<PAGE>

     As filed with the Securities and Exchange Commission on June 26, 2001

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               ----------------

                                   FORM 20-F
(Mark One)
[_]REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
   EXCHANGE ACT OF 1934

   For the fiscal year ended December 31, 2000

                                       OR

[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
   OF 1934

   For the fiscal year ended December 31, 2000

                                       OR

[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
   ACT OF 1934

                        Commission file number 001-16081

                               ----------------

                               HAVAS ADVERTISING
               (Exact name of Registrant as specified in charter)

                               Republic of France
                (Jurisdiction of incorporation or organization)

                           84, Rue de Villiers, 92683
                         Levallois-Perret Cedex, France
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the
Act: None

                               ----------------

Securities registered or to be registered pursuant to Section 12(g) of the Act:

<TABLE>
<CAPTION>
              Title of each class                  Name of each exchange on which registered
              -------------------                  -----------------------------------------
 <S>                                             <C>
 American Depositary Shares, each representing               Nasdaq National Market
   one ordinary share, nominal value 0.40 euro
                    per share
</TABLE>

                               ----------------

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: None

                               ----------------

  The number of outstanding shares of each of the issuer's classes of capital
or common stock as of December 31, 2000: 266,496,567 ordinary share, nominal
value 0.40 euro per share.

  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]

  Indicate by check mark which financial statement item the registrant has
elected to follow. Item 17 [_] Item 18 [X]

  Name and address of person authorized to receive notices and communications
from the Securities and Exchange Commission:

                                 R. John Cooper
                              430 Mountain Avenue
                         Murray Hill, New Jersey 07974

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
 <C>      <S>                                                              <C>
 FORWARD-LOOKING STATEMENTS...............................................   1


 PART I


 ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS..........    2
 ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE........................    2
 ITEM 3.  KEY INFORMATION................................................    2
    3.A   Selected financial data........................................    2
    3.B   Capitalization and indebtedness................................    3
    3.C   Reasons for the offer and use of proceeds......................    3
    3.D   Risk factors...................................................    3
 ITEM 4.  INFORMATION ON THE COMPANY.....................................    8
 ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS...................   20
 ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.....................   33
 ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS..............   42
 ITEM 8.  FINANCIAL INFORMATION..........................................   43
    8.A   Consolidated statements and other financial information........   43
    8.B   Significant changes............................................   44
 ITEM 9.  THE OFFER AND LISTING..........................................   46
    9.A   Listing details................................................   46
    9.B   Plan of distribution...........................................   47
    9.C   Markets........................................................   47
    9.D   Selling shareholders...........................................   47
    9.E   Dilution.......................................................   48
    9.F   Expenses of the issue..........................................   48
 ITEM 10. ADDITIONAL INFORMATION.........................................   48
    10.A  Share capital..................................................   48
    10.B  Memorandum and Articles of Association.........................   48
    10.C  Material contracts.............................................   48
    10.D  Exchange controls..............................................   49
    10.E  Taxation.......................................................   50
    10.F  Dividends and paying agents....................................   57
    10.G  Statement by experts...........................................   57
    10.H  Documents on display...........................................   57
    10.I  Subsidiary information.........................................   57
 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....   57
 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.........   59


 PART II


 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES................   60
 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
          USE OF PROCEEDS................................................   60
 ITEM 15. [RESERVED].....................................................   60
 ITEM 16. [RESERVED].....................................................   60


 PART III


 ITEM 17. FINANCIAL STATEMENTS...........................................   61
 ITEM 18. FINANCIAL STATEMENTS...........................................   61
 ITEM 19. EXHIBITS.......................................................   61
</TABLE>

<PAGE>

                           FORWARD-LOOKING STATEMENTS

  This annual report on Form 20-F contains certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended, relating to
our business and the sectors in which we and our subsidiaries operate. In
particular, among other statements, certain statements in Item 4 "Information
on the Company" with regard to management objectives, industry trends, market
standing and business risks, the statements in Item 5 "Operating and Financial
Review and Prospects" with regard to trends in results of operations, margins
and overall market trends, the statements in Item 8 "Financial Information"
relating to legal proceedings and Item 11 "Quantitative and Qualitative
Disclosures about Market Risks" are forward-looking in nature. Forward-looking
statements can be identified by the use of forward-looking words, such as
"may," "will," "project," "estimate," "anticipate," "believe," "expect,"
"continue," "potential," "opportunity" or the negative of those terms or other
variations of those terms or comparable words or expressions. By their nature,
forward-looking statements involve risk and uncertainty because they are based
on our current expectations and assumptions concerning events and circumstances
that will occur in the future. There are a number of factors that could cause
our actual results and developments to differ materially from those expressed
or implied by these forward-looking statements. These factors, include, but are
not limited to, the following:

  . the general economic conditions in our principal markets;

  . the level of worldwide spending on communications services by
    advertisers;

  . our ability to retain existing clients and attract new ones;

  . the unanticipated loss of an important client or a portion of a client's
    business as well as changes in advertising and marketing budgets of
    clients;

  . our ability to retain key personnel while continuing to control labor
    costs;

  . the impact of competition in our industry;

  . our ability to implement our growth strategy and to successfully
    integrate businesses we acquire; and

  . our ability to adjust to the changing trends in our industry.

                                       1
<PAGE>

                                     PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

  Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

  Not applicable.

ITEM 3. KEY INFORMATION

3.A Selected financial data

  The following table summarizes our selected financial data and is qualified
in its entirety by reference to, and should be read in conjunction with, our
audited consolidated financial statements and the notes to the financial
statements included in this annual report. The historical financial data for
the years ended December 31, 2000, 1999 and 1998 have been derived from our
audited consolidated financial statements prepared using U.S. GAAP.

  The 1998, 1997 and 1996 historical financial data were previously presented
in French francs and are now presented in euro. Solely for the convenience of
the reader, these historical financial data denominated in French francs have
been translated into euro using the fixed exchange rate applicable as of
January 1, 1999 ((Euro)1.00 = FF6.55957) for all periods presented. The
historical financial data for December 31, 2000 have been translated into U.S.
dollars at the noon buying rate of (Euro)1.00 = $0.9388 on December 29, 2000.
See Note 2 to our audited consolidated financial statements on page F-7 for
further information.

<TABLE>
<CAPTION>
                                            For the Years Ended December 31,
                    -----------------------------------------------------------------
                       2000              2000             1999            1998
                    ----------      --------------- ---------------- ----------------
                                                  U.S. GAAP
                                   (in thousands, except per share data)
                    -----------------------------------------------------------------
                       ($)
<S>                 <C>             <C>             <C>              <C>
Income Statement
 Data:
Net revenues......  $1,543,049      (Euro)1,643,640  (Euro)1,124,380   (Euro)872,767
Net income (loss)
 excluding
 goodwill
 amortization.....      73,947               78,768           45,783           4,858
Net income
 (loss)...........      27,608               29,408           25,225         (11,245)
Net income (loss)
 per share(1):
 Basic............        0.15                 0.16             0.18           (0.09)
 Diluted..........        0.14                 0.15             0.16           (0.09)
 Dividend per
  share(1)(2).....        0.24                 0.26             0.23            0.19
<CAPTION>
                                                For the Years Ended December 31,
                     -------------------------------------------------------------------------------
                          2000            1999            1998            1997            1996
                     --------------- --------------- --------------- --------------- ---------------
                                                       French GAAP
                                          (in thousands, except per share data)
                     -------------------------------------------------------------------------------
                                                       (unaudited)
<S>                  <C>             <C>             <C>             <C>             <C>
Income Statement
 Data:
Net revenues......   (Euro)1,795,551 (Euro)1,208,085   (Euro)874,407   (Euro)779,191   (Euro)665,379
Net income (loss)
 excluding
 goodwill
 amortization.....           123,897          78,841          61,434          39,942          29,093
Net income
 (loss)...........            89,224          56,106          45,486          24,812          15,975
Net income (loss)
 per share(1):
 Basic............              0.49            0.40            0.36            0.22            0.15
 Diluted..........              0.43            0.34            0.34            0.24            0.18
 Dividend per
  share(1)(2).....              0.26            0.23            0.19            0.17            0.15

<CAPTION>

                    --------------------------------------------------------------------
                       2000                 2000             1999            1998
                    ----------         --------------- ---------------- ----------------
                                                     U.S. GAAP
                                       (in thousands, except per share data)
                    --------------------------------------------------------------------
                       ($)
<S>                 <C>                <C>             <C>              <C>
Balance Sheet Data:
 Current Assets...  $2,069,418         (Euro)2,204,323 (Euro)11,270,094 (Euro)1,252,146
  Total assets....   5,439,100               5,793,673        2,286,846       1,912,506
Financial debt
 (includes long
 and short term)..   1,052,493               1,121,105          459,010         209,909
Shareholders'
 equity...........   2,503,141               2,666,321          537,710         434,412
<CAPTION>
                                                    As of December 31,
                    --------------------------------------------------------------------------------
                          2000            1999            1998            1997            1996
                     --------------- --------------- --------------- --------------- ---------------
                                                       French GAAP
                                          (in thousands, except per share data)
                     -------------------------------------------------------------------------------
                                                       (unaudited)
<S>                  <C>             <C>             <C>             <C>             <C>
Balance Sheet Data:
 Current Assets...   (Euro)3,372,839 (Euro)2,170,483 (Euro)1,406,293 (Euro)1,296,513 (Euro)1,117,384
  Total assets....         5,241,344       3,231,289       2,099,372      1, 968,357       1,739,465
Financial debt
 (includes long
 and short term)..         1,128,860         680,691         316,922         441,341         404,448
Shareholders'
 equity...........         1,040,228         643,097         524,873         340,806         279,642
</TABLE>
--------
(1) Per share data have been adjusted for the 20 for 1 stock split that
    occurred on May 26, 2000.
(2) These amounts reflect the dividend accrued for the year indicated,
    including the French avoir fiscal (before deduction of any French
    withholding tax). Actual payment of the annual dividend for each fiscal
    year occurs following our annual ordinary general shareholders meeting in
    the subsequent year. For an explanation of the French avoir fiscal, see
    "Taxation--French taxation--Withholding tax and avoir fiscal" and
    "Taxation--Taxation of U.S. investors--Taxation of dividends--Withholding
    tax and avoir fiscal."

                                       2
<PAGE>

3.B Capitalization and indebtedness

  Not applicable.

3.C Reasons for the offer and use of proceeds

  Not applicable.

3.D Risk factors

  You should carefully consider all of the information set forth in this annual
report and the following risk factors. The risks below are not the only ones we
face. Additional risks not currently known by us or that we currently deem
immaterial may also impair our business operations. Our business, financial
condition or results of operations could be materially adversely affected by
any of these risks. This annual report also contains forward-looking statements
that involve risks and uncertainties. Our results could materially differ from
those anticipated in these forward-looking statements as a result of certain
factors, including the risks we face as described below and elsewhere. See
"Forward Looking Statements" on page 1.

Our typical contracts provide clients with the right to cancel for any reason,
which has enabled clients to move freely to other agencies, and which has
resulted and may continue to result in lost revenues.

  Our clients typically have the right to cancel contracts with us for any
reason upon prior written notice, usually ranging from 90 days to 180 days.
Clients are also generally free to move from one agency to another with
relative ease. As is typical in the communications services industry, we have
lost or resigned client accounts and assignments in the past for a variety of
reasons, including conflicts with newly acquired clients, and we may continue
to lose or resign client accounts in the future for similar reasons. We may not
successfully replace revenues stemming from clients that leave or when a client
significantly reduces its marketing and communications spending. Any
significant reduction in the marketing and communications spending by, or the
loss of, one or more of our largest clients could significantly harm our
results of operations, slow our growth, and cause a decline in our revenues.

We are facing increased competition from existing multinational marketing and
communications companies as well as new competitors in related industries,
which may harm our growth and operating results.

  The communications services industry is highly competitive, and we expect it
to remain so. Our principal competitors in the advertising, direct marketing
and related businesses are large multinational marketing and communications
companies, as well as numerous smaller agencies that operate only in one or
more regions, countries or local markets. In addition, we compete with
divisions of large multinational marketing and communications companies as well
as specialized media buying companies for media planning and buying clients.
Recently, we also have been competing with major consulting firms which have
developed practices in marketing and communications. New competitors also
include smaller companies such as systems integrators, database marketing and
modeling companies and telemarketers, which offer technological solutions to
marketing and communications issues faced by clients. As a result of the
increasingly competitive environment, we may lose potential clients to our
competitors, which would negatively affect our growth and harm our business.

We may not be able to effectively compete with the largest multinational
advertising companies for globally consolidated accounts, which may adversely
affect our growth and our revenue.

  We believe that many large multinational companies are consolidating their
accounts with one organization that can fulfill their marketing and
communications needs worldwide. This trend requires us and our competitors to
make significant investments in order to obtain or maintain these global
accounts. These investments include additional offices and personnel around the
world and new and improved technology for

                                       3
<PAGE>

linking these offices and people. We are required to make significant capital
expenditures for maintenance, expansion and upgrades of the computer networks
that link our international networks of employees and offices. Although we are
one of the largest advertising service providers in the world, some of our
competitors are significantly larger than we are. To the extent that these
competitors have broader geographic coverage or greater financial resources to
invest in additional offices, personnel or technology, we may have difficulty
competing with them for globally consolidated accounts, which could adversely
affect our growth and our revenues.

We have lost client accounts in the past and may continue to lose existing
accounts in the future as a result of clients imposing mandatory periodic open
competitions, which may cause our revenues to decline and our business to
suffer.

  In the communications services industry, some clients routinely require
agencies to compete for business at mandatory periodic intervals. We have lost
client accounts in the past as a result of mandatory periodic open
competitions. To the extent that our existing clients continue to require us to
participate in an open competition to maintain an account, it increases the
risk of losing those accounts, which would harm our business and reduce our
revenues.

Based on recent macroeconomic analyst reports, we anticipate a slowdown in
growth of worldwide spending on communications services by advertisers in 2001,
which may reduce demand for our services and harm our revenues and operating
results.

  The amount of money that advertisers spend for promoting their products and
services is highly sensitive to fluctuations in general economic conditions.
Companies may significantly reduce their advertising budgets in reaction to
declines in general economic conditions, resulting in disproportionate
decreases in demand for advertising and marketing services and greater negative
effects on the communications services industry compared to other industries
that are not as sensitive to changes in general economic conditions. Based on
recent macroeconomic analyst reports, we currently anticipate a slow down in
growth of spending on communications services in 2001 in the United States and
worldwide, which may harm our revenues and operating results.

If we fail to attract and retain qualified key creative, research, media and
account personnel, our operating results may suffer.

  Our success depends significantly on the skills of our creative, research,
media and account personnel and practice group specialists and their
relationships with our clients. Many of these employees may be difficult to
replace. If we lose one or more key personnel, we may not be able to find
suitable replacements and we may lose important clients, which may negatively
affect our ability to generate and sustain our business. In addition, since
demand among communications services companies for qualified personnel is very
high, we may have to increase the salaries, bonuses and fringe benefits we
offer to our personnel, which may negatively affect our operating results.

If we lose the services of one or more key management personnel, our ability to
manage our diverse group of businesses and integrate newly-acquired businesses
may suffer, which could slow our growth and have a negative impact on our stock
price.

  We depend on the services of our senior management team to coordinate the
global activities of our four principal operating divisions and implement our
acquisition strategy. The services provided by our senior management are
critical to our success and the members of our senior management team are
difficult to replace. In addition, many members of our senior management team
do not have written employment arrangements with us and may resign from their
positions at any time. In particular, Alain de Pouzilhac was appointed as our
Chairman and Chief Executive Officer at the request of Vivendi Universal
Publishing and has no formal employment agreement with us. As a result, Mr. de
Pouzilhac may terminate his position as our Chairman and

                                       4
<PAGE>

Chief Executive Officer at any time, whether at the request of Vivendi
Universal Publishing or otherwise. Loss of the services of one or more of our
executive officers could seriously disrupt our ability to manage and coordinate
effectively the activities of our four principal operating divisions while
continuing to implement our acquisition strategy. This could slow our growth,
harm our business over the long term, and have a negative impact on our stock
price.

A core component of our business strategy is external growth through
acquisitions, which could involve numerous risks and result in shareholder
dilution.

  We acquired more than 20 companies in 1998, more than 40 companies in 1999
and more than 35 companies in 2000 and intend to continue to pursue
acquisitions in the future to enhance our capabilities and expand our
geographic reach. Any acquisition involves a number of risks, which include

  . difficulties of integrating the activities, technologies and service
    offerings of the acquired businesses,

  . the diversion of our management's resources to difficult integration
    issues rather than the other aspects of our business,

  . the management of physically and culturally distant and diverse entities,
    and

  . the possible loss of key personnel in the businesses acquired.

  Failure to overcome these risks or other problems encountered in any of our
acquisitions could slow our growth or lower the quality of our services, which
could reduce customer demand and seriously harm our revenues and operating
results.

  In addition, we may pay for the purchase prices of some of our acquisitions
by issuing stock, which would result in dilution to our current shareholders.
We may also incur additional debt and contingent liabilities and recognize
increased amortization expenses related to goodwill and other intangible assets
in connection with our acquisitions, which would negatively affect our
financial condition and our operating results.

We may not be successful in identifying suitable acquisition candidates that
meet our criteria, which may impede our growth.

  Integral to our business strategy is our ability to expand through
acquisitions, which requires us to identify suitable acquisition candidates or
investment opportunities that meet our criteria and are compatible with our
growth strategy. In analyzing acquisition candidates, we evaluate their
projected financial performance in terms of internal rate of return, the pay
back period, return on capital employed and the anticipated earnings impact of
the acquisition. In addition, we endeavor to carefully review the creative work
product of acquisition candidates to determine whether they meet our standards.
We may not be successful in identifying suitable businesses or opportunities
that meet our acquisition criteria or consummating acquisitions or investments
on satisfactory terms. Failures in identifying or consummating acquisitions
could reduce the number of acquisitions we complete, and slow our growth, which
could in turn have a negative impact on our stock price.

We face increasing competition for the purchase of agencies, which may impede
our ability to make future acquisitions or may increase the cost of these
acquisitions.

  We compete with other communications companies and other buyers for
acquisitions. These competitors may drive up the price we must pay for the
companies or assets we seek to acquire or may succeed in acquiring those
companies or assets themselves. Increasing competition for acquisition
candidates has raised the price we have paid for acquisitions in some markets
and may continue to do so. In addition, our potential acquisition targets may
find our competitors to be more attractive suitors because they may have
greater resources, may be willing to pay more, or may have a more compatible
operating philosophy. The increased costs of acquisitions may slow our growth
and harm our financial condition and our operating results.


                                       5
<PAGE>

Fluctuations in the exchange rates between the euro and the various currencies
in which we conduct business may adversely affect our operating results.

  We record the revenues and expenses of our local operations in their home
currencies and translates these amounts into euro. As a result, fluctuations in
foreign currency exchange rates in markets where we derive significant revenues
or have significant operations may adversely affect our revenues, expenses and
results of operations as well as the value of our assets and liabilities as
reported in euro. Fluctuations may also adversely affect the comparability of
period-to-period results. For example, the value of the Brazilian Real
fluctuated in relation to the euro during the 12 months ended December 31, 1999
and ended the period lower than its value to the euro in the beginning of the
year. Since each Brazilian Real converted to fewer euro, our revenue in euro
was reduced. In the past, the currencies of many Latin American countries,
including Brazil and Mexico in particular, have experienced substantial
devaluation and volatility.

We plan to increase the portion of our revenues that are derived from Latin
American and Asia-Pacific markets which have a history of political and economic
instability that may disrupt our operations and adversely affect our results.

  We derived approximately 9% of our revenues in 2000 from Latin American and
Asia-Pacific markets, and we plan to increase the portion of our revenues from
Latin American and Asia-Pacific markets in the future. Both Latin America and
the Asia-Pacific region have experienced periods of political and economic
instability recently and experience has shown that negative economic or
political developments in one country in a region can lead to or exacerbate
economic or political crises elsewhere in the region. If these conditions were
to reoccur, our business could be adversely affected. Historically, political
and economic instability in Latin American and Asia-Pacific countries has been
caused by

  . extensive governmental involvement, control or ownership of industries in
    local economies, including financial institutions and other commerce
    infrastructure,

  . unexpected changes in regulatory requirements such as imposing licensing
    requirements or levying new taxes,

  . slow or negative growth as a result of recessionary trends caused by
    currency devaluation, interest rate hikes and inflation,

  . imposition of trade barriers through trade restrictions, high tariffs and
    taxes, and

  . wage and price controls that reduce potential profitability of
    businesses.

  Any reoccurrence of adverse political and economic conditions may deter
economic growth in these regions, which may harm our overall business when
compared to companies in the communications services industry that do not
derive such a significant portion of their revenues from these regions.
Currently, we do not have political risk insurance to guard against business
interruptions and other losses caused by political acts.

We could lose the right to use our corporate name, which would require us to
incur costs and may disrupt our business.

  We do not own our corporate name "Havas Advertising." The right to use our
corporate name was licensed from Vivendi Universal Publishing pursuant to a
license agreement which expired on December 31, 2000. Although we are currently
negotiating with Vivendi Universal Publishing for the right to continue to use
the name "Havas Advertising," we cannot assure you that we will obtain such
right on favorable terms or at all. Vivendi Universal Publishing was our
largest shareholder from our incorporation in 1968 until 2000, and on June 6,
2001, Vivendi Universal Publishing disposed of all its remaining shareholding
in us. If Vivendi Universal Publishing decides not to sell, license or
otherwise grant to us the right to continue to use the name "Havas
Advertising," we would be required to change our corporate name, which would
require us to incur costs and may disrupt our business.


                                       6
<PAGE>

Regulatory restrictions in certain countries in which we operate prohibit
certain economic activities such as media buying, which has harmed and may
continue to harm our revenues and operating results.

  We may be subject to laws and regulations in some of our markets that
restrict or prohibit specific types of services and products we are able to
offer to our existing and potential clients, which would prevent us from
pursuing significant opportunities and have a negative impact on our overall
business.

  Our agencies are located in numerous countries with different levels of
governmental regulation relating to the advertising industry. Any new law or
regulation pertaining to the advertising industry, or the application or
interpretation of existing laws, may

  . assess fees, taxes or tariffs on advertisements,

  . restrict the media, content, form or duration of advertising,

  . prevent us from offering some Internet content or services, or

  . otherwise harm our business, financial condition and operating results,

which could increase our costs or otherwise reduce our profitability or
business prospects.

  For example, in France, media buying activities are subject to specific
regulations following the adoption in 1993 of Law No. 93-122, known as the "Loi
Sapin." The Loi Sapin profoundly redefined long-standing practices in the media
industry in France and in particular the traditional role of advertising
agencies. Since the introduction of the Loi Sapin, advertising agencies in
France are no longer able to purchase advertising space from media providers
and then resell the space on different terms to advertisers. In addition,
advertising agencies cannot receive any commissions or discounts directly from
media providers. The Loi Sapin has had in the past, and we expect that it will
continue to have, a significant negative financial impact on our media buying
activities in France.

  Government laws and regulations in France, the United States and other
significant markets for us could place us at a competitive disadvantage
relative to other communications companies having a larger portion of their
business conducted in countries with less advertising regulation.

Government regulation in certain countries in which we operate may impose
potential liability for false or misleading advertising, which could harm our
business.

  In some of the markets in which we operate, there are laws and regulations
which impose significant liabilities upon advertisers and advertising agencies
for false or misleading advertising. As a result, we may face potential
liability if the content of any of our advertisements are found to be false or
misleading.

  For example, as the owner of advertising agencies operating in the United
States which create and place print and Internet advertisements, we are subject
to Sections 5 and 12 of the U.S. Federal Trade Commission Act. These sections
regulate advertising in all media, including the Internet, and require
advertisers and advertising agencies to have substantiation for advertising
claims before disseminating advertisements. In the event that any advertising
that we have created is found to be false, deceptive or misleading, we may have
liability under the Federal Trade Commission Act.

Regulatory uncertainties regarding the collection and use of client data could
harm our business and adversely affect our revenues from marketing services.

  Growing concern regarding privacy and the collection, distribution and use of
information about Internet users has led to increased federal, state and
foreign scrutiny and legislative and regulatory activity concerning data
collection and use practices. Various federal, state and foreign governments
and agencies have recently proposed limitations on the collection and use of
information regarding Internet users.

                                       7
<PAGE>

  For example, in October 1998, the European Union adopted a directive that
limits the collection and use of information regarding Internet users in
Europe. In addition to government activity, a number of industry and privacy
advocacy groups are considering various new, additional or different self-
regulatory standards. Due to our significant marketing services, which rely on
the collection and use of client data, this scrutiny, and any legislation,
regulations or standards promulgated, may substantially harm our operations or
significantly reduce our revenues derived from marketing services.

  Governments, trade associations and industry self-regulatory groups may enact
more burdensome laws, regulations and guidelines, including consumer privacy
laws, affecting us or our clients. Since many of the proposed laws or
regulations are just being developed, and a consensus on privacy and data usage
has not been reached, we cannot yet determine the impact these regulations may
have on our business. Any of these laws, regulations, guidelines or other
restrictions could have an adverse effect on our business and adversely affect
our revenues from marketing services.

 Civil liabilities or judgments against us or our directors or officers based
on U.S. federal or state securities laws may not be enforceable in the U.S. or
in France.

  Holders of Havas Advertising American Depositary Shares may not be able to
effect service of process within the United States upon our directors and
officers and our outside auditors. As a result, it may not be possible to
enforce, in U.S. courts, judgments against these persons or against us based on
any civil liability provisions of the U.S. federal or state securities laws. In
addition, civil liabilities based on U.S. federal or state securities laws may
not be enforceable against us and our directors and officers in France. If an
original action is brought in France, based solely on U.S. federal or state
securities laws, French courts may not have the necessary jurisdiction to grant
the remedies sought. Actions for enforcement in France of judgments of U.S.
courts rendered against these French persons would require them to waive their
right under the French Civil Code to be sued only in France. We believe that
none of these French persons have waived this right with respect to actions
based solely on the U.S. federal or state securities laws.

