Havas: Third Quarter 2006 Revenue

Revenue of EUR1,062 Million, up +2.1% for the First Nine Months of 2006

Compared to the Same Period in 2005

Net New Business[1] of EUR1,580 million for the First Nine Months of 2006,

More Than Double That of the First Nine Months of 2005

Nov 06, 2006, 00:00 ET from Havas

    SURESNES, France, November 6 /PRNewswire/ -- Havas today announced
 third quarter 2006 revenue of EUR343 million, compared to EUR341 million
 reported for third quarter 2005. This represents organic growth of +1.9%,
 after +0.2% in the first half of 2006.
     For the first nine months of 2006, revenue was EUR1,062 million
 compared to EUR1,041 million for the same period last year, an increase of
     At constant exchange rates, the increase is +1.1% over the first nine
 months of the year. The exchange rate impact is once again linked to a
 stronger US dollar and Canadian dollar in the early part of the year, but
 this impact was significantly reduced in the third quarter.
     Excluding exchange rate and scope of consolidation changes, organic
 growth over the first nine months of 2006 was +0.7%.
     1. General remarks
     The third quarter of 2006, with organic growth of 1.9%, followed a
 similar pattern to the second. Most regions performed strongly, driven by
 sustained activity in corporate communication, healthcare and media
     Organic growth in third quarter 2006 saw a progression for the Euro
 RSCG and MPG divisions, which benefited from strong respective markets and
 new account wins since the start of the year.
     Net new business was EUR1,580 million for the first nine months of
 2006, compared to EUR760 million for the first nine months of 2005 and
 EUR1,055 million for full-year 2005. New accounts wins over the period were
 satisfactory, including the major wins of Reckitt Benckiser and Danone in
 the USA, not to mention Progressive Direct and PSA (media buying France),
 the effects of which will be felt in the fourth quarter.
     2. Detailed analysis by region
     The figures in brackets show revenue (millions of euros) and organic
 growth for the periods mentioned.
     - France (67, +3.4% in Q3 2006 and 221, +2.8% for the first nine months
 of 2006)
     The improvement was maintained in the third quarter, including
 excellent performances from healthcare communication and from traditional
 advertising at Euro RSCG.
     - United Kingdom (44, +3.5% in Q3 2006 and 128, +0.5% over the first
 nine months of 2006)
     Q3 momentum in this region was driven by corporate communication, but
 confirmed growth in advertising and media consulting was also noteworthy.
     - Europe (excluding France and Great Britain) (70, +16.4% in Q3 2006
 and 220, +10.6% for the first nine months of 2006)
     Once again, the two growth drivers were media consulting at MPG and
 CRM, which enjoyed remarkable growth in the third quarter. Spain, Germany
 and Belgium were the biggest contributors to growth in this region.
     - North America (130, -7.1% in Q3 2006 and 404, -5.9% for the first
 nine months of 2006)
     Second quarter trends were accentuated in the third quarter: healthcare
 and corporate communication reported exceptional levels of activity within
 the Euro RSCG network. The Euro RSCG New York agency has also performed
 well since the start of the year.
     Furthermore, Arnold has been awarded with the major win of Progressive
 Direct which allows to partly amortize the loss in 2005 of Volkswagen and
 will positively impact the net new business for the fourth quarter 2006.
     - Asia-Pacific (15, +1.8% in Q3 2006 and 43, -2.6% for the first nine
 months of 2006)
     A difficult start to the year in Australia was offset by strong
 performances, particularly from China (excluding Hong Kong) and also from
 India, Indonesia, Japan and Singapore.
     - Latin America (17, +13.9% in Q3 2006 and 45, +15.5% for the first
 nine months of 2006)
     Media consulting had an excellent third quarter. Advertising and CRM
