June 14, 2018 / 1:23 PM / a month ago

Vivendi's ad unit Havas to beef up corporate PR arm

LONDON/PARIS (Reuters) - Vivendi’s advertising division Havas plans to bolster its corporate public relations arm in response to increasing difficulties in the advertising industry, chief executive Yannick Bollore said on Thursday.

FILE PHOTO: Yannick Bollore, Chairman and Chief Executive Officer of Havas Group, speaks at the media group Vivendi company's shareholders meeting in Paris, France, April 19, 2018. REUTERS/Charles Platiau

The company will invest 100 million euros (87.7 million pounds) over the next five years, mostly on acquisitions to strengthen Havas’s advisory network AMO, notably in the United States, Spain, Italy and Southeast Asia, he said.

Along with bigger European rivals WPP and Publicis, Havas has tried to reposition itself in an advertising environment marked by smaller budgets from big advertisers and the dominance of Facebook and Google on targeted ads online.

“We really want to become the number one corporate financial¬†communication network in the world, we are already number one in terms of new accounts,” Bollore told Reuters in an interview.

Havas, which earns more than half of its revenue in Europe, was the worst performer among its peers in the first quarter of this year with a drop in underlying sales of 1.7 percent to 482 million euros (421.7 million pounds).

NEW VIVENDI CHAIRMAN

The challenges have fueled questioned among analysts about the rationale that led French media group Vivendi to acquire Havas for about 3.9 billion euros (3.4 billion pounds) in 2017 .

Havas was previously owned by the family-run conglomerate Bollore Group, led by French tycoon Vincent Bollore, who also controls Vivendi.

Yannick Bollore, 38, succeeded his father Vincent as Vivendi’s new chairman in April.

“It’s true that the last two or three quarters were tough for all the industry, not only for Havas,” said Yannick.

“But I think it will force us to adapt our structure and to optimize our approach to advertising.”

The Havas CEO added that the ad group was in line with its budget and that the division’s underlying sales growth should be higher in the second half of the year than in the first half.

“The pipeline is very good,” he said. “2019 is going to be a good year.”

Reporting by Kate Holton in London, Mathieu Rosemain and Gwenaelle Barzic in Paris ; Editing by Matthias Blamont

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