BoAML: Havas Q3 growth in line with Q2

Bank of America Merrill Lynch (BoAML) has maintained their buy rating on Havas stock. In its rating report the bank states that Havas is the only agency to report Q3 organic growth in line with Q2, reflecting US contract wins.

The slowdown in September has not surprised analysts as Havas was the last of the agencies to report. Quarter 3 organic growth of 2% was at the low end of estimates though. Reported revenues grew 11% to €428 million, just above estimates.

The bank stated that organic growth accelerated in the Asia Pacific region (+11.8% in Q3 versus 9% in Q2) and Latin America (+10.7% versus 4.8%). Growth in North America also improved (+2.5% versus +0.5%), benefiting from new contract wins.

Not surprisingly, Europe deteriorated from +1.9% in Q2 to -0.4% in Q3 driven by the UK (-1.6% in Q3 versus +2.3% in Q2) and France (-0.6% versus +0.5%). However, performance was mixed across the region, with Spain, Belgium, Italy, Ireland, Germany and Russia all reporting positive growth.

Havas suggested that growth slowed in September, mirroring the trends seen by WPP, Publicis & Interpublic. BoAML’s organic growth forecast for 2012 has been revised downwards from 2.7% to 2.2% and leaves the 2013 forecast of 0.6% unchanged.