READ - Havas

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READ - Havas

2003 Full Year Results
Analyst presentation
4 March 2004
Introductory Matters
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.
Note 1: Except where otherwise indicated, EBIT as used herein means earnings before interest, taxes and goodwill amortization
Note 2: Except where otherwise indicated, net New Business in this presentation means the estimated annual advertising budgets minus estimated
annual advertising budget losses.
2
Table of contents
1) 2003 Summary
2) 2003 figures
3) Strategic reorganization and restructuring plan
4) 2003 achievements
5) The strategic reorganization is already having
positive effects
6) Havas and the outlook for 2004
7) Conclusion
3
1
2003 Summary
4
1) 2003 Summary
Disappointing figures
Strategic reorganization and significant restructuring for a
sustainable relaunch of the Group.
Without impacting Havas’ capacity to win:
- New global Clients
- Creative quality & innovation
- New talent and retain those already at Havas
This demonstrates that the disappointment in 2003 was
exceptional and not structural
5
2
2003 Key Figures
6
2003 – Highlights
2003
2002
1,645
1,987
Operating income
136
229
Exceptional items
(226)
(9)
Net income (Group share)
(396)
23
Diluted EPS (in €)
(1.33)
0.08
641
664
+ 36
+ 54
€M
Revenue
Net Debt as at 31/12
Free Cash Flow *
•* Net cash from operations + net cash from investing activities – dividends + capital increases
7
2003 RESULTS
Analysis
8
Revenue
2002 - 2003 Growth
Organic* :
- 5.7 %
Constant currency :
- 7.9 %
Unadjusted :
- 17.2 %
* See appendix for full details
9
Revenue by Region
Q4
% organic
Full year
% organic
1,987
- 3.8 %
- 5.7 %
283
303
+ 3.2 %
- 3.6 %
Great Britain
289
391
Continental Europe
259
282
+ 3.4 %
- 6.4 %
692
868
- 4.3 %
- 3.6 %
Asia Pacific
65
76
- 10.6 %
+ 0.2 %
Latin America
57
67
+ 4.0 %
+ 1.5 %
2003
€M
2002
€M
1,645
France
TOTAL
- 12.1 % - 13.0 %
(excluding France and GB)
North America
10
Revenue by division
Excluding
companies closed,
sold or to-be-sold
Euro
RSCG
70%
Arnold
WWP
14%
MPG
16%
11
Revenue by Region
UK
14%
France
19%
Asia Pacific
4%
Latam
4%
Excluding
companies closed,
sold or to-be-sold
North
America
43%
Other Europe
16%
12
2003 – Operating income
€M
Revenue
Compensation
Other operating expenses
Total operating expenses
Operating income
%
2003
2002
Delta
1 645
(968)
(541)
(1 509)
136
8,3%
1 987
(1 124)
(635)
(1 759)
229
11,5%
(343)
156
94
250
(93)
13
Staff Costs
€M
Staff Costs / revenue
Staff Costs
Headcount (at 31/12)
2003
2002
Change
58.9%
56.6%
+ 2.3 pts
968
1,124
-13.8%
15,961
17,972
-11.2%
14
Headcount
Evolution
Headcount on 31/12/2002
17,972
Acquisitions
+ 259
Businesses Sold or Closed
(951)
Redundancies
(1,548)
Resignations/recruitment
+
Transfers
Headcount on 31/12/2003
785
(556)
15,961
15
Other expenses
€M
2003
2002
Change
Other operating expenses / revenue 32.9 %
31.9 %
Other operating expenses
541
635
-14.8%
128
149
-14.1%
57
72
-20.9%
of which : Rent
Depreciation
+1.0pt
16
2003 – P&L
€M
Rev enue
Operat ing inc ome
%
Financial income (expense)
Exceptional items
Tax
Net income of fully consolidated companies
Net inc ome bef ore amort iz at ion (Group s hare)
Goodwill amortization and impairment
Net inc ome Group s hare
2003
2002
1 645
1 987
136
229
8,3%
11,5%
(45)
(47)
(226)
(9)
(38)
(62)
(173)
112
(179)
95
(216)
(71)
(396)
23
17
Exceptional items 2003
€M
Redundancies (H1 and H2)
Real Estate
Other restructuring costs
Purchase of Oceane Put
Capital gain on Oceane re-purchases + Others
TOTAL
2003
(54)
(75)
(50)
(51)
4
(226)
18
2003 2nd half Restructuring plan
1. Reduction in headcount: approx. 1,100 jobs eliminated for
€47 million
2. Real Estate restructuring :
40 properties put onto the rental market,

representing about 70,000 m²,
principally in the UK and the US,
managed centrally.
3. Others : provision for losses on sale of assets, depreciation
of assets (IT, Software, …), litigation …
19
Restructuring Costs
2003 Costs
€M
Redundancies
(47)
Real Estate
(75)
Other restructuring
charges
(50)
TOTAL exclud. Goodwill
(172)
Cash out
2003
27
2004
41
TOTAL
68
20
P&L Impact
1. Cost reduction in ongoing companies
2. Elimination of revenue and costs of companies closed or
sold :

