Publicis and Havas blame poor start to 2003 on euro's strength

The French advertising groups Publicis and Havas both blamed the strength of the euro and an uncertain global climate for a difficult first three months of 2003.

Publicis announced a big leap in first quarter revenues - up 57 per cent to 905 million euros (£651 million) - due to the consolidation of the Bcom3 agencies into the group. However, like-for-like revenues were down 1.2 per cent on the same period last year.

Havas reported a fall in revenues of 8.6 per cent to 402 million euros (£289 million). However, excluding the effect of changes in the exchange rates, Havas revenues were down 5.8 per cent, compared with 6.7 per cent in the final quarter of 2002.

Publicis said there were encouraging signs from the US advertising market in the first three months of 2003, but said that European markets including Germany, The Netherlands, Spain and Italy were "soft spots", contributing to a decline in European growth of 5.2 per cent.

Havas said March was the most difficult of the first three months, and predicted there would not be an advertising industry recovery until 2004.

Two-thirds of Havas' revenues come from the US and UK markets, and it said a significant drop in March had stemmed from "clients suspending some 'one-off' communications initiatives when the war began in Iraq".

Maurice Levy, the chairman and chief executive of Publicis, said: "Despite first quarter visibility obscured by the uncertainties caused by the war in Iraq, some encouraging signs were sighted in the first three months of this year. This included confirmation of some positive signs in the US advertising market, as well as very encouraging growth in the Asia-Pacific market."

Alain de Pouzilhac, the chairman and chief executive of Havas, said: "The evolution of our revenue for the first quarter of 2003 is in line with forecasts. As for the evolution of our revenue, we remain cautiously optimistic for the three remaining quarters."