Havas Group Reports 'Slight' Q1 2017 Organic Growth

Havas Group reported growth of 2.6% and organic growth of 0.1% in Q1 2017, based on consolidated group revenue of €519 million ($564.42 million), up from €506 million ($550.28 million) in Q1 2016.

"Our main regions performed satisfactorily, with the exception of certain countries in Europe and Asia-Pacific that saw a slight reduction in business, largely as a result of reduced spending by certain clients," said Yannick Bolloré, chairman/CEO, Havas Group, during a call with investors.

Havas says this "slow start" is not reflective of the rest of the year.

"We remain confident in Group performance over the quarters ahead," said Bolloré, citing net new business of €563 million ($612.27 million), including Chivas Regal worldwide, Carling Black Label in the UK, Sony in Colombia, and Best Western in Italy. Other global wins included Airwick, Clearasil, Seoul Tourism and the European Parliament in 28 markets.



Not all regions performed equally. North America reported 0.9% organic growth, driven partly by Havas Chicago and new client wins including Mattress Firm, Bob’s Discount Furniture, Change-Diapers.com and Dolce & Gabbana.

APAC reported the Group’s weakest performance in the first quarter, including -5.1% organic growth, largely as a result of falling spend by certain clients, particularly in China, Hong Kong and the United Arab Emirates.

Even so, performance improved sequentially from fourth-quarter 2016 and the recent win of Inoherb, China’s leading men’s skincare brand. This region will bear fruit very soon, says Bolloré, adding that Australia benefited from an increase in spending by several major clients and maintained double-digit growth.

Europe was stable, thanks to positive growth of 1.4% in France and 0.5% in the UK. The remainder of Europe was down slightly -- particularly in Spain, Italy, Germany, Belgium, the Netherlands and Poland.

Latin America began the year on a stronger note than in late 2016, but was penalized by the high baseline set in Brazil last year. Still, the region reported organic growth of 3.2% primarily due to Chile, as well as with double-digit growth in Argentina and Colombia.

Havas addressed the current controversy over appropriate Internet advertising by saying the Group is working with YouTube and Google to ensure these platforms serve as a safe place for advertisers. "Once we realized there was a problem we advised clients to pull investments to give them time to correct [their] algorithm." Havas is helping YouTube develop "new measures" and "find better ways" of creating a safe environment, they said.

Despite this moderate performance, Havas believes the coming quarters will reflect the network's reorganization initiated at the beginning of this year. "And our clients, along with our teams all over the world, have welcomed this client-centric model that goes even further in breaking down silos to provide a service that is ever more agile, seamless and integrated," said Bolloré.

"We confirm our forecast of organic growth of +2% to +3% for full-year 2017."

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