16 sold / to be sold + 8 closed

Of which 3 more companies to be sold relative to the September
18 announcement, following analysis that they did not meet the
strategic criteria for remaining in the Group
21
Cost reduction in ongoing companies
Achieved in
2003
Expected
for a full year
Difference
2004 vs 2003
Redundancies
7
63
56
Real Estate
4
17
13
costs
0
1
1
TOTAL
11
81
70
€M
Other restructuring
22
Elimination of revenue and costs of
companies sold or closed
€M
2003 Revenue
2003 Costs
2003 EBIT
Closed
Sold
To be sold
Total
30
15
125
170
(40)
(16)
(127)
(183)
(10)
(1)
(2)
(13)
Estimated sale price
70
Goodwill Impairment
152
23
Pro-forma Summary of 2003 events
In M€
Revenue
Costs
Ongoing companies
0
(70)
Companies closed
Companies sold
Restructuring impact
Acquired companies
Total impact
(30)
(40)
(15)
(16)
(45)
(126)
11
8
(34)
(118)
Impact on 2004
Relative to 2003
*
* Of which €94 million of compensation costs
24
2003 – Tax
€M
Recurring
Exceptional
Total
91
(226)
(135)
(32)
82
50
Depreciation of DTA* generated in 2003
(62)
(62)
Depreciation of DTA @ 31/12/2003
(26)
(26)
(32)
(6)
(38)
59
(232)
(173)
Profit / (loss) before tax
Theoretical income tax @ 36%
TOTAL TAX
Profit / (loss) after tax
* DTA : Deferred Tax Assets
25
2003 - Goodwill
€M
Amortization :
Impairment
Total :
65
:
152
217
26
2003 – Earnings per Share
€ cent
2003
2002
(60)
32
(133)
8
297 009 275
294 757 744
(60)
31
(133)
(8)
297 732 970
332 613 996
Basic
EPS before goodwill amort.
EPS
# Shares
Diluted
EPS before goodwill amort.
EPS
# Shares
27
CASH FLOW STATEMENT
AND
BALANCE SHEET AS AT 31/12/03
28
2003 - Cash Flow Statement
2003
2002
22
197
Changes in working capital
132
47
CASH FLOWS FROM OPERATIONS
154
244
Investments (net)
Tangible and intangible
(32)
(42)
Financial *
(54)
(87)
5
19
INVESTMENT FLOWS
(81)
(110)
Dividends
(43)
(89)
6
9
36
54
(49)
(72)
€M
Net cash generation
Net cash position of subsidiaries acquired or disposed
Capital increases
NET FREE CASH FLOW
* : including Earn-outs and Buy-outs
29
2003 – Working Capital Analysis
A positive flow of €132 million
€82 million coming from a multi-year group-wide
program to improve working capital, following an
excellent performance in 2002
€50 million of exceptional items, including €41 million
of restructuring costs which will be expensed in early
2004.
30
2003 – Working Capital Analysis
Working capital as at 31/12/03 accounts for more than 20% of
2003 revenue, versus less than 15% in 2002 and less than
10% in 2001.
WORKING CAPITAL / REVENUE
30,0%
25,0%
20,0%
15,0%
10,0%
5,0%
0,0%
30.06.01
31.12.01
30.06.02
31.12.02
30.06.03
31.12.03
Exceptional items
31
2003 – Evolution of Net Debt
2003
2002
(664)
(703)
Net free cash flow
36
54
FX
(5)
(10)
Others
(9)
(5)
(642)
(664)
M€
Opening net debt
Closing net debt
32
2003 – Structure of Net Debt
€M
31/12/2003
conversion
price
31/12/2002
in €
Convertible Bond 99 - Maturity 01/01/04
(85)
(85)
9.08
(566)
(680)
20.87
(450)
(450)
10.39
(1 101)
(1 215)
Bank facilities
(93)
(119)
Other financial debt
(99)
(57)
Overdrafts
(48)
(68)
(1 341)
(1 459)
699
795
(642)
(664)
TOTAL CONVERTIBLE BONDS
GROSS DEBT
Cash and cash equivalents
