Havas and WPP, the communication giants involved in a tug-of-war
for Tempus, which owns the media agency CIA, have both ridden the
recession with better than expected half-year figures.
But Sir Martin Sorrell, WPP's chief executive, and Alain de Pouzilhac,
his Havas counterpart, both warn of tough advertising markets with
growth unlikely to pick up again until next year.
At the same time, WPP said it was concerned that what had until now been
essentially a business-to-business recession will spill over into the
"I think that the odds are it will get tougher before it gets easier,"
Nevertheless, WPP and Havas, the world's second- and fifth-largest
communication groups respectively, both turned in solid
The Paris-based Havas posted a revenue of almost £700 million for
the first half of the year - an increase of 49.8 per cent on the first
half of 2000 - together with billings of £4.6 billion.
De Pouzilhac cited the group's significant new-business wins, its
acquisition policy and strong growth in the burgeoning media and
marketing services sector as the reasons for the figures.
"In a market situation that declined over the second quarter of 2001,
Havas recorded overall growth of nearly 50 per cent and organic growth
of 5.5 per cent higher than the organic growth average for the three
largest communications groups in the world," de Pouzilhac said.
Meanwhile, WPP this week posted pre-tax profits of £247.6 million
for the six months to the end of June, up by almost 80 per cent but
including the first contribution from last year's acquisition, Young &
Revenue jumped by more than 65 per cent to pounds l.997 billion.
WPP claims it is well positioned to weather the economic storm because
of its strong financial position, geographic spread and consistent
It also believes that its strength in information and consultancy
services, PR and public affairs, identity and branding, healthcare and
specialist communications will help insulate it. All these will grow in
importance as clients spend increasing proportions of their budgets on
below-the-line activities, WPP says.
Havas too said it was committed to its strategy, successfully developed
over the past four years, of developing specialised divisions.
Similiarly, WPP admitted difficult market conditions were forcing it to
plan conservatively and focus attention on hitting margin targets.
It said its efforts had been reflected in the performances of its
subsidiaries - Ogilvy & Mather (including Cole & Weber and OgilvyOne),
J. Walter Thompson, Y&R (including The Media Edge), Red Cell and
MindShare, whose combined operating margins rose to 16.6 per cent in the
first half of the year compared with 15.9 per cent during the same
period in 2000.