SOURCE: HAVAS

March 23, 2010 12:54 ET

HAVAS : 2009 RESULTS

SURESNES, FRANCE--(Marketwire - March 23, 2010) - PRESS RELEASE

2009 RESULTS:

Solid performance in 2009

Net cash position turned positive

Proposed doubling of dividend

â-º Annual revenue of ÂEUR 1,441 million, organic growth of -7.9% for the full year and -4.4% for the fourth quarter, the strongest performance in the sector

â-º Income from operations margin of ÂEUR 180 million or 12.5% of revenue, up from 12% in 2008

â-º Net income, Group share: ÂEUR 92 million

â-º Net cash position of ÂEUR 48 million at 31 December 2009, after net debt of ÂEUR 79 million at year-end 2008

â-º Proposed doubling of dividend to 8 cents (ÂEUR ) per share

The Board of Directors, meeting on March 23, 2010, approved the annual accounts for the 2009 financial year.

The key figures were as follows:

Please see table in press release.

1. Revenue

Group revenue for 2009 was ÂEUR 1,441 million, i.e. a gross decrease of 8.1% on 2008.

Organic growth was -7.9% for the full year 2009.

In the fourth quarter of 2009, revenue totaled ÂEUR 415 million, i.e. organic growth of -4.4%. This was a significant improvement on the previous quarters and the best performance in the sector to date.

2. Results

Income from operations totaled ÂEUR 180 million in 2009, compared with ÂEUR 188 million in 2008. The income from operations margin was 12.5% of revenue, up from 12% in 2008.

This good level of margin on income from operations was achieved through disciplined cost control and the Group's ability to rapidly adjust its operating expenses to the demands of a highly fluctuating environment.

Non-recurring restructuring costs (severance payments, real estate) resulted in Operating income of ÂEUR 150 million in 2009.

The sharp drop in financial expense (due to the OCEANE bond redemption in early 2009 and the Group's strong financial position), as well as the lower tax rate, enabled the Group to contain the decrease in Net income (ÂEUR 92 million in 2009 after ÂEUR 104 million in 2008). When 2008 capital gains from disposals (ÂEUR 9 million) are factored out, 2009 Net income (Group share) fell by a mere 3%.

3. Financial structure

The Group's financial structure was further reinforced in 2009:

the net cash position at December 31, 2009 became positive at ÂEUR 48 million, after net debt of ÂEUR 79 million at December 31, 2008,

the maturity of net financial debt, which stood at two and a half years in 2006, was extended to over four years in early 2010,

and average net debt2 over the full year 2009 was ÂEUR 147 million, down 50% on 2008.

The further improvement of the Group's financial structure was due to:

the high level of cash generated through good results and constant attention to cash management

the moderate level of financial investment (approximately ÂEUR 13 million) in 2009, and substantial decrease in capital expenditure on tangible assets.

4. Net New Business1

Net new business1 for 2009 remained robust at ÂEUR 1,270 million.

Some of the most significant account wins of the year include:

Global :

Hyundai Kia (Havas Media)

Jacob's Creek Pernod Ricard (Euro RSCG)

Turespana (MPG)

Credit Suisse (Euro RSCG London)

Dulux (Akzonobel) (Euro RSCG London)

Israel Tourist Office (MPG International)

Reckitt Benckiser (MPG)

Cerruti (Euro RSCG BETC Luxe)

Symantec in 6 Asia-Pacific countries (MPG Singapore)

Regional :

Heineken in the US (Euro RSCG New York)

LVMH in the US (MPG US)

AXA in the UK and United Arab Emirates (Havas Media)

Coty in France (Havas Media France)

Nova Schin in Brazil (Euro RSCG Brazil)

BBVA and Viagra in Latin America (Euro RSCG)

Orange Business Services in Asia-Pacific (Euro RSCG)

Pfizer, GlaxoSmithKline, Novartis and Shire US (Euro RSCG Life)

DBS (Euro RSCG Singapore)

Yell Publicidad and Ministero de Defensa (MPG Spain)

The year also brought a number of new account wins in digital, some of the most significant of which were:

IBM (Euro RSCG 4D) worldwide, EDF (Euro RSCG C&O) worldwide, Heineken (Euro RSCG New York), Lacoste (Euro RSCG New York), Sprint (Euro RSCG Chicago) and Method (Euro RSCG San Francisco) in the US, Clearasil (Euro RSCG Sydney), comparethemarket.com (Euro RSCG 4D Digital UK), First Choice Holidays and Tesco Finance (Havas Media UK), Cruz Roja Espagnola and Unicef (Havas Media Spain), Carrefour, P&G and Embratel (Havas Media Brazil), Telmex and Lan Chile (Havas Media LATAM), Unilever (Havas Media Philippines), KFC & Pizza Hut (Yum Brands) (Havas Media China) and Tata (Havas Media Singapore).

