Revenue Decline Slows at Havas

BOSTON Havas on Thursday reported third-quarter revenue of approximately $435 million, down 5.5 percent in terms of organic growth compared with the same quarter a year ago.

The Paris-based holding company in a statement characterized the performance as an improvement, because the percentage drop in organic growth was the lowest it has posted since the year began. (Both second-quarter and first-half revenue were down about 7 percent compared with the year-ago period.)

Revenue for the first nine months of 2003 was $1.4 billion, down 6.4 percent compared with the same period in 2002.

Havas noted that excluding the 50 companies either being integrated into its Euro RSCG or MPG agency networks, or else being sold, closed or reorganized as part of an ongoing global reorganization, the overall revenue drop for the third quarter would have been less than 2 percent.

In an effort to manage its debt, Havas said it will offer holders of its bonds (convertible or exchangeable for new shares bearing interest at 4 percent) a cash payment of about $1.40 per bond, payable on Jan. 1. The total payout will be approximately $58 million. In exchange, Bond holders would waive their option for a 2006 redemption. If approved, the proposal will allow Havas to postpone until 2009 the final maturity of its $525 million convertible bond, “thereby significantly improving the group’s financial flexibility,” the company said in a statement.

Owing to that initiative and the ongoing reorganization, “Havas is confident in its goal of winning back market share. Internally, we are more determined than ever to put the group back among the leaders in our industry,” said company chairman and CEO Alain de Pouzilhac.

In accordance with French accounting practices, Havas will disclose second half and full year net income in the first quarter of 2004. For the first half of 2003, Havas previously reported net income of $28 million before goodwill write-downs. After goodwill, the company reported a net loss of $65 million, compared with a $17 million profit the previous year. Goodwill amortization includes a onetime charge of $56 million for disposal of assets.