Havas is stuck in the doldrums, along with most of its holding company peers, reporting negative growth in the first half of 2017 of 0.4 per cent. Group revenue was €1,108bn for the first half, an increase of just 1.9 per cent on an unadjusted basis. Havas’ initial forecast was for between two and three per cent growth.
Havas Group CEO Yannick Bolloré (below) says: “Although the Group’s momentum is positive, Havas’ financial performance in the first half of 2017 suffered a slowdown which affected the industry as a whole and led to revenue and profitability below our expectations. This can be explained mainly by a greater than expected decline in investment from advertisers, increasing pressure on our margins during contract negotiations and renegotiations and the macroeconomic downturn in high-growth markets such as Brazil and Mexico where the Group has a large presence, as well as in India and China.”
So it’s those clients turning the screw again, a point also made by WPP boss Sir Martin Sorrell who has criticised his peers for accepting work on uneconomic terms, “losing the plot.”
Bolloré also spoke about the tie up with Vivendi, run by paterfamilias Vincent: “Joining forces with Vivendi whose ambition is to become the world leader in content, media and communication is exciting. Vivendi will provide us with the strategic and financial means for us to develop during a time where the industry is undergoing rapid consolidation and is threatened by increasing competition from companies coming from other sectors. We are working with Vivendi to create synergies and open a new chapter in the history of our Group. A project which creates value for our clients, our talent and our shareholders.”
Significant investment from Vivendi, which owns Universal Music and Canal+ among others and was about the same size as WPP until the latter’s shares nosedived – would indeed give Havas a leg up. Like most of its holding company peers it could do with one.