ITEM 4. INFORMATION ON THE COMPANY

Overview

  We are a global advertising and communications company. According to
Advertising Age, we are the fifth largest advertising and communications
company in the world based on our 2000 revenues, including Snyder
Communications' 2000 revenues. With our headquarters located in Paris, two of
our four operating divisions headquartered in the United States and one in
Spain, we believe that we bring a multinational approach to our business which
distinguishes us from other major advertising companies. Through our worldwide
network, we offer a complete line of communications services, including general
advertising, direct marketing, media planning and buying, corporate
communications, sales promotion, design, human resources, multimedia
interactive communications and public relations. As of May 31, 2001, our
network consisted of over 330 agencies located in more than 65 countries.

  We conduct our business through the following four principal operating
divisions:

    Euro RSCG Worldwide. From its divisional headquarters in New York, Euro
  RSCG Worldwide manages our principal international brand--Euro RSCG--and,
  as of May 31, 2001 owned and operated a network of more than 190 agencies
  in Europe, the United States, Latin America and the Asia-Pacific region.
  Through this network, Euro RSCG Worldwide offers a complete range of
  advertising and communications services.

    Arnold Worldwide Partners. Arnold Worldwide Partners is a network of
  advertising agencies that emphasize creative work product and seek to
  establish strong local identity in the markets they serve. As of May 31,
  2001, the Arnold Worldwide Partners network consisted of 12 advertising
  agencies located in Europe, the United States, Canada, Brazil and
  Australia. Arnold Worldwide Partners primarily focuses on general
  advertising services.

                                       8
<PAGE>

    Media Planning Group. From its headquarters in Barcelona, Media Planning
  Group provides media planning and buying services to its clients and
  operates primarily in Europe, Latin America and the United States. We
  initially acquired 45% of Media Planning Group in 1999 and subsequently
  acquired the remaining 55% on May 22, 2001.

    Diversified Agencies Group. Our Diversified Agencies Group operating
  division included more than 50 "independent" agencies as of May 31, 2001.
  These agencies are wholly or partially owned by us but are referred to as
  "independent" because they generally are managed and operated autonomously,
  have operations that are local or regional in scope, and are not part of
  either our Euro RSCG Worldwide or Arnold Worldwide Partners networks. In
  addition to general advertising, these agencies focus on specific
  disciplines such as marketing services, design, research and public
  relations.

  Although our company is organized into four divisions, the general legal
ownership structure of the agencies comprising these four divisions is as set
forth below:

                                    [Chart]

                          Havas Advertising (France)

                             [ARROWS POINTING TO]

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                            Snyder Communications, Inc. (95.7%
Havas Advertising International SA          economic interest, 96.4% voting
  (France) (100%)                           interest)                             Media Planning Group (45%)   France
----------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                                   <C>                          <C>
                                                    [ARROWS POINTING TO]
----------------------------------------------------------------------------------------------------------------------------------
 . Germany  [ARROW POINTING TO] Havas        Arnold Worldwide Partners Agencies,                                Arnold Worldwide
  Advertising Holding Gmbh (100%)           Euro RSCG Agencies,                                                Partners Agencies,
  [ARROWS POINTING TO] Arnold               Diversified Agencies                                               Diversified Agencies
  Worldwide Partners Agencies, Euro
  RSCG Agencies
----------------------------------------------------------------------------------------------------------------------------------
 . Other Countries [ARROW POINTING TO]
  Arnold Worldwide Partners Agencies,
  Euro RSCG Agencies, Diversified
  Agencies
----------------------------------------------------------------------------------------------------------------------------------
 . U.K. [ARROW POINTING TO] Evelink Plc
  (100%) [ARROWS POINTING TO] Arnold
  Worldwide Partners Agencies, Euro
  RSCG Agencies, Diversified Agencies
----------------------------------------------------------------------------------------------------------------------------------
 . U.S. [ARROW POINTING TO] EWDB North
  America, Inc. (100%) [ARROWS
  POINTING TO] Euro RSCG Agencies,
  Diversified Agencies
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


  The table below provides a breakdown of total revenues by geographic region
in fiscal years 1998, 1999 and 2000.

<TABLE>
<CAPTION>

   Geographic Region                       2000          1999          1998
   -----------------                   ------------- ------------- -------------
                                                (in (Euro)  thousands)
   <S>                                 <C>           <C>           <C>
   France............................. (Euro)322,778 (Euro)290,975 (Euro)265,463
   Rest of Europe.....................       522,765       353,896       260,977
   North America......................       647,420       375,132       269,095
   Asia-Pacific.......................        87,497        60,764        42,949
   Latin America......................        63,180        43,613        34,283

</TABLE>


                                       9
<PAGE>

History and development of our business

  We strive to maintain an operating structure that is capable of continuously
evolving to take advantage of opportunities in the advertising and
communications services industry. Our current operating structure is less than
ten years old and is designed to allow us to adapt quickly to meet the needs of
our clients, especially those in dynamic and competitive industries such as
telecommunications, technology and health care.

  We were originally incorporated in 1968 under the name "Havas Conseil." At
that time, our sole shareholder was Havas S.A., a French media group. Since
then, Havas S.A.'s shareholding has steadily declined, from 100% in 1968, to
approximately 45% in 1972, to approximately 31% in 1998 and to 0% in June 2001.
Havas S.A. was acquired by Vivendi Universal, a media, communications and
environmental services company, in 1998 and is now known as Vivendi Universal
Publishing.

  In 1982, Havas Advertising shares were first listed on Euronext Paris S.A.
(previously the Paris Bourse), which is the French national stock exchange.
They have traded on the Premier Marche of Euronext Paris S.A., which is the
principal trading market for securities in France, since May 1985. Havas
Advertising ADSs began trading on the Nasdaq National Market System on
September 27, 2000.

  At the time of our original incorporation, our business activity was
concentrated in France and was focused on traditional advertising and media
buying services. Since the mid-1970s, we have expanded our business
significantly, both geographically and in the breadth of services that we are
able to offer. Our expansion has been achieved through internal growth and the
selective acquisition of complementary agencies. Over the last nine years, the
portion of our total revenues derived outside of France has increased from 48%
in 1991 to 85% in 2000 (including 100% of the revenue from Media Planning
Group).

  In the 1990s, we made a number of significant changes to our organization
which we believe have substantially expanded our geographic reach, the scope of
our services, and our positioning in an increasingly global market. These
changes included the following:

  . In 1992, we acquired RSCG Group, then a major French advertising group,
    and merged its "RSCG" network into our own "Eurocom" network to create
    Euro RSCG Worldwide. We chose to merge these two networks in order to
    create a single organization with an expanded global reach and an
    enhanced offering of services. The combination created what we consider
    to be a world class network capable of accommodating our clients in their
    local, regional and international businesses.

  . In 1997, we moved the divisional headquarters of Euro RSCG Worldwide from
    Paris to New York. This has allowed us to move closer to U.S. advertisers
    and to the U.S. advertising market, which Zenith Media recently estimated
    to account for 44% of 2000 worldwide advertising expenditures. In
    addition, we believe our introduction of worldwide branding and a global
    network linking all members of Euro RSCG Worldwide has raised the level
    of cooperation among the agencies comprising the Euro RSCG Worldwide
    network.

  . In 1999, we created a new media planning group combining the media
    planning and buying activities of Media Planning, S.A., a Spanish
    company, with our existing media planning business. We initially acquired
    45% of this new group and subsequently acquired the remaining 55% on May
    22, 2001. We believe that operating our media planning and buying
    activities as separate entities rather than solely as departments within
    its agencies is the most effective structure to capitalize on growth
    opportunities in the media business. By combining our media planning and
    buying activities with those of Media Planning, S.A., we believe that we
    have created a powerful network of media expertise which has the
    management skills and resources necessary to compete in the media market.

  . In 2000, we acquired Snyder Communications, an international provider of
    direct marketing, advertising and communications services and Internet
    professional services. As a result, we added Snyder Communications'
    Bounty SCA Worldwide agency to the Euro RSCG Worldwide network to
    strengthen our marketing services. We also added Brann Worldwide, the
    direct marketing specialist agency of

                                       10
<PAGE>

   Snyder Communications, to our Diversified Agencies Group and we added
   Snyder Communications' Arnold Communications advertising agency to our
   prior "Campus" network to create the Arnold Worldwide Partners network.

  Since late 1998, we have pursued an aggressive strategy of growth through
acquisition, acquiring over 20 companies in 1998, over 40 companies in 1999 and
over 35 companies in 2000. For more information relating to these acquisitions,
please see "Operating and Financial Review and Prospects--Strategic acquisition
plan" beginning on page 22 and Note 3 to our 2000 consolidated financial
statements on page F-10.

Industry trends

  Our management believes that several industry trends have had and will
continue to have a fundamental impact on our business and prospects. These
trends include:

  . Continued growth of integrated communications services, which consists of
    coordinating traditional advertising services with marketing services;

  . Globalization of many industries and the resulting globalization of the
    advertising industry and polarization into a relatively small number of
    global networks and a large number of smaller local and regional
    agencies;

  . Growth of marketing services, as the rapid development of new
    communication technologies has enabled advertisers to reach their target
    audiences in means that are more effective than mass marketing;

  . Continued evolution of the Internet as a new market for advertising and
    marketing services; and

  . Evolution of media planning and buying from an ancillary service within
    traditional advertising agencies into a specialized autonomous service.

Business strategy

  Our strategy is to continue our development into one of the leading global
advertising and marketing services companies with levels of growth and
profitability that are comparable to the "top three" global advertising and
communications companies--WPP Group, Omnicom Group, and The Interpublic Group
of Companies--as ranked by Advertising Age based on 2000 revenues. To
accomplish this growth, we have identified the following key goals:

  . Focus on attracting and serving multinational clients through an emphasis
    on coordinating the worldwide efforts of our constituent advertising,
    media planning and buying, and marketing services companies;

  . Capitalize on the opportunities to provide integrated communications
    services;

  . Expand and consolidate our positions in various markets, primarily
    through acquisitions, with emphasis on the United States, Latin America,
    and Asia for traditional advertising and Europe, the United States, Latin
    America, and the Asia-Pacific region for marketing services;

  . Promote a decentralized and multicultural approach to our business to
    better respond to client needs and to attract and retain key personnel;
    and

  . Improve our financial performance by seeking to achieve key financial
    performance goals, including increasing the proportion of marketing
    services in our business mix, increased geographic diversification with
    strong emphasis on the Asia-Pacific region and Latin America, and
    continued emphasis on improving operating margins and cash earnings per
    share.

Advertising and communications services

  We offer the following products and services:

  . Integrated communications. Integrated communications services consist of
    coordinating traditional advertising services with marketing services.

                                       11
<PAGE>

  . General advertising. General advertising services consist of defining the
    nature, content and target audience of an appropriate advertising message
    for the promotion of brands, products or services; creating work product;
    advising clients in the choice of media to disseminate creative work
    product; and monitoring the effectiveness of the advertising message and
    work product through studies and research.

  . Direct marketing. Direct marketing services consist of providing
    communications, such as direct mail, and related database support which
    are designed to develop and maintain a measurable contact between the
    message sender and the receiver.

  . Media planning and buying. Media planning and buying services consist of
    optimizing the efficiency of advertisements by determining the media best
    suited for reaching the largest and most targeted sample of readers,
    listeners or viewers and planning and buying media for advertisers.

  . Corporate communications. Corporate communications services consist of
    providing communications relating to a company, such as annual reports to
    stockholders, intended to make the company better known or improve its
    image to stockholders, suppliers or the financial markets.

  . Sales promotion. Sales promotion services consist of designing
    communications which aim to induce consumer purchasing, promote consumer
    loyalty, increase consumer interest in a product or react to a
    competitor's attack.

  . Design. Design services are intended to increase the sales of products or
    services through the design of products themselves, their packaging, the
    visual identity of companies or the architecture of business
    establishments.

  . Television sponsorship. Television sponsorship services are a relatively
    recent communications specialty and consist of associating a brand or a
    product to a television program.

  . Human resources. Human resources services are a specialty provided to
    companies for their hiring, training, promotion and related internal
    communications.

  . Multimedia interactive communication. Multimedia interactive
    communication services consist of providing communications using on-line,
    off-line and interactive multimedia.

  . Public relations. Public relations services consist of conditioning the
    public to have a positive understanding of and goodwill for a client.

Organization into four divisions

  Because our business is organized into four operating divisions, utilizing
independent brands, including Euro RSCG Worldwide and Arnold Worldwide
Partners, we are often able to represent clients with competing products and
services, which enables us to continue to expand internationally.

  The separation of our operations into four divisions also facilitates the
diversification of our investment in different types of advertising and
communications services. For example, we accomplish much of our investment in
local and regional agencies that specialize in one or more communications
services through Diversified Agencies Group. We believe ownership of these
agencies offers strong economic benefits, such as allowing us to leverage the
local and specialized services and know-how of these agencies for the benefit
of clients of our other divisions and to offer the services of the other
divisions to clients of our Diversified Agencies Group division. Recognizing
that many of these agencies cannot be successfully integrated into a
multinational agency such as Euro RSCG Worldwide or Arnold Worldwide Partners,
we have enabled these agencies to maintain their independence and identity in
our Diversified Agencies Group. As a result, this operating structure allows us
to realize the economic benefits of ownership of integrated multinational
advertising and communications firms such as Euro RSCG Worldwide and of
specialized local and regional firms such as those comprising Diversified
Agencies Group.

  Set forth below is a summary of each of our four divisions.


                                       12
<PAGE>

Euro RSCG Worldwide

  Overview. Our Euro RSCG Worldwide division was founded in 1991 and is our
principal international brand. In less than a decade, the division has
progressively expanded into an international network of agencies. This has been
accomplished primarily through acquisitions of independent local agencies
around the world. As of May 31, 2001, the network consisted of over 190
agencies in over 65 countries. Euro RSCG Worldwide was ranked by Advertising
Age as the fifth largest advertising agency network worldwide in April 2001,
based on 2000 revenues.

  Euro RSCG Worldwide offers a full range of communications services necessary
to support major international clients. Traditional advertising historically
has been the network's main activity, but now accounts for less than half of
Euro RSCG Worldwide's business as its agencies have become increasingly active
in marketing, healthcare communications, public relations and interactive
communications.

  The network's decentralized management style reflects Euro RSCG Worldwide's
historical development from a loose federation of local agencies into a global
multicultural network. Agencies typically retain their local management and
branding, and, in many cases, local management retains a minority equity stake
in the agencies. To insure coordination between agencies, Euro RSCG Worldwide
has in place a small group of managers, each responsible for a geographic
region or activity sector. Global brand directors are solely dedicated to the
relationship with a particular client and for channeling the network's
resources to service the global needs of that client. To improve exchanges and
enable more rapid communication between the agencies, in 1997 our Euro RSCG
Worldwide network developed and launched StarLink, a sophisticated intranet
tool that links all members of Euro RSCG Worldwide and their clients with the
goal of globally coordinating Euro RSCG Worldwide's delivery of client
services.

  Euro RSCG Worldwide formed an interactive business, Euro RSCG Interaction, in
1998. We organized Euro RSCG Interaction to take advantage of the growing
Internet advertising market by offering interactive expertise across multiple
disciplines. Euro RSCG Interaction specializes in digital production,
entertainment and third party content, e-commerce, dot.com brand building,
database analysis and management and interactive television. Utilizing
integrated digital media, Euro RSCG Interaction seeks to provide creative
integrated business solutions and overall brand communications strategies for
clients. As of May 31, 2001, Euro RSCG Interaction had 45 offices in 26
countries.

  In May 1999, Euro RSCG Worldwide launched Euro RSCG Marketing Services, a
network designed to better coordinate the marketing services furnished by our
Euro RSCG Worldwide agencies and strengthen their ability to provide global
creative solutions. Following our acquisition of Snyder Communications in
September 2000, we added Snyder Communications' Bounty SCA Worldwide agency,
which provides marketing services and sales promotion, to our Euro RSCG
Worldwide network. As of May 31, 2001, our Euro RSCG Worldwide network included
more than 75 agencies in 35 countries which provide direct marketing and
related services.

  Strategic Expansion. Euro RSCG Worldwide is in the process of a strategic
expansion, both geographically and through the development of particular
communications services, that is intended to further enhance its position among
the world's five largest advertising agency networks, as ranked by Advertising
Age based on 2000 revenues.

  Euro RSCG Worldwide intends to continue to expand its operations
geographically, primarily through selective acquisitions. In the United States
and Europe, this expansion is expected to occur through acquisitions of
agencies whose specialties and client bases will complement Euro RSCG
Worldwide's existing offerings and client bases in those markets. Euro RSCG
Worldwide also intends to continue expansion in the Asia-Pacific region.
Although this region has recently experienced an economic downturn, we believe
that further expansion may be possible in the near future. In addition, Euro
RSCG Worldwide intends to continue expansion throughout Latin America while
also developing its marketing services in the region. We currently expect such
expansion in the Asia-Pacific region and in Latin America primarily to occur
through selective acquisitions of compatible agencies in those regions.

                                       13
<PAGE>

  Euro RSCG Worldwide also intends to further expand its operations in the
healthcare advertising, marketing services and interactive media areas. Euro
RSCG Worldwide expects to continue to strengthen its existing network of over
40 agencies that provide advertising and communications services to the
healthcare industry through a combination of internal growth and acquisitions.
Euro RSCG Worldwide currently intends to increase its presence in marketing
services through the acquisition of integrated direct marketing activities that
are capable of establishing and managing direct contact with consumers. Euro
RSCG Worldwide also intends to strengthen its interactive media services
offerings through internal growth and also through selective acquisitions.

Arnold Worldwide Partners

  Overview. Following our acquisition of Snyder Communications, we combined
Snyder Communications' Arnold Communications advertising agency with our former
"Campus" network and moved the headquarters of the division from Paris to
Boston to create "Arnold Worldwide Partners." As of May 31, 2001, our Arnold
Worldwide Partners network consisted of 12 advertising agencies in Europe, the
United States, Canada, Brazil and Australia. These agencies primarily focus on
general advertising services, emphasize creative work product and seek to
establish a strong local identity in the markets they serve. Arnold Worldwide
Partners' approach to managing projects involves using a team of advertising
experts in the country of origin of the project to develop a multinational
advertising campaign that is carefully coordinated with our other Arnold
Worldwide Partners agencies. As a result, we believe that Arnold Worldwide
Partners agencies provide high quality creative work and precise and rapid
international coordination. Although, as discussed below, our Arnold Worldwide
Partners division currently intends to expand in the near future, we expect the
geographic coverage of Arnold Worldwide Partners to remain limited to the
countries with the most advertising activity in order to best address the needs
of its target clients, major global advertisers.

  Strategic Expansion. Arnold Worldwide Partners currently intends to expand
its operations through selective acquisition of agencies in each of the United
States, Latin America and the Asia-Pacific region. Arnold Worldwide Partners
intends to target agencies that it believes are generally recognized for the
high quality of their work product and that will foster Arnold Worldwide
Partners' approach to careful coordination of multinational advertising
campaigns.

Media Planning Group

  Overview. In recent years, the media services industry has been affected by
the increasing segmentation of the media and audiences, the increasing
importance of high technology and the increasingly global needs of clients. In
response to these changes, we decided to reorganize our media operations as a
separate, autonomous operating company, with the size, geographic reach,
expertise and dedicated management we believe are required to succeed in the
industry's new environment. Accordingly, we combined our existing media
services agencies with Media Planning, S.A., a private Spanish-based media
specialist, in October 1999. We initially acquired a 45% equity interest in
Media Planning, S.A., which then changed its name to Media Planning Group. On
May 22, 2001, we acquired the remaining 55% of Media Planning Group. For a
detailed description of the creation of Media Planning Group, please see
"Operating and financial review and prospects--Creation of Media Planning
Group" beginning on page 24.

  Media Planning Group, which is headquartered in Barcelona, had more than
1,900 employees and operated in 15 countries as of May 31, 2001. We estimate
that approximately 69% of Media Planning Group's revenues in 2000 were derived
from the division's own clients, with the rest derived from clients of our
other agencies. Since its creation, our Media Planning Group has become one of
the largest media service groups worldwide. Media Planning Group is ranked by
Advertising Age, based on 2000 billings, as the eleventh largest media
specialist company in the world and the eleventh largest in the U.S.

  Strategic Expansion. In the media services industry, we believe larger media
services firms can often leverage their size by obtaining more favorable terms
for media purchases for their clients and are also better

                                       14
<PAGE>

able to analyze for their clients the effects of their planning and purchasing
of media due to their greater resources. As a result of these considerations,
Media Planning Group intends to continue its growth by consolidating its
positions in Europe, the United States and Latin America through acquisitions
and internal growth. At the same time, Media Planning Group currently intends
to expand into the Asia-Pacific region primarily through acquisitions.

Diversified Agencies Group

  Overview. We formed our Diversified Agencies Group division in 1996.
Following our acquisition of Snyder Communications, we added Snyder
Communications' Brann Worldwide network of agencies, which provide full scale
direct marketing and sales solutions, to Diversified Agencies Group. As of May
31, 2001, Diversified Agencies Group had more than 50 agencies in 19 countries.
Unlike Euro RSCG Worldwide, Arnold Worldwide Partners or Media Planning Group,
the agencies included in our Diversified Agencies Group have maintained their
independence and identity. Although these agencies have access to the resources
of our other operating divisions, they generally operate as independent
business units, maintaining their autonomy, individual values and business
culture. We believe that they present strong economic potential for our
business generally, such as allowing us to leverage local and specialized
services and know-how of these agencies for the benefit of clients of our other
divisions and to offer the services of our other divisions to clients of the
independent agencies of Diversified Agencies Group.

  The principal services provided by Diversified Agencies Group include:

  . marketing services;

  . public relations;

  . corporate communications;

  . human resources;

  . multimedia interactive communications;

  . design; and

  . general advertising.

  Strategic Expansion. Diversified Agencies Group currently intends to continue
selectively acquiring agencies seeking the support of a larger firm such as
Havas Advertising while maintaining their autonomy. Diversified Agencies Group
intends to acquire independent agencies that are generally recognized within
the industry in their markets for the quality of their services and that
specialize in marketing services, multimedia interactive communications,
design, public relations, human resources or recruiting advertising. In
addition, we believe that sports may become a more important media in the
future. We believe this market is currently experiencing very strong expansion
worldwide in areas such as sponsoring, consulting activities and the creation
and organization of sporting events. In June 1999, Diversified Agencies Group
created Havas Advertising Sports to offer sports media services to sports
institutions, federations, clubs, broadcasters and advertisers. Diversified
Agencies Group also intends to focus on expanding geographically, including in
the United States and continental Europe, primarily through selective
acquisitions.

Seasonality

  Our business is subject to seasonal effects and we have generally experienced
the greatest level of business, both in terms of revenue and earnings, in the
fourth quarter of each year.

Competition

  The advertising and communications services industry is highly competitive,
and we expect it to remain so. At the holding company level, our principal
competitors are other large multinational marketing and

                                       15
<PAGE>

communications companies, including WPP Group, Omnicom Group, The Interpublic
Group of Companies, Publicis, BMD, Dentsu, True North Communications, Grey
Global Group and Hakuhodo. The actual competition for clients, however,
generally takes place at the agency level. Our principal agency networks in the
advertising industry are Euro RSCG Worldwide and Arnold Worldwide Partners,
which compete with other similar multinational agencies and networks of
agencies, including BBDO, DDB Needham, McCann Erickson, Leo Burnett, Young &
Rubicam, Dentsu, J. Walter Thompson, Lowe Lintas, Grey Advertising, as well as
numerous smaller agencies that operate only in regional or local markets. In
addition, we compete with divisions of large multinational marketing and
communications companies as well as specialized media buying and planning
companies for media planning and buying clients.

  We must compete with these other companies and agencies to maintain existing
client relationships and to obtain new clients and assignments. In addition,
some clients require agencies to compete for business at mandatory periodic
intervals. We believe that we compete principally on the basis of the following
factors:

  . creative reputation;

  . knowledge of media;

  . quality and breadth of services;

  . experience and expertise in interactive services;

  . geographic coverage and diversity;

  . relationships with clients; and

  . size and financial resources.

  Recently, we also have encountered competition from major consulting firms
which have developed practices in marketing and communications. New competitors
also include smaller companies such as systems integrators, database marketing
and modeling companies and telemarketers, which offer technological solutions
to marketing and communications issues faced by clients. In addition, the trend
among multinational companies towards consolidation of global accounts also has
required us and other companies seeking to compete effectively in the
international communications services industry to make significant investments.
These investments include additional offices and personnel around the world and
new and improved technology for linking these offices and people.

Intellectual property

  The name "Havas" is a registered trademark owned by Vivendi Universal
Publishing. Since 1996, we have licensed the use of the name "Havas
Advertising" from Vivendi Universal Publishing under annual license agreements.
We paid Vivendi Universal Publishing an annual royalty of approximately
(Euro)305,000 under the license agreement for 2000, which expired on December
31, 2000. We currently are negotiating with Vivendi Universal Publishing for
the right to continue to use the name "Havas Advertising". Vivendi Universal
Publishing has registered, or is in the process of registering, the name
"Havas" in more than 65 countries.


  We have trademark protections at each of our four division levels. Our "Euro
RSCG Worldwide" name is a registered trademark owned by Euro RSCG Worldwide and
is registered, or in the process of being registered, in more than 75
countries. Our "Arnold Worldwide Partners" name is a registered trademark owned
by Arnold Worldwide Partners and is registered, or in the process of being
registered, in 9 countries and the European Union. Our "Media Planning Group"
name is a registered trademark owned by Media Planning Group and is registered,
or in the process of being registered, in 11 countries and the European Union.
Registration and maintenance of intellectual property protection for the
individual agencies within our Diversified Agencies Group division are handled
on an agency-by-agency basis.