NET DEBT
Undrawn available credit lines at 31/12/2003 : € 159 million
33
Simplified Balance Sheet as at 31/12/2003
€M
ASSETS
Goodwill
LIABILITIES
31/12/03
31/12/02
31/12/03
31/12/02
1 583
1 893
640
1 165
21
32
Shareholders' funds
Minority interests
Tangible and Intangible assets
190
255
661
1 197
Financial assets
23
26
245
158
Provisions for risks & charges
(332)
(245)
642
664
Net Debt
157
200
73
110
Debts re : Fixed assets
1 621
2 129
1 621
2 129
Working Capital
Deferred Tax Assets
TOTAL
Total
TOTAL
34
2003 - Earn-out / Buy-out Commitments
€M
31/12/2003
31/12/2002
Earn-out
61
103
Buy-out
95
109
TOTAL ESTIMATED COMMITMENTS
156
212
US GAAP figures
35
Earn-out / Buy-out Reconciliation to 2003 estimate
€M
Total estimated commitments 31/12/02
212
Paid out in 2003
(46)
Difference on 2003 payment estimates
(5)
Acquisitions in 2003
20
Adjustments to prior estimates
(25)
Total estimated commitments 31/12/03
156
US GAAP figures
36
Earn-out + Buy-out – Maturity profile
€M
Estimated @ 31/12/2003
2004
2005
2006
85
28
18
2007 2008 et +
11
14
TOTAL
156
37
Dividend Policy
in € Cents
Net dividend
2001
2003 1
2002
17
9
Gross dividend
25.5
13.5
7.5
Pay-out ratio
45 %2
28 % 3
30 % 2
Gross yield 4
3.1 %
3.6%
1.1%
1.
2.
3.
4.
5
Dividend to be approved by the Shareholders Meeting on May 26, 2004
Net dividend / net income before goodwill and exceptional items
Net dividend / net income before goodwill
Based on share price at 31/12.
38
3
Strategic Reorganization and
Restructuring Plan
39
3) Strategic Reorganization and Restructuring Plan
Strategic reorganization was necessary in order to:
respond to clients’ new needs,
implement a new organization to strengthen Havas’
competitiveness and efficiency.
Restructuring Plan was necessary in order to:
significantly improve Havas’ financial performance
40
How ?
By implementing an organization exclusively based on two
global networks and a strong creative presence in key
countries worldwide.
2 global networks :
Euro RSCG Worldwide
MPG
Strong creative
presence in key
countries worldwide
Arnold Worldwide
Partners
41
We have resolved the issue of the 50 underperforming companies
Implemented
19 companies transferred from
AWP and Specialized Services
8 companies closed
7 companies reorganized
16 companies sold
Euro RSCG
9
9
9
companies
representing
approx. 60% of
revenues sold
or about to be
sold (letter of
intent signed)
42
Improve our financial performance
We have taken advantage of the restructuring to :
Reduce our staff costs by € 94 million
Reduce our administrative costs including Real Estate :
70 000 m² (630 000 sq ft) made available for rent
Identify cost savings
significant savings expected in a multi-year plan
43
4
2003 achievements
44
A) We continued to develop our New Business wins
45
Generally
Net Billings*
Net New Business
2003
Change
1 696
+5.8%
*: estimated annual advertising budgets won less estimated annual advertising budgets lost
46
Specific Major Wins
10 major accounts for global integrated communications:
Intel Centrino, MCI Corporate, Polaroid, Aventis Lantus, Roche Diagnostic, Cap
Gemini, Areva, Remy Cointreau, Fromages Suisses, Amgen Corporate

