Flat figures show that IPG and Havas continue to tread water in Q2 results

Two words from the first sentence of the press release sum up IPG’s performance – “solid” and “moderate.” With 1.7% organic growth for the quarter and guidance of 1% for the year, I’d argue this is a group that’s simply treading water.

There was talk of initiatives in AI, strong retail media performance and broadening their offer to solve more of the challenges that clients face, as we might expect. But there were two problem areas: first, the “tech and telecom sector continued to weigh on growth,” in particular the “loss of a large AOR assignment with a telco client late last year” that is continuing to hurt it, and second, “in keeping with recent quarters…underperformance at our digital specialist agencies.”

Good news for us at Green Square was that M&A is still on the agenda as a more rapid route to increasing capabilities and growth overall.

Next came the Vivendi group results, of which Havas is just one piece. Vivendi’s organic revenue growth for H1 was 5.8%, just ahead of Publicis and Omnicom. Canal+ and Lagardere make up over 80% of Vivendi’s revenues, so the fact that Havas delivered only 0.3% organic growth gets somewhat lost. For Q2, Havas actually had an organic decline of 2.3%, which pretty much wiped out its Q1 growth.

Much like IPG, this was mainly down to a “partial loss of a big client in the US,” which left that geography down 6.4% for H1. The impact of this loss will also be felt in Q3, but the hope is for a return to organic growth in Q4 or maybe in 2025. This leaves a lot for the acquisitions to cover off to maintain overall growth.

It was announced earlier this week that another step had been taken towards separately listing Havas, which looks set to be on the Euronext Exchange in Amsterdam. There will be no hiding within Vivendi’s numbers once this has happened. Fascinatingly, Canal+ looks to be heading for a listing on the London Stock Exchange.

It will be interesting to see how the Converged strategy, which was announced in June, unfolds and it was again positive to see reference to future M&A: “Virtually zero net debt [in Havas] to seize investment opportunities in the future.”

This all made me think back to Nigel Bogle’s infamous statement: “I’m only ever three phone calls away from disaster.” This was said when BBH was an independent agency and losing a client (or three!) could potentially impact the viability of a business. IPG and Havas clearly have scale and diversity of revenues that protect them from three phone calls becoming a “disaster,” but it would appear that just one phone call can create a pretty big bump.