Havas Records Modest Improvement, Intel, Volkswagen Losses Drag On MPG's U.S. Results

In its first quarterly earnings report since the restructuring of its board and its management team, Paris-based agency holding company Havas reported a modest improvement in earnings, largely on the basis of traditional advertising and media services. The improvement, which amounted to 2.2 percent organic growth during the first half, was described as the "start of the group's recovery," the new management team said in its earnings statement, echoing the same language used by the old management team to explain Havas' lagging growth over the past couple of years.

"They must be significantly improved upon by regaining market share in order to close the gap with our main competitors," the company added, noting that the second quarter of 2005, in which revenues rose 3 percent, was in fact a doubling of the organic growth rate from the first quarter, when revenues rose only 1.4 percent. Results varied markedly by market and region, with the company's home base of France sustaining the worst results, falling 1.6 percent during the second quarter.

North America was "essentially stable" during the first half, with organic growth inching up 0.4 percent. While North American revenues actually fell 0.9 percent during the second quarter the company said that should come as no "surprise," as the full impact of MPG's Intel and Volkswagen media accounts in the U.S. were recognized during the quarter.

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