key brands in regional and local markets:
Integrated Communications: American Legacy, Travelocity, Amtrak, Agilent,
Carrefour
Advertising: Coca-Cola, EDF, Colonial Williamsburg, Vision Express, Yili Milk,
Accucard, Biosynergy, Koenig Pilsener, Schweizerische Bundesbahn,
Universal Studio Canada.
in media, regional wins of strong brands in their markets:
Carrefour, France Telecom, MCI, Agilent, Schering Plough, Travelocity, Amtrak, Barclays
47
main losses :
Subway, Alberto Culver, Yahoo, Abbey National, Camelot, Monster.com
significant development of existing Clients geographically and in
different disciplines
France Télécom (18), Peugeot (15), Reckitt Benckiser (10), Danone (7), Diageo (7),
L’Oréal (7), Air France (6), Nestlé (6), Alcatel (5), Cadbury (5), Intel (5)
48
Top Clients trust us
Leading client represents ~ 3% of revenue
Top 25 clients represent ~ 30% of revenue
The leading sector is Automotive ~15% of revenue
49
B) We had our best creative year
Peugeot 206: won most awards of any ad in 2003.
Ultimate Distinction : Peugeot 206 was voted best
worldwide TV commercial of the year (22 awards),
and it is also the most « clicked » spot of the year
over the internet.
50
B) We had our best creative year
Evian « Waterboy »
was the best loved
commercial in France
Evian « Waterboy »
commercial was voted
« Campaign of the Year»
51
is the only
Worldwide network to win
Cannes lions
in every communication discipline :
This demonstrates the expertise and competitiveness of
our leading network in Integrated Communications
52
Section 1
Agency
Advertiser
Title
Category
Peugeot 206
Sculptor
Film
DR Inkbeer
Social
Experiment
Media
Unboring
Cyber/Websites
Direct
Sales Promotion-Asia
GUINNESS
Tape measure
Human Guinea
Pigs
Witness
INPES
MINI USA
TIM
Barrels
Mini USA
Experience 2
Press & Outdoor
Cyber/Website
Cyber/Other
GOLD LION
Euro RSCG MCM Italy
MEDIA LION
Euro RSCG Partnership
Singapore
SILVER LION
Euro RSCG Circle USA
Euro RSCG Eurad Switzerland
Euro RSCG Partnership
Singapore
KLP Euro RSCG London
IKEA
Arena 225
Exercise
Dr Inkbeer
Direct
BRONZE LION
Euro RSCG BETC France
Euro RSCG Circle USA
Euro RSCG Interaction Brazil
53
ranked 4th worldwide
by
for creativity
54
Top Creative Agencies In 2003 Gunn Report
1.
Crispin Porter & Bogusky (Miami) (40=)
50
2.
TBWA\Paris (Boulogne Billancourt) (45=)
45
3.
Wieden & Kennedy (Portland, OR & NY) (1)
41
4.
Arnold Worldwide (Boston) (18=)
29
(Figures between brackets refer to 2002 Ranking)
55
C) Remained very attractive
New talents :
Jim Heekin (Euro RSCG Worldwide New York)
Marc Lepere (Euro RSCG Worldwide New York
John Staffen (Arnold Worldwide Partners New York)
Kevin Roddy (Euro RSCG MVBMS New York)
Mark Sitley (Euro RSCG MVBMS New York)
Ned Russell (Arnold New York)
Steve Swanson (Arnold St Louis)
Christine James (MPG USA)
Nick Hastings (Euro RSCG London)
Chukiat Jaroensuk (Euro RSCG Flagship Thailand)
Jorge Lopéz Ghisoli (Euro RSCG Espagne)
Adams Chow (Euro RSCG Hong Kong)
Nicolas Vale (Euro RSCG Vale Mexico)
While retaining our existing talents
56
5
The strategic reorganization is
already having positive effects
57
5) The strategic reorganization is already having positive effects
In Interactivity, Euro RSCG Interaction has just been
ranked
#1 interactive agency, Agency of the Year, on a
worldwide basis in the interactive market. (One of the most
dynamic sectors in 2004 according to the London Business
School Study; +14%).
Source : Interactive Quarterly Adweek February 23, 2004
58
New Business level has been encouraging since the beginning of the
year:
Arnold: Fidelity retained, Relpax, Tyson Foods, Tourism Toronto
MPG: Volkswagen and Seat in Spain, Diageo in Spain, Colombia
Telecom in Latam
Euro RSCG: new worldwide alignment for a Danone division,
Pfizer Menostar, Inamed, a new account Aventis and SanDisk in
USA, and SabMiller Italy, Nokia Interactive Latam, Novartis
Nicotinell in Germany, American Standard Companies in Asia
Pacific.
In Marketing Services : the retention of Royal Mail UK, DTVN and
Dial Corporation US
Yesterday Wanadoo won for Corporate & Financial communication
59
Improve our financial performance
The drive to drastically reduce costs is ongoing with the
implementation of Group contracts and policies in the
following areas:
General Purchasing (including Travel)
Real Estate (nearly 9% of costs)
IT
Insurance
Creation of country back-offices (payroll/finance)