                                       16
<PAGE>

Government regulation

  Our business is subject to government regulation, both within and outside the
United States. In the United States and abroad, federal, state and local
governments and their agencies and various consumer groups have directly or
indirectly affected or attempted to affect the scope, content and manner of
presentation of advertising. The continued activity by government and by
consumer groups regarding advertising may cause further change in advertising
practices in coming years.

  As the owner of advertising agencies operating in the United States which
create and place print and Internet advertisements, our business is subject to
Sections 5 and 12 of the U.S. Federal Trade Commission Act. These sections
regulate advertising in all media, including the Internet, and require
advertisers and advertising agencies to have substantiation for advertising
claims before disseminating advertisements. In the event that any advertising
that we have created is found to be false, deceptive, unfair, or misleading,
the Federal Trade Commission Act could potentially subject us to liability.

  In France, media buying activities are subject to specific regulations
following the adoption in 1993 of Law No. 93-122, known as the "Loi Sapin." The
Loi Sapin, the objective of which is to encourage greater transparency in media
buying dealings, has profoundly redefined long-standing practices in the media
industry in France and in particular the traditional role of advertising
agencies. Prior to the adoption of the Loi Sapin, agencies acted as
intermediaries between advertisers and media providers. Since the introduction
of the Loi Sapin, agencies must act as agents for advertisers. As a result,
agencies are no longer able to purchase advertising space from media providers
and then resell the space on different terms to advertisers. In addition, media
providers must bill advertisers directly for advertising space and agencies
cannot receive any commissions or discounts directly from media providers. The
Loi Sapin only applies in France and in situations where both the media
provider and the advertiser or the agency are French or located in France. The
Loi Sapin has had in the past, and continues to have, a significant negative
financial impact on our media buying activities in France. We are not aware of
any existing, or contemplated, similar legislation in the other countries in
which we currently operate.

  Various U.S. federal, state and foreign governments and agencies have
recently proposed limitations on the collection and use of personal information
regarding Internet users. In October 1998, the European Union Data Protection
Directive became effective. This Directive limits the collection and use of
personal information from Europeans both on and off the Internet. This
Directive will also be implemented through national legislation by the EU
Member States. In addition to government activity, a number of industry and
privacy advocacy groups are considering various new, additional or different
self-regulatory standards. Due to our significant marketing services, which
rely on the collection and use of client data, this scrutiny, and any
legislation, regulations or standards promulgated, may have a material adverse
impact on our business.

Employees and labor relations

  Our business is highly dependent upon the skills of our creative, research,
media and account personnel and their relationships with our clients. In
France, our employees generally have employment contracts, many of which
contain covenants not to compete. Our senior management employees also are
generally bound by covenants not to compete. However, our remaining employees
generally are not subject to covenants not to compete and are, therefore,
typically able to move within the industry with relative ease. Competition with
our competitors for qualified personnel is intense, and we, like our principal
competitors, are vulnerable to any failure to attract or retain qualified
personnel. We believe the compensation arrangements for our key employees are
highly competitive with those of other advertising and communications services
companies.

                                       17
<PAGE>

  The total number of employees and the geographic breakdown of employees set
forth in the table below is based on the average number of employees employed
during the year by each agency that was included in our worldwide network as of
December 31, 1998, 1999 and 2000, respectively.

<TABLE>
<CAPTION>
                                       Total Number               Asia    Latin
Year Ended December 31,                of Employees Europe U.S.  Pacific America
-----------------------                ------------ ------ ----- ------- -------
<S>                                    <C>          <C>    <C>   <C>     <C>
1998..................................     8,451     5,331 1,956    776    388
1999(1)...............................    11,967     7,154 2,626  1,301    886
2000(1)...............................    21,500    11,600 7,100  1,900    900
</TABLE>
--------
(1) Includes Media Planning Group

  None of our U.S. employees are covered by any collective bargaining
agreements or similar arrangements. In Europe, membership of our employees in
labor unions varies from country to country, and a number of countries prohibit
us from keeping records of union membership. We are subject to various
collective bargaining agreements in Europe. In most continental European
countries, collective bargaining agreements are imposed by law on the entire
industry.

  Our principal collective bargaining agreements are as follows:

<TABLE>
<CAPTION>
                                                  Number of
                                                   Covered
   Country                                        Employees  Expiration Date
   -------                                        ---------  ---------------
   <S>                                            <C>       <C>
   Argentina.....................................    111    No expiration
   Austria.......................................     35    December 31, 2001
   Belgium.......................................    248    No expiration
   France........................................  3,247    No expiration
   Italy.........................................    155    December 31, 2002
   Portugal......................................    133    No expiration
   Portugal......................................    124    December 31, 2001
   Spain.........................................    895    December 31, 2000(1)
</TABLE>
--------
(1) A new collective bargaining agreement is currently being negotiated. The
    existing agreement has been extended pending the outcome of the
    negotiations.

Properties

  We operate in more than 65 countries. In each location, we generally lease
office properties, although in a few locations we own our office properties.

  Our headquarters are located in Levallois-Perret, France, where we occupy
approximately 294,000 square feet, for a base annual rent of (Euro)7.3 million
for 2000 and (Euro)7.4 million for 2001. Our lease expires on December 31,
2002.

  Our Euro RSCG Worldwide division headquarters are located in New York, New
York, where we occupy approximately 129,369 square feet for an annual rent of
$3.0 million through August 31, 2000, $3.7 million through December 31, 2003
and $4.1 million through December 31, 2007. The lessee under the lease is one
of our wholly-owned subsidiaries and we have guaranteed our subsidiary's
obligations under the lease. The lease expires on December 31, 2007.

  In addition to these leases, we have entered into leases for our principal
offices located in the United States, the United Kingdom and France. In the
United States, we lease properties in New York City and Mineola, New York;
Murray Hill, New Jersey; Baltimore; Seattle; Washington, D.C.; Atlanta; Boston;
Dallas; Chicago and Deerfield, Illinois; San Francisco; Salt Lake City;
Pittsburgh; Wilton and Danbury, Connecticut; and Richmond, Virginia for an
aggregate current annual base rent of (Euro)49.9 million, excluding Euro RSCG

                                       18
<PAGE>

Worldwide's headquarters. The leases for our U.S. offices expire at various
dates ranging from April 30, 2002 to November 31, 2014. In the United Kingdom,
we lease properties in London, Birmingham, Glasgow, Kent, Manchester,
Nottingham, Bristol, Newcastle, Edinburgh, Cirencester, Diss, Borehamwood and
Cardiff, for an aggregate current annual base rent of (Euro)12.7 million. Our
U.K. leases expire at various dates ranging from September 29, 2001 to March
25, 2015. In France, we lease property in Paris and its suburbs, Bordeaux,
Lyon, Rennes, Lille, Reims, Tours, Toulouse, Annecy, Strasbourg, Marseille,
Montpelier, Nice, Metz and Roubaix, for an aggregate current annual base rent
of (Euro)3.7 million, excluding our company headquarters. Our French leases
expire at various dates ranging from December 31, 2001 to December 31, 2008. In
all other countries where we lease office properties, the aggregate annual base
rent to be paid during 2001 was approximately (Euro)17.4 million.

  We believe that all of our facilities are suitable for their use, and that we
generally have sufficient space for our existing needs and expected near-term
growth.

                                       19
<PAGE>

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

  On January 1, 1999, the euro was introduced as the common legal currency of
the 11 member states of the European Economic and Monetary Union, including
France. We have adopted the euro as our reporting currency and restated our
consolidated financial statements in euro for prior years based on the fixed
exchange rate between French francs and the euro applicable as of January 1,
1999 ((Euro)1.00 = FF6.55957). Although our consolidated financial statements
depict the same trends as would have been shown had they been presented in
French francs, they may not be directly comparable to the consolidated
financial statements of other companies that have also been restated in euro.
Prior to the adoption of the euro, the currencies of other countries fluctuated
against the French franc, but because the euro did not exist prior to January
1, 1999, historical exchange rates for the euro are not available.
Consequently, comparison of our consolidated financial statements and those of
another company that had historically used a reporting currency other than the
French franc that takes into account actual fluctuations in exchange rates
could give a much different impression than a comparison of our consolidated
financial statements and those of another company translated into euro. For
further information, see "Exchange Rate Information" and Note 2 to our 2000
consolidated financial statements on page F-7.

  The following discussion of our results of operations and financial condition
should be read together with our consolidated financial statements and the
accompanying notes included elsewhere in this annual report. In order to
facilitate comparison with other groups in the advertising industry, our
financial statements included in this annual report have been restated using
U.S. GAAP.

Overview

  We operate in one business segment, communications services. We offer a
complete line of communications services, including general advertising, direct
marketing, media planning and buying, corporate communications, sales
promotion, design, human resources, multimedia interactive communications and
public relations. Our results of operations are not significantly dependent on
any single client or industry group.

  Our results of operations for 1998, 1999 and 2000 were impacted by the
following principal factors:

  . our acquisition of Snyder Communications in 2000;

  . the rapid implementation of our strategic acquisition plan beginning in
    late 1998, which resulted in a large number of acquisitions in North
    America, Europe, South America and the Asia-Pacific region, with a
    particular emphasis on acquisitions in the marketing services and media
    services sectors;

  . organic growth driven by the development of our main international
    brands, and the expansion of our activity with clients in the high-growth
    telecommunications, technology and healthcare sectors; and
  . the combination of our media planning and buying businesses with those of
    Media Planning, S.A., to create our new "Media Planning Group" division
    in 1999.

  On February 5, 2001, we agreed to acquire all of the issued and outstanding
shares of Circle.com, the interactive communications business of Snyder
Communications. We currently anticipate that the acquisition of the Circle.com
common stock will occur on or about June 27, 2001.

  On May 22, 2001, we increased our ownership of Media Planning Group to 100%
by acquiring the remaining 55% interest from the other shareholders of Media
Planning Group in exchange for 28.8 million Havas Advertising shares and a cash
payment of (Euro)51.1 million.

Outlook

  We expect to continue to pursue targeted acquisitions of businesses in each
of our four divisions in 2001, while also working to increase our organic
growth. We also intend to focus on increasing the relative

                                       20
<PAGE>

contribution of marketing services to our overall revenue mix and changing our
geographic revenue mix to more closely reflect the geographic breakdown of
worldwide advertising spending, primarily by increasing the portion of our
revenues from Latin America and the Asia-Pacific region.

  In the first quarter of 2001, we experienced a slowdown in the growth in
advertising spending by our clients and we expect to see slower growth in
worldwide spending on communications services by advertisers generally in 2001.
However, we currently are not able to assess the magnitude of the slowdown in
the growth of worldwide advertising spending in light of the current
uncertainty regarding how the U.S. market, which Zenith Media recently
estimated to account for approximately 44% of worldwide advertising spending,
will perform in 2001. The risk of a continued slowdown in communications
spending by advertisers in the United States may have a significant impact on
our operating results for 2001, especially since we experience our greatest
level of business in the fourth quarter of each year.

Strategic acquisition plan

  One of the key elements of our business strategy is the targeted expansion
and consolidation of our business and services in various markets worldwide.
Since late 1998, we have actively pursued this acquisition strategy. In
analyzing potential acquisitions, we evaluate the projected financial
performance of the target in terms of:

  . internal rate of return;

  . pay back period, calculated as the number of years necessary to recover
    the investment amount from free cash flow of the acquired business;

  . return on capital employed, calculated by dividing projected earnings
    before interest, taxes and amortization (EBITA) less hypothetical tax on
    that amount by the investment amount; and

  . earnings impact on our consolidated financial statements after goodwill
    amortization and interest costs on the investment amount.

  We also generally require that the creative work product of acquisition
candidates be carefully reviewed by our management to determine whether it
meets our quality, innovation and creativity standards. Our assessment is
typically based on available objective factors, like advertising awards won,
and a subjective review and analysis of the technical and artistic quality,
creativity and innovation of the work product.

  In late 1998, in 1999 and in 2000, our pursuit of this strategy resulted in a
large number of acquisitions around the world. We acquired more than 20
companies in 1998, more than 40 companies in 1999 and more than 35 companies in
2000.

  Financial impact of acquisitions. In 1998, 1999 and 2000, we paid an
aggregate of approximately (Euro)40.9 million, (Euro)255.4 million and
(Euro)2,360.2 million, respectively for the businesses we acquired, and we
acquired total goodwill of approximately (Euro)38.6 million, (Euro)263.7
million and (Euro)2,246.0 million, respectively. The total contribution of
acquired businesses to our revenues was (Euro)48.8 million in 1998, (Euro)137.0
million in 1999 and (Euro)346.6 million in 2000.

  Principal acquisitions. Most of the financial impact of our acquisitions in
2000 was attributable to our acquisition of Snyder Communications on September
26, 2000. We acquired Snyder Communications through the merger of one of our
subsidiaries into Snyder Communications. Each share of Snyder Communications
SNC common stock was exchanged for 1.3710 Havas Advertising ADSs in the
transaction. We issued a total of 100,751,047 ADSs in the transaction, valued
at (Euro)20.43 per ADS based on the average Havas Advertising closing share
price over the last four trading days prior to the closing of the transaction.
The total purchase, including acquisition costs, amounted to (Euro)2,149.8
million. We have allocated the purchase price to the assets and liabilities
acquired using our best judgment as to their respective fair values as of the
date of the acquisition. We are in the process of obtaining a fair market
valuation to determine the appropriate values of

                                       21
<PAGE>

other intangibles such as trade names, workforce and customer lists from an
independent valuation firm. We have estimated that approximately (Euro)338.9
million of the purchase price will be attributed to such other intangibles to
be amortized over a period of 10 years, generating a deferred tax liability of
(Euro)135.6 million. The residual goodwill has been allocated between the SNC
and Circle.com business units, in an amount of (Euro)1,862.3 million and
(Euro)17.0 million, respectively, based on the relative market capitalization
of the SNC common stock and the Circle.com common stock at September 22, 2000,
and is amortized over 40 years for SNC and 7 years for Circle.com. The
acquisition of Snyder Communications contributed (Euro)210.6 million to our
2000 revenues.

  In addition, we completed over 35 other small and medium-sized acquisitions
in 2000 in the United States, Canada, Europe and Asia. We paid total cash
consideration in 2000 for these other acquisitions of (Euro)210.4 million,
resulting in (Euro)163.4 million of goodwill that will be amortized over 40
years. These acquisitions contributed (Euro)136.0 million to our 2000 revenues.

  Most of the financial impact of our acquisitions in 1999 was attributable to
the following principal acquisitions:

  . In the United States, we completed two principal acquisitions in 1999.
    First, we acquired all of the assets of Jordan McGrath Case & Partners
    Inc., a U.S. company specialized in advertising and healthcare
    communications, on January 1, 1999. We have fully consolidated the
    results of Jordan McGrath operations since January 1, 1999. The total
    consideration to be paid by us for the Jordan McGrath acquisition will be
    based on the cumulative profits before taxes of Jordan McGrath from 1999
    through 2001. We made an initial cash payment of (Euro)44.1 million on
    January 1, 1999 and a cash earn out payment of approximately (Euro)15.5
    million in April 2000 based on the 1999 financial performance of Jordan
    McGrath. An additional earn out payment is possible in 2002, based on
    profits before taxes in 2000 and 2001. Second, we acquired all of the
    assets of Devon Direct Marketing and Advertising, Inc., a U.S. company
    specialized in marketing services, on September 27, 1999. We have fully
    consolidated the results of Devon Direct operations since July 1, 1999.
    The total consideration to be paid by us for the Devon Direct acquisition
    will be based on the profit before taxes of Devon Direct for the years
    1999 through 2002. We made an initial cash payment of (Euro)44.4 million
    on September 27, 1999. Earn out payments are possible in 2001, 2002 and
    2003 based on profit before taxes for the preceding fiscal years.
    Goodwill from the Jordan McGrath acquisition was (Euro)45.1 million, and
    from the Devon Direct acquisition was (Euro)41.8 million, each of which
    will be amortized over 40 years. These acquisitions contributed
    (Euro)53.1 million to our 1999 revenues.

  . In Europe, we acquired all of the outstanding shares of Lopex Plc, a
    U.K.-based marketing services and public relations firm, following a
    public tender offer in cash of 120 pence per share, valuing Lopex at
    approximately (Euro)100 million. Our cash tender offer price represented
    a 20% premium above a competing tender offer, and a 27% premium over the
    closing share price of Lopex on the day before the offer. This tender
    offer price was established based on our estimate of the minimum price
    necessary to win the bidding contest for Lopex and our determination that
    Lopex would meet our minimum financial criteria for acquisitions at that
    price. This acquisition was accounted for as a purchase as of July 1,
    1999. We paid total consideration, including acquisition costs, of
    approximately (Euro)110.8 million. Goodwill from this acquisition was
    (Euro)120.5 million, which will be amortized over 40 years. Lopex
    contributed (Euro)35.1 million to our 1999 revenues.

  In addition, we completed approximately 40 other small and medium-sized
acquisitions in 1999 in the United States, Europe, Asia and Latin America, most
of them in marketing services. We paid total cash consideration in 1999 for
these acquisitions of (Euro)56.1 million, resulting in (Euro)56.4 million of
goodwill that will be amortized over 40 years. These acquisitions contributed
(Euro)47.5 million to our 1999 revenues.

  Most of the financial impact of our acquisitions in 1998 was attributable to
over 20 small and medium-sized acquisitions in the United States, Canada,
Europe, Pacific and Latin America, primarily in the general advertising and
marketing services sectors. We paid total cash consideration in 1998 for these
acquisitions of

                                       22
<PAGE>

(Euro)40.9 million, resulting in (Euro)38.6 million of goodwill that will be
amortized over 40 years. These acquisitions contributed (Euro)48.8 million to
our 1998 revenues.

  Increase of compensation expenses under U.S. GAAP. We believe that intangible
assets constitute an essential part of the value of most acquired businesses in
the advertising industry and that these assets are by definition difficult to
evaluate. Consequently, we believe that it is important to link the acquisition
price that we pay to the actual post-acquisition performance of the acquired
business. To address this issue, our acquisition agreements have typically
included "earn out" and "buy out" clauses. Under these clauses a portion of the
acquisition price we pay over time to the sellers, in amounts that vary based
on the financial performance of the acquired business.

  We have generally used earn out clauses where we have acquired all or a fixed
portion of the shares of a company, making an initial payment to the sellers at
the time of acquisition and making subsequent "earn out" payments during an
agreed upon term of three to five years. The amount of the earn out payments
generally vary on the basis of a multiple of some measure of the financial
performance of the acquired business during the period following the
acquisition. We have generally used buy out clauses where we have initially
acquired less than all of the shares of a company. In these cases, the buy out
clause allows or obliges us to purchase additional shares at a price based on a
multiple of some measure of the financial performance of the acquired business.
The multiple generally increases over time, until the end of an agreed upon
period, typically of five years. Until recently, we have generally conditioned
earn out and buy out payment obligations on the continued employment of the
seller.

  Under U.S. GAAP, the portion of an earn out or buy out payment that is deemed
to be conditioned upon the continued employment of the seller is generally
accrued as a compensation expense over the term of the earn out or buy out
clause, as applicable. Under French GAAP as applied by us, earn out and buy out
payments were accounted for by us as additional goodwill resulting from the
purchase price of the acquired business. Consequently, the cost of most of
these earn out payments has been recharacterized in our U.S. GAAP financial
statements as compensation expense during the period of payment. These expenses
under U.S. GAAP totaled (Euro)6.7 million, (Euro)17.4 million and (Euro)16.4
million in 1998, 1999 and 2000, respectively, representing a reduction in our
earnings under U.S. GAAP compared to French GAAP of approximately 14.7% for
1998, 31.0% for 1999 and 18.3% for 2000. At December 31, 2000, total accruals
for earn out and buy out payments were (Euro)38.1 million. On the basis of our
financial performance in 2000, we estimate that the payments we will be
required to make under the earn out and buy out clauses that we had entered
into on or prior to December 31, 2000 would total (Euro)55.7 million. Actual
expense could be higher or lower, depending upon the actual financial
performance of these acquired businesses.

  We have traditionally negotiated our earn out and buy out clauses in
accordance with standard European and international market practices, without
regard to the U.S. GAAP treatment of earn out and buy out clauses. Because we
now publish accounts in U.S. GAAP, our management expects to take into
consideration that U.S. GAAP consequences in negotiating the terms of future
acquisitions, with the objective of clearly differentiating purchase price from
compensation while achieving our objective of linking the price paid for an
acquired business to the actual post-acquisition performance of that business,
without conditioning such price on the continued employment of the seller.

Creation of Media Planning Group

  Media planning and buying services have traditionally been offered by most
advertising agencies as a complement to other advertising services. In the
complexity of today's market, we believe that media planning and buying are of
tremendous importance to advertisers, should be offered as separate services
and offer high growth potential for those groups capable of providing
specialized media services to their clients.

  Accordingly, in March 1999 we entered into an agreement with the shareholders
of Media Planning, S.A., a Spanish media group, to combine our respective media
planning and buying activities to create "Media

                                       23
<PAGE>

Planning Group." We completed the transaction on October 5, 1999, as an
exchange of similar assets, in which we contributed our media planning and
buying businesses in France, the United Kingdom, Spain, Italy, the Netherlands
and the United States to Media Planning Group, a Spanish joint venture company.
At the same time, the shareholders of Media Planning, S.A. contributed to the
joint venture the media planning and buying businesses of Media Planning, S.A.
in Spain, Portugal and Latin America. The aggregate fair value of the
businesses and other assets contributed to Media Planning Group by us and Media
Planning, S.A. were (Euro)140.3 million and (Euro)171.5 million, respectively.
The valuations of the businesses contributed by us and Media Planning, S.A.
were generally based on the product of earnings before interest, taxes,
depreciation and amortization for the applicable business and a valuation
multiple which applied to both our and Media Planning, S.A.'s contributions to
Media Planning Group.

  In exchange for their respective contributions, the shareholders of Media
Planning, S.A. received an aggregate of 55% of the shares of Media Planning
Group, and we received the remaining 45%.

  Under U.S. GAAP, we have fully consolidated the businesses we contributed to
Media Planning Group for the first nine months of 1999, and we have accounted
for the 45% interest in Media Planning Group we acquired using the equity
method from September 30, 1999. However, under French GAAP, we have fully
consolidated Media Planning Group from January 1, 1999. This difference in
accounting treatment has resulted in a reduction of (Euro)35.9 million and
(Euro)167.0 million in our consolidated revenues as reported under U.S. GAAP
versus French GAAP for 1999 and 2000, respectively. Due primarily to this
difference in accounting treatment, our consolidated revenues for 1999 and 2000
under U.S. GAAP were (Euro)1,124.4 million and (Euro)1,643.6 million,
respectively, and under French GAAP were (Euro)1,208.1 million and
(Euro)1,795.6 million, respectively, representing a 6.9% reduction in revenues
for 1999 and a 8.5% reduction in revenues for 2000 under U.S. GAAP. We acquired
the remaining 55% equity interest in Media Planning Group on May 22, 2001. As a
result, we will fully consolidate the results of operations of Media Planning
Group under both French GAAP and U.S. GAAP.

  In the first nine months of 1999, the media planning and buying businesses
that we contributed to Media Planning Group had consolidated revenues of
(Euro)48.2 million. In the last three months of 1999, Media Planning Group had
net income under U.S. GAAP of (Euro)10.0 million, of which 45% or (Euro)5.0
million (after amortization of negative goodwill in the amount of (Euro)(0.5)
million) we included in our consolidated statement of income using the equity
method. On a pro forma basis assuming that Media Planning Group had been
created on January 1, 1999, its total revenues would have been (Euro)139.9
million, and its net income would have been (Euro)15.3 million, of which 45% or
(Euro)8.7 million (after amortization of negative goodwill of (Euro)(1.8)
million) would have been included in our net income. The fourth quarter net
income of Media Planning Group is more than five times the average of the first
three quarters, which reflects the ordinary seasonality of purchases of media
space as a result of commercial preparations for fourth quarter holidays and
other year-end festivities.

  In 2000, Media Planning Group had consolidated revenues of (Euro)153.9
million and net income of (Euro)16.3 million, of which 45% or (Euro)8.2 million
(after amortization of negative goodwill of (Euro)(2.3) million and other
consolidation adjustments) was included in our net income.

Seasonality

  Our business is subject to seasonal effects and we have generally experienced
the greatest level of business, both in terms of revenue and earnings, in the
fourth quarter of each year. As a result, cash, accounts receivable, accounts
payable and accrued expenses are typically higher on our year end balance sheet
than at the end of any of the preceding three quarters.

Explanation of key line items

  Net revenues. Our revenues consist of fees and commissions received from our
clients. Revenues are presented net of amounts that our clients pay to us to
cover costs that are incurred on their behalf with third parties, such as for
the purchase of television, radio or print advertising space.

                                       24
<PAGE>

  Compensation cost. Our compensation cost consists principally of salaries,
bonuses and benefits to employees. Compensation cost does not include payments
made under earn out or buy out clauses to employees who were stockholders of
businesses we acquired. These costs are accounted for as "Compensation to
former stockholders of subsidiaries." Compensation cost does include all other
compensation paid or payable to such individuals.

  Compensation to former stockholders of subsidiaries. This item consists of
earn out and buy out payments made or accrued to employees who were
stockholders of businesses we acquired and conditioned on the continued
employment of those employees.

  Amortization of goodwill and other intangibles. This item consists primarily
of the amortization over a fixed period, generally 40 years, of the excess of
acquisition costs over the fair value of the assets acquired and liabilities
assumed and the amortization of the value of intangibles acquired in
acquisitions over their estimated useful life. We present this item separately
on our income statement to facilitate the analysis of our earnings before
amortization.

