De Pouzilhac strengthened in battle against Bollore as Havas returns to profit

by Staff

March 03, 2005

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De Pouzilhac strengthened in battle against Bollore as Havas returns to profit

PARIS - Havas, the French advertising group, says its reorganisation has paid off with a return to profit of €92m (£63m) for 2004, compared with a loss of €179m the year before, which is likely to strengthen Alain de Pouzilhac's hand against a possible takeover by shareholder Vincent Bollore.

The results are ahead of forecasts and the market responded by pushing Havas's share price up by over 3% this morning to €4.60.

Havas saw organic growth of 2% for the year, including 4.6% for the fourth quarter. Its operating margin recovered to 13.2%, compared with 8.3% in 2003, and it slashed debt from €642m to €226m.

Revenues for the year stood at €1.49bn compared with 2003 revenues of €1.65bn, with the figure falling after Havas sold off parts of its business as it restructured in the wake of the advertising recession.

De Pouzilhac, chairman and CEO of Havas, said: "The 2004 results demonstrate the perfect execution of the strategic reorganisation started in fall 2003. These results are spectacular."

He added: "As a result, we start the year 2005 confidently. Our objective is to continue the positive development of our organic growth, and to further improve Havas's profitability, notably through cost reduction."

The confident outlook comes after high-profile account losses in January this year, which came too late to affect these results. First MPG lost the £186m Volkswagen media account and then Euro RSCG/MPG withdrew from the £162m Intel US advertising and media review, which is still ongoing.

Despite those losses, Havas performed well on the new-business front last year, with net new business for 2004 rising by 59% to net billings of €1.5bn. It appeared that Havas's decision to invest more in healthcare paid off with a number of new business wins across its agencies, with Euro RSCG winning Nictotinell and Lovenox, while Arnold won the Pfizer drug Relpax.

Havas's strong performance will give De Pouzilhac further ammunition in his battle against what is seen as a creeping takeover by the French corporate raider Vincent Bollore, the group's largest shareholder.

De Pouzilhac has been building up a block of friendly shareholders to fight against any takeover moves by the Bollore Group, which now owns more than 20% of the company.

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