Revenue of EUR1,461 million SURESNES, France, March 10
/PRNewswire-FirstCall/ -- - Operating income of EUR128 million,
compared with EUR172 million in 2004 - Net income (Group share) of
EUR59 million compared with EUR55 million in 2004, i.e. +8% -
Diluted earnings per share of 14 cents, versus 16 cents in 2004 -
Average net debt of EUR542 million, after EUR538 million in 2004 -
2005 proposed dividend per share of 3 cents At its meeting on March
10, the Board of Directors, chaired by Vincent Bollore, approved
the 2005 financial statements drawn up in accordance with IFRS
accounting standards applicable on December 31, 2005. 1) 2005
results - Organic growth was 2.5% in 2005. Revenue, however, was
down 2% by comparison with 2004, due primarily to the impact of the
disposals programme decided at the end of 2003 and implemented in
2004. - The Operating income has two main components: Income from
operations, and Other operating expenses and income. - Income from
operations down slightly Income from operations stood at EUR152
million in 2005 compared with EUR157 million in 2004, giving a
margin of 10.4% in 2005 versus 10.5% in 2004. - A significantly
negative total for "Other operating expenses and income" In 2005,
Other operating expenses and income produced a negative total of
EUR24 million, in contrast with the positive total of EUR15 million
in 2004. For 2005, these include: - Costs associated with the
departure of the Group's former CEO amounting to over EUR10
million, - Provisions for litigation by former senior executives or
employees amounting to EUR11 million, - Goodwill impairment of
EUR21 million, - Capital gains and losses on disposals which
produced a net total of + EUR18 million. - The Financial result
improved significantly, largely due to the partial buy-back of 2006
convertible bonds in 2004 which generated savings of EUR39 million
in 2005. - Income tax was sharply reduced despite relatively stable
income before tax, bringing the effective tax rate down from 28% to
17%, due primarily to increased recognition of deferred tax assets.
- Net income (Group share) rose from EUR55 million to EUR59
million, i.e. an increase of 8% over 2004. - Earnings per share,
whether basic or diluted, did not keep pace with this trend due to
the full-year impact of the capital increase carried out in October
2004. Earnings per share, basic or diluted, fell from 16 cents in
2004 to 14 cents in 2005. 2) Financial position at December 31,
2005 Net debt at December 31, 2005 was EUR417 million, compared
with EUR311 million at December 31, 2004. This increase in net debt
at year-end is due to one-off items related to changes in working
capital requirements. Average net debt over the year was EUR542
million in 2005 compared with EUR538 million in 2004. The 2006
convertible bond was redeemed in full on January 1, 2006 for EUR221
million. 3) 2005 dividend The Board of Directors has decided to
recommend to the next Annual Shareholders' Meeting, that will be
held on May 23th next, a dividend of 3 cents per share, compared
with 7 cents in 2004. 4) Net New Business(a) 2005 Net new business
for 2005 totaled EUR1,055 million in estimated annual billings. The
main accounts won in 2005 were: - Integrated communications:
Jaguar, ESPN Mobile and Lukoil in the United States, LG Electronics
at the pan-European level; - Traditional advertising: RadioShack,
Sony Electronics, CareFirst, Hershey's and Verizon in the United
States, Afflelou, Champion, Cacharel Parfums, Tac O Tac, le
Transilien (SNCF), Le Figaro, GMF and BHV in France, News
Corporation Ltd, Superdrug Stores Plc in the United Kingdom,
Sogecable in Spain, Citroen in Russia, Turkiye Is bankasi in
Turkey, Palmers in Austria, Germany, Eastern and Central Europe;
eBay in China and Dell in South-East Asia; - Media: Citroen at the
pan-European level, AutoZone, Amica Insurance, BAE Systems,
Esurance and Hershey's in the United States, P&O Ferries in
Great Britain, the Netherlands and Belgium, Peugeot in the
Netherlands and Belgium, Telepizza, Hasbro and Tourespana in Spain,
EDF, ING Direct, Interparfums (Burberry, Lanvin and Lacroix),
Danone, Axa and Lagardere in France, easyMobile in Germany and the
Netherlands; - Marketing services: Heineken, Danone (CRM), Danoe,
the 2007 Rugby World Cup and Tena in France; DirectBuy (U.S.),
easyMobile (Netherlands, Germany and Great Britain); -
Corporate/finance: EDF and Previade-Mutouest in France. -
Healthcare: Benefiber (Novartis) and Lidoderm in the United States.
