Havas proprietor Vivendi has revealed that between 30% and 40% of its 870-strong Ukrainian workforce have managed to flee the nation because the “nightmare” of the Russian invasion two weeks in the past.
Yannick Bollore, chairman of Vivendi and chief govt officer of Havas, stated the French media big had been sending further cash and different assets akin to satellite tv for pc telephones to Ukraine to help its staff at Havas and sister firm Gameloft, whose workplaces in Kharkov have been bombed.
He additionally revealed that Havas had been in talks to put money into a Russian company—a long-time affiliate company companion for Havas shoppers—simply earlier than the struggle started however he cancelled these plans this week as a result of “there isn’t any approach we are able to do an funding in Russia proper now”. Vivendi doesn’t have operations or workers in Russia.
Bollore was talking to Marketing campaign at Vivendi’s annual monetary outcomes, which confirmed Havas’ revenues grew 10.4% to €2.24 billion (US$2.47 billion) in 2021—a turnaround after a 9.9% decline in 2020 through the worst of the coronavirus stoop.
Income earlier than distinctive objects (Ebita) nearly doubled to €239 million—increased than 2019 ranges.
Havas described 2021 as a “document” 12 months when it comes to shopper wins, together with Asda for artistic, Unilever for media in Western Europe and Pfizer and Sanofi for Havas Well being & You.
In his interview, Bollore dismissed solutions that Havas, the smallest of the large six company teams, would possibly put money into large-scale M&A, noting the group grew quicker than French counterpart Publicis regardless of its rival making bigger acquisitions.
How was 2021 for Havas?
“2021 regarded fairly totally different from what we anticipated on the finish of 2020 once we did the budgeting train and we have been nonetheless coping with Covid-19. We anticipated to get again to 2019 outcomes extra in 2022.
“We’ve seen the state of affairs enhance month after month and I’m proud that on the finish of 2021 not solely have we reached our 2019 outcomes when it comes to income however when it comes to Ebita [profit] we’re even increased than 2019, which is implausible as we’ve got [achieved it] one 12 months upfront of our plans.”
How have your three divisions—artistic, media, healthcare—carried out? For instance, healthcare shoppers at the moment are nearly 30% of world income.
“Now we have mainly one third every [in revenue terms]. Well being had a really sturdy efficiency in 2020 regardless of the pandemic as a result of the pharmaceutical sector was on the forefront of what wanted to be carried out, which was fairly useful as a result of media and artistic have been damage fairly badly, particularly media.
“In 2021, the three divisions have been over-performing—they’re three engines. Well being continued its nice development. Artistic has been doing fairly properly—excessive, single-digit progress. And media has recovered loads. The three divisions are in line—we’ve got the identical efficiency. “
You had some vital media wins akin to Unilever and the Iberia a part of IAG in 2021. Has there been a big change in your media enterprise?
“Now we have fully reshuffled our media enterprise three or 4 years in the past with a brand new management, together with Peter Mears globally and Paddy Affleck within the UK. The workforce reshuffled the product deeply.
“Now we have invested loads—we haven’t carried out huge acquisitions in media. Now we have actually invested in our product, attempting to attain two factors of differentiation. First, how can we use information—the way in which we analyse information to drive media. Second, driving the significant media expertise—what we name MX—as a result of not all media channels are the identical when it comes to meaningfulness and making a extra significant expertise will drive extra enterprise [for clients].
“It’s working properly and has been super-convincing for brand spanking new shoppers. However I’m all the time extra proud once we retain our shoppers than once we win new shoppers as a result of retaining shoppers, they know who we’re, they know the way we function, so it’s nice once they stick with us.”
In a message to workers, you and Arnaud de Puyfontaine, the chief govt of Vivendi, speak about supporting workers in Ukraine given the “desperately tragic” state of affairs. What are you doing?
“I used to be involved with Covid however I’m horrified by what’s occurring in Ukraine. Now we have 250 individuals in Havas and 620 individuals in Gameloft, which is positioned in Kharkov—their buildings have been bombed final week and they don’t seem to be ready to return to work.
“Truthfully, it’s a nightmare for the [Vivendi] group—as a result of it’s very laborious to assist them in a correct approach. As a result of the group is doing wonderful [at a business level], we’re in a position to give monetary help—not solely persevering with to pay salaries but in addition to offer further monetary help to our individuals.
“We’re additionally giving some logistics help as a result of in some unspecified time in the future they couldn’t even use their telephones so we’ve got despatched some satellite tv for pc telephones to verify they will contact the groups and their household.
“For the previous 10 days, between 30% and 40% of our groups have escaped the nation to neighbouring international locations—they’ve been welcomed by different teammates at Vivendi, Havas and Gameloft.
“Truthfully, it’s a nightmare as a result of we’re not ready to take care of this type of factor. However we’re actually doing our greatest and the state of affairs is evolving daily.”
What concerning the state of affairs in Russia? Now we have seen WPP shut down operations in Russia.
“Vivendi and Gameloft don’t have any operations in Russia. The one operation that Havas has is an affiliation—we function via a neighborhood companion, the ADV Group, that serves our international shoppers. It’s not the identical state of affairs as WPP, which had a fully-owned operation.
“We had been working with our Russian companion to make an funding in Russia prior to now month [before the war] however I had a gathering with them yesterday morning and informed them we’re placing a cease to this funding venture. There isn’t any approach we are able to do an funding in Russia proper now.
“It was a tough determination to make but it surely’s necessary that each one of our help as we speak is for Ukrainian teammates and I don’t need to decide to something in Russia. You may make an argument for investing in Russia as a result of the rouble is down loads and valuations are down. I’m accountable for making one of the best enterprise choices for the group however I don’t need to benefit from the state of affairs as we speak. “
Does your relationship along with your affiliate proceed?