Results of operations

 Year ended December 31, 2000 compared with year ended December 31, 1999

  Net revenues. Our net revenues were (Euro)1,643.6 million for the year ended
December 31, 2000, an increase of 46.2% compared with (Euro)1,124.4 million for
the year ended December 31, 1999. Approximately (Euro)383.0 million of this
increase was related to revenues of businesses acquired in 2000 and (Euro)99.9
million of this increase was due to growth of our existing businesses,
excluding the effects of currency fluctuations and excluding revenues from
businesses sold or otherwise disposed of in 2000. Our revenues in 2000 were
also positively impacted by the increase in the value of the U.S. dollar during
the period, which had the effect of increasing the value as reported in euro of
our U.S. dollar-denominated revenues by (Euro)55.1 million.

  Our internal growth reflected a number of positive developments in our
business and in our markets:

  . As a general matter, all of our activities in 2000 and in 1999 benefited
    from increases in advertising budgets worldwide, reflecting the favorable
    economic conditions prevailing in most of our major geographic markets.

  . In 2000, we gained a number of major new client accounts, including CNN,
    ING, Skyteam and Alberto Culver (VO5) by Euro RSCG Worldwide, BMW Minicar
    and Monster.com by Arnold Worldwide Partners, and Fleet Bank USA, Chandon
    and Orange by Diversified Agencies Group. We did not lose any clients in
    2000 that individually had accounted for a significant portion of our
    revenues in the prior year. However, Philips, a significant client of
    Euro RSCG Worldwide, informed us in 2000 that it was moving its account,
    effective as of the third quarter of 2001.

  . In 2000, we continued our strategy of pursuing new business from clients
    in growth industries, such as telecommunications, technology, financial
    services, media and healthcare. In 2000, we estimate on the basis of our
    unaudited management accounts that customers in these industries
    accounted for approximately 50% of our total revenues.

  . We continued to experience growth in demand for our interactive services
    in 2000. We place great strategic importance on these activities as part
    of our integrated communications services offered to clients.

  For a discussion of our external growth activities in 2000 and 1999 see "--
Strategic acquisition plan" above.

  Geographic breakdown of revenues. The following table sets forth a geographic
breakdown of our revenues expressed as a percentage of total revenues for 1999
and 2000. The revenues for 1999 in the table

                                       25
<PAGE>

below include the revenues derived from the businesses we contributed to Media
Planning Group for the first nine months of 1999. However, the table below does
not include the results of the newly created Media Planning Group and does not
include the results of Snyder Communications prior to its acquisition by us on
September 26, 2000. For a pro forma presentation of our 1999 and 2000 results,
you should refer to the disclosure we provided in our Registration Statement on
Form F-4, File No. 333-59880. In preparing this table, we have allocated
revenues to the country or region of the subsidiary realizing the revenues:

<TABLE>
<CAPTION>
   Region                                                            1999  2000
   ------                                                            ----  ----
   <S>                                                               <C>   <C>
   France........................................................... 25.9% 19.6%
   Europe (excluding France)........................................ 31.5% 31.9%
   North America.................................................... 33.4% 39.4%
   Asia Pacific.....................................................  5.4%  5.3%
   Latin America....................................................  3.8%  3.8%
</TABLE>

  In 2000 as in 1999, North America, Europe (excluding France) and France
remained our most important regions in terms of revenues. The substantial
increase in revenues derived from North America and Europe (excluding France)
as compared to France was primarily attributable to an increase in U.S.
revenues of (Euro)266.9 million, and an increase in U.K. revenues of
(Euro)131.2 million. The increase in U.S. revenues was primarily attributable
to acquisitions, including the acquisition of Snyder Communications, and to the
strength of the U.S. dollar relative to the euro. The increase in U.K. revenues
was primarily attributable to acquisitions, including the acquisition of Snyder
Communications, and to strong organic growth.

  Compensation cost and stock based compensation. Compensation cost and stock
based compensation was (Euro)946.4 million for the year ended December 31,
2000, an increase of 42.6% compared with (Euro)664.0 million for the year ended
December 31, 1999. (Euro)183.3 million of this increase was a result of new
businesses acquired during this time period and (Euro)99.1 million of this
increase reflected an increase in work volume in existing businesses. As a
percentage of revenues, compensation cost and stock based compensation
decreased to 57.6% for the year ended December 31, 2000 from 59.1% for the year
ended December 31, 1999. This decrease was primarily attributable to the above-
average operating efficiency of a number of new businesses acquired in 2000,
which in the aggregate had compensation cost and stock based compensation
representing 47.9% of revenues for 2000.

  General and administrative non-payroll costs. General and administrative non-
payroll costs were (Euro)516.9 million for the year ended December 31, 2000, an
increase of 47.9% compared with (Euro)349.4 million for the year ended December
31, 1999. (Euro)148.7 million of this increase reflected the cost of
integrating newly-acquired businesses and (Euro)18.8 million of this increase
reflected the overall increase in our billings in our existing businesses in
2000. Expressed as a percentage of total revenues, general and administrative
non-payroll costs were 31.5% for the year ended December 31, 2000 compared with
31.0% for the year ended December 31, 1999.

  Compensation to former stockholders of subsidiaries. Compensation to former
stockholders of acquired businesses was (Euro)16.4 million for the year ended
December 31, 2000, a decrease of 6.2% compared with (Euro)17.4 million for the
year ended December 31, 1999. This decrease was primarily due to a reduction in
the number of earn out or buy out payments recognized as compensation expense
under U.S. GAAP. Under French GAAP, this compensation was allocated directly to
goodwill with an impact on our operating income spread over the goodwill
amortization period.

  Amortization of goodwill and other intangibles. Amortization of goodwill and
other intangibles was (Euro)49.4 million for the year ended December 31, 2000,
an increase of 140.1% compared with (Euro)20.6 million for the year ended
December 31, 1999. This increase was primarily the result of the acquisition of
Snyder Communications and the large number of other acquisitions during 2000,
as well as acquisitions during 1999 for which 1999 amortization did not reflect
a full year of ownership of the acquired businesses.

                                       26
<PAGE>

  Interest expense. Interest expense was (Euro)52.6 million for the year ended
December 31, 2000, an increase of 86.6% compared with (Euro)28.2 million for
the year ended December 31, 1999. This increase resulted primarily from:

  . an increase of (Euro)9.6 million due to borrowings under a $400 million
    multicurrency 364 day term loan facility we entered into in May 2000;

  . an increase of (Euro)6.6 million related to debt acquired in the Snyder
    Communications acquisition;

  . an increase of (Euro)4.3 million due to the issuance by Evelink plc, our
    indirect, wholly owned subsidiary, of a (Pounds)40 million convertible
    bond in January 2000; and

  . an increase of (Euro)1.0 million due to a (Euro)38 million term loan we
    entered into in January 2000.

  Interest income. Interest income was (Euro)29.5 million for the year ended
December 31, 2000, an increase of 12.7% compared with (Euro)26.2 million for
the year ended December 31, 1999. This increase resulted primarily from
increased interest income recognized by subsidiaries with positive cash
positions in 2000.

  Provision for income taxes. Provision for income taxes was (Euro)62.2 million
for the year ended December 31, 2000, an increase of 58.1% compared with
(Euro)39.4 million for the year ended December 31, 1999. (Euro)12.3 million of
this increase was a result of acquisitions, and (Euro)10.5 million of this
increase resulted from the general increase in our earnings worldwide. Our
effective tax rate for the year ended December 31, 2000 was 66.4%.

  Minority interests. Minority interests were (Euro)9.9 million for the year
ended December 31, 2000, a decrease of 35.8% compared with (Euro)15.5 million
for the year ended December 31, 1999. This decrease is primarily due to the
losses of Circle.com attributable to the holders of Circle.com common stock. In
more than two-thirds of the acquisitions we made during 2000, and more than
half of the acquisitions during 1999, the prior owners of the acquired
businesses retained an equity interest in these businesses.

  Net income. As a result of the foregoing, our net income improved to
(Euro)29.4 million for the year ended December 31, 2000, an increase of 16.7%
compared with (Euro)25.2 million for the year ended December 31, 1999.

 Year ended December 31, 1999 compared with year ended December 31, 1998

  Net revenues. Our net revenues for the year ended December 31, 1999 were
(Euro)1,124.4 million, an increase of 28.8% compared with net revenues of
(Euro)872.8 million for the year ended December 31, 1998. Management estimates
that (Euro)137.0 million of this increase was driven by acquisitions during
1999, and that (Euro)117.4 million of this increase was driven by internal
growth in revenues of our existing businesses, excluding the effects of
currency fluctuations and excluding revenues from businesses sold or otherwise
disposed of in 1999. Our revenues in 1999 were also positively impacted by the
increase in the value of the U.S. dollar during the course of 1999, which had
the effect of increasing the value in euro of our U.S. dollar-denominated
revenues by (Euro)11.4 million.

  Our internal growth reflected a number of positive developments in our
business and in our markets:

  . As a general matter, all of our activities in 1998 and in 1999 benefited
    from increases in advertising budgets worldwide, reflecting the favorable
    economic conditions prevailing in most of our major geographic markets.

  . In 1999, we gained a number of major new client accounts, including Air
    France, Telefonica, Novartis and Microsoft Europe by Euro RSCG Worldwide,
    Alcatel and Dreamcast by Campus, and Liberty Surf, Virgin Net, Virgin
    Atlantic and Sky TV by Diversified Agencies Group. We did not lose any
    clients in 1999 that individually had accounted for a significant portion
    of our revenues in the prior year.

  . In 1999, we derived an increasingly larger portion of our revenues from
    clients in high growth businesses such as telecommunications, technology,
    financial services, media and healthcare. We

                                       27
<PAGE>

   estimate on the basis of our unaudited management accounts that customers
   in these industries accounted for approximately 53.0% of our total
   revenues in 1999 compared with approximately 49.0% in 1998.

  . In 1999 and 1998, the industry experienced tremendous growth in demand
    for interactive services. For example, Universal McCann estimates that
    U.S. expenditures on interactive services increased by 75% in 1999. We
    place great strategic importance on these activities and, in 1998 and
    1999, focused on developing our ability to provide interactive services,
    primarily through strategic acquisitions. In February 2000, Adweek named
    Euro RSCG Worldwide among the top ten agencies in the world for such
    services, based on projected 1999 revenues.

  For a discussion of our external growth activities in 1998 and 1999, see "--
Strategic acquisition plan" above.

  Geographic breakdown of revenues. The following table sets forth a geographic
breakdown of our revenues expressed as a percentage of total revenues for 1998
and 1999. The revenues for 1999 in the table below include the revenues derived
from the businesses we contributed to Media Planning Group for the first nine
months of 1999. However, the table below does not include the results of the
newly created Media Planning Group. For a pro forma presentation of our 1999
results, giving effect to the creation of Media Planning Group as of January 1,
1999 and assuming that Media Planning Group had been fully consolidated, you
should refer to the disclosure we provided in our Registration Statement on
Form F-4, File No. 333-59880. In preparing this table, we have allocated
revenues to the country or region of the subsidiary realizing the revenues:

<TABLE>
<CAPTION>
   Region                                                            1998  1999
   ------                                                            ----  ----
   <S>                                                               <C>   <C>
   France........................................................... 30.4% 25.9%
   Rest of Europe................................................... 30.0% 31.5%
   North America.................................................... 30.8% 33.4%
   Asia Pacific.....................................................  4.9%  5.4%
   Latin America....................................................  3.9%  3.8%
</TABLE>

  In 1999 as in 1998, the United States, France and the rest of Europe remained
our most important regions in terms of revenues. The substantial increase in
revenues derived from the U.S. and the rest of Europe as compared to France was
primarily attributable to an increase in U.S. revenues of (Euro)100.8 million,
and an increase in U.K. revenues of (Euro)61.5 million.

  Compensation cost and stock based compensation. Compensation cost and stock
based compensation was (Euro)664.0 million for the year ended December 31,
1999, an increase of 23.0% compared with compensation cost and stock based
compensation of (Euro)539.7 million for the year ended December 31, 1998.
(Euro)74.1 million of this increase reflected new businesses acquired and
(Euro)50.2 million of this increase reflected an increase in work volume in our
existing businesses. As a percentage of revenues, compensation cost and stock
based compensation decreased from 61.7% for the year ended December 31, 1998 to
59.0% for the year ended December 31, 1999. We believe this decrease was
primarily attributable to the above-average operating efficiency of a number of
the new businesses acquired in 1999, which in the aggregate had compensation
cost and stock based compensation representing 54% of revenues for 1999, and to
increased productivity in our existing businesses, which in the aggregate had
compensation cost and stock based compensation representing 59.7% of revenues.

  General and administrative non-payroll costs. General and administrative non-
payroll costs were (Euro)349.4 million for the year ended December 31, 1999, an
increase of 29.2% compared with general and administrative non-payroll costs of
(Euro)270.4 million for the year ended December 31, 1998. (Euro)41.2 million of
this increase reflected the cost of integrating newly-acquired businesses and
(Euro)37.8 million of this increase reflected the overall increase in our
billings in our existing businesses in 1999. Expressed as a percentage of total
revenues, general and administrative non-payroll costs were stable at 31.0% in
both 1999 and 1998.

                                       28
<PAGE>

  Compensation to former stockholders of subsidiaries. Compensation to former
stockholders of subsidiaries was (Euro)17.4 million for the year ended December
31, 1999, an increase of 159.7% compared with (Euro)6.7 million for the year
ended December 31, 1998. This increase was principally attributable to the
substantial acceleration in 1999 of acquisitions made under our strategic
acquisition plan. (Euro)5.6 million of this increase resulted from new
acquisitions in 1999. Under French GAAP, this compensation was allocated
directly to goodwill with an impact on our operating income spread over the
goodwill amortization period.

  Amortization of goodwill. Amortization of goodwill was (Euro)20.6 million for
the year ended December 31, 1999, an increase of 28% compared with amortization
of goodwill of (Euro)16.1 million for the year ended December 31, 1998. This
increase was attributable to the large number of acquisitions we made in 1999
under our strategic acquisition plan. Amortization of goodwill from businesses
acquired in 1999 will increase in 2000, as 1999 amortization did not reflect a
full year of our ownership of these businesses.

  Interest expense. Interest expense was (Euro)28.2 million for the year ended
December 31, 1999, a decrease of 7% compared with interest expense of
(Euro)30.4 million for the year ended December 31, 1998. This decrease resulted
primarily from a decrease of (Euro)3.4 million due to the conversion in July
1998 of (Euro)149.4 million of convertible bonds originally issued in 1992 and
1994 into Havas Advertising shares, a decrease of (Euro)3.0 million due to a
reduction in other financial debt, and an increase of (Euro)4.2 million due to
the issuance in 1999 of (Euro)230.0 million of convertible bonds at a lower
rate of interest.

  Interest income. Interest income was (Euro)26.2 million for the year ended
December 31, 1999, an increase of 26.0% compared with (Euro)20.8 million for
the year ended December 31, 1998. The improvement in interest income in 1999
resulted from an increase of (Euro)3.2 million due to increased interest income
in subsidiaries with positive cash positions in 1999 and an increase of
(Euro)2.2 million due to a (Euro)230.0 million increase in cash following the
issuance in 1999 of convertible bonds and before this additional cash was used
to pay for acquisitions.

  Provision for income taxes. Provision for income taxes was (Euro)39.4 million
for the year ended December 31, 1999, an increase of 16.5% compared with
(Euro)33.8 million for the year ended December 31, 1998. (Euro)4.1 million of
this increase was due to an increase in taxes paid outside of France as a
result of acquisitions, and (Euro)1.5 million of this increase resulted from
the general increase in our earnings worldwide. Our effective tax rate for the
year ended December 31, 1999 was 52.2%. We record a valuation allowance with
respect to deferred tax assets whenever we determine, based on the available
evidence, that it is more likely than not that some or all of the tax benefits
reflected in the deferred tax assets are not recoverable. In 1999, we recorded
a (Euro)4.5 million reduction of the valuation allowance on deferred tax
assets. This reduction was due primarily to the use of tax loss carryforwards
to offset tax charges resulting from better than expected results of
subsidiaries in tax jurisdictions where we had previously recorded a valuation
allowance. We had recorded this valuation allowance at December 31, 1998,
following our determination, based on projections of future results and the
history of losses of the relevant subsidiaries, that it was more likely than
not that these subsidiaries would not be able to recover the tax benefits of
their deferred tax assets.

  Minority interests. Minority interests were (Euro)15.5 million for the year
ended December 31, 1999, an increase of 66.7% compared with minority interests
of (Euro)9.3 million for the year ended December 31, 1998. In more than half of
the acquisitions we made in 1998 and 1999, the prior owners of the acquired
businesses retained an equity interest in these businesses. (Euro)2.6 million
of the increase in minority interests in 1999 was attributable to acquisitions
in 1999, and (Euro)3.6 million was attributable to growth in revenues of
previously acquired businesses.

  Net income. As a result of the foregoing, our net income improved to
(Euro)25.2 million for the year ended December 31, 1999 compared with a net
loss of (Euro)11.2 million for the year ended December 31, 1998.

                                       29
<PAGE>

Liquidity and capital resources

  Our primary sources of funds in 1998, 1999 and 2000 were:

  . cash generated from operations;

  . the issuance of (Euro)230.0 million of convertible bonds in February
    1999;

  . the issuance of (Euro)708.9 million of convertible bonds in December
    2000; and

  . a $400 million multicurrency 364 day term loan facility we entered into
    in May 2000 with Morgan Guaranty Trust Company of New York, as Agent, and
    J.P. Morgan Securities Ltd. and Societe Generale, as arrangers.

  Our primary uses of cash have been to finance our strategic acquisition
program and, in 2000, to refinance the debt assumed from Snyder Communications,
to make other cash payments required in connection with our acquisition of
Snyder Communications, and to repay in full and terminate our $400 million term
loan facility.

  Liquidity. In February 1999, we issued 1,223,405 convertible bonds due
January 1, 2004, each with a nominal value of (Euro)188, for an aggregate
principal amount of (Euro)230.0 million. We received net proceeds of
(Euro)225.4 million from this issuance. The coupon rate of the bonds is 1.0%
payable annually in arrears on the first day of January of each year, and the
gross yield to maturity is 1.759%, assuming no conversion or redemption takes
place prior to maturity. The implicit interest rate, including issue costs, is
2.18%. The bonds have a maturity date of January 1, 2004. Each bond may be
converted at any time at the option of the holder into 20 Havas Advertising
shares, subject to adjustment for transactions including mergers and
acquisitions and distributions of reserves or financial instruments, which may,
at our option, be newly-issued shares, treasury shares, or a combination
thereof. The bonds have a redemption value on maturity of (Euro)195.13 per bond
(i.e., a premium of (Euro)7.13). We have the option to redeem the bonds at any
time from January 1, 2002 until December 31, 2003, at an early redemption price
that guarantees the holder of the bond a yield to maturity equivalent to the
rate the holder of the bond would have obtained in the event of redemption at
maturity. We also have the option to redeem the bonds at par value plus accrued
interest when less than 10% of the bonds issued remain outstanding. We have
agreed not to give any other bonds any preference over the bonds, or reduce our
share capital or alter the way we allocate profits. As of May 31, 2001, 769,380
bonds had been converted into 15,387,600 of Havas Advertising shares. There is
no guarantee or other security of our obligations under the bonds.

  In June 1999, our indirect, wholly owned subsidiary, EWDB North America Inc.,
borrowed $30.0 million from Banque Nationale de Paris, New York Branch. In
connection with this loan, we agreed to deposit with Banque Nationale de Paris,
New York Branch, $30.0 million to allow the subsidiary to borrow the funds. The
loan bears interest at a rate of LIBOR plus a margin. The deposit earns
interest at a rate of LIBOR less a margin. The deposit and loan mature
simultaneously in six equal annual installments from June 4, 2001 to June 5,
2006.

  On January 19, 2000, our indirect, wholly owned subsidiary, Evelink plc,
issued a (Pounds)40 million convertible bond due July 19, 2007 to Banque
Nationale de Paris S.A. This convertible bond bears interest at the rate of 7%
per annum, and is convertible, at the option of the holder, at any time from
January 19, 2000 until January 19, 2007 into ordinary shares of Evelink plc.
The number of shares into which the bond is convertible will be determined by
dividing (Pounds)40 million by the share price of Evelink plc on the date of
conversion. Net proceeds were used primarily to refinance debt associated with
the July 2000 acquisition of Lopex Plc, and for other acquisitions and general
corporate purposes. In conjunction with this bond issuance, we agreed to pay
the holder of the bond any amounts under the bond which become due and are not
paid by Evelink plc.

  Also on January 19, 2000, Evelink plc issued a warrant to Banque Nationale de
Paris S.A. authorizing the holder of the warrant, upon payment of (Pounds)40
million, to purchase from Evelink plc 117,131 shares of Evelink plc on January
19, 2007. The right to purchase shares under the warrant will lapse in the
event that the conversion rights of the (Pounds)40 million convertible bond
issued on January 19, 2000 are exercised. In addition, our

                                       30
<PAGE>

wholly owned subsidiary, Havas Advertising International S.A., and Banque
Nationale de Paris S.A. (as the initial holder of the bond) entered into a
Forward Sale Agreement under which Havas Advertising International S.A. paid
(Pounds)25.2 million to Banque Nationale de Paris S.A. for the future purchase
of the Evelink plc shares issuable on conversion of the (Pounds)40 million
convertible bond, and Banque Nationale de Paris S.A. agreed to convert, or
arrange for a third party to convert, the (Pounds)40 million convertible bond
into shares of Evelink plc on January 19, 2007 (or prior to January 19, 2007
under some circumstances) and to sell, or arrange for a third party to sell,
those shares to Havas Advertising International S.A. The number of shares
subject to the Forward Sale Agreement will be determined by dividing (Pounds)40
million by the share price of Evelink plc on the date Banque Nationale de Paris
S.A. sells, or arranges for a third party to sell, the shares to Havas
Advertising International S.A.

  On January 25, 2000, we entered into a term loan agreement with Credit
Commercial de France and Banque Nationale de Paris in the principal amount of
(Euro)38 million. The loan bears interest at a rate of EURIBOR plus 0.275%. The
loan is payable in full on January 25, 2005. In December 2000, we used
(Euro)38.0 million of the proceeds from our December 2000 issuance of
convertible bonds to pay off and terminate this loan.

  In May 2000, we, Havas Advertising International SA, HAS Acquisition Corp.,
our wholly owned special purpose subsidiary used for the acquisition of Snyder
Communications, and EWDB North America Inc., as borrowers, entered into a $400
million multicurrency 364 day term loan facility with Morgan Guaranty Trust
Company of New York, as Agent, and J.P. Morgan Securities Ltd. and Societe
Generale, as arrangers. The rate of interest in respect of each advance under
the facility is a variable rate per annum, based on the rate shown on Telerate
page 3750 applicable to dollars, LIBOR, for advances made in dollars, or the
rate shown on Telerate page 248 applicable to euro, EURIBOR, for advances made
in euro, in each case plus a margin ranging from 0.50% to 0.65%. In July 2000,
we drew $50 million under this facility to finance acquisitions and for general
corporate purposes. In September 2000, we drew $240 million under this facility
to:

  . refinance approximately $183.5 million of borrowings of Snyder
    Communications;

  . finance the $43.4 million consideration required to cash-out stock
    options held by members of the board of directors of Snyder
    Communications as part of the Snyder Communications acquisition; and

  . finance expenses related to our acquisition of Snyder Communications and
    future general corporate expenses of Snyder Communications.

  In November 2000, we drew (Euro)50.0 million under this facility to finance
acquisitions and general corporate expenses. In December 2000, we used
(Euro)369.0 million of the proceeds from our December 2000 issuance of
convertible bonds to pay off the outstanding borrowings under the $400 million
term loan facility and terminated the facility.

  In December 2000, we issued 32,817,012 convertible bonds, each with a nominal
value of (Euro)21.60, for an aggregate principal amount of (Euro)708.0 million.
We received net proceeds of (Euro)695.0 million from this issuance. We used
proceeds from the issuance to pay off the outstanding borrowings under our
(Euro)38 million term loan agreement and our $400 million term loan facility,
and we intend to use the remaining proceeds from the placement to further
reduce borrowings and to fund future acquisitions. The coupon rate of the bonds
is 1.0%, payable annually in arrears on the first of January of each year
beginning January 1, 2002, and the gross yield to maturity is 4.25%, assuming
no conversion or redemption takes place prior to maturity. The implicit
interest rate, including issue costs, is 4.67%. The bonds have a maturity date
of January 1, 2006. Each bond may be converted at any time by the holder into
one Havas Advertising share, subject to adjustment for transactions including
mergers and acquisitions and distributions of reserves or financial
instruments, which may, at our option, be a newly-issued share, a treasury
share, or a combination thereof. The bonds have a redemption value on maturity
of (Euro)25.44 per bond, or approximately 117.78% of their nominal value. We
have the option to redeem all, but not less than all, of the outstanding bonds
between January 1, 2004 and December 31, 2005, at an early redemption price
that guarantees the holder of the bond a yield to maturity equivalent to the
rate the

                                       31
<PAGE>

holder of the bond would have obtained in the event of redemption at maturity.
We also have the option to redeem the bonds at par value plus accrued interest
when less than 10% of the bonds issued remain outstanding. We have agreed not
to give any other bonds any preference over the bonds, or reduce its share
capital or alter the way it allocates profits. As of May 31, 2001, no bonds had
been converted into Havas Advertising shares. There is no guarantee or other
security of our obligations under the bonds.

  We borrow at both fixed and variable rates. We generally do not hedge our
interest rate exposure, with the exception of the currency and interest rate
swap arrangement described above. For a discussion of our debt and lines of
credit as of December 31, 2000, please see Note 8 to our 2000 consolidated
financial statements on page F-15 of this annual report.

