vodafone
 and Spanair.
     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.
     BETC Euro RSCG once again distinguished itself in recent months with
 the "Marche de l'Empereur" campaign for Canal +. In France, the agency took
 the top prize for an advertising campaign awarded by the Grand Prix des
 Medias organized by CB News magazine, and the Strategies magazine Grand
 Prix for advertising. In the USA, BETC Euro RSCG was honored by the Clio
 Awards, the New York Art Directors Club and the AICP.
     The "Fair Enough" campaign created for American Legacy by Arnold Boston
 took a number of US awards at events including the International Andy
 Awards, The One Show, the Clio Awards, the New York Art Directors Club, the
 AICP and the Kelly Awards.
     The Delaney Report Quarterly Awards also named Euro RSCG New York the
 best US advertising agency in Q2 2006, while MPG in Spain was voted Media
 Agency of the Year by Spanish advertising magazine Anuncios.
     The Group's interim results will be published in mid-September.
                      1st Quarter            2nd Quarter            1st Half
                    Revenue  Organic      Revenue Organic      Revenue Organic
                             growth               growth                growth
     In Euro million
     France            70     -1.4%          84    +6.1%         154     +2.6%
     United Kingdom    40     -2.6%          44    +0.5%          84     -1.0%
     Europe (excl.
     France and UK)    65     +5.8%          86   +10.0%         151     +8.2%
     North America    138     -6.7%         136    -3.9%         274     -5.3%
     Latin America     13    +19.1%          15   +14.5%          28    +16.5%
     Asia-Pacific      13     -9.5%          15    -0.3%          28     -4.8%
     TOTAL            339     -2.4%         380    +2.5%         719     +0.2%
     1. Revenue H1 2005                                           700
     2. Foreign Exchange Impact                                   +16
     3. H1 2005 at H1 2006 FX                                     716
     4. Changes in scope of consolidation: acquisitions,
        disposals closures and others                               2
     5. H1 2005 at H1 2006 FX and scope                           718
     6. Revenue H1 2006                                           719
     7. Organic change                                           +0,2%
     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:
     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.
     Contacts :
     Communications: Solenne Anthonioz
     Tel: +33-(0)1-58-47-90-27
     Investor Relations: Herve Philippe
     Chief Financial Officer
     Tel: +33-(0)1-58-47-91-23
     [1] Net business wins, expressed in estimated annual billings. Full
 definition on page 6 of this release.