Havas revenue slows to 3.3% in 2016

Bolloré: chief executive of Havas
Bolloré: chief executive of Havas

Havas Group was unable to match its double-digit growth of recent years after posting a 3.3% lift in global revenue for 2016, with the UK growth down to 1.6%.

The group today reported a positive net income of €177m (£151.21m) for 2016, 3.3% up from 2015. Meanwhile its consolidated revenue was €2.28bn for the full year and organic growth was 3.1%.

Chief executive Yannick Bolloré was unable to claim another record-breaking year, after Havas posted 17.3% year-on-year growth last year and 4.3% growth in 2014 (also a record-breaking year at the time).

Today Bolloré credited the group’s results, particularly in the fourth quarter, to "strong performance" from Europe, which grew 5.4% in revenue and "an upturn in our businesses in North America, which posted growth of 7.3%".

However France and the UK, the group’s two largest markets, slowed to growth of 2.1% and 1.3% respectively. Havas' organic growth for France in 2015 was 3.2% while for the UK it was 4.4%. 

While North America has been challenging for most agency groups, Havas Group reported growth of 2.1% for the region. The group’s release credited Havas Media, Havas Chicago and Havas Health for the region’s positive numbers.

Asia-Pacific has been more difficult for Havas, with Q4 revenues dipping due to previous high performance coupled with reduced spend by "certain clients". This has affected China, Japan, Thailand, Malaysia and the UAE in particular, said the release. Full year organic revenue dropped by 1.8%.

The group’s businesses in Latin America dropped sharply in 2016, with full-year organic revenue falling 2.6%. "Mexico is the country facing the greatest difficulties following the loss of clients. The media businesses in Brazil continued to grow and Argentina and Colombia both performed well thanks to their development of existing clients such as Danone, L’Oréal, PSA and Sab-Miller," said the release.

"The dynamic performance of our sales teams coupled with the effects of our Together strategy provided the impetus for these convincing results, backed by a sound, healthy financial position showing positive net cash at December 31," said Bolloré.

New Business

Net new business won in 2016 was on €2.19bn in terms of billings, on par with 2015. 

The group’s most significant wins were the global media account for Swarovski, global digital, advertising and content account for 5 consumer healthcare categories of GSK, media duties for Tracfone (Havas Media North America),  Wallapop (Havas Edge), TD Bank (Havas Media North America), Tim in Italie and Brazil (Havas Italy) and Bourjois and Rimmel (BETC London).

However, major losses last year included Nationwide’s £38m business, which Havas Media UK lost after eight years, as well Birdseye brand owner Iglo. Arena Media also lost the £80m Electronic Arts account. 

Acquisitions and start-ups

Havas spent a around €55m on acquisitions last year. Some of the most significant for the group were UK entertainment and lifestyle media group, Target MCG; Mr Smith, an integrated agency in New Zealand, and TP1, a full-service digital agency in Quebec.

The group ended the year with a net cash war chest of €149m, up from €88m in 2015.

Havas Villages

Havas has continued to implement this strategy and now has 47 villages around the world, the most recent being in London with the launch taking place on 9 March.

"Our villages combine colleagues from every communications discipline under one roof and we are happy to report that we have now completed the phase of establishing Villages all over the world," Bolloré added.

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