 continued to report highly satisfactory growth.
     3. New Business and creativity
     The main accounts won in third quarter 2006 were:
     - Advertising: Reckitt Benckiser (global account),
     Breathe Right(R) (Canada, Japan, Mexico, United Kingdom, France, Spain,
 Italy, Germany and Poland), La Mairie de Paris, Labeyrie and Pierre &
 Vacances (France), EPSON (Germany), Montepio (Portugal), Bharat Sanchar
 Nigam Limited (India), Vichy and Sony (China), LG Electronics (Latin
     - Media: Danone (United States), LG Electronics (Latin America), M6
 theme channels and Arkema (France), Correos y Telegrafos, Ministerio de
 Sanidad Y Consumo, Magners, Vallehermoso, Guerlain, Skoda, Unidental, BNP
 Paribas, Multicanal, Banak and Marca Valencia (Spain), Link4 (Poland),
 Almacenes Paris (Chile), Casa Pedro Domecq (Mexico).
     - Marketing services: Maison de France and Barclays (United Kingdom)
     - Corporate: NatIxis and NYSE (France), Vinci (pan-European).
     Campaign awards during the second quarter of 2006 included:
     The AMO network (Euro RSCG C&O, Maitland UK, Abernathy USA), a
 strategic alliance of Havas Group PR and financial communication agencies
 in Europe (including Euro RSCG C&O in Paris), was recently named "financial
 consultancy of the year" by the Holmes Report, the benchmark report card
 for corporate and PR agencies around the world, published annually by Paul
     For the third year running Media Planning Spain has been chosen as the
 Best Media Agency 2006 in the Spanish publicity awards, Premios Control.
     In August 2006, EHS Brann Argentina has won a CAMPRO (Golden award) in
 the "Best Use of an Innovative Communications Strategy" category for its
 "Zest in the City" campaign to promote soft drink Cepita. EHS Brann Madrid
 has been awarded an Echo Award, organised by the prestigious American
 Direct Marketing Association.
     BETC Euro RSCG won yet more honors with its "March of the Emperors"
 campaign for Canal+, taking two Gold awards at the international Shark
 Awards Festival held in Ireland in September.
     At the New York Festivals International Advertising Awards in
 September, Arnold Boston, BETC Euro RSCG, Euro RSCG Carillo Pastore, Euro
 RSCG 4D Amsterdam, Euro RSCG Singapore, Euro RSCG Buenos Aires, Euro RSCG
 Vale and Euro RSCG Zurich were all big winners, taking a total of 21 awards
 including five gold awards.
     In the WebAwards, which recognize the best corporate websites, Arnold
 Boston walked away with a total of 12 prizes, and Euro RSCG 4D in Boston,
 New York and Portland in the United States took 4 prizes.
     In September 2006, MPG and Euro RSCG Argentina awarded Silver Award
 "Financial Services Category": "Enjoy Life Today" for BBVA Banco Frances
 (EFFIE Awards). MPG Barcelona and the The Eat Out (Grupo Agrolimen) won the
 Metro Global Print Award 2006 with their campaign for Bocatta. Media
 Contacts USA's 'Stupid Things' Campaign for Vonage received a bronze award
 in the Direct Response category at the 2006 MIXX Awards.
     At the Grand Prix de l'Affichage in October, Devarrieuxvillaret won two
 awards for its "Les Portraits" and "Les Baches" campaign for the
 SNCF/Transilien, BETC Euro RSCG won two awards for its "Les Sieges"
 campaigns for Air France and INPES, and Scher Lafarge took an award for
     4. Calendar
     The Group will publish its fourth quarter 2006 revenue in February
     About Havas
     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:
     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 : Anne Marsan
     Tel: +33-(0)1-58-47-90-33
     Solenne Anthonioz
     Tel: +33-(0)1-58-47-90-27
     Investor Relations: Herve Philippe
     Directeur Financier du Groupe Havas
     Tel: +33-(0)1-58-47-91-23
     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
 744 B
     [1] Net account wins, expressed in estimated annual billings. Full
 definition given on the last page of this press release.