Australia leads growth in the region for Havas as the global group reports a 7% increase in profit for the first half of the year, with organic growth rising 3%. Revenue increased 5.2%.
Yannick Bolloré, Havas CEO, described growth in the APAC region as “robust”. Across the APAC and Africa region organic growth, which excludes the impact of foreign currency and acquisitions, was 6.7% in the first half of the year - well above the group's global growth of 3%. In Q2 organic growth was 8.9% in the region.
Group revenue in Q2 was €581 million and reached €1.09 billion for the first half. Across APAC and Africa Q2 revenue was $46m, reaching €84m for the first half.
For the first half, operating income increased 7% compared with the same period last year reaching €137m.
The group, which revealed it was combining the strategy teams for its Sydney media and creative arms earlier this month, says its new business pipeline is “strong”.
Bolloré added that the “Together” strategy of its Villages approach implemented three years ago to shape Havas into “the most integrated and agile group in the industry” is delivering strong results.
Meanwhile, Interpublic Group (IPG), which owns IPG Mediabrands and its agencies Initiative and UM, as well as creative groups including McCann and MullenLowe, reported better than expected first half results.
In Q2, revenue increased 2.2% to US$1.9bn with organic revenue increasing 3.7%. Operating income for the quarter increased 4.2% to US$224.8m. Operating margin in Q2 was 11.7%.
In the first half of the year, IPG's revenue increased 3% during the period reaching US$3.66bn with organic growth up 5.1%. Growth was driven by the US market. In the first half of the year IPG reported a 9.9% rise in operating profit to US$245.7m. Operating margin was 6.7% for the first half of 2016, compared to 6.3% for the first half of 2015.
Michael Roth, Interpublic's chairman and CEO, said in the financial statement: "We are pleased to report another quarter of solid revenue and profit increases that position us to achieve our financial objectives. Despite increased macro uncertainty, the tone of the business remains sound. We therefore continue to believe that we will deliver at the high end of our original 3% to 4% organic growth target for the full year, as well as expand operating margin by 50 basis points or better.
"During the quarter, we once again saw contributions from a broad range of our creative, marketing services and media agencies, and our digital capabilities across the group were significant drivers of growth. The high calibre of our people and the effectiveness of our offerings on behalf of clients are what have fuelled our strong organic revenue growth during the first half of this year. Going forward, we will stay vigilant in terms of costs, and continue to focus on achieving the appropriate levels of profit conversion. We also remain committed to our robust capital return programs, which have been significant incremental drivers of shareholder value creation."
The group says its operating expenses increased 2% during the first half with $2.5bn spent on staff salaries.
The group's cash and equivalents stand at $675.4m, total debt increased marginally from $1.82bn from $1.76bn at December 31, 2015.
Yesterday Publicis Groupe reported 3% growth for the first half of the year, but CEO Maurice Levy said he expects a tougher time in Q3 following some large account losses.
WPP is due to report its earnings in August.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop me a line at rosiebaker@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day. Need a job? Visit adnewsjobs.com.au.