Revenue Rises at Havas, Publicis

BOSTON Havas today reported record organic growth for 2007, buoyed by strong performances in all business groups, particularly its digital and media operations.

Arch-rival Publicis Groupe tallied healthy full-year sales and profit, but the company’s organic growth lagged somewhat, dragged down by the pharmaceuticals sector.

Both holding companies are headquartered in Paris.

Havas said its full-year revenue rose more than 4 percent to $2.23 billion compared to the previous 12 months. On an organic basis, factoring out currency fluctuations and the impact of acquisitions, Havas grew more than 7 percent. Organic growth in Q4 was nearly 10 percent to approximately $635 million.

Fernando Rodes Vila, Havas CEO, said the overall performance “is above our expectations and confirms the turnaround successfully undertaken by the group over the past two years.”

Havas’ digital and media operations revenue rose 28 and 19 percent last year, respectively. Revenue at agency network Euro RSCG improved 5.5 percent.

Organic growth in ’07 topped 16 percent in Asia-Pacific, Latin America and other international markets. North American growth was 3.4 percent. In all other markets, growth was between 5.5-12.5 percent, including 7.6 percent in Europe.

Net new business last year was $2.18 billion, Havas said.

The company will disclose its ’07 net earnings in March.

At Publicis, full-year revenue rose 6.5 percent to more than $6.8 billion, representing an organic gain of slightly more than 3 percent. In Q4, organic growth was 4.2 percent to $1.9 billion.

Net income for 2007 was just under $660 million, an improvement of 2 percent.

Maurice Levy, Publicis chairman and CEO, called the overall numbers “excellent,” but noted that organic growth had not kept pace.

“The only somber note has been our insufficient organic growth number — 3.1 percent — essentially due to the particular situation of the pharmaceutical sector,” he said.

Factoring out pharmaceuticals, organic growth was 4.3 percent — and 6.1 percent in the second half.

Publicis spent much of ’07 growing its digital operations (often through acquisitions) following the January absorption of Boston-based i-shop Digitas.

Indeed, marketing services and digital have become increasingly important to the company, and Levy noted that those sectors now represent 36 percent of the company’s total revenue, up from 23 percent three years ago.

Net new business for the year totaled $5 billion.

Levy said the new year “presents some challenges,” notably a slowdown in the U.S. economy, but he pointed to opportunities such as the Beijing Olympics — and the general health of the digital sector — as positives.

In terms of specific operations, the company said Saatchi & Saatchi and its namesake Publicis network performed well, but noted that Leo Burnett suffered from key domestic losses such as the U.S. Army and Cadillac. Media operations performed well in the U.S., Europe and Asia.

Like Havas, Publicis fared best in international markets, growing 11 percent in Africa and the Middle East and about 9 percent in both Asia and Latin America. North American and European revenue lagged, growing 1.7 percent last year in each region.