Havas targets spend of €700m on acquisitions

Havas, the owner of the Euro RSCG Worldwide advertising agency and the MPG brand, has reported 2010 profit of 110 million euros, missing analyst estimates. Chief executive officer Fernando Rodes resigned (although he is retaining a Vice Chairman role) and will be replaced by David Jones, the British CEO of RSCG. The company says it it will look to invest c€700m of its cash resources in acquisitions over the next 3 years.

Analyst Richard Menzies-Gow at BofA Merrill Lynch describes the results as mixed. “There are positives and negatives within the figures but overall we would say they are a little disappointing versus expectations. Organic growth is ahead at +3.5% (BofAML forecast +2.8%) but Q4 at +4.9% was actually below the Q3 growth rate of +5.3%, the only agency group to report such a deceleration.”

On the positive side he added: “Encouragingly the US and Europe both did see an acceleration into Q4. Equally positive was €1.9bn of net new business through 2010, up 50% on 2009.”

Margins were broadly in line with expectations at 13% but exceptional costs were higher.

WPP reported its 2010 results on Friday with margins at 13.2% and a target of 13.7% for 2011.