Havas boss Yannick Bolloré on the Riverorchid deal, acquiring people not agencies, and why he doesn’t like rollercoasters

Yannick BolloréYannick Bolloré, the CEO of French holding company Havas and son of billionaire corporate raider Vincent, was in Phnom Penh last week for the unveiling of a deal to buy Indochina specialist agency Riverorchid.

Mumbrella Asia’s editor Robin Hicks asked the 35 year-old executive what Riverorchid brings Havas, what he’s looking for in acquisition targets, his thoughts on the global economy and rumours of mergers with other holding companies, and where next for the communications giant in Asia.

Why has it taken so long for a large French multinational to invest in Indochina, a region France has strong historical ties with?

Two things. First is that Havas is doing well today, and is in a very healthy financial situation [the company reported revenue growth of 7.1 per cent, up by 10.1 per cent to $40 million in Asia and Africa, in May]. But that has not always been the case. Ten years ago, the company was doing badly, when the Bolloré Group took over. Now Havas is doing much better, and after a period of time we have focused on recovery, and we’re now doing much better and in a position to consider acquisitions.

So why only now? Acquisitions are about finding the right people. What Pick [Santiphong Pimolsaengsuriya, better known as Pick, Riverorchid’s co-founder and CEO] and Warwick [Olds, Riverorchid’s other co-founder] have been building with Riverorchid Group is quite unique in the Indochinese market. You don’t always find this type of jewel. So to answer your question, it’s a combination of a good period of time for Havas from a financial standpoint and also the fact that we met Pick and Warwick, and said ok, let’s partner together for the years ahead.

So now, as the global economy isn’t performing well but Havas is, it’s a good time to acquire?

I believe the economy has not been good only for the last couple of months. It started to deteriorate early July with the Shanghai stock market [the Shanghai Composite crash wiped trillions off the value of companies listed in China], which was a wake up call. It’s hard to answer your question, because there are multiple ways to answer it. But regarding Riverorchid, our discussions with them started two years ago, so the state of the economy had little to do with it. Today, I think what’s important once again is to find the right people to invest with.

Do you have clear KPIs for Warwick and Pick in terms what you want to have achieve this time next year?

I think we need to pay close attention to the issue of integration, as it [Riverorchid] is a company of more than 200 people. It’s not a small agency, it’s a group. We need to spend time to make sure that the integration is done properly. Because it’s a group with a true personality, which has enjoyed great success. We need to look at how we can bring them global tools, and how they can bring us all of their knowledge of the region. So integration is the main thing, and after that we can think about further expansion.

Finding the right acquisitions is tough, the market runs out of good agencies to acquire. What’s your sense of the market place out there, and the quality on offer?

There are a lot of talented people out there starting businesses, and I must add that every year new agencies are getting created by young very talented people. I believe that it’s important for us to always be looking at what’s happening in the market, as the environment is changing very quickly. But I don’t think it’s about finding the right agencies, it’s about finding the right people. It’s people we’re partnering with.

Can you give any hints on where you want to build Havas in Asia through acquisition?

Yes, today with the acquisition of Riverorchid following the acquisition of our affiliate in Vietnam; both are important investments being made by Havas in Indochina that completes a good presence in Southeast Asia. I think we need to continue to invest in others parts of Asia. I do not have anything specific to announce, but can say we are continuing to look seriously at new companies to partner with. But once again the culture of Havas is a key element of our success, and we’re very cautious about the people we partner with. I believe that in acquisitions, one plus one never equals two. Our goal is to find a number above two and not below.

What was interesting about today’s deal was the mirroring of the Havas Village concept with Riverorchid’s own approach to integration, with all services including media under one roof. So integration is a key consideration for you in the agencies you acquire?

Yes, integration and leadership. With people like Pick and Warwick, we have talent that will help us to grow faster in this region.

How much time will you be spending in this region?

I would say I come here around five times a year, spending one week every two months. I would love to spend more, but Asia is so big. Even coming here as often as I do is never enough, but I’m in contact with the team every day.

What about Havas merging with another holding company? There have been on and off rumours about a potential merger with IPG. Do you see further consolidation in the industry going forward and do you see Havas as part of that?

Look at the organic growth of a company like Havas, it’s the best in the industry. And we still have a lot of things to do on our own. So for now, we will continue to focus on our own journey, and I can tell you that are things that we are working on that are very positive that will play out over the years to come.

What do you see as the biggest challenges and opportunities for the group this year?

Honestly, I think we have opportunities everywhere. We must not forget about our two main regions, the US number one and Europe number two. There’s still a lot of opportunity for us in these two regions. We need to continue focusing on Asia, where we have huge opportunities – even bigger than in the other regions – and without forgetting that LatAm [Latin America] is still very important for us. We are number one in most markets in that region.

And the biggest obstacle to growth this year? The global economy and wobbles in China?

For me, the big obstacle for me is stability. The problems we have faced over the last two months are to do with uncertainty about the future.

And these concerns are shared by your clients?

Yes, our clients are very worried about the unexpected consequences of a slowdown in China.

Any other expectations for the year ahead? You’ve spoken quite a bit about digital disruption in adland in the press…

We’re only scratching the surface in terms of what advertising can be doing in the digital space, and that will continue. But I’m not worried that the communications groups will not be able to adapt; so I’m not worried about disintermediation. I see only opportunities from digital disruption.

My main concern is macro economic uncertainty. Last month it was a mess, today it seems to be better. I don’t like rollercoasters.


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