60
6
Havas and the outlook for 2004
61
A) The environment
Market upturn is happening, especially in the US and
APAC; weaker in Europe and Latam.
2004 vs 2003 Forecast:
Zenith Major Media = + 4.7% (2003 vs 2002 : +3.4%)
Havas LBS = + 4.4% (2003 vs 2002 : +1.8%*)
* US, Germany, UK and France only
62
Zenith Forecast – Traditional Advertising
2004 vs. 2003
North America
+5.0%
Europe
+3.7%
France
Germany
+2.1%
+2.7%
Italy
+3.0%
Spain
+3.3%
UK
+3.2%
Asia Pacific
Japan
Latin America
Others
Total
+5.1%
+1.5%
+0.6%
+10.8%
+4.7%
Source : Zenith Media –December 8, 2003
63
LBS / Havas Forecast Mix of Marketing Services and Traditional
Advertising
2004 vs. 2003
USA
+4.6%
Germany
+1.0%
UK
+6.3%
France
+2.0%
China
+11.6%
Brazil
+11.2%
Total
+4.4%
Marketing Expenditure Trends Havas/LBS : 772 Interviews of decision makers – December 2003
64
LBS / Havas forecast by activity
Breakdown
2004 vs. 2003
Advertising
39.9%
+4.2%
Sales promotion
20.5%
+2.5%
Brand PR/ Sponsorship
15.4%
+3.8%
Direct Mail
14.6%
+3.1%
7.6%
+14.2%
Total including others
100%
+4.4%
Total Advertising
39.9%
+4.2%
Total Marketing Services
60.1%
+4.6%
Total
100%
+4.4%
Activity
Interactive Marketing
Marketing Expenditure Trends Havas/LBS : 772 Interviews of decision makers – December 2003
65
B) Objectives
In this more favorable context, the reorganized
Havas must, whatever the environment, return to
a dynamic of growth and improve profitability.
66
Through our three great brands:
67
Euro RSCG Worldwide
« Jim Heekin »
68
Our Outlook for 2004
_
The stage is set to achieve this year
_
As an organization, we are now:
_ Stronger
_ Leaner
_ Healthy
_
Our point of difference centered on:
_ Creative Business Ideas®
_ Prosumer Segment Expertise
_ Power of One
1
Creative Business Ideas®
Our Objective
To bring our clients
Creative Business Ideas
®
3
Prosumer Segment Expertise
Euro RSCG Worldwide Landmark Study
Categories?
Aspirations?
Brands?
Behaviors?
Media?
5
Power of One
Power of One
_
Integrated communications companies, not
traditional advertising agencies
_ A single P&L
_ A single CEO and management team
_ Deliver the commodity part of what we do as
cost-effectively as possible
_ Reinvest talent and knowledge that produces
“added value”
_
Grounded in discipline-neutral strategy
_
Led by brand-focused, rather than discipline-focused,
leaders
_
World-class execution specialists
7
Tremendous Progress in Two Years
_
Brazil
_France
_
Mexico
_Spain
_
Argentina
_
Colombia
_
Puerto Rico
_
Greater China*
_
Southeast Asia*
_
India-Middle East
_U.S.
_UK
_Germany
_Belgium
_Italy
_Switzerland
_Portugal
_Austria
_Eastern
_Euro
Europe*
RSCG Life
(*) Implemented on regional level
8
Major Client Partnerships
9
New Partnerships 2003
10
Total Worldwide Assignments
Rank
Number of
Accounts
Total
Assignments
Agency Network (parent ad organization)
HQ
1
McCann-Erickson WW (Interpublic)
NY
62
1,180
2
Grey Worldwide (Grey)
NY
55
802
3
Ogilvy & Mather Worldwide (WPP)
NY
48
1,261
NY
46
931
4
(Havas)
5
Saatchi & Saatchi (Publicis)
NY
37
486
6
BBDO Worldwide (Omnicom)
NY
35
639
7
Y&R Advertising (WPP)
NY
32
612
8
Publicis Worldwide (Publicis)
Paris
31
719
9
J. Walter Thompson (WPP)
NY
29
679
NY/London
25
536
10
Lowe & Partners Worldwide (Interpublic)
Note: This ranking is based on the total # of client assignments listed in the Ad Age (2003). In some cases, networks have multiple assignments from a single marketer.
11
We are Everywhere Clients Need Us
12
Keys to Success
in 2004 and Beyond
Keys to Success
1.
Continued integration and cohesion within
our global network
2.
Quality of our people and our product
3.
Ability to grow in relation to our competition
14
Keys to Success
Integration
1.
Continued integration and cohesion within our
global network
_ We are a young, rapidly growing global network
comprised of many entrepreneurial companies and
cultures
_ We enjoy and leverage several competitive
advantages
_ Innovative vision (CBI’s and Power of One)
_ Inherent understanding of today’s business realities
_ Entrepreneurial DNA
_ Multicultural DNA, etc.
15
Keys to Success
Talent
2.
Quality of our people and our product
_ Our success is totally contingent on having the best
people and the best product in each market and in
every discipline in which we compete
_ We must be proactive against this goal
16
Keys to Success
Growth Culture
3.
Ability to grow in relation to our competition
_
Key Strategies:
_ New Business Plan
_ Existing Client Plan
17
