Havas Reports 2013 Profit And Margin Gains

Havas has issued its full-year 2013 financial results, reporting slight improvements in both net profit and operating profit margin.

Net profit for the year was up almost 2% to 128 million Euros or approximately $176.5 million, based on Friday’s conversion rates.

The company’s year-end financial report issued Thursday followed its report last month, which detailed 2013 revenue and organic growth. Revenues were down 1% for the year, while organic growth was up 1%. Both North America and Europe dragged down the company’s overall revenue and organic growth results.

This week, the company reported its 2013 profit margin to be 13.8%, slightly better than the 13.6% it reported for 2012.

On a conference call with investors, Havas CEO Yannick Bollore said the company’s objective was to achieve a 15% margin with no specific time frame identified. He did say the company’s recent strategy of consolidating its local operations into single “villages,” as the company calls them, would help improve margins.

Bollore also downplayed recent speculation that Havas and Vivendi were planning a possible merger. Havas parent, the Bollore Group, has a 5% ownership stake in Vivendi. But up to now, Bollore said on the analyst call, there has been “no discussion” with Vivendi about a business combination.  

He did not rule out a possible future merger with Vivendi or another company, and said that a merger was one possible strategic option for the company. But he also said that if the company decided on a merger, it would first have to conclude that option would be in the best interests of clients -- something he pointedly noted that Publicis and Omnicom have yet to demonstrate with their proposed merger.

Another strategic option for Havas is to remain on its current course of growing organically and through small- to mid-sized acquisitions, which is likely at least for the short term, Bollore said.

The company is also interested in expanding and sharpening its content creation expertise, said Bollore. He noted that Havas and Orange created a venture in Los Angeles last fall called “Siliwood,” designed to explore opportunities and innovations in media, content, technology and data science. 

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