‘The affiliate is Russian—it’s a Russian operation with Russian individuals and so they proceed to function. A lot of the shoppers are native. They don’t seem to be my shoppers. Among the worldwide shoppers are persevering with—I do know some pharma firms are persevering with. However it’s not my determination, it’s between shoppers and the native companion.”
Are you giving a monetary outlook for 2022?
‘We haven’t given any monetary steerage. What I stated to the workforce at first of the 12 months was that the momentum for the group was superb however we had three threats coming in 2022. First, inflation—it’s all the time simpler to extend wage and compensation than to extend our charges for our shoppers. Second, how the logistics and delivery points will have an effect on a few of our shoppers and can change a few of their communications. And the third risk was the geo-political threat with Russia and China.
“Now some very unhealthy issues have occurred in Russia. I’ve [been looking at] some totally different eventualities [about what can happen next]: I’ve a situation the place issues will final for a time period in Ukraine however we’re reviewing eventualities the place the battle may turn into one thing a lot larger and that may have a a lot larger affect on the worldwide financial system and for Vivendi and Havas.
“If issues stay the identical [and the conflict does not spread further], it gained’t change the optimistic momentum we’re experiencing globally—and I don’t prefer to say one thing like that through the center of a disaster as a result of it’s very laborious.
“I need to be prudent and I don’t prefer to decide to any steerage as we speak since you don’t know what can occur. Three weeks in the past, we’d have had a very totally different dialog.”
What have been you predicting earlier than the Ukraine struggle started?
“Earlier than the struggle, the momentum was very optimistic as a result of we gained lots of new enterprise final 12 months and our leaders are very dedicated—we’ve got had the identical govt committee because the starting of the pandemic—and we’ve got nice expertise attraction capabilities as a result of individuals take pleasure in working at Havas.”
Do you are worried there’s a threat of a recession in 2022?
“Not if issues stay equal [and the conflict does not escalate further]. And particularly not in our trade—as a result of Covid-19 has demonstrated that there’s a essential want for manufacturers to speak. I don’t imagine manufacturers will cease speaking.”
Havas and another company teams have been struggling to develop earlier than the pandemic however now, Ukraine apart, issues have going higher for the sector. What has been occurring? Have you ever been in a position to simplify and digitise and modernise extra shortly?
“It’s a conjunction of issues. Covid-19 has accelerated the transformation of the sector and Covid has additionally confirmed to firms and types that communication works. The manufacturers which have maintained their communications finances have out-performed their friends.
“Leaving apart the affect of the illness [on health and well being], it has been a very good factor as a result of it has accelerated the transformation that wanted to be carried out.
“Now we have tailored our value construction and located productiveness for our shoppers, we’ve got labored extra effectively, we’ve got organised the group into three divisions— well being, artistic, media—it’s a lot easier.
“Now we have launched Havas CX and Havas Market and we’re creating a brand new follow round consultancy with a robust company within the UK, Gate One.”
There are 36,000 individuals in Vivendi and 20,000 in Havas. Now you have got bought down your stake in Common Music Group, Havas is a extra vital a part of Vivendi when it comes to the income and its individuals. What subsequent for Havas within the Vivendi household? You can do huge M&A within the company sector and cease being quantity six and begin being quantity two or primary…
“Sure, however why? Every little thing begins with a ‘Why?’. Whenever you have a look at the natural progress of Havas and the development of the profitability if you examine with 2019, it’s precisely in step with our [bigger] friends.
“Within the case of our French colleagues from Publicis, they’re doing precisely the identical progress—even barely decrease at 10% [versus 10.4% at Havas]. They’ve carried out larger acquisitions and are extra uncovered to the US, so they need to be rising quicker.
“So I’m not certain we’re under-scale. If we have been larger, we wouldn’t develop quicker as a result of the larger teams aren’t rising any quicker than Havas. And, truthfully, it’s been the identical case for the final eight years—generally we’re doing higher, generally we’re doing barely decrease.
“I’m not certain that including any scale will assist the enterprise. Possibly I’ll really feel higher to say I’m primary as a substitute of quantity six—by the way in which, I don’t get up within the morning and suppose I’m quantity six. I don’t actually care about being quantity six. I believe we’ve got excellent scale.
“After I place myself from a Vivendi viewpoint, I believe we are able to have a greater use of our cash in creating another companies—as an example, we’ve got invested within the e-book publishing enterprise [by buying Editis and are acquiring Hachette]. We believed in e-book publishing, we have been under-scale.
“With the TV enterprise with Studio Canal and Canal+, we nonetheless have some room to develop as a result of we’ve got grown subscribers from eight million to 24 million in 5 years and our opponents Netflix and Disney+ have between 150 million and 200 million subscribers.
“Simply to return again on promoting, I’m not certain it could change the standard of the groups and repair to the shoppers, if we have been to amass considered one of our friends. From a shopper perspective—I’m attempting to be client-centric—I’m not certain it could change.”
So if Vivendi is investing extra in different components of the enterprise, what makes you enthusiastic about Havas for the longer term?
“What excites me at Havas is our means to affect the world with our communications property and our recommendation to shoppers. I used to be very proud once we began our Significant Manufacturers Survey and once we defined to shoppers that in the event that they have been perceived as significant they’d over-perform their shoppers [in terms of stock market performance].
“Now we have given a number of recommendation to shoppers to turn into extra significant from a variety and inclusion standpoint, from a local weather change standpoint, typically from a CSR level view.
“I really feel we’re contributing to creating the world a greater place.”