Our Mission and Vision
Our Mission
Be and be perceived as the best
global marketing communications
company in the world
19
Our Vision
To directly impact our
clients’ business performance
through Creative Business Ideas®
delivered through media
neutral, integrated
Power of One organizations
20
Media Planning Group
« Fernando Rodes »
69
MPG’s Philosophy rests on 3 Keystones
Methodology
The same service methodology in all markets: Catalyst
Technology
The best set of strategic tools, backed by a global IT infrastructure
Team & Organization
Young, talented and focused international coordination team
In order that we may achieve sustained growth and success
04/03/2004
making media make a difference
1
Methodology
MPG is the only network that approaches client service with a
common methodology across all global markets. Catalyst
ensures that we are asking ourselves the right questions with
regard to Innovation, Knowledge and Strategy- the three
axis on which the methodology rests. We call this the 6D
process:
04/03/2004
2
Technology
Our global tools provide decision support, quantifying the
effects of communication investment and allowing flexibility for
different market scenarios. MPG’s tools received an A+ from
Recma who say, “MPG has a well established consumer
survey, a wide range of strategic planning tools and a
focus on web planning”.
04/03/2004
3
Team and Organisation
MPG’s International department coordinates global client
accounts from “hubs”, (offices in Paris, London, Madrid..)
Recma recognizes MPG’s excellence in international
coordination, and we have been awarded an A+ in this area.
04/03/2004
4
MPG’s Growth in 2003
MPG, the fastest growing agency in Europe
Source: Global Billings & Rankings - Recma Report, April 2003
2002 vs 2001
MPG
MediaCom
Universal McCann
Starcom
Mediaedge:Cia
Initiative Media
Mindshare
Carat
OMD
Zenith Optimedia
19.90%
12.43%
5.50%
5.25%
3.72%
3.37%
3.29%
2.04%
1.52%
1.48%
EMEA figures 2002 vs 2001
04/03/2004
5
MPG’s New Business in 2003
GLOBAL ACCOUNTS:
FRANCE TELECOM
Account maintenance: France, Spain, Switzerland, Slovakia, International
New markets & services: Global coordination
CARREFOUR
Account maintenance: Spain, Portugal
New countries: France, Switzerland, Poland and Turkey
The next step is to target Italy, Czech Republic, Slovakia, Greece, Belgium – mid
term
VOLKSWAGEN GROUP
New markets & services: Spain, (announced Jan 04)
Media buying account for all of their bands, including Volkswagen, Audi, Seat and
Skoda. We also hold the account in Argentina & the US.
04/03/2004
6
MPG’s New Business in 2003 cont.
Argentina: Carrefour, Volkswagen, Wall Mart, Suzuki/Izusu, Diageo,
ADEFA, Renault
Austria: Geox, Air France
Belgium: Puig, Geox, Productor
Brazil: BBVA (MC), Peugeot (MC), Airbus
Chile: Banco Santander, Masterfoods, Hyundai, FOX Cine, Air France
(MC), INTEL (MC)
Colombia: Carulla-Vivero, Protabaco S.A., Bavaria
Czech Republic: Honda
France: France Telecom, Carrefour, Auchan (MC), EDF (MC), France
Telecom (MC), Orange (MC), Piaggio (MC), Cap Gemini (MC/AR),
Decathlon (Geopolis), AREVA, ICEP, Laboratoires Vendome (Arena,
Euromedia.com), ACCOR (MC), Francophonie (MC), Canal+ (MC), Sesma
(MC)
Germany: Hoerzu, Intercitrus, Licher, Mediantis. Polaroid
Greece: Papadoupolus
Hungary: JVC, Pfizer Tempo, Auchan, MOL, Sky Europe, Kaiserfood,
Hörmann, Air France, Carlsbad Mineral Water
Italy: Daihatsu, Zero Nove (Mediapressing)
04/03/2004
7
MPG’s New Business in 2003 cont.
Mexico: Parfumerie Versalles, Pronosticos Deportivos, Bonafont,
Astrazeneca, NIKE, Aerovias de Mexico, Distribuidora Coloso (AR)
Netherlands: Geox, JVC
Poland: Carrefour, Inteligo Financial Services, Volkswagen (MC),
Nordea Bank (MC), Pierre Fabre Dermo-Cosmetique, Zentiva, Glaxo
Smithkline (MC), Carlsbad Mineral Water, Credit Suisse
Portugal: Carrefour, Citroen, Peugeot, ICEP, Geox (AR), Tele 2, Sharp,
Accor Hotels (MC)
Spain: France Telecom, Carrefour, Shering Plough, Campari, Sociedad
Imag y Prom Turistica de Galicia, Conduit, Daewoo, Antonio Puig,
Avalle, Hair Recovery, Banco Atlantico, Panrico (MC), Wanadoo (MC),
Mantequerias Arias/ Bongrain (AR), INDRA (AR), SEIKO, Palm, Play
Again, Bauer (AR), Turespaña (MC), Carlsbad Mineral Water, Zentiva
Switzerland: France Telecom, Carrefour
Turkey: Carrefour
UK: ING, Gucci, E-Sure (MC) Thistle Hotels (MC), Agent Provocateur,
Gamer TV
US: Nasdaq, Amtrak, Volkswagen, Bagby Dskin, Colonial Williamsburg,
MCI, Red Lobster Ethnic, Red Lobster Modelling Project, Toshiba (MC),
