Analysts had thought that revenues could be down by as much as 13.3%, as a result of continued weakness in the European advertising and marketing sectors.
Revenues came in at €402m (£287.7m) with first-quarter billings of €2.7bn. Havas said that growth was more negative in March than in the first two months of the year, particularly in speciality communications and in marketing services, and mainly in the US and the UK, which together represent approximately two-thirds of group revenue.
Alain de Pouzilhac, chairman and CEO of Havas, said: "We re-affirm our two key objectives for 2003: pursue the improvement of our earnings before interest and tax ratio compared with last year and continue to improve our free cash flow to reduce our debt. We also continue to reduce our costs."
He added: "As for the evolution of our revenue, we remain cautiously optimistic for the three remaining quarters. While we do not see any strong signs of a recovery as yet, we do believe that the trend for communications spend will be positive for the rest of the year 2003."
The significant drop in March, mainly in the US and UK, has resulted largely from a certain number of clients halting marketing spend when the war began in Iraq. However, Havas said that the rapid outcome of the war in Iraq had given rise to a number of positive signs.
Havas said that both the American market and traditional advertising appear relatively stable and that clients, particularly in the healthcare sector, remain dynamic, despite a slight decline in the quarter due primarily to timing differences of some expenditure.
"We do not believe this will impact the positive outlook for the year in a sector in which Havas is strongly positioned and continues to develop through major new business wins. The outlook for the consumer goods sector, in which the group has strengthened its position with Reckitt Benckiser, also remains promising," it said.
Despite these positive factors, Havas said they did not alter the general consensus that an industry recovery will not occur before 2004.
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