2011 WPP Profit Soars 43%

Havas reports 9% increase in net income

Two more industry holding companies reported 2011 results, posting increases thanks to contributions from emerging economies, digital operations and the continued willingness of cash-rich Western multinationals to invest in their brands despite challenges like the Eurozone crisis and its global financial ramifications.

WPP Group, the world’s largest holding company, said 2011 was a record year with profits soaring 43 percent year-over-year to $1.46 billion and an 11 percent increase in revenue to $16.05 billion.

Asia, Latin America, Africa and Central Europe were the best performing regions for WPP, which is headquartered in Dublin. The company’s digital operations and media planning and buying led practice areas.

At Paris-based Havas, profits climbed 9 percent to $159.5 million and the company saw a 5.6 percent increase in sales year-over-year to $2.19 billion. Emerging markets in Latin America and Asia Pacific helped fuel growth in 2011 as well as digital and social media, which now make up 23 percent of the company’s revenue.

While reporting 2011 results, Havas also announced a new structure for the Havas Group, which includes the rebranding of Euro RSCG Worldwide as Havas Worldwide, effective in September.

Under the new operating structure, the Havas Group will consist of Havas Media, Havas Worldwide—the rebranded EuroRSCG network—Arnold Worldwide and the holding company’s other communications agencies. Havas is also creating a new umbrella brand, Havas Digital.

Looking ahead, WPP estimated that the quadrennial boost of the UEFA Football Championships in Central and Eastern Europe; the London Summer Olympics and the U.S. presidential election should contribute 1 percent to industry growth this year. (WPP is forecasting a 4 percent increase in revenue.) However, the company expressed concern about the post-election prospects in America in 2013, saying it's probable that President Obama will be reelected and will likely would have to deal with legislative gridlock as he and a Republican-controlled Congress confront the U.S. budget deficit.

Despite continuing economic uncertainty, 2011 proved to be a good year generally with industry holding companies posting double-digit increases in net income: Publicis Groupe said profits rose 14 percent to $791 million in 2011; Omnicom Group posted a 15 percent increase to $952.6 million and Interpublic Group of Companies reported that profits nearly doubled to $520 million.