  As of December 31, 2000, our subsidiaries also had outstanding (Euro)96.0
million under long-term notes with U.S. banks. These loans bear interest at
rates ranging from LIBOR plus 0.175% to LIBOR plus 0.55% and mature at dates
ranging from January 7, 2002 to March 6, 2006. The borrowing subsidiaries are
subject to customary financial covenants under these notes. Examples of the
financial covenants applicable to the borrowing subsidiaries under these notes
include:

  . a ratio of total debt to earnings before interest, taxes, depreciation
    and amortization of less than 3.8 to one;

  . a ratio of earnings before interest and taxes to interest expense of
    greater than three to one;

  . a ratio of total debt to equity of less than 2.5 to one;

  . a minimum net worth of greater than $3 million;

  . a minimum current assets ratio greater than 0.95; and

  . a free cash flow to debt service ratio greater than 1.3.

  Under one of these loans, for a principal amount of (Euro)32.2 million, we
are also subject to the following financial covenants:

  . a net financial debt to operating cash flow ratio less than three; and

  . shareholders' equity greater than FF2.5 billion.

  As of December 31, 2000, our subsidiaries were also subject to (Euro)56.9
million in short-term borrowing arrangements. The weighted average interest
rate on short-term borrowings that were outstanding as of December 31, 2000 was
7.0%. Our subsidiaries were also subject to various lines of credit in an
amount equal to (Euro)127.6 million as of December 31, 2000. These lines of
credit bear interest at the prevailing market rates in the countries of the
subsidiaries.

  We and our subsidiaries are subject to restrictive covenants under the above
borrowings related to total borrowing levels at either the subsidiary level or
country level on some of their borrowings. Covenants on our debt include total
borrowing levels in some countries and minimum shareholders' consolidated
equity, among others. At December 31, 2000, EWDB North America, Inc., our
indirect, wholly owned subsidiary, did not meet the financial covenants under
one credit facility due to the level of debt incurred by it in connection with
the acquisition of Snyder Communications. However, the issuing bank agreed to a
provisory non-application of the applicable covenants and has further agreed to
issue a waiver of default. As of December 31, 2000, we were in compliance with
all other debt covenants related to the above borrowings. In addition, we
frequently guarantee significant loans of our subsidiaries.

  On May 13, 2001, all outstanding and unexercised warrants to subscribe for
Havas Advertising shares at a price of (Euro)9.15, which were originally issued
on May 13, 1998 expired. Of a total of 6,695,621 shares covered by these
warrants, 6,649,540 warrants had been exercised, resulting in the creation of
6,649,540 shares.

                                       32
<PAGE>

Cash Flows

  Year ended December 31, 2000 compared to year ended December 31, 1999. Our
net cash provided by operating activities in 2000 was (Euro)107.9 compared with
(Euro)118.2 million in 1999. This decrease was primarily a result of a
significant increase in working capital requirements in 2000 due mainly to an
increase in receivables, which was partially offset by an increase in advances
from clients.

  Net cash used in investing activities was (Euro)(248.5) million in 2000,
compared with (Euro)(362.7) million in 1999. This decrease does not reflect a
decrease in our investing activities as part of our strategic acquisition
program. Instead, the decrease was primarily the result of cash acquired in the
Snyder Communications acquisition that was not offset by cash paid since the
purchase price of that acquisition was financed primarily with Havas
Advertising shares and is therefore not included in the purchase of
subsidiaries reported on the cash flow statement.

  Net cash provided by financing activities was (Euro)468.1 million in 2000,
compared with (Euro)302.2 million in 1999. In both 2000 and 1999, cash from
financing activities was primarily generated by the sale of debt securities. We
issued (Euro)708.9 million of convertible bonds in December 2000 and
(Euro)230.0 million of convertible bonds in February 1999.

  Year ended December 31, 1999 compared to year ended December 31, 1998. Our
net cash provided by operating activities in 1999 increased to (Euro)118.2
million from (Euro)86.9 million in 1998. This substantial increase was
primarily due to an increase in our operating profit and improvements in
working capital management practices in subsidiaries.

  Net cash used in investing activities in 1999 increased to (Euro)(362.7)
million from (Euro)(72.3) million in 1998. This substantial increase was
primarily due to the cost of our strategic acquisition program.

  Net cash provided by financing activities was (Euro)302.2 million in 1999
compared with (Euro)10.2 million in 1998. This substantial increase was
primarily due to the issuance of (Euro)230.0 million of convertible bonds in
1999.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
Our board of directors

  In accordance with French law, our affairs are managed by our board of
directors and by our Chairman and Chief Executive Officer, who has full
authority to manage our affairs and has broad powers to act on our behalf
within our corporate purpose and to represent us in dealings with third
parties, subject only to the powers expressly reserved to the board of
directors or our shareholders by law, by our statuts or by decision of our
board of directors or shareholders.

  Under our statuts, our board of directors must consist of between three and
24 directors. As of May 31, 2001, our board of directors consists of 19
directors. Our statuts provide that each director is elected for a term of six
years, and is eligible for reelection when the term expires. The board of
directors has the power to appoint and remove the Chairman and Chief Executive
Officer at any time. There are no family relationships among our officers or
directors.

  Set forth in the table below are the names and ages of the members of our
board of directors, their principal occupation or employment, the dates of
their initial appointment as directors and the expiration of their current
positions as of May 31, 2001. Three of our directors are independent, which
means generally that they are not officers, employees or family members of
officers of us or our affiliates.

                                       33
<PAGE>

<TABLE>
<CAPTION>
                                                                                  Term
Name                          Position Age  Principal Occupation  Director Since Expires
----                          -------- --- ---------------------  -------------- -------
<S>                           <C>      <C> <C>                    <C>            <C>
Alain de Pouzilhac..........  Chairman  56 Chairman of the Board    April 1989    2006
                                           of Directors and
                                           Chief Executive
                                           Officer, Havas
                                           Advertising

Michel Boutinard
 Rouelle(1).................  Director  55 Consultant               March 1997    2004

Jean-Michel Carlo...........  Director  56 Executive Vice          October 1997   2003
                                           President, Havas
                                           Advertising; Chairman
                                           and Chief Executive
                                           Officer, Diversified
                                           Agencies Group

Leopoldo Rodes Castane......  Director  66 Vice Chairman, Banco      May 2001     2007
                                           Urquijo and Chairman,
                                           Media Planning Group

Alain Cayzac................  Director  60 Executive Vice          October 1997   2003
                                           President, Havas
                                           Advertising

Richard Colker(1)...........  Director  55 Managing Partner,        June 1995     2003
                                           Acadia Investment
                                           Corporation

Nicolas Duhamel.............  Director  47 Executive Vice           June 1994     2004
                                           President and Chief
                                           Financial Officer,
                                           Vivendi Universal
                                           Publishing

Ed Eskandarian..............  Director  64 Executive Vice         September 2000  2001
                                           President, Havas
                                           Advertising; Chairman
                                           and Chief Executive
                                           Officer, Arnold
                                           Worldwide Partners

Pierre Lescure..............  Director  55 Co-Chief Operating       June 1994     2002
                                           Officer, Vivendi
                                           Universal; Chairman
                                           of the Executive
                                           Board, Canal+ Group

Juan March..................  Director  61 Co-Chairman of            May 2001     2007
                                           Corporacion
                                           Financiera Alba;
                                           Director, Banca March

Jacques Mayoux..............  Director  76 Vice-Chairman,          August 1988    2006
                                           Goldman Sachs Europe

Thierry Meyer...............  Director  62 Advisor to Senior        June 1995     2005
                                           Management, Alcatel

Jean-Laurent Nabet..........  Director  37 Director of Mergers,    October 1998   2006
                                           Acquisitions and
                                           Financial Analysis,
                                           Vivendi Universal

Fernando Rodes Vila.........  Director  40 Executive Vice          January 2001   2002
                                           President, Havas
                                           Advertising; Chief
                                           Executive Officer,
                                           Media Planning Group
</TABLE>

                                       34
<PAGE>

<TABLE>
<CAPTION>
                                                                    Director     Term
Name                          Position Age  Principal Occupation      Since     Expires
----                          -------- --- ---------------------  ------------- -------
<S>                           <C>      <C> <C>                    <C>           <C>
Bob Schmetterer.............  Director  57 Executive Vice           May 1998     2004
                                           President, Havas
                                           Advertising; Chairman
                                           and Chief Executive
                                           Officer, Euro RSCG
                                           Worldwide

Jacques Seguela.............  Director  67 Executive Vice           June 1992    2004
                                           President and Chief
                                           Creative Officer,
                                           Havas Advertising

Patrick Soulard.............  Director  49 Chairman of the        December 1999  2004
                                           Investment Banking
                                           Division, Societe
                                           Generale

Vivendi Universal
 Publishing, represented by   Director  62 Co-Chief Operating       May 1998     2004
 Eric Licoys................               Officer, Vivendi
                                           Universal; Chairman,
                                           Vivendi Universal
                                           Publishing

SOCIF, represented by
 Clement Vaturi(1)..........  Director 60  Chairman of the        August 1988    2004
                                           Board, Immobiliere
                                           Hoteliere S.A.
</TABLE>
--------
(1) Member of the Audit Committee

  The following are summary biographies of each of the members of our board of
directors:

  Alain de Pouzilhac. Alain de Pouzilhac is currently our Chairman and Chief
Executive Officer and a member of our executive committee. Mr. de Pouzilhac
also currently serves as Chairman, Chief Executive Officer and President of
Snyder Communications. He began his career at Publicis Conseil, a French
advertising company, in 1969 as an Assistant Account Executive. In 1970, he
joined the French advertising company DDB as account executive. In 1982, he was
appointed Chairman and Chief Executive Officer of Havas Conseil, one of our
subsidiaries. Between 1984 and 1989, he served as Chairman of HCM, an
advertising joint venture comprised of Havas Conseil and Marsteller (an agency
affiliated with the U.S. advertising company Young & Rubicam), and HCM's
successor, HDM, an advertising joint venture comprised of Havas Conseil, Dentsu
and Marsteller. Mr. de Pouzilhac was appointed our Chairman and Chief Executive
Officer in 1989. Mr. de Pouzilhac was appointed as our Chairman and Chief
Executive Officer at the request of Vivendi Universal Publishing and has no
formal employment agreement with us.

  Michel Boutinard Rouelle. Michel Boutinard Rouelle is one of our directors, a
position he has held since March 1997. Mr. Boutinard Rouelle, a graduate of the
Institut d'Etudes Politiques de Paris and the Ecole Nationale d'Administration
(ENA), began his career in government and public affairs, holding a variety of
national, regional and local offices in France from 1971 to 1988, including
Chief of Staff of the Mayor of Paris from 1977 to 1979 and Counsellor to the
Prime Minister from 1986 to 1988. From 1989 to 1999, Mr. Boutinard Rouelle held
a variety of positions with Vivendi Universal Publishing, a French media group,
and its affiliates. These positions included Vice President of Vivendi
Universal Publishing from 1997 to 1998 and Chairman and Chief Executive Officer
of Vivendi Universal Publishing's affiliate Havas Media Communication from 1995
to 1999. Since 1999, Mr. Boutinard Rouelle has acted as a free-lance management
consultant.

                                       35

<PAGE>

  Jean-Michel Carlo. Jean-Michel Carlo is currently one of our Executive Vice
Presidents, the Chairman and Chief Executive Officer of our Diversified
Agencies Group and a member of our executive committee. Mr. Carlo, a Ph.D. in
Economics and a graduate of the Institut d'Etudes Politiques de Paris, began
rhis career at Havas Conseil in 1972. In 1977, he left Havas Conseil to join
FCA, a French advertising company. Mr. Carlo then went on to found our Avril
advertising agency in 1978. In 1982, he was appointed Chairman and Chief
Executive Officer of Young & Rubicam in France and Europe. From 1991 to 1996,
he served as Chairman of BDDP France, a French advertising company. In April
1997, Mr. Carlo was appointed as Executive Vice President of Havas Advertising.

  Leopoldo Rodes Castane. Leopoldo Rodes Castane is currently Vice Chairman of
Banco Urquijo, a Spanish financial institution, and Chairman of Media Planning
Group. Mr. Rodes Castane founded Tiempo, an advertising agency, in 1958, and
was its Chairman and Chief Executive Officer until 1984. In 1985, Mr. Rodes
Castane also founded and became President of "Barcelona '92," an organization
created to promote the bid of Barcelona as the host city of the 1992 Summer
Olympic Games and from 1986 through 1992, he served as a member of the
executive committee of Summer Olympic Games of Barcelona "COOB '92." From 1994
to 1996, he was a member of the International Advisory Board of Repsol, S.A., a
Spanish oil and gas exploration and development company, Mr. Rodes Castane has
been President and Chairman of the Media Planning Group since 1999. He also
currently serves on the Board of Directors of Alcatel Espana, S.A., a Spanish
telecommunications company, Christie's International Europe, an auction
company, Hoteles Unidos, S.A. and Sogecable, S.A., a Spanish pay television
company.

  Alain Cayzac. Alain Cayzac is currently one of our Executive Vice Presidents
and a member of the executive committee. Mr. Cayzac, a graduate of Hautes
Etudes Commerciales (HEC) and of Berlin University, began his career in
advertising in 1972 as an Associate Director of RSCG. He was appointed Chairman
of RSCG in 1984. In 1996, he was appointed Chairman and Chief Executive Officer
of Euro RSCG Worldwide. He was appointed as one of our Executive Vice
Presidents in 1997. He currently is responsible for our development of sports
marketing and is also working on our human resources policies. Mr. Cayzac is
also Vice Chairman of the PSG soccer team and Chairman of the AACC, the French
association of advertising agencies.

  Richard Colker. Richard Colker is currently Managing Partner of Acadia
Investment Corporation, a private investment company, and Colker, Gelardin &
Co., a private investment banking partnership. Mr. Colker has held these
positions since 1990. A graduate of Michigan State University, Mr. Colker began
his career at Wells Fargo Bank N.A., a financial institution, as Manager,
Corporate Finance Department. From 1976 to 1983, Mr. Colker served as Vice
President of Banque de la Societe Financiere Europeenne, a French financial
institution. From 1983 to 1990, Mr. Colker served as Managing Director,
Investment Banking, and a Member of the London Management Committee of the
investment bank Kidder, Peabody International Limited and its affiliate Kidder,
Peabody & Co., and a Member of the Board of Directors of another affiliate,
Kidder, Peabody Italia S.p.A. Mr. Colker has been one of our directors since
June 1995.

  Nicolas Duhamel. Nicolas Duhamel is currently Executive Vice President and
Chief Financial Officer of Vivendi Universal Publishing. Mr. Duhamel is a
graduate of the Institut d'Etudes Politiques de Paris and the Ecole Nationale
d'Administration (ENA). Mr. Duhamel was Inspecteur des Finances in the French
Ministry of Economy from 1980 to 1984. From 1984 to 1988, he served as manager
in charge of the budget and tax system at France Telecom. Since 1988, Mr.
Duhamel has held a variety of positions with Vivendi Universal Publishing,
including Director of Development from 1988 to 1992 and general manager of
Vivendi Universal Publishing's yellow pages subsidiary from 1992 to 1993. He
became the Chief Financial Officer of Vivendi Universal Publishing in 1993.

  Ed Eskandarian. Ed Eskandarian is currently the Chairman and Chief Executive
Officer of Arnold Worldwide Partners. Mr. Eskandarian, a graduate of Villanova
University and Harvard Business School, began his career as a scientist working
for NASA. In 1971, Mr. Eskandarian became senior vice president of Humphrey
Browning MacDougall, an advertising agency, and in 1981 he became President and
Chief Executive Officer of that agency. When London-based WCRS acquired
Humphrey Browning MacDougall in

                                       36
<PAGE>

the mid-1980's, Mr. Eskandarian continued as Chairman and Chief Executive
Officer of the newly-formed WCRS Diversified Communications. In 1990, Mr.
Eskandarian purchased Arnold Advertising, and has served as its Chairman and
Chief Executive Officer since that time.

  Pierre Lescure. Pierre Lescure is currently Co-Chief Operating Officer of
Vivendi Universal, where he is in charge of its television and film business
unit, and Chairman of the Executive Board of Canal+ Group, a French pay
television company and an affiliate of Vivendi Universal. Mr. Lescure, a
graduate of the Centre de Formation de Journalistes in Paris, began his career
in journalism, holding a variety of positions in French radio and television
from 1965 to 1984. Since 1984, he has held a variety of positions with Canal+
Group and its affiliated companies, including Chairman and Chief Executive
Officer of Canal+ Group from 1994 to 2000. Mr. Lescure currently serves on the
board of directors of several companies, including the Board of Directors of
Vivendi Universal and its affiliated companies Cegetel and Canal+ and the
Supervisory Board of Directors of Lagardere, a French media group, and the
French newspaper Le Monde. Mr. Lescure is also Chairman of the PSG soccer team.

  Eric Licoys. Eric Licoys is currently Co-Chief Operating Officer of Vivendi
Universal, and Chairman of Vivendi Universal Publishing. Mr. Licoys, a graduate
of the Institut d'Etudies Politiques de Paris, started his career in banking.
From 1982 to 1986 Mr. Licoys was Senior Vice President of Compagnie Financiere
Barclays, a financial institution, and from 1986 to 1990 he served as its
Chairman and Chief Executive Officer. From 1990 until 1996, Mr. Licoys served
in several positions with Lazard Freres et Cie, an investment bank, including
Managing Partner in 1996. Since 1997, Mr. Licoys has held several positions
with Vivendi Universal and its affiliates, including Advisor to the Chairman of
Vivendi Universal and Chairman and Chief Executive Officer of Vivendi Universal
Publishing. In 1999, Mr. Licoys was named Chief Operating Officer of Vivendi
Universal's predecessor company, and in 2000, he became Co-Chief Operating
Officer of Vivendi Universal. Mr. Licoys currently serves on the board of
directors of several companies, including the Board of Directors of Canal+,
Grupo Anaya, an affiliate of Vivendi Universal Publishing, and Intermediate
Capital Group Plc, a U.K. financial institution.

  Juan March. Juan March is currently Co-Chairman of Corporacion Financiera
Alba, a Spanish financial and real estate holding company, and a director of
Banca March, a Spanish financial institution. Mr. March, who received his Ph.D.
from Escuela Superior de Ingenieros Industriales in Madrid, has co-managed the
companies of the March Group since 1973. In addition, since 1973 he has served
as Chairman of the Juan March Foundation. Mr. March is currently a member of
the International Advisory Board for the Council on Foreign Relations and a
member of the Board of Directors of Foundation Internationale Carrefour.

  Jacques Mayoux. Jacques Mayoux is currently Vice-Chairman of Goldman Sachs
Europe. Mr. Mayoux, a graduate of Hautes Etudes Commerciales (HEC) and the
Ecole Nationale d'Administration (ENA), began his career in government, holding
a variety of offices within the French Ministry of Finance beginning in 1952.
He served as Chief Executive Officer of Credit Agricole, a French financial
institution, from 1963 to 1975, Chief Executive Officer of Sacilor, a French
steel company, from 1978 to 1982, and Chief Executive Officer of Societe
Generale, a French financial institution, from 1982 to 1986. Since 1986,
Mr. Mayoux has served on the board of directors of several companies, including
the Board of Directors of Altra Banque and Euris.

  Thierry Meyer. Thierry Meyer is currently Advisor to Senior Management of
Alcatel, a French telecommunications company, a position he has held since
1996. Mr. Meyer, a graduate of Universite Libre de Bruxelles and Harvard
University, began his career at Philips Electronics N.V., a Dutch electronics
company, in its marketing department in 1964. From 1969 through 1995, he served
in many capacities for Philips Electronics, including Chairman and Managing
Director of several of its international divisions. Currently, Mr. Meyer also
serves on the board of directors of Alcatel-Bell, a manufacturer and supplier
of telecommunications and office automation components, Atlinks, Intel SA and
International Management Development.

  Jean-Laurent Nabet. Jean-Laurent Nabet is currently Director of Mergers,
Acquisitions and Financial Analysis of Vivendi Universal, a position he has
held since February 2001. Mr. Nabet, a graduate of Hautes

                                       37
<PAGE>

Etudes Commerciales (HEC), began his career as a financial analyst at Societe
Generale in September 1989. In 1995, he became Vivendi Universal Publishing's
Director of Investor Relations and from 1998 to January 2001, he served as its
Director of Development.

  Fernando Rodes Vila. Fernando Rodes Vila is currently one of our Executive
Vice Presidents and the Chief Executive Officer of Media Planning Group and a
member of our executive committee. Mr. Rodes Vila, a graduate of UCB University
and of Gresham College in London in Economics and Finance Management, began his
career in banking. In 1985, he joined Manufacturers Hanover Trust, a financial
institution, as the Director of Capital Markets. In 1989, he became Director of
company banking services at Banco Espanol de Credito, a Spanish financial
institution. Mr. Rodes Vila was appointed Chief Executive Officer of Media
Planning, S.A. in 1994. In 1999, concurrently with the combination of our media
services with those of Media Planning, S.A., Mr. Rodes Vila was appointed as
the Chief Executive Officer of Media Planning Group.

  Bob Schmetterer. Bob Schmetterer is currently one of our Executive Vice
Presidents and the Chairman and Chief Executive Officer of Euro RSCG Worldwide
and a member of our executive committee. Mr. Schmetterer began his career in
advertising at Scali McCabe Sloves in 1971. In 1987, he became one of the
founding partners of the New York advertising agency Messner Vetere Berger
McNamee Schmetterer Euro RSCG. In 1984 he was appointed Chief Executive Officer
of HCM and later served as Chief Executive Officer of HDM. Mr. Schmetterer has
served as Chairman and Chief Executive Officer of Euro RSCG Worldwide since
1997.

  Jacques Seguela. Jacques Seguela is currently one of our Executive Vice
Presidents and our Chief Creative Officer and a member of our executive
committee. Mr. Seguela, who has a Ph.D. in Pharmacy, began his career as a
reporter for Paris-Match and then for France-Soir. In 1969, he created RSCG,
which merged with Eurocom in 1991 to create Euro RSCG Worldwide. Mr. Seguela is
the author of fifteen books on advertising and related matters and has been
involved in numerous political campaigns in France and elsewhere.

  Patrick Soulard. Patrick Soulard is currently Chairman of the Investment
Banking Division of Societe Generale, a position he has held since 1999.
Mr. Soulard, a graduate of the Institut d'Etudes Politiques de Paris and the
Ecole Nationale d'Administration (ENA), began his career in government, holding
a variety of offices within the French Ministry of Finance form 1977 to 1986.
From 1986 to 1995, he held a variety of positions with Banque Nationale de
Paris, a French financial institution, including Director of Financial Affairs
and Industrial Holdings, and Manager of BNP Equities. Mr. Soulard joined
Societe Generale as a Senior Banker in 1996. He is currently a director of
Foncieres Financieres de Participation, an investment company.

  Clement Vaturi. Clement Vaturi has served as Chairman of the Board of
Immobiliere Hoteliere, a French hotel real estate development company, since
1983. Mr. Vaturi is also Chairman and Chief Executive Officer of several of
Immobiliere Hoteliere's affiliates, including Immobiliere Hoteliere
Montparnasse and SOCIF. Mr. Vaturi, who received his Bachelor of Science, Civil
Engineering, from the Massachusetts Institute of Technology and his Master of
Science, Industrial Management, from the Sloan School of Management at the
Massachusetts Institute of Technology, also serves as Chairman of Credicom NV,
a Belgian financial institution. Mr. Vaturi has been one of our directors since
August 1988.

                                       38
<PAGE>

Our executive committee

  The table below presents information regarding the current members of our
executive committee, which is our group of executive officers:

<TABLE>
<CAPTION>
                                                                   Executive
 Name                                Position                Age Officer Since
 ----                                --------                --- -------------
 <C>                   <S>                                   <C> <C>
 Alain de Pouzilhac... Chairman and Chief Executive           56   April 1989
                       Officer
 Jean-Michel Carlo.... Executive Vice President (Chairman     56   April 1997
                       and Chief Executive Officer of
                       Diversified Agencies Group)
 Alain Cayzac......... Executive Vice President               60   June 1992
 Ed Eskandarian....... Executive Vice President (Chairman     64 September 2000
                       and Chief Executive Officer of
                       Arnold Worldwide Partners)
 Jacques Herail....... Executive Vice President and Chief     48   April 1992
                       Financial Officer
 Fernando Rodes Vila.. Executive Vice President (Chief        40  October 1999
                       Executive Officer of Media Planning
                       Group)
 Bob Schmetterer...... Executive Vice President (Chairman     57   June 1998
                       and Chief Executive Officer of Euro
                       RSCG Worldwide)
 Jacques Seguela...... Executive Vice President and Chief     67   June 1992
                       Creative Officer
 Simon Gillham........ Vice President of Communications       45   April 2001
</TABLE>

  The following are summary biographies of the members of the executive
committee. Summary biographies of Messrs. de Pouzilhac, Carlo, Cayzac,
Eskandarian, Rodes Vila, Schmetterer and Seguela, who are also members of our
board of directors, are set forth under "--Our board of directors" on page 33.

  Jacques Herail. Jacques Herail is currently our Executive Vice President and
Chief Financial Officer and a member of our executive committee. He also
currently serves as Senior Vice President of Snyder Communications. Mr. Herail,
a graduate of Sciences Economiques at the Institut d'Etudes Politiques and the
Ecole Superieure des Sciences Economiques et Commerciales (ESSEC), began his
career at the accounting firm Arthur Andersen in 1976. In 1984, he was
appointed Chief Financial Officer of HCM and later served as Chief Financial
Officer of HDM. Between 1989 and 1996, he served as Executive Vice President
and Chief Financial Officer of Euro RSCG Worldwide. Since 1996, Mr. Herail has
served as our Executive Vice President and Chief Financial Officer.

  Simon Gillham. Simon Gillham is currently Vice President of Communications
and a member of our executive committee. Mr. Gillham, a graduate of Sussex
University and Bristol University, began his career with Thomson, a global
electronics company, and in 1991 was appointed vice president of communications
of Thomson Consumer Electronics, which is today known as Thomson Multimedia. In
1994, he joined the CarnaudMetalbox Group, a metal and plastics manufacturer,
to help the group's international expansion. Following the creation of a sports
marketing company in 1996, Mr. Gillham ran the commercial interests of a
professional rugby club based in London. Early in 1999, Mr. Gillham was
appointed vice president of communications for the Valeo Group, an
international automotive components and systems supplier. In April 2001, Mr.
Gillham was appointed our Vice President of Communications.

