Havas Group reported first-half financial results today and indicated that the performance was “below our expectations,” as Havas Group CEO Yannick Bollore put it.
The
firm posted an organic revenue decline of nearly 1% in the second quarter and 0.4% for the first half of the year. That was below the holding company’s previous forecast of 2% to 3% first-half
organic growth.
“Although the Group’s momentum is positive, Havas’ financial performance in the first half of 2017 suffered a slowdown which affected the industry as
whole and led to revenue and profitability below our expectations,” Bollore stated.
Havas is the second holding company this week to disclose disappointing results -- along with
WPP, which posted its first-half results Wednesday, sending its shares down about
12%. Havas traded a fraction of a percentage point higher Friday on the Paris exchange. It released results after the close of the market.
Like WPP, Havas said the weak results were
partly due to less spending by clients. Havas also cited “pressure” on fees from clients and economy-related woes in some markets like Brazil, Mexico, India and China.
In
North America, first-half performance was “down slightly,” although the U.S. ended up in positive territory despite clients like IBM cutting back on ad spend. WPP noted Wednesday that
package goods clients in particular -- many of which saw organic declines themselves in the first half” -- notably cut back on spending.
Bollore indicated that the Group is hoping
for slight improvement in the second half of the year, but that “we are unable to confirm” the company’s earlier full-year organic growth forecast of between 2% and 3%. At this
point, Havas has not issued revised guidance.
Havas’ reported first-half revenue was up 1.9% to a little more than 1.1 billion euros (about $1.3 billion at today’s exchange
rate). Operating income was down 27% to 100 million euros ($119 million).
The firm reported net new business of over 1.4 billion euro ($1.7 billion) for the first half. Wins included
Bristol-Myers Squibb and Michelin.