5) An excellent year for creativity in 2005 At the 52nd
International Advertising Festival in Cannes, the Havas Group won
awards in a number of categories: Euro RSCG Worldwide shared top
ranking in terms of awards received in the Cyber category, Euro
RSCG 4D Sao Paolo was rated third best interactive agency and Euro
RSCG 4D Amsterdam/Fuel was awarded four Lions including one in the
Titanium category (best integrated communications campaign). In
addition, Euro RSCG Worldwide was ranked 8th worldwide in the Gunn
Report, the international benchmark for creativity, while the
Arnold Boston agency was ranked 3rd in the United States and is a
member of the highly exclusive club of just nine agencies to have
appeared in every Gunn Report ranking since its was first
introduced. Two Euro RSCG Worldwide films featured amongst the
campaigns that received most awards in 2005: the Peugeot "Toys" and
Citroen "Carbot" films. 6) Outlook In order for Havas Group
managers and employees to benefit from the group's growth, the
Board of Directors has decided to propose to the Annual
Shareholders' Meeting the introduction of a new stock options plan,
the creation of an allotment of free shares and the launch of an
employee share-ownership programme. 7) Decision by the Board of
Directors The Board of Directors thanked Philippe Wahl for turning
around the Havas Group and appointed Fernando Rodes as Chief
Executive Officer of Havas. About Havas Havas (Euronext Paris:
HAV.PA; Nasdaq: HAVS) is a global advertising and communications
services group. Headquartered in Paris, Havas has three principal
operating divisions: Euro RSCG Worldwide which is headquartered in
New York, Arnold Worldwide Partners in Boston, and Media Planning
Group in Barcelona. A multicultural and decentralized Group, Havas
is present in 77 countries through its networks of agencies located
in 44 countries and contractual affiliations with agencies in 33
additional countries. 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 14,400 people. Further information about
Havas is available on the company's website: http://www.havas.com/
Forward-Looking Information This document contains certain
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements relate to expectations, beliefs, projections, future
plans and strategies, anticipated events or trends and similar
expressions, concerning matters that are not historical facts.
These forward-looking statements reflect Havas' current views about
future events and are subject to risks, uncertainties, assumptions
and changes in circumstances that may cause Havas' actual results
to differ significantly from those expressed in any forward-looking
statement. Certain factors that could cause actual results to
differ materially from expected results include changes in global
economic, business, competitive market and regulatory factors. For
more information regarding risk factors relevant to Havas, please
see Havas' filings with the U.S. Securities and Exchange
Commission. 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. (a) 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. Contacts : Simon Gillham Communications: Solenne
Anthonioz Tel: +33-(0)1-58-47-90-27 Investor Relations: Herve
Philippe Chief Financial Officer Tel: +33-(0)1-58-47-91-23 2 allee
de Longchamp 92281 Suresnes Cedex, France Tel +33-(0)-1-58-47-90-00
Fax +33-(0)-1-58-47-99-99 http://www.havas.com/ SA au capital de
171 552 757,20 euros- 335 480 265 RCS Nanterre - APE 744 B
APPENDICES: CONSOLIDATED FINANCIAL STATEMENTS ARE AVAILABLE ON THE
HAVAS WEBSITE DATASOURCE: Havas CONTACT: Communications: Solenne
Anthonioz, Tel: +33-(0)1-58-47-90-27, , Investor Relations: Herve
Philippe, Chief Financial Officer, Tel: +33-(0)1-58-47-91-23,
Copyright