Havas Outpaces Publicis in Q3

BOSTON Havas today reported a 9.3 percent rise in third-quarter organic revenue to $530 million, upstaging its acquisitive archrival Publicis Groupe, which reported a 4.6 percent Q3 revenue boost to $1.61 billion, compared to the same period a year ago. Organic growth factors out currency fluctuations and the impact of acquisitions.

Today’s numbers continue a reversal of recent trends for the Paris-based holding companies. Havas has, for the most part, endured mediocre financial performances in recent years, while Publicis’ numbers—and its agency acquisitions worldwide, made largely to bolster its digital operations—have been generally more impressive.

Over the past few quarters, however, Havas has made gains while Publicis has seen its growth begin to stall.

Havas said its Q3 performance represented its strongest quarterly organic growth figure since 2000. “We are very happy with our growth in Q3, and feel all the more comfortable about achieving our objectives for the full year 2007,” said Havas CEO Fernando Rodes Vila, in a statement.

Havas attributed the strong performance to revenue realized from new business won during 2006, notably Reckitt Benckiser, Sanofi-Aventis, Pfizer, Exxon Mobil, GSK, Progressive Direct and SFR.

Most of its businesses contributed to the Q3 surge, especially media and digital operations, which continue to be a high growth sector.

Especially noteworthy was the strong performance of North American operations, which improved more than 9 percent to generate close to $190 million in revenue, compared to a decline of 7 percent in the third quarter a year ago.

The company said that turnaround stemmed from “the sharp acceleration of all our activities, especially in the digital sector for Euro RSCG 4D Chicago and New York, but also Media Contacts, media expertise and advertising in the case of Arnold.”

For the first nine months of 2007, Havas’ revenue is up 3.3 percent to about $1.58 billion, compared with the same period in 2006.

Long-term gains, of course, remain to be seen, but Havas was able to crow at least for today at the expense of Publicis. The latter’s chief executive, Maurice Lévy, chose to accentuate the positive, noting that Q3 organic growth of 4.6 percent was “in line with our internal forecasts” and represented an improvement over the first half, when organic growth was just 1.5 percent.

Mainly to blame were Publicis’ healthcare holdings, which were “penalized by difficulties in the healthcare sector in general, and in [the] Selling Solutions unit in particular,” Lévy said. He noted, “Attention should be directed to the excellent double-digit growth of our media agencies and of Digitas (almost 18 percent), the latter not yet taken into account in calculating organic growth for 2007.”

For the first nine months, Publicis’ organic revenue improved 2.6 percent to approximately $4.85 billion, compared with the same stretch in 2006.

Since acquiring Boston-based i-shop Digitas in January, Publicis has continued building its mobile and digital agency roster, and Lévy said those investments “have strengthened our position in high-growth emerging economies, in line with our strategy. All these developments are leading to the steady transformation of the group and of our business model, which will positively affect our future growth.”