Havas revenue slows to 3.3% in 2016

The group reported on Tuesday positive net income of €177 million for 2016, up 3.3 percent from 2015. Meanwhile its consolidated revenue was €2.28 billion for the full year, and organic growth was 3.1 percent.

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

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

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

While North America has been challenging for most agency groups, Havas Group reported growth of 2.1 percent 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 percent.

The group’s businesses in Latin America dropped sharply in 2016, with full-year organic revenue falling 2.6 percent. "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 €2.19 billion in terms of billings, on par with 2015. 

The group’s most significant wins were the global media account for Swarovski; a global digital, advertising and content account for five consumer healthcare categories of GSK; and 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 UK 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 startups

Havas spent a around €55 million 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 €149 million, up from €88 million in 2015.

Havas Villages

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

"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.