Havas Advertising, the French network which recently dropped out of the bidding for Tempus (see Havas Will Not Renew Tempus Offer), this morning released results which fell below expectations. The company also issued a profits warning on its full year results saying that its operating profit margin was likely to fall to between 10 and 12% for the full year, well below expectations.
Havas is now undertaking its second restructure this year and the cost of this is likely to wipe out profits made in H1 (see
Havas Posts Good Growth, But No Tempus Counterbid).
Shares in Havas fell by more than 9% after the announcement, which concluded by saying: “The worldwide advertising market is now estimated to decline by 2.5% in 2001 vs 2000. At the beginning of the year it was expected to increase by 6%.
It is our view that the tragic events of September 11 in the USA have created awareness that the main factor protecting the economy from recession -consumer confidence- has been dramatically weakened.
All the indicators show that recession is now increasingly certain in the USA and, by extension, on a global scale. This means that the second half of 2001 and beyond will be very challenging.”