Our audit committee

  Our board of directors has a standing audit committee. The purpose of the
audit committee is to:

  . make recommendations concerning the engagement of independent public
    accountants;

  . review with our management and independent public accountants the plans
    for, and scope of, the audit procedures to be utilized and results of
    audits;

  . approve the professional services provided by the independent public
    accountants; and

  . review the adequacy and effectiveness of our internal accounting
    controls.

The current members of our audit committee are Messrs. Boutinard Rouelle,
Colker and Vaturi.

                                       39
<PAGE>

Compensation of our directors and officers

  The aggregate amount of compensation which we paid to our principal executive
officers and directors as a group (23 persons in all in 2000) for services in
all capacities in 2000 was approximately (Euro)10.0 million. The aggregate
amount which we set aside or accrued to provide pension, retirement or similar
benefits for the same executive officers and directors as a group for the 2000
fiscal year was approximately (Euro)218,400.

Ownership of Havas Advertising Shares by our directors and officers

  As of April 30, 2001, none of our directors or executive officers owned more
than 1% of our outstanding shares, with the exception of Vivendi Universal
Publishing, which held 29,939,200 registered shares, constituting 11.2% of our
issued shares.

  As of April 30, 2001, Vivendi Universal Publishing owned 29,939,200 shares
and on June 6, 2001, based on publicly available reports, Vivendi Universal
Publishing sold all of its then remaining shares in an open market transaction.

Options to purchase securities from Havas Advertising

  As of May 31, 2001, our shareholders had authorized the board of directors to
grant options for an aggregate of up to 44,231,370 Havas Advertising shares
during various periods ending on or before May 21, 2006. As of May 31, 2001,
our board of directors had granted options for an aggregate of 36,841,862 Havas
Advertising shares under these authorizations, of which options to purchase an
aggregate of 24,579,537 Havas Advertising shares were outstanding with exercise
prices ranging from 3.34 to 27.65 and expiring at various times from 2002 to
2008. As of May 31, 2001, there were outstanding options to purchase an
aggregate of 8,473,660 Havas Advertising shares granted to our directors and
executive officers under these authorizations. All of the options we granted
are subject to adjustment on the occurrence of dilutive events.

  Our board of directors will fix the number of Havas Advertising shares and
the exercise price under the authorized option plans in accordance with the
laws in effect at the time the board of directors decides to grant the options.
At that time, we also will establish the conditions for exercising the options
and the periods during which the options may be exercised.

  Our option plans typically permit our board of directors to grant options to
purchase up to an aggregate percentage of our issued shares from time to time.
Each authorization of option plans by our shareholders is effective for five
years from the date of authorization or until all of the options under the plan
have been granted. On May 22, 2001, our shareholders approved a new option plan
allowing the board of directors to grant options to purchase up to an aggregate
of 2.5% of the then issued Havas Advertising shares, including treasury shares,
from time to time, provided that the aggregate number of shares purchasable
under options outstanding from time to time may not exceed 12% of the then
issued Havas Advertising shares, including treasury shares. As of May 31, 2001,
we had issued 302,017,871 Havas Advertising shares and had outstanding options
to purchase or subscribe to an aggregate of 24,579,537 Havas Advertising
shares. Therefore, our board of directors were authorized to grant options to
purchase up to an aggregate of 7,389,508 Havas Advertising shares under the May
2001 plan as of that date. As of May 31, 2001, the only new options that may be
granted by the board are options to purchase shares under the May 2001 plan.

  Upon the completion of the acquisition of Snyder Communications in September
2001, all outstanding options to purchase shares of SNC common stock of Snyder
Communications were converted into options to purchase an aggregate of
9,494,597 Havas Advertising ADSs, of which options to purchase an aggregate of
7,244,047 Havas Advertising ADSs were outstanding as of May 31, 2001 at
exercise prices ranging from $0.96 to $18.55. These options are not considered
to be part of any of our option plans and do not affect the calculation of the
limits on option grants described above.

                                       40
<PAGE>

  The table below shows information relating to our various option plans and
the converted SNC options, as of May 31, 2001:

<TABLE>
<CAPTION>
                         June      June
                       1991 Plan 1994 Plan   June 1996 Plan                        June 1997 Plan
                       --------- --------- ------------------ ----------------------------------------------------------
                         March     Dec.      Dec.     March     June      March     Feb.     June      Sep.       Dec.
                         1995      1995      1996      1997     1997      1998      1999     1999      1999       1999
                         Grant     Grant     Grant    Grant     Grant     Grant    Grant    Grant      Grant     Grant
                       --------- --------- --------- -------- --------- --------- -------- --------  ---------  --------
<S>                    <C>       <C>       <C>       <C>      <C>       <C>       <C>      <C>       <C>        <C>
Date of shareholders'
meeting............... 06/18/91   06/30/94  06/27/96 06/27/96  06/19/97  06/19/97 06/19/97 06/19/97   06/19/97  06/19/97
Date of board of
directors' meeting.... 03/23/95   12/07/95  12/05/96 03/06/97  06/19/97  03/05/98 02/25/99 06/17/99   09/30/99  12/02/99
Options issuable......      --         --        --       --        --        --       --       --         --        --
Options issued........  685,260  3,837,280 2,541,280   80,000 6,000,000 1,590,000  710,220  300,000    200,000   865,000
Options exercised.....  677,140  2,908,060 1,189,940   80,000       --    386,645      --    20,000        --     24,000
Of which: options
issued to members of
the executive
committee.............  229,800    903,400 1,001,320      --  3,070,000   410,000  324,220      --         --    500,000
Number of executive
officers concerned....        2          5         3      --          5         3        2      --         --          2
Exercisable from...... 03/23/95   12/07/95  12/05/96 01/01/98  06/19/02  03/05/98 02/25/99 01/01/00  01/ 01/00  01/01/00
Expiration date....... 03/22/02   12/31/02  12/31/03 12/31/03  06/19/04  12/31/04 02/24/06 06/16/06  09/ 29/06  12/01/06
Option exercise price
per share(FF).........       22       21.9     27.75    31.60     30.25     41.65  50.0165   59.692    71.1715   102.985
(Euro)................    3.354     3.3385    4.2305   4.8175    4.6115    6.3495    7.625    9.100      10.85      15.7
Conditions
applicable............      --         --        --       --        --        --       --        (1)        (2)       (3)
</TABLE>

<TABLE>
<CAPTION>
                                                                                          Former SNC
                                June 1999 Plan             May 2000 Plan                    Option
                          ----------------------------  --------------------             Converted in
                           March      May     October     March       May        May        Snyder
                            2000      2000     2000       2001       2001       2001    Communications
                           Grant     Grant     Grant      Grant      Grant      Plan     Acquisition
                          --------  -------- ---------  ---------  ---------  --------- --------------
<S>                       <C>       <C>      <C>        <C>        <C>        <C>       <C>
Date of shareholders'
meeting.................  06/17/99  06/17/99  06/17/99   05/23/00   05/23/00   05/22/01    08/25/00
Date of board of
directors' meeting......  03/02/00  05/23/00  10/23/00   03/01/01   05/22/01        --     08/25/00
Options issuable........       --        --        --         --         --   7,389,508         --
Options issued..........   888,120   400,000 3,953,500  4,448,000  3,366,662        --    9,494,597
Options exercised.......       --        --        --         --         --         --    1,464,778
Of which: options issued
to members of the
executive committee.....   288,120   400,000       --   1,500,000  1,500,000        --          --
Number of executive
officers concerned......         2         1       --           7          7        --          --
Exercisable from........  01/01/01  05/23/00  10/23/00   03/01/01   01/01/02        --     08/26/00
Expiration date.........  03/01/07  05/22/07  10/22/07   02/29/08   05/21/08        --     09/13/10
Option exercise price
per share(FF)...........   181.372    163.99    116.50     101.67      97.41        --          N/A
(Euro)..................     27.65     25.00     17.76      15.50      14.85        --        12.37(8)
Conditions applicable...        (4)      --         (5)        (6)        (7)       --
</TABLE>
-----
(1) 100,000 of these options are exercisable in 2000, 100,000 in 2001 and the
    remainder in 2002.
(2) 66,660 of these options are exercisable in 2000, 66,680 in 2001 and the
    remainder in 2002.
(3) 173,000 of these options are exercisable in 2000, 346,000 in 2001 and the
    remainder in 2002.
(4) 296,040 of these options are exercisable in 2001, 296,040 in 2002 and the
    remainder in 2003.
(5) 756,164 of these options are exercisable from October 23, 2000, 1,065,779
    in 2001, 1,065,778 in 2002 and the remainder in 2003.
(6) 194,835 of these options are exercisable from March 1, 2001, 1,417,722 in
    2002, 1,417,721 in 2003 and the remainder in 2004.
(7) 1,122,221 of these options are exercisable in 2002, 1,122,220 in 2003 and
    the remainder in 2004.
(8) Represents the weighted average exercise price of $11.61 converted into
    euro at the noon buying rate of 1.00 = $0.9388 on December 29, 2000.

                                       41
<PAGE>

Transactions involving directors, officers and shareholders of Havas
Advertising

  Trademark License Agreement with Vivendi Universal Publishing. We entered
into a trademark license arrangement with Vivendi Universal Publishing pursuant
to which we paid a license fee to Vivendi Universal Publishing in the amount of
(Euro)305,000 for the exclusive license to use the "Havas Advertising"
trademark and a non-exclusive license to use the Vivendi Universal Publishing
logo. Vivendi Universal Publishing reserved the right to use or have a third
party use the name "Havas," either alone or in combination with any other terms
other than the combination of "Havas Advertising."

  We were permitted to use the "Havas Advertising" trademark or logo only to
the extent that, and so long as, Vivendi Universal Publishing remained our
largest shareholder. The trademark license agreement also provided that the
trademark could be used by us in all countries in which Vivendi Universal
Publishing applied for and obtained trademark protection. Either we or Vivendi
Universal Publishing were permitted to terminate the trademark license
agreement:

  . in the event Vivendi Universal Publishing lost its statuts as our largest
    shareholder, subject to a six month notice period; or

  . after a breach of the other party's obligations under the trademark
    license agreement and the failure to cure the breach for six months.

  This agreement was entered into on October 2000, effective retroactively as
of January 1, 2000, and expired on December 31, 2000. Although we are currently
in the process of negotiating with Vivendi Universal Publishing for the right
to continue to use the name "Havas Advertising," we cannot assure you that we
will obtain such right on favorable terms or at all.

  Transactions with Vivendi Universal. We rendered advertising services to
Vivendi Universal, the parent company of Vivendi Universal Publishing, and its
affiliates in the amount of (Euro)20.2 million, (Euro)18.6 million and
(Euro)17.1 million for the years ended December 31, 2000, 1999 and 1998,
respectively. We also purchased media space from affiliates of Vivendi
Universal on behalf of its clients. The accounts receivable and payable
(including payable to media companies affiliated with Vivendi Universal) from
these services amounted to (Euro)9.6 million and (Euro)3.0 million as of
December 31, 2000, (Euro)8.2 million and (Euro)3.1 million as of December 31,
1999, and (Euro)14.1 million and (Euro)18.4 million as of December 31, 1998.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
  The following table shows, to our knowledge, as of April 30, 2001, except as
otherwise indicated below, the number of Havas Advertising shares and the
percentage of outstanding Havas Advertising shares owned by

  . each person known to us to be the owner of more than 5% of outstanding
    Havas Advertising shares; and

  . our directors and executive officers as a group.

  We hold 7,151,350 shares as treasury stock. These Havas Advertising shares do
not have voting rights. As a result, the percentage of the issued Havas
Advertising shares owned by each of our shareholders translates into a slightly
greater percentage of total voting rights.


                                       42
<PAGE>

<TABLE>
<CAPTION>
                                                          Percentage Percentage
                                               Number of  of Issued  of Voting
           Identity of Person or Group           Shares     Shares     Rights
           ---------------------------         ---------- ---------- ----------
   <S>                                         <C>        <C>        <C>
   Putnam Investment Management, LLC and The
    Putnam Advisory Company, LLC(1)........... 36,029,500    13.4%      13.8%
   Vivendi Universal Publishing(2)............ 29,939,200    11.2%      11.5%
   All directors and executive officers of
    Havas Advertising as a group (19 persons,
    including Vivendi Universal
    Publishing)(3)............................ 31,235,120    11.7%      12.0%
</TABLE>
--------
(1) Based on information provided to us by Putnam Investment Management, LLC
    and The Putnam Advisory Company, LLC in its Notification of Holdings under
    the EC Directive 88/627 on the Disclosure of Interest of Shares, dated
    March 28, 2001.
(2) Vivendi Universal Publishing is a wholly owned subsidiary of Vivendi
    Universal, a media, communications and environmental services company. Eric
    Licoys, as Chairman and Chief Executive Officer of Vivendi Universal
    Publishing, may be deemed to share voting power with respect to the Havas
    Advertising shares owned by Vivendi Universal Publishing and, consequently,
    be a beneficial owner of those Havas Advertising shares. Mr. Licoys
    disclaims any beneficial ownership of Havas Advertising shares owned by
    Vivendi Universal Publishing. On June 6, 2001, based on publicly available
    reports, Vivendi Universal Publishing sold all outstanding Havas
    Advertising shares it owned.
(3) Does not include two of our directors who were appointed in May 2001.

  As of May 31, 2001, Vivendi Universal Publishing owned in registered form
approximately 7.0% of outstanding Havas Advertising shares. In addition,
Vivendi Universal Publishing, represented by Eric Licoys, serves on our board
of directors and two executive officers of Vivendi Universal Publishing,
Nicholas Duhamel and Jean-Laurent Nabet, also are members of our board of
directors. In addition, Alain de Pouzilhac, our Chairman and Chief Executive
Officer since 1989, is also an officer of Vivendi Universal Publishing.
Mr. de Pouzilhac was appointed as our Chairman and Chief Executive Officer at
the request of Vivendi Universal Publishing and has no formal employment
agreement with us. As a result, Mr. de Pouzilhac may terminate his position as
our Chairman and Chief Executive Officer at any time, whether at the request of
Vivendi Universal Publishing or otherwise. On June 6, 2001, Vivendi Universal
Publishing sold all outstanding Havas Advertising shares it owned in an open
market transaction.

ITEM 8. FINANCIAL INFORMATION

8.A Consolidated statements and other financial information

8.A.1 See Item 18 "Financial Statements".

8.A.2 See Item 18 "Financial Statements".

8.A.3 See Report of Independent Accountants, page F-1.

8.A.4 We have complied with this requirement.

8.A.5 Not applicable.

8.A.6 Not applicable.

8.A.7 Legal proceedings

 Circle.com litigation

  On June 4, 2001, two holders of Circle.com common stock filed a purported
class action lawsuit in Delaware Chancery Court against Snyder Communications,
Havas Advertising and each director of Havas Advertising. The lawsuit sought a
preliminary and permanent injunction, or, alternatively, monetary damages.

                                       43
<PAGE>

The lawsuit alleges that Havas Advertising and the board of directors of Snyder
Communications breached their fiduciary duties owed to the Circle.com
stockholders when considering and negotiating the proposed merger of Snyder
Communications with a subsidiary of Havas Advertising by failing to create an
independent negotiating structure, failing to seek truly independent advice,
concealing material information from the Circle.com stockholders, and unfairly
timing the proposed merger to the disadvantage of the Circle.com stockholders.
Subsequent to the filing of the lawsuit, the purported representatives of the
purported Circle.com stockholder class withdrew their application for a
preliminary injunction and expedited discovery and Havas Advertising agreed to
waive any objection to jurisdiction it may otherwise assert under French law,
and, in the event the court enters a judgment for money damages in favor of
Circle.com stockholders, to waive any right Havas Advertising may have under
French law to assert that such judgment is not enforceable against it and any
defendant indemnified by Havas Advertising.

  Snyder Communications, Havas Advertising and the directors of Snyder
Communications and Havas Advertising deny all liability with respect to the
claims alleged in the complaint and believe those claims to be without merit.
Snyder Communications and the other defendants to the lawsuit intend to defend
themselves vigorously in such action.


 French tax authorities

  The French tax authorities have alleged that we acquired investments from
employees at overstated prices. We and our tax counsel believe that the
position of the tax authorities is unfounded and are defending our position
vigorously. We brought the matter before the Paris Tribunal Administratif, or
tax court, and the proceedings are pending. Based upon the current assessment
established by the tax authorities, the maximum possible liability is
approximately (Euro)5 million. Based upon presently available information, we
are not in a position to give an estimate of a range of possible loss.

  We are also from time to time involved in legal actions in the ordinary
course of our business. We are not aware of any pending or threatened
litigation, arbitration or administrative proceedings relating to claims or
amounts which (individually or in the aggregate) we believe are likely to have
a material adverse effect on our business, financial condition or future
results of operations. Any litigation, however, involves risk and potentially
significant litigation costs, and therefore we cannot give any assurance that
any litigation which may arise in the future will not have a material adverse
effect on our business, financial condition or future results of operations.

8.A.8 Dividend policy

  We may declare dividends upon the recommendation of our board of directors
and the approval of our shareholders at their annual general meeting. Under the
French Commercial Code, a company's right to pay dividends is limited in some
circumstances.

8.B Significant changes

 Acquisition of remaining shares of Media Planning Group

  On May 22, 2001, we increased our ownership of Media Planning Group to 100%
by acquiring the remaining 55% equity interest from the other shareholders of
Media Planning Group in exchange for 28.8 million Havas Advertising shares and
a cash payment of (Euro)51.1 million. In addition, we appointed two officers of
Media Planning Group to our board of directors. For more information regarding
the creation of the Media Planning Group, please see page 23.


                                       44
<PAGE>

 Sale by Vivendi of Havas Advertising shares

  Based on publicly available reports, on June 6, 2001, Vivendi Universal
Publishing sold all of Havas Advertising shares it held in an open market
transaction.

 Acquisition of the Circle.com common stock

  On May 22, 2001, our registration statement on Form F-4 in connection with
our proposed acquisition of Snyder Communications Circle.com common stock by
merger was declared effective by the Securities and Exchange Commission. The
special stockholders meeting of Snyder Communications, at which the
stockholders of Snyder Communications will be asked to vote for or against the
merger, is expected to be held on June 26, 2001. We anticipate that we will
complete the merger on or about June 27, 2001, at which time all outstanding
shares of Circle.com common stock will be exchanged for Havas Advertising ADSs
or, in case of fractional shares, cash.

 Revenue and billings during first quarter of 2001

  On May 9, 2001, we reported information regarding our revenue and billings
during the three months ended March 31, 2001.

  The following information is based on our unaudited French GAAP accounts or
management accounts and therefore is not comparable to our U.S. GAAP financial
information presented elsewhere throughout this annual report. Our management
accounts are internal accounts prepared by each of our agencies to track our
financial performance. These internal management accounts are not necessarily
maintained in accordance with French GAAP and are unaudited.

  We reported total revenue under French GAAP (including 100% of the revenues
from Media Planning Group) of (Euro)545.2 million for the three months ended
March 31, 2001, an increase of 63.8% compared with (Euro)332.9 for the three
months ended March 31, 2000. The allocations of revenue by region set forth in
the tables below are based on management accounts and depict by geographic
region and by major discipline (1) revenue for the three months ended March 31,
2001, (2) revenue growth for the three months ended March 31, 2001 compared
with the three months ended March 31, 2000, as adjusted to exclude the effects
of currency fluctuations and (3) pro forma revenue growth for the three months
ended March 31, 2001 compared with the three months ended March 31, 2000, as
adjusted to exclude the effects of currency fluctuations and acquisitions other
than Snyder Communications:

                          Revenue By Geographic Region

<TABLE>
<CAPTION>
                              Three Months
                                  Ended                Three Months Ended March 31, 2001
                             March 31, 2001        Versus Three Months Ended March 31, 2000
                            ----------------- ---------------------------------------------------
                                                                       Pro Forma Revenue Growth,
                                                                        Excluding the Effects of
                                                  Revenue Growth,        Currency Fluctuations
                                 Revenue      Excluding the Effects of   and Acquisitions Other
                            ((Euro) millions)  Currency Fluctuations   than Snyder Communications
                            ----------------- ------------------------ --------------------------
   <S>                      <C>               <C>                      <C>
   Europe..................       264.2                 +36.0%                   +10.0%
   North America...........       244.2                +115.2%                    +5.0%
   Asia Pacific............        15.1                 +11.1%                    +5.1%
   Latin America...........        21.7                 +14.7%                   +16.4%
                                  -----                ------                    -----
     Total.................       545.2                 +60.2%                    +7.9%
</TABLE>


                                       45
<PAGE>

                          Revenue by Major Discipline

<TABLE>
<CAPTION>
                              Three Months
                                  Ended                Three Months Ended March 31, 2001
                             March 31, 2001        Versus Three Months Ended March 31, 2000
                            ----------------- ---------------------------------------------------
                                                                       Pro Forma Revenue Growth,
                                                                        Excluding the Effects of
                                                  Revenue Growth,        Currency Fluctuations
                                 Revenue      Excluding the Effects of   and Acquisitions Other
          Pro Forma         ((Euro) millions)  Currency Fluctuations   than Snyder Communications
          ---------         ----------------- ------------------------ --------------------------
   <S>                      <C>               <C>                      <C>
   Traditional
    Advertising............       213.7                +32.8%                     +5.0%
   Media & Marketing.......       331.5                +84.9%                    +10.0%
                                  -----                -----                     -----
     Total.................       545.2                +60.2%                     +7.9%
</TABLE>

  We reported net new billings (including 100% of Media Planning Group's net
new billings) on an annualized basis of (Euro)883 million for the three months
ended March 31, 2001.

ITEM 9. THE OFFER AND LISTING

9.A Listing details

  The principal trading market for Havas Advertising shares is the Premier
Marche of Euronext Paris S.A. (which resulted from the merger of the Paris,
Brussels and Amsterdam stock exchanges on October 27, 2000), a self regulatory
organization responsible for supervision of trading in listed securities in
France. Havas Advertising shares have been traded on the Premier Marche since
October 23, 1982. Prior to this date, Havas Advertising shares were not
publicly traded. Havas Advertising shares are currently included in the "SBF
80," "SBF 120," and "SBF 250" indices.

  Havas Advertising shares are also quoted on the Nasdaq National Market System
under the symbol "HADV". In addition, we sponsor ADSs in the United States with
Morgan Guaranty Trust Company of New York as depositary. Each Havas Advertising
ADS represents one Havas Advertising share.

                                       46
<PAGE>

  The table below indicates the range of the high and low prices in U.S.
dollars for the ADSs on Nasdaq beginning on September 27, 2000, the date Havas
Advertising ADSs began trading on Nasdaq. The table below also provides the
high and low prices in euro for the Havas Advertising shares on Euronext Paris
from 1996 to May 31, 2001. The high and low closing prices have been adjusted
to reflect our 20 for 1 stock split on May 26, 2000.

<TABLE>
<CAPTION>
                                             Nasdaq         Euronext Paris
                                          price per ADS     price per Share
                                          ------------- -----------------------
Calendar Period                            High   Low      High         Low
---------------                           ------ ------ ----------- -----------
Annual information for the past five years:

<S>                                       <C>    <C>    <C>         <C>
1996.....................................    --     --  (Euro) 4.76 (Euro) 3.00
1997.....................................    --     --  (Euro) 6.04 (Euro) 4.14
1998.....................................    --     --  (Euro)10.12 (Euro) 5.94
1999.....................................    --     --  (Euro)22.20 (Euro) 6.95
2000..................................... $16.50 $13.00 (Euro)36.50 (Euro)14.70

Quarterly information for the past two years:

1999
First quarter............................    --     --  (Euro) 9.50 (Euro) 6.95
Second quarter...........................    --     --  (Euro)10.69 (Euro) 8.65
Third quarter............................    --     --  (Euro)11.94 (Euro) 9.98
Fourth quarter...........................    --     --  (Euro)22.20 (Euro)11.38

2000
First quarter............................    --     --  (Euro)36.50 (Euro)18.11
Second quarter...........................    --     --  (Euro)29.25 (Euro)18.45
Third quarter............................    --     --  (Euro)28.45 (Euro)17.80
Fourth quarter........................... $16.50 $13.00 (Euro)19.82 (Euro)14.70

2001
First quarter............................ $16.75 $11.64 (Euro)18.50 (Euro)13.25
Second quarter (through May 31, 2001).... $13.96 $11.19 (Euro)18.60 (Euro)12.05

Monthly information for most recent six months:

December 2000............................ $15.38 $13.38 (Euro)17.90 (Euro)14.70
January 2001............................. $16.75 $13.75 (Euro)18.50 (Euro)14.05
February 2001............................ $15.13 $13.52 (Euro)16.45 (Euro)14.85
March 2001............................... $14.94 $11.64 (Euro)16.59 (Euro)13.25
April 2001............................... $13.18 $11.19 (Euro)15.20 (Euro)12.05
May 2001................................. $13.96 $12.76 (Euro)16.60 (Euro)14.30
</TABLE>

9.B Plan of distribution

  Not applicable.

9.C Markets

  See Item 9.A "Listing details."

9.D Selling shareholders

  Not applicable.

                                       47
<PAGE>

9.E Dilution

  Not applicable.

9.F Expenses of the issue

  Not applicable.

ITEM 10. ADDITIONAL INFORMATION

10.A Share capital

  Not applicable

10.B Memorandum and Articles of Association

  For a general description of our Articles of Association, or statuts, see
pages 116-126 of our registration statement on Form F-4, as filed with the SEC
on May 18, 2001, registration number 333-59880, which is incorporated by
reference herein.