Euro RSCG was also appointed to Unilever's first ever global digital roster.

In the area of social networks, Euro RSCG was named agency of reference for Motorola USA, IKEA UK and sanofi-aventis in North America.

5. Board decisions and outlook

In view of the Group's satisfactory results and improved financial structure, the Board of Directors has decided to propose that the dividend be increased to 8 cents (ÂEUR ) at the next Annual General Meeting of shareholders.

The shareholders will also be asked to approve a share buyback plan totaling 40 million shares, i.e. 9.3% of the Group's capital.

The Havas S.A. shareholders' meeting will be convened on Tuesday, May 11, 2010.

APPENDIX 1: Financial information

Please see tables in the press release.

About Havas

Havas (Euronext Paris: HAV.PA) is a global advertising and communications services group. Headquartered in Paris, Havas operates through its two Business Units (the term " Business Unit " will from now on replace the term " Division "), Havas Worldwide and Havas Media, in order to optimize synergies and further reinforce Havas's position as the most integrated of all of the major holding companies. Havas Worldwide incorporates the Euro RSCG Worldwide network as well as agencies with strong local identities: Arnold in the USA, the UK and Italy, H and W&Cie in France... Havas Media incorporates the MPG, Arena, Havas Sports & Entertainment and Havas Digital networks. A multicultural and decentralized Group, Havas is present in more than 75 countries through its networks of agencies and contractual affiliations. The Group offers a broad range of communications services, including traditional advertising, direct marketing, media planning and buying, corporate communications, sales promotion, design, human resources, sports marketing, multimedia interactive communications and public relations. Havas employs approximately 14,000 people.

Further information about Havas is available on the company's website: www.havas.com

Forward-Looking Information

This document contains certain forward-looking statements which speak only as of the date on which they are made. Forward looking statements relate to projections, anticipated events or trends, future plans and strategies, and reflect Havas' current views about future events. They are therefore subject to inherent risks and uncertainties that may cause Havas' actual results to differ materially from those expressed in any forward-looking statement. Factors that could cause actual results to differ materially from expected results include changes in the global economic environment or in the business environment, and in factors such as competition and market regulation. For more information regarding risk factors relevant to Havas, please see Havas' filings with the AutoritÃ(c) des MarchÃ(c)s Financiers (documents in French) and, up to October 2006, with the U.S. Securities and Exchange Commission (documents in English only). Havas does not intend, and disclaims any duty or obligation, to update or revise any forward-looking statements contained in this document to reflect new information, future events or otherwise.

(1) Net New Business

Net new business represents the estimated annual advertising budgets for new business wins (which includes new clients, clients retained after a competitive review, and new product or brand expansions for existing clients) less the estimated annual advertising budgets for lost accounts. Havas' management uses net new business as a measurement of the effectiveness of its client development and retention efforts. Net new business is not an accurate predictor of future revenues, since what constitutes new business or lost business is subject to differing judgments, the amounts associated with individual business wins and losses depend on estimated client budgets, clients may not spend as much as they budget, the timing of budgeted expenditures is uncertain, and the amount of budgeted expenditures that translate into revenues depends on the nature of the expenditures and the applicable fee structures. In addition, Havas' guidelines for determining the amount of new business wins and lost business may differ from those employed by other companies.

(2) Net Debt (quarterly, by semester or annually) is calculated for the four main countries (France, USA, UK and Spain), as the difference between structured gross debt (OCEANE, OBSAAR, credit lines, etc.) and cash at bank and in hand measured on a daily basis. For the other countries, net debt is the debt accounted for at the end of the previous quarter.

Contact Information

  • Contacts :

    Communications:

    Lorella Gessa

    Communications Director, Havas Group

    Tel: +33 (0)1 58 47 90 36

    Email Contact

    Investor Relations:

    HervÃ(c) Philippe

    Chief Financial Officer, Havas Group

    Tel: +33 (0)1 58 47 91 23 Email Contact

    Elsa Cardarelli

    Director of Investor Relations, Havas Group

    Tel: +33 (0)1 58 47 90 58

    Email Contact

    This information is provided by HUGIN