CEO and Chairman, Havas, Havas N.V.
Vivendi Seeking 'Right Partner' for Universal Music Deal: Bollore
Jun.19 -- Yannick Bollore, Havas chairman and chief executive officer and chairman at Vivendi, discusses the impact of U.S.-China trade tensions on advertiser spending, social media platform regulation, and strategy for its subsidiary Universal Music Group. He speaks with Bloomberg's Caroline Hyde on "Bloomberg Markets."
About Yannick Bollore
In a June 2019 interview, Yannick Bolloré stated that Vivendi was working to find a strategic or financial partner for up to 50% of Universal Music Group (UMG) to accelerate its growth, clarifying that the company had not said it wanted to spin off UMG. He expressed confidence that the process was on track and that the company was not in a hurry, as UMG was performing well. Regarding trade tensions between the U.S. and China, Bolloré said he did not see a slowdown in advertising investment but described uncertainty as "very bad for business" and expressed hope that an agreement would be reached by the end of the year. In a 2014 interview, Bolloré described Havas's scale as an advantage, arguing that the company was large enough to manage global clients while remaining agile enough to adapt to industry changes. He emphasized the importance of innovation, stating that "when a company stop to innovate it starts to die," and discussed the integration of media and creative disciplines within Havas Villages as a strategy to enhance advertising campaigns.
Transcript (16 segments)
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Interviewer0:00
We sit in France, of course, a French-based conglomerate that you work for, but you are a very international business. If we focus on Havas first and foremost, presence in Asia, Europe, the United States, where is growing fastest for you at the moment?
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Yannick Bollore0:12
That's true that we make 80% of our revenue outside France. Our largest country, the U.S., by far, almost more than a third. But we are growing very fast in Asia, especially in China and India. But we can see also a lot of growth in the U.S. and also in the U.K. and some more mature economies such as France as well.
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Interviewer0:30
U.K., interesting, considering the amount of concern about the economy there in terms of political instability, but the consumer is still there, so therefore the people want to advertise?
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Yannick Bollore0:39
Yeah, that's interesting because it's been, I think, three years from now that Brexit has been voted. I remember it was in Cannes three years ago. I was going to bed on the Thursday night and Remain was leading, and when I woke up the next day, Brexit finally won. Everybody was shocked in our industry, as you can imagine. People are more in favor of Remain. But still, three years later, I mean, the investments haven't slowed down. We even have moved our European headquarters from Paris to London, and I can see that the business is pretty good and pretty solid in the U.K.
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Interviewer1:08
What about the consumer in general, particularly as we enter this era of geopolitical instability no matter where you look to a certain extent? Is the U.S. consumer still there, still a driving force in terms of the U.S. economy?
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Yannick Bollore1:19
Yeah, the U.S. is still a very, very strong economy. But it's been six years I've been CEO at Havas now, and in six years there have been a lot of change in consumer behavior. We can really see now more and more consumers want to consume a brand that they perceive as being meaningful. So more and more of our clients are trying to do some purposeful campaigns. So all generations, not only the youngest generation, wants to buy more out of meaningful brands with purpose. It's a big change.
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Interviewer1:47
The rise of Gen Z, don't we know it. What about China? You're saying Asia is still a great growth presence. India, China, with concern about the U.S.-Chinese relationship, have you seen any change in the desire of Chinese companies to be advertising in the West, to be advertised in the U.S., and vice versa?
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Yannick Bollore2:04
That's a very important question. I mean, the U.S. is the largest advertising economy, China is now number two. We are very strong in both countries, so we monitor the situation very closely. What I can tell now is I don't see any slowdown in terms of investment. But uncertainty, as you know, is very bad for business. So I really hope that they will find a way to end this war very rapidly. I think maybe I'm doing wishful thinking, but I'd like to be an optimistic guy. I think by the end of the year everybody will find an agreement. I think it's better for everyone.
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Interviewer2:36
We'll see if Trump and Xi make any sort of headway at the G20. Your perspective on what's also not slowing down is M&A, particularly in this sector, the advertising sector. We've got Accenture making deals, we've got Publicis making deals. Are you looking to make deals? How do you find the industry evolving?
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Yannick Bollore2:54
Yeah, I think Havas is always making a lot of deals. We are doing between five and 12 acquisitions a year for the last six years, so it's a very active M&A pipeline. What I'm very satisfied of is that the advertising agencies are very attractive from an M&A standpoint. You see a lot of new companies from different worlds, such as the consultants, only to invest into advertising. I really believe that advertising agencies have a bright future ahead of them.
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Interviewer3:21
What about the relationship of yourself, the advertising community, the brands, with the big social media platforms? There is a lot of regulatory scrutiny on them at the moment, concern about the overall power that they have within the system. Is this something that resonates with you?
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Yannick Bollore3:36
Yeah, of course, we work hand-in-hand with those platforms since the beginning. And to be honest, we're taking these issues very seriously. So there are different platforms. I mean, for instance, we have created tools to make sure that brands that advertise on social platforms can do it in a safe and positive environment. And once again, I think it would be unthinkable not to advertise on social platforms in the world of today. This is where the consumers spend the most of their time. But we need to guarantee to our clients to find a positive environment. But, you know, complexity serves agencies pretty well. So I think it's good for us that the world and the ecosystem is getting more complex.
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Interviewer4:12
I want to focus in on your chairmanship of Vivendi as well. Let's talk about potential deals there. Universal Music Group, one that you're looking to potentially spin off. Any appetite there? When do you think a deal might be made?
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Yannick Bollore4:24
We didn't say that we wanted to spin off Universal Music Group. I mean, the supervisory board of Vivendi is working with the management board to try to find a strategy called a financial partner up to 50% of the shares to accelerate the growth of UMG. As you may know, the music industry is going through a huge period of growth. I mean, the business is thriving, and we want to make sure we can accelerate this growth in the coming years. So for now, we have communicated that we want to open a process before the end of 2019, and all the management of Vivendi is very confident that the process is still on track.
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Interviewer5:02
On the right track. So a deal done by 2019, or just the process?
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Yannick Bollore5:06
It's a process to open. But, you know, we are not in a hurry. UMG is doing very well. The question is how to find the right partner, up to 50%. Once again, but everything's fine, trust me.