SURESNES, France, September 26 /PRNewswire-FirstCall/ -- - Marked
upturn in profitability in first half 2007 compared to first half 2006:
- operating income +34.4%
- net income (Group share) +70.6%
- First half 2007 earnings per share up +60.0% compared to first half
- A stronger financial structure founded on a significant reduction in
net debt at June 30, 2007 to EUR430 million compared to EUR648 million at
June 30, 2006
Fernando Rodes Vila, CEO of Havas, stated: "These satisfactory
first-half 2007 results for Havas are in line with expectations. Continuing
our focus on winning new business, rationalization and cost control is the
key to the Group's long-term, profitable growth."
1. 2007 interim results and financial position at June 30, 2007
The Board of Directors, at its meeting of September 26, approved the
interim results for the period ended June 30, 2007.
- At EUR729 million in first half 2007, Group revenue was up +1.3% in
gross terms compared to the first half of 2006, due primarily to the
strategy of reinforcing talents and New Business teams introduced in 2006,
and despite the appreciation of the euro against the dollar which had a
negative impact on the Group of EUR20 million in the first six months of
the year by comparison with the same period in 2006.
- The Group's organic growth in the first half of 2007 improved as
1st quarter 2007 + 3.2%
2nd quarter 2007 + 5.4%
First half 2007 + 4.4%
At 4.4%, organic growth in first half 2007 was at its highest level
since the first half of 2001.
- Income from operations, at EUR75 million, showed a significant
increase of +16.9% over first half 2006. Margin on income from operations
rose +1.4 points from 8.9% to 10.3%, thanks to tight cost control.
- Operating income also stood at EUR75 million, a substantial increase
of +34.4% compared to first half 2006. Operating margin was 10.3% in first
half 2007 compared to 7.7% for first half 2006, an increase of +2.6 points.
- Net income (Group share) was EUR35 million for first half 2007, a
remarkable +70.6% increase compared to first half 2006.
- Earnings per share for the first half of 2007 were 8 centimes (EUR)
compared to 5 centimes (EUR) for first half 2006, an increase of +60.0%.
- The Group's financial structure also improved significantly in H1
2007 by comparison with the first half of 2006. Net debt at June 30, 2007
stood at EUR430 million compared to EUR648 million at June 30, 2006.
Average net debt for the period was EUR404 million in first half 2007
compared to EUR517 million in first half 2006 and EUR527 million in the
second half of 2006, a reduction of over 20%.
2. Highlights of first half 2007
The first half reaped the benefits of new account wins from the
previous year, with the biggest contributors among these new clients being:
Reckitt Benckiser, Sanofi-Aventis, Pfizer, Exxon Mobil, Progressive Direct,
SFR, Banco Santander, GSK and Barclays.
Net New Business grew strongly over the first half, by more than EUR1.2
billion, the highest level in the last five years. Some of the key account
wins include Sears, Volvo, Kraft Foods, Turespana, BBC and Virgin Mobile.
All the Group's main businesses contributed to second quarter organic
growth, in particular healthcare communication and media consulting.
Multimedia business also continued to make progress. Performance was
dynamic across all the regions.
The 2007 Interim Results presentation is available on the company's
APPENDIX: FINANCIAL INFORMATION
See the press release available on the Havas website:
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 and Havas Media,
which are headquartered in New York and Barcelona respectively, and through
a number of independent agencies renowned for their creativity, such as
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 which speak
only as of the date on which they are made. Forward-looking statements
relate to projections, anticipated events or trends, future plans and
strategies, and reflect Havas' current views about future events. They are
therefore subject to inherent risks and uncertainties that may cause Havas'
actual results to differ materially from those expressed in any
forward-looking statement. Factors that could cause actual results to
differ materially from expected results include changes in the global
economic environment or in the business environment, and in factors such as
competition and market regulation. For more information regarding risk
factors relevant to Havas, please see Havas' filings with the Autorite des
Marches Financiers (documents in French) and, up to October 2006, with the
U.S. Securities and Exchange Commission (documents in English only). 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.
(1) Average net debt (quarterly or annually) is calculated for the 4
main countries (France, USA, UK and Spain) as the difference between
structured gross debt (océanes, credit lines, etc.) and cash at bank
measured on a daily basis; for the other countries, average net debt is the
debt recognized at the end of each quarter. The closing position is a net
book debt position.
Chief Financial Officer