10.C Material contracts

  The following summarizes each material contract, other than contracts entered
into in the ordinary course of business, to which we are a party, for the two
years immediately preceding the date of filing of this annual report. Since the
following is only a summary, you should carefully read each of the material
contracts, which are filed as exhibits to this annual report, that are
discussed below.

  . On October 5, 1999, in connection with our initial acquisition of a 45%
    equity interest in Media Planning Group, we entered into a Second
    Supplemental and Amendment Agreement to the Merger Agreement with
    Advertising Antwerpen B.V., Cantabro Catalana de Inversiones, S.A.,
    Compania de Catera e Inversiones, S.A., Deya , S.A., Invermaro, SL,
    Inversiones y Servicios Publicitarios, S.A. and Calle Arcos, S.L., which
    amends the original merger agreement, dated November 29, 1998. For more
    information on the Media Planning Group transaction, please see page 24.

  . We entered into a trademark license agreement with Vivendi Universal
    Publishing, formerly known as Havas, S.A., dated December 7, 1999,
    whereby we were granted the right to use the name "Havas Advertising" in
    all countries so long as Vivendi remained our largest shareholder and
    Vivendi applied for and obtained trademark protection. In return for this
    right during 1999, we paid Vivendi (Euro)610,000. This agreement expired
    on December 31, 1999 and we subsequently entered into a new trademark
    license agreement with Vivendi on October 2, 2000, which was
    retroactively made effective as of January 1, 2000. We paid Vivendi
    (Euro)305,000 for the worldwide right to use the name "Havas Advertising"
    in 2000. This agreement expired on December 31, 2000.

  . In connection with our merger of Snyder Communications, on February 20,
    2000, EWDB North America, Inc., one of our wholly-owned subsidiaries,
    executed and delivered a guaranty in favor of Snyder Communications
    pursuant to which EWDB guaranteed some of our performance obligations
    under the merger agreement. The guaranty automatically terminated upon
    full performance by all parties of their respective obligations under the
    merger agreement.

  . On May 18, 2000, we entered into a $400,000,000 multicurrency 364 day
    term loan facility on May 18, 2000, which was amended on June 15, 2000,
    with Morgan Guaranty Trust Company of New York and Societe Generale, as
    lenders, and certain of our subsidiaries. The facility was obtained
    primarily to refinance Snyder Communication's borrowings outstanding at
    the time of its acquisition by us, to finance future mergers and
    acquisitions, and for general corporate purposes. In addition, we and
    several of our subsidiaries executed and delivered a Guarantee and
    Indemnity for the benefit of the lenders

                                       48
<PAGE>

   pursuant to which we and our guarantying subsidiaries guaranteed the
   prompt payment of principal and interest and the performance of all
   obligations under the term loan facility. For more information relating to
   this credit facility, please see the discussion on pages 95-97 in
   "Operating and Financial Review and Prospects--Liquidity and Capital
   Resources."

  . On August 3, 2000, we entered into an Amended and Restated Agreement and
    Plan of Merger with HAS Acquisition Corporation, one of our subsidiaries,
    and Snyder Communications, pursuant to which HAS Acquisition merged with
    and into Snyder Communications.

  . On August 18, 2000, we entered into an Amended and Restated Company
    Stockholder Voting Agreement with certain stockholders of Snyder
    Communications, Inc. in connection with the merger with Snyder
    Communications. Under this agreement, some of the stockholders of Snyder
    Communications agreed to vote in favor of the merger.

  . On January 1, 2001, EWDB North America Inc., one of our U.S.
    subsidiaries, entered into Fourth Amendment of Lease with The Rector,
    Church-Wardens and Vestrymen of Trinity Church in the City of New York.
    Pursuant to this lease, EWDB North America occupies approximately 158,000
    square feet for its headquarters for a fixed annual rent of approximately
    $3,732,191, which escalates to $4,127,443 starting on January 1, 2003.
    The amended lease terminates on December 31, 2007.

  . On January 20, 2001, we entered into Agreement to Contribute with
    Advertising Antwerpen B.V., Banco Santander Central Hispano, S.A.,
    Compania de Cartera e Inversiones S.A., Deya S.A., Mr. Jose Martinez-
    Rovira Vidal, Mrs. Maris Luisa Munoz Alvarez, Mrs. Cristina Martinez-
    Rovira Munoz, and Mrs. Sandra Martinez-Rovira Munoz, who are former
    shareholders of Media Planning Group, and Havas Advertising, S.A.,
    pursuant to which the former shareholders of Media Planning Group agreed
    to sell the shares they held in Media Planning Group to us for 28.8
    million of Havas Advertising shares and a cash payment of (Euro)51.2
    million.

  . On February 5, 2001, we entered into an Agreement and Plan of Merger,
    which was subsequently amended on May 14, 2001, with HAS Acquisition II
    Corporation, one of our subsidiaries, and Snyder Communications, pursuant
    to which HAS Acquisition II will merge with and into Snyder
    Communication. After the merger, Snyder Communications will be our
    wholly-owned subsidiary. We expect this merger to be completed on or
    about June 26, 2001.

  . On April 2, 2001, we entered into Protocol Agreement and Commercial Lease
    with Suresnes Immobilier pursuant to which we agreed to lease an office
    building, which contains approximately 21,340 square meters of leasable
    area, for a period of nine years, commencing on the date we take
    possession of the leased building. The building is currently under
    construction and we anticipate that we will take possession of the leased
    building on February 9, 2003. The minimum net annual rent is
    approximately (Euro)7.6 million, which may be adjusted annually based on
    the national construction cost index.

  . On May 14, 2001, in connection with our acquisition of the remaining 55%
    interest in Media Planning Group, we entered into a registration rights
    agreement with Acacia ISP, S.L., Banco Santander Central Hispano, S.A.,
    Compania de Cartera e Inversiones S.A., Deya S.A., Jose Martinez-Rovira
    Vidal, Maria Luisa Munoz Alvarez, Cristina Martinez-Rovira Munoz and
    Sandra Martinez-Rovira Munoz, pursuant to which we granted to the sellers
    certain registration rights with respect to Havas Advertising shares they
    received as consideration for the acquisition.

10.D Exchange controls

  French exchange control regulations currently do not limit the amount of
payments that we may remit to non-residents of France. Laws and regulations
concerning foreign exchange controls do require, however, that all payments or
transfers of funds made by a French resident to a non-resident be handled by
an accredited intermediary. In France, all registered banks and most credit
establishments are accredited intermediaries.

                                      49
<PAGE>

10.E Taxation

French taxation

  The following is a description of the French tax consequences of owning and
disposing of Havas Advertising shares. This description may only be relevant to
holders of Havas Advertising shares who are not residents of France and do not
hold their shares in connection with a permanent establishment or a fixed base
in France through which the holders carry on a business or perform personal
services.

  This description may not address all aspects of French tax laws that may be
relevant in light of the particular circumstances of individual holders of
Havas Advertising shares. It is based on the laws, conventions and treaties in
force as of the date of this Annual Report, all of which are subject to change,
possibly with retroactive effect, or different interpretations.

  Holders of Havas Advertising shares should consult their own tax advisors
about the potential tax effects of owning or disposing of shares in any
particular situation.

 Taxation on sale or disposal of Havas Advertising shares

  Generally, a holder of Havas Advertising shares will not be subject to any
French income tax or capital gains tax when the holder sells or disposes of
Havas Advertising shares if both of the following apply:

  . the holder is not a French resident for French tax purposes; and

  . the holder has held not more than 25% of Havas Advertising's dividend
    rights, known as droits aux benefices sociaux, at any time during the
    preceding five years, either directly or indirectly.

  If a double tax treaty between France and the country of residence of a
holder of Havas Advertising shares contains more favorable provisions, a holder
may not be subject to any French income tax or capital gains tax when the
holder sells or disposes of any Havas Advertising shares, even if one or both
of the above statements does not apply to the holder.

  Subject to various conditions, foreign states, international organizations
and a number of foreign public bodies are not considered French residents for
these purposes.

  If a holder of Havas Advertising shares transfers shares using a written
agreement, that agreement must generally be registered. The holder will be
required to pay a registration duty of 1% of either the purchase price or the
market value of the shares transferred, whichever is higher. The maximum duty
is FF 20,000 per transfer. However, if the agreement is executed outside
France, the holder of Havas Advertising shares will not be required to pay this
duty.

 Taxation of dividends

  Withholding tax and avoir fiscal. In France, companies may only pay dividends
out of income remaining after tax has been paid. When shareholders resident in
France receive dividends from French companies, they are entitled to a tax
credit, known as the avoir fiscal. The amount of the avoir fiscal is generally
equal to:

  . 50% of the dividend paid for shareholders who are individuals or
    corporate shareholders that benefit from the participation exemption
    regime defined in Articles 145 and 216 of the French Tax Code; or

  . 25% of the dividend paid for shareholders who are not individuals and who
    do not benefit from the participation exemption regime if the avoir
    fiscal is used in year 2001 (the amount will be reduced to 15% for avoir
    fiscal used as from January 1, 2002).

                                       50
<PAGE>

  Shareholders resident in France and entitled to the avoir fiscal at the rate
of 25% (15% as from January 1, 2002) may generally be entitled to an additional
tax credit equal to 50% (70% as from January 1, 2002) of any precompte actually
paid in cash by a company upon distribution of dividends paid out of specified
profits. See "--The Precompte."

  Under French domestic law, shareholders who are not residents of France are
not eligible for the avoir fiscal unless the double tax treaty between France
and the country of residence of the shareholder provides for a transfer of the
avoir fiscal.

  French companies must generally deduct a 25% French withholding tax from
dividends paid to non-residents. Under most tax treaties between France and
other countries, the rate of this withholding tax may be reduced or eliminated
in some circumstances. Generally, if dividends are subject to a French
withholding tax, a holder who is a non-French resident is subsequently entitled
to a tax credit in that holder's country of residence for the amount of tax
actually withheld.

  The following countries, French overseas territories, known as Territoires
d'Outre-Mer, and other territories have entered into income tax treaties with
France that provide for the arrangements summarized below:

<TABLE>
<S>           <C>         <C>         <C>            <C>
Australia     Gabon       Malaysia    Pakistan       United States
Austria       Germany     Mali        Senegal        Ukraine
Belgium       Ghana       Malta       Singapore      Venezuela
Bolivia       Iceland     Mauritius   South Korea    French Territoires
Brazil        India       Mexico      Spain          d'Outre-Mer and Other
Burkina Faso  Israel      Namibia     Sweden         Mayotte
Cameroon      Italy       Netherlands Switzerland    New Caledonia
Canada        Ivory Coast New Zealand Togo           Saint-Pierre et Miquelon
Estonia       Japan       Niger       Turkey
Finland       Luxembourg  Norway      United Kingdom
</TABLE>

  Under these treaties, a shareholder who fulfills specified conditions may
generally apply to the French tax authorities for the following:

  . lower rate of withholding tax, generally 15%; and

  . refund of the avoir fiscal, after deduction of withholding tax payable on
    the avoir fiscal.

  Except for the United States, none of the countries or territories listed
above has a treaty granting benefits to holders of Havas Advertising ADSs, as
opposed to shares. Accordingly, this discussion of treaty benefits does not
apply to Havas Advertising ADS holders. If these arrangements apply to a
shareholder, Havas Advertising will withhold tax from the dividend at the lower
rate, provided that the shareholder has established, before the date of payment
of the dividend, that the shareholder is entitled to the lower rate and has
complied with the filing formalities. Otherwise, Havas Advertising must
withhold tax at the full rate of 25%, and the shareholder may subsequently
claim the excess tax paid.

  Dividends distributed to German tax residents which give rise to the avoir
fiscal are exempt from withholding tax provided that the beneficiary has
complied with the filing formalities. Such dividends give rise to an avoir
fiscal granted by the German Treasury.

  Some of the countries and territories listed above impose additional
conditions for corporate entities wishing to receive the avoir fiscal. In other
countries and territories, individual residents may receive the avoir fiscal
but corporate entities may not.

                                       51
<PAGE>

  The Precompte. A French company must pay an equalization tax known as the
precompte to the French tax authorities if it distributes dividends which give
rise to avoir fiscal and whenever dividends are distributed out of

  . profits which have not been taxed at the ordinary corporate income tax
    rate; or

  . profits which have been earned during a tax year closed more than five
    years before the distribution.

  The amount of the precompte is 50% of the net dividends.

  A shareholder that is not a French resident for French tax purposes may
generally obtain a refund of the amount of any precompte Havas Advertising
actually pays in cash, net of applicable withholding tax, if the shareholder is
entitled to the benefits of a tax treaty and the treaty does not provide for
the transfer of the avoir fiscal.

 Estate and gift tax

  France imposes estate and gift tax where an individual or entity acquires
real and personal property from a non-resident of France by way of inheritance
or gift. France has entered into estate and gift tax treaties with a number of
countries. Under these treaties, residents of those countries may be exempted
from this tax or obtain a tax credit, assuming specified conditions are met.
Holders of Havas Advertising shares should consult their own tax advisors about
whether French estate and gift tax will apply and whether they may claim an
exemption or tax credit.

 Wealth tax

  French individual residents are taxable on their worldwide assets. Non-
resident individuals are taxable only on their assets which are located in
France. However, financial investments made by non-resident individuals, other
than in real property companies, are exempt from wealth tax under certain
conditions.

  If a double tax treaty between France and a holder's country of residence
contains more favorable provisions, the holder may not be subject to French
wealth tax.

Taxation of U.S. investors

  On August 31, 1994, the United States and France signed a tax treaty, which
generally became effective on December 30, 1995. The following is a general
summary of the principal tax effects on holders of Havas Advertising shares or
Havas Advertising ADSs for purposes of U.S. federal income tax and French tax,
if all of the following five points apply:

  . the holder owns, directly or indirectly, less than 10% of Havas
    Advertising's share capital;

  . the holder is any one of (a), (b) or (c) below:

    (a) a citizen or resident of the United States for U.S. federal income
    tax purposes, or

    (b) a U.S. domestic corporation, or

    (c) otherwise subject to U.S. federal income taxation on a net income
    basis in respect of its Havas Advertising shares or Havas Advertising
    ADSs;

  . the holder is entitled to the benefits of the U.S.-France tax treaty
    under the "limitations on benefits" article of that treaty;

  . the holder holds Havas Advertising shares or Havas Advertising ADSs as
    capital assets; and

  . the holder's functional currency is the U.S. dollar.

                                       52
<PAGE>

  For purposes of the U.S.-France tax treaty and U.S. federal income tax,
holders of Havas Advertising ADSs will be treated as holders of the shares
which their Havas Advertising ADSs represent.

  Special rules may apply to United States expatriates, insurance companies,
pass-through entities and investors in such entities, tax-exempt organizations,
financial institutions, persons subject to the alternative minimum tax,
securities broker-dealers and persons holding their Havas Advertising shares or
Havas Advertising ADSs as part of a conversion transaction, among others. Those
special rules are not discussed in this registration statement.

  Holders of Havas Advertising shares or Havas Advertising ADSs should consult
their own tax advisers as to the particular tax consequences to them of owning
Havas Advertising shares or Havas Advertising ADSs, including their eligibility
for the benefits of the U.S.-France tax treaty, the applicability and effect of
state, local, foreign and other tax laws and possible changes in tax law.

 Taxation of dividends

  Withholding tax and avoir fiscal. Dividends paid to non-residents by French
companies are subject to a 25% French withholding tax. Under the U.S.-France
tax treaty, this withholding tax is reduced to 15% if a holder's ownership of
Havas Advertising shares or Havas Advertising ADSs is not effectively connected
with a permanent establishment or a fixed base that the holder has in France.

  Specific provisions apply if the holder is considered an "eligible" U.S.
holder of Havas Advertising shares or Havas Advertising ADSs. A holder is
"eligible" if its ownership of Havas Advertising shares or Havas Advertising
ADSs is not effectively connected with a permanent establishment or a fixed
base that the holder has in France and any one of the following four points
applies:

  . the holder is an individual or other non-corporate holder that is a
    resident of the United States for purposes of the U.S.-France tax treaty;

  . the holder is a U.S. corporation, other than a regulated investment
    company;

  . the holder is a U.S. corporation which is a regulated investment company,
    provided that less than 20% of the holder's shares are beneficially owned
    by persons who are neither citizens nor residents of the United States;
    or

  . the holder is a partnership or trust that is a resident of the United
    States for purposes of the U.S.-France tax treaty, but only to the extent
    that the holder's partners, beneficiaries or grantors would qualify as
    "eligible" under one of the first two points in this list.

  If a holder is an "eligible" U.S. holder, dividends distributed by Havas
Advertising will be subject to a withholding tax at the reduced rate of 15%,
provided that the holder has previously established that it is a resident of
the United States under the U.S.-France tax treaty in accordance with the
following procedures:

  . The holder must complete French Treasury Form RF1 A EU-No. 5052 and send
    it to the paying establishment before the date of payment of the
    dividend. If the holder is not an individual, the holder must also send
    the paying establishment an affidavit attesting that the holder is the
    beneficial owner of all the rights attached to the full ownership of
    Havas Advertising shares or Havas Advertising ADSs, including, among
    other things, the dividend rights.

  . If the holder cannot complete Form RF1 A EU-No. 5052 before the date of
    payment of the dividend, the holder may complete a simplified certificate
    and send it to the French tax authorities or the institution which holds
    the shares on his behalf. This certificate must state all of the
    following five points:

   (a) the holder is a resident of the United States for purposes of the
   U.S.-France tax treaty;

                                       53
<PAGE>

   (b) the holder's ownership of Havas Advertising shares or Havas
   Advertising ADSs is not effectively connected with a permanent
   establishment or a fixed base in France;

   (c) the holder owns all the rights attached to the full ownership of
   Havas Advertising shares or Havas Advertising ADSs, including, among
   other things, the dividend rights;

   (d) the holder fulfills all the requirements under the U.S.-France tax
   treaty to be entitled to the reduced rate of withholding tax and to be
   entitled to the transfer of the avoir fiscal; and

   (e) the holder claims the reduced rate of withholding tax and payment of
   the avoir fiscal.

  If a holder is not an "eligible" U.S. holder, or if the holder has not
completed Form RF1 A EU-No. 5052 or the five-point certificate before the
dividend payment date, Havas Advertising will deduct French withholding tax at
the rate of 25%. In that case, a holder may claim a refund of the excess
withholding tax.

  If a holder is an "eligible" U.S. holder, the holder may also claim the avoir
fiscal, by completing Form RF1 A EU-No. 5052 and sending it to the paying
establishment before December 31 of the year following the year during which
the dividend is paid. The holder will be entitled to a payment equal to the
avoir fiscal, less a 15% withholding tax on the avoir fiscal. As noted below,
the holder will not receive this payment until after the close of the calendar
year in which the dividend was paid. To receive the payment, the holder must
submit a claim to the French tax authorities and attest that they are subject
to U.S. federal income taxes on the payment of the avoir fiscal and the related
dividend. For partnerships or trusts, the partners, beneficiaries or grantors
must make the attestation.

  Specified rules apply to the following:

  . tax-exempt U.S. pension funds, which include the exempt pension funds
    established and managed in order to pay retirement benefits subject to
    the provisions of Section 401(a) of the Internal Revenue Code (qualified
    retirement plans), Section 403(b) of the U.S. Internal Revenue Code (tax
    deferred annuity contracts) or Section 457 of the U.S. Internal Revenue
    Code (deferred compensation plans); and

  . various other tax-exempt entities, including specified state-owned
    institutions, not-for-profit organizations and individuals for dividends
    which they beneficially own and which are derived from an investment
    retirement account.

  Entities in these two categories are eligible for the reduced withholding tax
rate of 15% on dividends, subject to the same withholding tax filing
requirements as "eligible" U.S. holders, except that they may have to supply
additional documentation evidencing their entitlement to these benefits. These
entities are not entitled to the full avoir fiscal. These entities may claim a
partial avoir fiscal equal to 30/85 of the gross avoir fiscal, provided that
they own, directly or indirectly, less than 10% of the company's capital and
they satisfy the filing formalities contained in U.S. Internal Revenue Service
regulations.

  The avoir fiscal or partial avoir fiscal and any French withholding tax
refund are generally expected to be paid within 12 months after the holder of
Havas Advertising shares or Havas Advertising ADSs files Form RF1 A EU-No.
5052. However, they will not be paid before January 15 following the end of the
calendar year in which the dividend is paid.

  For U.S. federal income tax purposes, the gross amount of a dividend and any
avoir fiscal, including any French withholding tax, will be included in each
holder's gross income as dividend income when payment is received by them (or
the custodian, if the holder owns Havas Advertising ADSs), to the extent they
are paid or deemed paid out of Havas Advertising's current or accumulated
earnings and profits as calculated for U.S. federal income tax purposes.
Dividends paid by Havas Advertising will not give rise to any dividends
received deduction. They will generally constitute foreign source "passive"
income for foreign tax credit purposes. For some recipients, they will
constitute foreign source "financial services" income for foreign tax credit
purposes.

                                       54
<PAGE>

  Also for U.S. federal income tax purposes, the amount of any dividend paid in
euro or French francs, including any French withholding taxes, will be equal to
the U.S. dollar value of the euro or French francs on the date the dividend is
included in income, regardless of whether the payment is in fact converted into
U.S. dollars. A holder will generally be required to recognize U.S. source
ordinary income or loss when the holder sells or disposes of the euros or
French francs. A holder may also be required to recognize foreign currency gain
or loss if that holder receives a refund under the U.S.-France tax treaty of
tax withheld in excess of the treaty rate. This foreign currency gain or loss
will generally be U.S. source ordinary income or loss.

  To the extent that any dividends paid exceed Havas Advertising's current and
accumulated earnings and profits as calculated for U.S. federal income tax
purposes, the distribution will be treated as follows:

  . First, as a tax-free return of capital, which will cause a reduction in
    the adjusted basis of a holder's Havas Advertising shares or Havas
    Advertising ADSs. This adjustment will increase the amount of gain, or
    decrease the amount of loss, which a holder will recognize if such holder
    later disposes of those Havas Advertising shares or Havas Advertising
    ADSs.

  . Second, the balance of the dividend in excess of the adjusted basis will
    be taxed as capital gain recognized on a sale or exchange.

  French withholding tax imposed on the dividends a holder receives and on any
avoir fiscal at 15% under the U.S.-France tax treaty is treated as payment of a
foreign income tax. A holder may take this amount as a credit against the
holder's U.S. federal income tax liability, subject to various conditions and
limitations, including minimum holding period requirements.

  The Precompte. A French company must pay an equalization tax known as the
precompte to the French tax authorities if it distributes dividends which give
rise to avoir fiscal and whenever dividends are distributed out of:

  . profits which have not been taxed at the ordinary corporate income tax
    rate; or

  . profits which have been earned during a tax year closed more than five
    years before the distribution.

  The amount of the precompte is 50% of the net dividends.

  If a holder is not entitled to the full avoir fiscal, the holder may
generally obtain a refund from the French tax authorities of any precompte paid
by Havas Advertising with respect to dividends distributed to them. Under the
U.S.-France tax treaty, the amount of the precompte refunded to U.S. residents
is reduced by the 15% withholding tax applicable to dividends and by the
partial avoir fiscal, if any. A holder is entitled to a refund of any precompte
which Havas Advertising actually pays in cash, but not to any precompte which
Havas Advertising pays by off-setting French and/or foreign tax credits. To
apply for a refund of the precompte, a holder should file French Treasury Form
RF1 B EU-No. 5053 before December 31 of the year following the year in which
the dividend was paid. The form and its instructions are available from the
Internal Revenue Service in the United States or from the French Centre des
Impots des Non-Residents whose address is 9, rue d'Uzes, 75094 Paris Cedex 2,
France.

  For U.S. federal income tax purposes, the amount of the precompte will be
included in a holder's gross income as dividend income in the year the holder
receives it. It will generally constitute foreign source "passive" income for
foreign tax credit purposes. For some recipients, it will constitute foreign
source "financial services" income for foreign tax credit purposes. The amount
of any precompte paid in euro or French francs, including any French
withholding taxes, will be equal to the U.S. dollar value of the euro or French
francs on the date the precompte is included in income, regardless of whether
the payment is in fact converted into U.S. dollars. A holder will generally be
required to recognize a U.S. source ordinary income or loss when the holder
sells or disposes of the euro or French francs.

                                       55
<PAGE>

 Taxation of capital gains

  If a holder is a resident of the United States for purposes of the U.S.-
France tax treaty, the holder will not be subject to French tax on any capital
gain if the holder sells or exchanges its Havas Advertising shares or Havas
Advertising ADSs, unless the holder has a permanent establishment or fixed base
in France and the Havas Advertising shares or Havas Advertising ADSs the holder
sold or exchanged were part of the business property of that permanent
establishment or fixed base. Special rules apply to individuals who are
residents of more than one country.

  In general, for U.S. federal income tax purposes, a holder will recognize
capital gain or loss if the holder sells or exchanges its shares or Havas
Advertising ADSs in the same manner as the holder would if it were to sell or
exchange any other shares held as capital assets. Any gain or loss will
generally be U.S. source gain or loss. If a holder is an individual, any
capital gain will generally be subject to U.S. federal income tax at
preferential rates if the holder meets the minimum holding periods.

  We believe that we will not be treated as a passive foreign investment
company, or PFIC, for U.S. federal income tax purposes for the current taxable
year or for future taxable years. However, an actual determination of PFIC
status is fundamentally factual in nature and cannot be made until the close of
the applicable taxable year. We will be a PFIC for any taxable year in which
either:

  . 75% or more of its gross income is passive income; or

  . our assets which produce passive income or which are held for the
    production of passive income amount to at least 50% of the value of our
    total assets on average.

  If we were to become a PFIC, the tax applicable to distributions on Havas
Advertising shares or Havas Advertising ADSs and any gains a holder realizes
when the holder disposes of Havas Advertising shares or Havas Advertising ADSs
may be less favorable to the holder. Each holder should consult its own tax
advisors regarding the PFIC rules and their effect on the holder if they
purchase Havas Advertising shares or Havas Advertising ADSs.

