Havas’ Income Declines

BOSTON Havas today reported a sharp decline in after-tax net income to approximately $61 million in 2006, a nearly 23 percent drop compared to the previous year.

The Paris-based holding company attributed the falloff mainly to a heightened income tax burden. In pre-tax terms, the income performance was essentially flat.

Operating income tumbled less than 5 percent to $162 million in 2006 compared to the previous 12-month period, according to Havas.

All numbers are based on current rates of exchange.

The company in February had reported 2006 revenue of about $1.95 billion, up less than 1 percent, or basically flat, compared to 2005. In organic growth terms, factoring out currency fluctuations and other factors, the performance was likewise flat.

Yesterday, Havas chairman Vincent Bolloré was thwarted in his quest to place associates on the board of U.K.-based rival Aegis Group. Aegis shareholders for the third time in 10 months voted down Bolloré’s proposal. Analysts have pointed to Aegis’ strong financial performances of late and Havas’ mediocrity as key reasons it makes no sense for the companies to forge ties. Bolloré has said he wishes to combine the media operations of the two firms.

On the positive side, Havas said it added nearly $2.6 billion in net new business in 2006, while reducing its net debt by $47 million to about $511 million.

Havas owns Arnold, Euro RSCG and MPG.

The company’s overall performance lagged most of its competitors. Publicis Groupe’s revenue rose 6 percent and its net income surged 15 percent in 2006, compared to the previous year.

WPP Group saw its revenue and profit rise 10 percent and 15 percent last year, while Omnicom Group registered revenue and income spikes of 8.5 percent and 9.5 percent. Troubled IPG saw its revenue fall 1 percent while losing $31.7 million in 2006, though that performance was a huge improvement on the $263 million loss it suffered in 2005.