Polaroid, Red Lobster (MC)
04/03/2004
8
MPG’s Network Organisation
04/03/2004
9
MPG’s 3 Main Objectives for 2004
Develop the MPG Product
Our aim is to generate a market leader in terms of performance and
innovation: upgrade thinking on Integrated Channel Planning, develop a
unique offer in the area of marketing mix optimization, combine econometric
modeling capabilities and proprietary decision support systems technology.
Reinforce the Media Planning Network
We aim to strengthen the network through a closer partnership between local
offices and the newly created MP Commercial Strategy and Activity Team. This
MP team will lead the network’s commercial approach and support local offices
by redeploying existing resources, adding new ones, and by developing the
culture of cooperation and shared knowledge regarding global clients,
throughout the network.
Continue our Global Expansion
Continue our expansion in order that our clients may benefit from a
transversal core network with true worldwide coverage. In January we opened
MPG Russia in Moscow, and by the end of 2004 MPG hopes to have introduced
the MPG brand name in some of the principal Asian markets.
04/03/2004
10
MPG’s Global Client List
USA
Volkswagen
Reckitt Benckiser
Volvo
GSK
McDonald’s
PSA Panregional Latam
POLAND
HUNGARY
RUSSIA
PSA online
Mitsubishi
CZECH REPUBLIC
REPUBLI
Intel
Carrefour
Auchan
Ceska
Pojistovna
Centiva
Leader Price
Pzifer
Del Pharmea
KMV
LG Petro Bank
Sara Lee
UPC
BELGIUM Durex
GERMANY
AUSTRIA
PSA
UKRAINE
Muller
Geox
Sopexa
Centiva
Douglas
Packard Bell Hochriegl
Carlsbald Water
Beauté Prestige Int’l Telegate
NETHERLANDS
PSA
Diageo
JVC
UK
Inter Contl Hotels
Intel
TUI
FRANCE
ING
PSA
YSL
France Telecom
Groupe Mulliez
Française des Jeux
Reckitt Benckiser
ROMANIA
SWITZERLAND
Reckitt Benckiser
FT
HONDURAS
ECUADOR
DENMARK
PORTUGAL
Air France
Carrefour
CC El Bosque COSTA RICA
Partido Nacional Sonae Gr
Turespaña
AIG Life
YSL
Corp.
Megasuper
Nutrexpa
Banco Futuro
Danone
YSL
Airpak
Costa
Rica
Alcatel
Celular One
PSA
Air France
SPAIN
ITALY
Arrocera Costa Rica
GREECE
Nestlé
INTEL
El Corte Inglés Geox
BPI
COLOMBIA
PSA
Yamaha
NICARAGUA
YSL
BBVA
Danone
Beaute Prestige Int’l
Texaco Caribbean
Air France
Alpina
Nestlé
Turespaña
PANAMA
Merco
INDIA
INTEL TURKEY
Reckitt Benckiser Holiday Inn
Corporación Medcom
Reckitt
Benckiser
Carrefour
Peugeot
Productos Prestigio S.A.
DELL
Champion
BMW
VENEZUELA
MEXICO
Novartis
Uno
BBVA
GUATEMALA
Peugeot
Microsoft
Reckitt Benckiser
Gr. Carso
Distrib Automóviles
ISRAEL
BRAZIL
Danone
Amedesgua
Reckitt Benckiser
Banco Santander
BBVA Bancomer Grill & Bar Guatemala
Peugeot
Reckitt Benckiser
Effem Mexico
AIG
Peugeot
Brazil
Cadbury
PERU
CHILE
BBVA
Banco Santander ARGENTINA
Banco Rio
BBVA
Cepas
Peugeot Chile
BBVA
Carrefour
Carrefour
Renault
Volkswagen
04/03/2004
Louis Vuitton
SLOVAKIA
Globtel
Eurotel
Slo. Telecom
P&G
11
Arnold Worldwide Partners
« Ed Eskandarian »
70
Outlook for AWP in 2004
Stronger
Full
US Economy
year benefit of the 2003 Restructuring plan
Reorganization
More
Focus
71
Arnold Worldwide Partners
AWP Prior to Restructuring &
Reorganization
AWP Today
Integrated
Marketing
Services
19%
Marketing
Services
Advertising
43%
57%
Advertising
81%
72
AWP’s ranking
1
2
3
4
5
6
7
8
9
10
11
Top 15 US agencies
J. Walter Thompson
BBDO
DDB
Grey
McCann-Erickson
Foote, Cone & Belding
Leo Burnett
Young & Rubicam
Deutsch
Ogilvy & Mather
Campbell-Ewald
12 Arnold
13 TBWA/Chiat/Day
14 Euro RSCG Tatham Partners
15 Saatchi & Saatchi
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Top 20 US based consolidated agency networks
McCann-Erickson Worldwide
DDB Worldwide
BBDO Worldwide
Lowe
Euro RSCG Worldwide
Grey Worldwide
J. Walter Thomson Co.
Ogilvy & Mather Worldwide
Young & Rubicam
Publicis Worldwide
TBWA Worldwide
Leo Burnett Worldwide
FCB Group
Saatchi & Saatchi
15 Arnold Worldwide Partners
16
17
18
19
20
TMP Worldwide
Carlson Marketing Group
CommonHealth
Digitas
Campbell-Ewald
Source: AdWeek April 7 2003, Advertising Age
73
A Unique Market Positioning
We are a creatively driven Network located in the
world’s key markets.
Committed to offering our clients a complete range
of integrated services that delivers business results.
Passionate about creativity and big ideas
74
AWP Today
Current Operations:US, Canada, UK, France, Spain, Italy, Australia & China
Plans to expand: Germany, Mexico & Quebec
75
AWP Today
AWP
is now concentrated in North America and Europe

