French advertising network, Havas, has posted first quarter financial results that show a significant slow-down in revenues in the UK and US. These regions comprise around two-thirds of Havas’ business.
Total group revenues were €402 million, down by 19.8% on Q1 2002. Within this, Europe fell by 15.1% to €197 million, with Germany, Italy and the UK all down by more than 10%, according to Merrill Lynch analysts. Revenues in the US fell by 23.8% to €179 million.
After trading that was only slightly down in January and February, the decline deepened during March, particularly in speciality communications and marketing services and mainly in the UK and US. This was largely the result of clients suspending some ‘one-off’ activity during the war in Iraq.
Havas is keen to point out that in Q1 2002 – the comparable period – its revenues declined by only 5.5%, which was a stronger performance than most of its principal competitors. In this light, it has ‘tougher’ year on year comparisons than these competitors. It also notes that the rate of decline is easing; Q1 2003 organic growth is down by 5.8%, whilst Q4 2002 dropped by 6.7%.
Advertising revenues – including media – fell by just 1.3% to €199 million, with the US market having now bottomed out, according to Merrill Lynch. Marketing services dropped by 9.7% to €203 million.
The group says that both the US market and traditional advertising appear relatively stable. Nevertheless, it concurs with the industry consensus that there will be no recovery in the markets until 2004.
Havas owns the Media Planning Group, Euro RSCG Worldwide and Arnold Worldwide Partners networks.
