An exceptional loss of €226m (£150.5m) was primarily comprised of €172m restructuring costs and €51m relating to a bond buy-back. Revenue for 2003 totalled €1.645bn as operating income came in at €136m representing an operating margin of 8.3%, down from 11.5% in 2002.
The decline in operating margins is significant as higher operating margins is an indicator of efficiency in the ad world.
Havas's operating margin of 8.3% compares with WPP Group's 13%, up from 12.3%, and Publicis Groupe's 14%.
Havas said the decline in operating margin was mainly due to poor forecasting from Euro RSCG, which at a late stage in the year turned out to be over-optimistic.
As a result of this revenues were lower than anticipated, resulting in too high a cost structure. Havas said the situation should not be repeated in 2004.
Havas completed a major restructure during 2003 partly to placate investors after a tough first six months, which saw the group report a 31% fall in first-half earnings.
The restructure cost almost 1,000 jobs and made Euro RSCG the UK's third-largest marketing communications group.
Alain de Pouzilhac, the Havas chairman, said the revamp was needed to prepare the group for "the significant changes anticipated within the media environment in the future and to relaunch our growth and profits".
Havas said that the restructuring had not diminished the group's ability to develop its existing clients nor win new global clients. In terms of new business Havas scored 10 major account wins including Intel Centrino, MCI Corporate, Polaroid, Aventis Lantus and Cap Gemini.
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