US, Canada, UK, France, Spain, Italy, Australia & China

With plans to expand in Mexico, Germany & Quebec
81%
of the top 100 Global Advertisers’ Ad spending is in
North America and Europe*
78%
of the world’s largest spending brands** are still only
regional (US/Europe) or generate 95% of their sales in
their home territories
* Advertising Age, 2003 Global Marketing Report
** AC Nielsen 2001 “Billion- Dollar Brands”
76
The Heart and Soul of Agency is our Creative Product
In 2003 Arnold was:

Ranked #2 agency in the world by
Creativity Magazine

Ranked #4 in the world by the Gunn
Report

Arnold Worldwide won 5 EFFIES,
including the Grand EFFIE.

Have won awards for 25 of our clients
across the network, including both TV
and integration.
77
Our Reputation Continues to Grow
The MAP Report ranked Arnold #1 in the US
TM
“Arnold has the highest overall positive perception score
among the advertising agencies measured in the MAP
Report
TM
.”
“are known for developing innovative creative work,” the
highest level of agreement was seen for the following
three agencies:
Goodby,
Silverstein & Partners
TBWA
Arnold
December 2003
78
Off to a Great Start in 2004
Pitches won in 2004:

Fidelity Investments
US

Tyson Foods
US

Ralston Purina (pet food loyalty brand)
US

Houlihan’s
US

Piaggio
Italy

Glaxo Smith Kline (smoking Cessation)
US, Europe, Australia

Pfizer (Relpax)
US

Toronto Tourism
Canada

DEAWOO energy div
Italy

Galicia
Spain
79
2004 Continues to Look Promising!
Current New Business Activity
(in millions Euros)
Country
Prospect
Ad Budget
Status
US
Verizon
260
Finals: 1 of 3
US
Circuit City
176
RFP
US
Old Navy
92
Finals: 1 of 5
US
Ferrero Rocher
24
Finals: 1 of 3
US
Foxwoods
16
Finals: 1 of 2
US
Timberland
8
RFP
US
Jamaica Tourism
N/A
Finals: 1 of 3
Canada
Tourism Barbados
N/A Waiting for final decision
France
Aeroport de Paris
N/A
Short List
France
CORA
N/A
Short List
80
AWP in 2004
An Exciting (and profitable) year ahead
81
7
Conclusion
82
7) Conclusion
We want the drive for growth and profitability improvement in
2004 to be SUSTAINABLE
Continuing to invest in :

Resources
Capacity to innovate
Capacity to deliver new creative ideas
Talent
83
Conclusion
If we are reasonably confident for 2004 it is because Havas
has provided itself the means through
strategic
reorganization and management changes
financial
restructuring and cost reduction
development
new
and existing talent
pursuit
New
of existing Clients
of creative excellence
Business
to be competitive again compared to the main
communications Groups in the market
84
2003 Full Year Results
Analyst presentation
4 March 2004
APPENDIX
86
2003 – ORGANIC GROWTH 2003
€ Millions
1. Revenue 2002
1.
1 987
2. Foreign exchange impact
2.
(200)
3. 2002 at 2003 exchange rates
3.
1 787
4. Impact of disposed and closed companies
-17,2%
4.
(43)
5. Impact of change of method
5.
(7)
6. Impact of acquisitions
6.
+7
7. 2002 at 2003 exchange rates and scope
7.
1 744
8. Revenue 2003
8.
1 645
9. Organic growth
-7,9 %
(5.7 %)
87
2003 – Number of shares for EPS calculation
# SHARES
AS AT
31/12/03
SHARES IN ISSUE
# SHARES
(AVERAGE)
306 196 659
305 249 769
(7 614 663)
(8 240 494)
298 581 996
297 009 275
CONVERTIBLE BOND 99
9 395 094
0
CONVERTIBLE BOND 00
27 100 727
0
CONVERTIBLE BOND 02
43 325 581
0
STOCK OPTIONS
34 032 883
723 695
412 436 281
297 732 970
TREASURY STOCK
BASIC
FULLY DILUTED
NET INCOME
BEFORE GW
EPS
€M
€
(179,0)
(0,60)
(396,0)
(1,33)
88
2003 – Estimated revenue breakdown by Client sector*
Finance 9%
Other
6%
FMCG &
Leisure
37 %
Auto
15 %
Pharma &
Health
14%
TMT
19 %
2003
Finance
11%
FMCG &
Leisure
34%
Other
8%
Auto
13%
Pharma &
Health
14%
TMT
20%
2002
*Extrapolation based on identified revenues
89