 French estate and gift taxes

  Under "The Convention Between the United States of America and the French
Republic for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Estates, Inheritance and Gifts of November 24,
1978", if a holder transfers their Havas Advertising shares or Havas
Advertising ADSs by gift, or if they are transferred by reason of the holder's
death, that transfer will only be subject to French gift or inheritance tax if
one of the following applies:

  . the holder is domiciled in France at the time of making the gift, or at
    the time of the holder's death; or

  . the holder used the Havas Advertising shares or Havas Advertising ADSs in
    conducting a business through a permanent establishment or fixed base in
    France, or the holder held the Havas Advertising shares or Havas
    Advertising ADSs for that use.

 French wealth tax

  The French wealth tax does not generally apply to Havas Advertising shares or
Havas Advertising ADSs if the holder is a "resident" of the United States for
purposes of the U.S.-France tax treaty.

 United States information reporting and backup withholding

  A holder may be required to report dividend payments and proceeds from the
sale or disposal of such holder's Havas Advertising shares or Havas Advertising
ADSs to the Internal Revenue Service. U.S. federal backup withholding generally
is a withholding tax imposed at the rate of 31% on some payments to persons

                                       56
<PAGE>

that fail to furnish required information. Backup withholding will not apply to
a holder who furnishes a correct taxpayer identification number or certificate
of foreign statuts and makes any other required certification, or who is
otherwise exempt from backup withholding. Any U.S. persons required to
establish their exempt statuts generally must file Internal Revenue Service
Form W-9, entitled Request for Taxpayer Identification Number and
Certification. Finalized Treasury regulations, which are applicable to payments
made after December 31, 2000, have generally expanded the circumstances under
which information reporting and backup withholding may apply.

  Amounts withheld as backup withholding may be credited against a holder's
U.S. federal income tax liability. A holder may obtain a refund of any excess
amounts withheld under the backup withholding rules by filing the appropriate
claim for refund with the Internal Revenue Service and furnishing any required
information.

10.F Dividends and paying agents

  Not applicable

10.G Statement by experts

  Not applicable

10.H Documents on display

  It is possible to read and copy documents referred to in this annual report
on Form 20-F that have been filed with the SEC at the SEC's public reference
room located at 450 Fifth Street, NW, Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms and
their copy charges. In addition, the SEC also maintains a website
(http://www.sec.gov) that makes available reports, proxy statements and other
information regarding issuers that file electronically with the SEC.

10.I Subsidiary information

  Not applicable

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Impact of changes in foreign currency exchange rates and interest rates

  Foreign currency exchange rates. We have operations in over 65 countries. The
geographic diversity of our operations is reflected in the diversity of the
currencies that make up our results of operations. In 2000, 68.3% of our
revenues were realized in currencies other than the euro, including 38.0%
realized in U.S. dollars and 18.6% realized in British pounds. On a pro forma
basis assuming that the merger with Snyder Communications had been completed on
January 1, 2000, 76.3% of our 2000 revenues would have been realized in
currencies other than the euro, including 45.5% in U.S. dollars and 21.0% in
British pounds. In 1999, 58.7% of our revenues were realized in currencies
other than the euro, including 30.4% realized in U.S. dollars and 15.6%
realized in British pounds.

  The majority of our subsidiaries carry out businesses which are essentially
local, with almost all of their revenues received in local currency and almost
all of their costs incurred in local currency. For those subsidiaries that are
involved in more international businesses, non-local currency expenses are
generally billed to the clients for whom those expenses are incurred on a basis
which protects the subsidiary from currency exchange rate fluctuations between
the time that it incurs the expenses and the time that it receives payment from
the client. In addition, most of our acquisitions in the United States and the
United Kingdom have been funded through local borrowings, resulting in
financial expenses and repayment obligations in the same local

                                       57
<PAGE>

currency. For these reasons, our exposure to losses resulting from mismatches
between the currencies in which we receive revenues and the currencies in which
we incur costs tends to be limited. However, we cannot assure you that we will
be able to avoid mismatches between the currencies in which we receive revenues
and the currencies in which we incur costs in the future or that any mismatches
will not materially affect our results of operations.

  Because these foreign currency mismatches tend to be limited, we generally do
not hedge our exposure to foreign currencies and as of December 31, 2000 had
not entered into any foreign currency hedges, with the exception of the
following:

  . a currency and interest rate swap arrangement entered into with respect
    to a $30.0 million collateral deposit made by us used to secure a
    borrowing in the same amount made by a U.S. subsidiary;

  . a forward sale contract entered into in connection with a Canadian $10.7
    million intercompany loan by our U.K. subsidiary to a newly-acquired
    Canadian subsidiary; and

  . a forward purchase contract entered into in connection with a (Pounds)1.1
    million intercompany debt of our French subsidiary owed to two U.K.
    subsidiaries.

  For a discussion of the terms of the $30.0 million currency and interest rate
swap arrangement and for a discussion of the valuation of this arrangement and
our other financial instruments as of December 31, 2000, see Notes 2.14, 8 and
17 to our 2000 consolidated financial statements included elsewhere in this
annual report.

  Because of the geographic diversity of our operations, our subsidiaries
record their revenues, expenses, assets and liabilities in a number of
different currencies. When we prepare our consolidated financial statements,
the value of these different revenues, expenses, assets and liabilities is
translated into euro. Fluctuations in the value of the euro will have an impact
on the value of the amounts at which these revenues, expenses, assets and
liabilities are recorded in our financial statements. For this reason, changes
in foreign currency exchange rates can have a significant impact on our results
of operations and financial position as reported in euro. This is particularly
true with respect to changes in U.S. dollar/euro exchange rate and the British
pound/euro exchange rate.

  Interest rates. In the course of our operations, we are exposed to interest
rate changes, primarily as a result of our credit facilities used to finance
our investment activity and to maintain financial liquidity. We borrow at both
fixed and variable rates.

  As of December 31, 2000, we had (Euro)123.3 million of outstanding long-term
borrowings, including current maturities, comprised principally of:

  . (Euro)96.0 million in U.S. dollar denominated bank loans, including
    (Euro)1.3 million at fixed rates of 8.0% due 2005 and (Euro)94.7 million
    at variable rates ranging from 6.9% to 9.5%, due 2001 to 2006;

  . (Euro)22.7 million in a British pound denominated convertible bond at a
    fixed rate of 7.605%, due 2007; and

  . (Euro)4.6 million in other borrowings (including (Euro)1.2 million at
    fixed rates and (Euro)3.4 at variable rates).

  We generally do not hedge our interest rate exposure, with the exception of
the following:

  . the currency and interest rate swap arrangement described above; and

  . an interest rate swap arrangement entered into by Media Planning Group in
    connection with (Euro)30.1 million of a (Euro)42.1 million credit
    facility with a Spanish bank.

  For a discussion of the valuation of this (Euro)30.0 million interest rate
swap arrangement as of December 31, 2000, see Notes 2.14, 8 and 17 to our 2000
consolidated financial statements included elsewhere in this annual report.

                                       58
<PAGE>

  Based on approximately (Euro)98.1 million of outstanding long-term borrowings
at variable rates as of December 31, 2000, the impact on pre-tax earnings
resulting from a one-percentage point increase or decrease in interest rates
would be approximately (Euro)0.98 million, holding other variables constant.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

  Not applicable

                                       59
<PAGE>

                                    PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.

  None

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
         PROCEEDS.

  None

ITEM 15. [RESERVED]

ITEM 16. [RESERVED]

                                       60
<PAGE>

                                    PART III

ITEM 17. FINANCIAL STATEMENTS

  Not applicable

ITEM 18. FINANCIAL STATEMENTS

  The following financial statements are filed as part of this Annual Report on
Form 20-F:

Havas Advertising and Subsidiaries

<TABLE>
<S>                                                                        <C>
Report of Independent Public Accountants.................................. F-2
Consolidated Statements of Income......................................... F-3
Consolidated Balance Sheets............................................... F-4
Consolidated Statements of Changes in Shareholders' Equity and
 Comprehensive Income..................................................... F-5
Consolidated Statements of Cash Flows..................................... F-6
Notes to Consolidated Financial Statements................................ F-7
</TABLE>

ITEM 19. EXHIBITS

<TABLE>
<CAPTION>
 Exhibit No.                             Description
 -----------                             -----------
 <C>         <S>
    1.1      Statuts (Articles of Association) of Havas Advertising (English
             translation) (incorporated by reference to Exhibit 3.1 to Havas
             Advertising's registration statement on Form F-4
             (Reg. No. 333-43362)).

    2.1      Form of Deposit Agreement among Havas Advertising, Morgan Guaranty
             Trust Company of New York and all holders from time to time of
             Havas Advertising ADSs (incorporated by reference to Exhibit 4.1
             to Havas Advertising's registration statement on Form F-4 (Reg.
             No. 333-43362)).

    2.2      Note d'Operation (Prospectus) dated February 3, 1999 for the
             issuance of convertible bonds by Havas Advertising (incorporated
             by reference to Exhibit 4.2 to Havas Advertising's registration
             statement on Form F-4 (Reg. No. 333-43362)).

    2.3      Note d'Operation (Prospectus) dated December 12, 2000 for the
             issuance of convertible bonds by Havas Advertising (incorporated
             by reference to Exhibit 4.3 to Havas Advertising's registration
             statement on Form F-4 (Reg. No. 333-59880).

    4.1*     Fourth Amendment to Lease dated January 1, 2000, between EWDB
             North America Inc. and The Rector, Church-Wardens and Vestrymen of
             Trinity Church in the City of New York.

    4.2*     Protocol Agreement and Commercial Lease dated as of April 2, 2001
             by and between Havas Advertising and Suresnes Immobilier
             (summary).

    4.3      Agreement and Plan of Merger dated February 5, 2001 among Havas
             Advertising, HAS Acquisition II Corporation and Snyder
             Communications (incorporated by reference to Exhibit 2.1 to Havas
             Advertising's registration statement on Form F-4 (Reg. No. 333-
             59880)).

    4.4      Amendment No. 1 to Agreement and Plan of Merger dated May 14, 2001
             among Havas Advertising, HAS Acquisition II Corporation and Snyder
             Communications (incorporated by reference to Exhibit 2.1A to Havas
             Advertising's registration statement on Form F-4 (Reg. No. 333-
             59880).

    4.5      Amended and Restated Agreement and Plan of Merger dated as of
             August 3, 2000 among Havas Advertising, HAS Acquisition
             Corporation and Snyder Communications (incorporated by reference
             to Exhibit 2.1 to Havas Advertising's registration statement on
             Form F-4 (Reg. No. 333-43362)).
</TABLE>

                                       61
<PAGE>

<TABLE>

<CAPTION>
 Exhibit No.                             Description
 -----------                             -----------
 <C>         <S>
    4.6      Second Supplemental and Amendment Agreement to the Merger
             Agreement dated October 5, 1999 between Advertising Antwerpen
             B.V., Cantabro Catalana de Inversiones, S.A., Compania de Cartera
             e Inversiones, S.A., Deya, S.A., Havas Advertising S.A., Havas
             Advertising International S.A., Martinez-Rovira Family and Media
             Planning Group S.A. (incorporated by reference to Exhibit 2.4 to
             Havas Advertising's registration statement on Form F-4 (Reg. No.
             333-43362)).

    4.7      Agreement to Contribute dated as of January 20, 2001 between Havas
             Advertising and Advertising Antwerpen B.V., Banco Santander
             Central Hispano, S.A., Compania de Cartera e Inversiones S.A.,
             Deya S.A., Mr. Jose Martinez-Rovira Vidal, Mrs. Maria Luisa Munoz
             Alvarez, Mrs. Cristina Martinez-Rovira Munoz, Mrs. Sandra
             Martinez-Rovira Munoz and Havas Advertising S.A. (incorporated by
             reference to Exhibit 2.7 to Havas Advertising's registration
             statement on Form F-4 (Reg. No. 333-59880))

    4.8      Trademark License Agreement dated December 7, 1999 by and between
             Havas S.A. and Havas Advertising (incorporated by reference to
             Exhibit 10.6 to Havas Advertising's registration statement on Form
             F-4 (Reg. No. 333-43362)).

    4.9      Guaranty dated as of February 20, 2000 by EDWB North America,
             Inc., in favor of Snyder Communications (incorporated by reference
             to Exhibit 10.9 to Havas Advertising's registration statement on
             Form F-4 (Reg. No. 333-43362)).

    4.10     U.S. $400,000,000 Multicurrency Term Loan Facility dated as of May
             18, 2000 among Havas Advertising, Havas Advertising International
             SA, HAS Acquisition Corp. and EWDB North America Inc., as
             borrowers, the guarantors listed in Schedule 2 to the Loan
             Facility, as guarantors, the lenders listed in Schedule 1 to the
             Loan Facility, J.P. Morgan Securities Ltd. and Societe Generale,
             as arrangers and Morgan Guaranty Trust Company of New York, as
             agent (incorporated by reference to Exhibit 10.10 to Havas
             Advertising's registration statement on Form F-4 (Reg. No. 333-
             43362)).

    4.11     Loan Amendment Agreement dated as of June 15, 2000 among Havas
             Advertising, as borrower's agent, Morgan Guaranty Trust Company of
             New York and Societe Generale, as lenders, J.P. Morgan Securities
             Ltd. and Societe Generale, as arrangers, and Morgan Guaranty Trust
             Company of New York, as agent (incorporated by reference to
             Exhibit 10.11 to Havas Advertising's registration statement on
             Form F-4 (Reg. No. 333-43362)).

    4.12     Guarantee and Indemnity dated as of June 15, 2000 among Havas
             Advertising, Havas Advertising International SA, HAS Acquisition
             Corp., EWDB North America Inc. and Evelink plc, as guarantors, and
             Morgan Guaranty Trust Company of New York, as agent (incorporated
             by reference to Exhibit 10.12 to Havas Advertising's registration
             statement on Form F-4 (Reg. No. 333-43362)).

    4.13     Trademark License Agreement dated October 2, 2000 by and between
             Havas S.A. and Havas Advertising (incorporated by reference to
             Exhibit 2.1 to Havas Advertising's registration statement on Form
             F-4 (Reg. No. 333-59880)).

    4.14*    Registration Rights Agreement dated as of May 14, 2001 among
             Acacia ISP, S.L., Banco Santander Central Hispano, S.A., Compania
             de Cartera e Inversiones S.A., Deya S.A., Jose Martinez-Rovira
             Vidal, Maria Luisa Munoz Alvarez, Cristina Martinez-Rovira Munoz
             and Sandra Martinez-Rovira Munoz.

    8.1      List of subsidiaries (incorporated by reference to Exhibit 21.1 to
             Havas Advertising's registration statement on Form F-4 (Reg. No.
             333-59880)).
</TABLE>
--------
*  Filed herewith

                                       62
<PAGE>

                                   SIGNATURES

  The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.

                                          Havas Advertising

                                                   /s/ Jacques Herail
                                          By: _________________________________
                                                     Jacques Herail
                                          Executive Vice President and Chief
                                           Financial Officer

                                       63
<PAGE>

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S>                                                                        <C>
Havas Advertising and Subsidiaries
Report of Independent Public Accountants.................................. F-2
Consolidated Statements of Income......................................... F-3
Consolidated Balance Sheets............................................... F-4
Consolidated Statements of Changes in Shareholders' Equity and
 Comprehensive Income..................................................... F-5
Consolidated Statements of Cash Flows..................................... F-6
Notes to Consolidated Financial Statements................................ F-7
</TABLE>


                                      F-1
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Havas Advertising

  We have audited the accompanying consolidated balance sheets of HAVAS
ADVERTISING (a French corporation) and subsidiaries as of December 31, 2000 and
1999, and the related consolidated statements of income, changes in
shareholders' equity and comprehensive income and cash flows for each of the
three years in the period ended December 31, 2000, 1999 and 1998, expressed in
euro. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

  We conducted our audits in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

  In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of HAVAS
ADVERTISING and subsidiaries as of December 31, 2000 and 1999, and the results
of their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America.

  Also, in our opinion, the translated amounts in the accompanying consolidated
financial statements translated into U.S. dollars have been computed on the
basis set forth in Note 2 to the accompanying consolidated financial
statements.

                                          Barbier Frinault & Associes
                                          Member firm of Andersen Worldwide

                                                /s/ Christian Chiarasini
                                          _____________________________________
                                                  Christian Chiarasini

Neuilly-sur-Seine, France
April 25, 2001 (except for note 21.2 for which the date is June 15, 2001)


                                      F-2
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                         Years ended December 31,
                               -----------------------------------------------
                          Note      2000         2000        1999       1998
                          ---- -------------- ----------  ----------  --------
                                               (In Euro     (In Euro 000's
                               (In US Dollars   000's      except per share
                                000's except  except per       amounts)
                                 per share      share
                                amounts) (1)   amounts)
<S>                       <C>  <C>            <C>         <C>         <C>
Net revenues.............         1,543,049    1,643,640   1,124,380   872,767
Operating Expenses:
  Compensation and
   related costs.........          (884,058)    (941,689)   (659,387) (523,328)
  Stock based
   compensation..........  10        (4,469)      (4,760)     (4,625)  (16,400)
  General and
   administrative non
   payroll costs.........          (485,231)    (516,863)   (349,354) (270,405)
  Compensation to former
   shareholders of
   acquired businesses...   9       (15,361)     (16,363)    (17,442)   (6,725)
  Amortization of
   goodwill and other
   intangibles...........   6       (46,339)     (49,360)    (20,558)  (16,103)
                                 ----------   ----------  ----------  --------
    Total operating
     expenses............        (1,435,458)  (1,529,035) (1,051,366) (832,961)
                                 ----------   ----------  ----------  --------
Operating income.........           107,591      114,605      73,014    39,806
                                 ----------   ----------  ----------  --------
  Interest (expense).....           (49,401)     (52,622)    (28,200)  (30,403)
  Interest income........            27,678       29,482      26,157    20,795
  Exchange rate
   gains/(losses)........            (2,369)      (2,523)      1,189      (740)
  Net gain/(loss) on
   trading securities....             3,865        4,117       3,544     2,994
  Other..................              (610)        (650)       (165)     (437)
                                 ----------   ----------  ----------  --------
Financial income
 (expense)--Net..........           (20,837)     (22,196)      2,525    (7,791)
                                 ----------   ----------  ----------  --------
Income from operations
 before income tax.......            86,754       92,409      75,539    32,015
  Provision for income
   tax...................  12       (58,435)     (62,244)    (39,379)  (33,787)
  Minority interests.....            (9,345)      (9,954)    (15,515)   (9,270)
  Equity in earnings
   (losses) of
   investees.............   7         8,634        9,197       4,580      (203)
                                 ----------   ----------  ----------  --------
Net income (loss)........            27,608       29,408      25,225   (11,245)
                                 ----------   ----------  ----------  --------
Net income (loss) per
 share(2):                 14
  Basic..................              0.15         0.16        0.18     (0.09)
                                 ----------   ----------  ----------  --------
  Diluted................              0.14         0.15        0.16     (0.09)
                                 ==========   ==========  ==========  ========
</TABLE>
--------
(1)  Translation of amounts from euro ("(Euro)") into US dollars ("$") has been
     made solely for the convenience of the reader at the noon buying rate of
     (Euro)1 = $0.9388 on December 29, 2000

(2)  Reflects the effect of May 2000 stock split (see Note 14)

  The consolidated statements of income have been prepared in French francs and
translated into euro using the fixed exchange rate as of January 1, 1999 of
(Euro)1 = FF 6.55957.

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-3
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                      December 31,
                                            ----------------------------------
                                       Note     2000        2000       1999
                                       ---- ------------- ---------  ---------
                                                            (In Euro 000's
                                            (In US Dollar  except per share
                                              000's)(1)        amounts)
<S>                                    <C>  <C>           <C>        <C>
                ASSETS
Current assets:
 Cash and cash equivalents............          557,849     594,215    270,943
 Marketable securities................    4         615         655      2,044
 Accounts receivable, net of reserve
  for doubtful accounts of 36,602 and
  15,573 as of
  12/31/2000 and 1999, respectively...        1,553,627   1,228,832    786,234
 Costs billable to clients............           39,873      42,472     37,438
 Prepaid expenses and advances to
  suppliers...........................           67,907      72,334     37,906
 Other receivables....................           93,639      99,743     49,270
 Deferred tax assets..................   12      56,413      60,090     19,484
 Other current assets.................           99,495     105,982     66,775
                                              ---------   ---------  ---------
   Total current assets...............        2,069,418   2,204,323  1,270,094
                                              =========   =========  =========
Noncurrent assets:
 Property and equipment, net..........    5     249,680     265,956    132,807
 Goodwill and other intangible assets,
  net.................................    6   2,894,261   3,082,937    769,049
 Equity investments...................    7      46,822      49,875     49,281
 Noncurrent deferred tax assets.......   12     102,586     109,273     15,215
 Other assets.........................           76,333      81,309     50,400
                                              ---------   ---------  ---------
   Total noncurrent assets............        3,369,682   3,589,350  1,016,752
                                              ---------   ---------  ---------
Total assets..........................        5,439,100   5,793,673  2,286,846
                                              =========   =========  =========
 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
 Short-term borrowings................    8     173,172     184,461    139,307
 Current maturities of long-term
  borrowings..........................    8      23,206      24,719     28,213
 Short-term obligations under capital
  leases..............................   15       4,017       4,279      2,944
 Accounts payable.....................          821,427     874,976    557,496
 Other payables.......................          419,443     446,786    327,187
 Advances from clients................          218,521     232,766    188,530
 Related parties payable..............           85,341      90,904     61,425
 Accrued compensation................. 9,10      16,155      17,208     19,335
 Deferred tax liabilities.............   12      14,115      15,035      1,250
 Deferred income......................           43,841      46,698     35,467
 Other current liabilities............              --          --       9,010
                                              ---------   ---------  ---------
   Total current liabilities..........        1,819,238   1,937,832  1,370,164
                                              ---------   ---------  ---------
Noncurrent liabilities
 Long-term borrowings.................    8      92,527      98,559     90,397
 Convertible bonds....................    8     748,606     797,407    185,650
 Long-term obligations under capital
  leases..............................   15      10,965      11,680     12,499
 Accrued compensation................. 9,10      22,245      23,696      6,122
 Deferred tax liabilities.............   12     114,026     121,459      2,434
 Accrued pensions and other benefits
  costs...............................   11      20,424      21,756     20,647
 Other liabilities....................          101,599     108,221     19,347
                                              ---------   ---------  ---------
   Total noncurrent liabilities.......        1,110,392   1,182,778    347,096
                                              ---------   ---------  ---------
Minority interests....................            6,329       6,742     31,876
                                              ---------   ---------  ---------
Shareholders' equity
 Common stock: (Euro)0.40 par value,
  260,345,217 and 145,889,560 shares
  issued and outstanding at December
  31, 2000 and 1999, respectively(2)..          100,075     106,599     60,756
 Additional paid-in capital...........        2,537,193   2,702,591    489,007
 Retained earnings....................          (16,655)    (17,741)   (17,305)
 Deferred compensation................          (24,974)    (26,602)       --
 Accumulated other comprehensive
  income..............................          (76,999)    (82,019)    18,764
 Less-Treasury stock, at cost,
  6,151,350 and 6,000,000 shares at
  December 31, 2000 and 1999
  respectively(2).....................          (15,498)    (16,507)   (13,512)
 Total Shareholders' Equity...........        2,503,141   2,666,321    537,710
                                              ---------   ---------  ---------
Total Liabilities and Shareholders'
 Equity...............................        5,439,100   5,793,673  2,286,846
                                              =========   =========  =========
</TABLE>
-------
(1)  Translation of amounts from euro ("(Euro)") into US dollars ("$") has been
     made solely for the convenience of the reader at the noon buying rate of
     (Euro)1 = $0.9388 on December 29, 2000

(2) Reflects the effect of May 2000 stock split (See Note 14)

  The consolidated balance sheets have been prepared in French francs and
translated into euro using the fixed exchange rate as of January 1, 1999 of
(Euro)1 = FF 6.55957.

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-4
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME

                 (In thousands of Euro except number of shares)

<TABLE>
<CAPTION>
                                                                            Unrealized
                         Number of          Additional                       Gain on                 Currency      Total
                           shares   Common   paid-in    Retained  Treasury  Marketable   Deferred   Translation Shareholder
                         (000's)(1)  Stock   Capital    Earnings   Stock    Securities Compensation Adjustment    Equity
                         ---------- ------- ----------  --------  --------  ---------- ------------ ----------- -----------
<S>                      <C>        <C>     <C>         <C>       <C>       <C>        <C>          <C>         <C>
Balance at December 31,
 1998..................   136,495    54,820   431,049   (23,777)  (24,154)      --           --        (3,526)     434,412
Change in par
 value(2)..............       --      2,715    (2,715)      --        --        --           --           --           --
Comprehensive income:
 Net income............       --        --        --     25,225       --        --           --           --        25,225
 Currency translation
  adjustment...........       --        --        --        --        --        --           --        21,784       21,784
 Unrealized gains on
  Securities...........       --        --        --        --        --        506          --           --           506
 Total comprehensive
  income...............       --        --        --     25,225       --        506          --        21,784       47,515
Dividends (per share
 amount:
 ((Euro)0.13)..........       --        --        --    (18,686)      --        --           --           --       (18,686)
Treasury stock
 transactions..........     1,344       --        121       --     10,642       --           --           --        10,763
Exercise of stock
 options and warrants..     3,192     1,277    17,208       --        --        --           --           --        18,485
Common stock issuance--
 convertible bonds.....     4,859     1,944    43,344       --        --        --           --           --        45,288
Other..................       --        --        --        (67)      --        --           --           --           (67)
                          -------   ------- ---------   -------   -------      ----      -------     --------    ---------
Balance at December 31,
 1999..................   145,890    60,756   489,007   (17,305)  (13,512)      506          --        18,258      537,710
                          =======   ======= =========   =======   =======      ====      =======     ========    =========
Comprehensive income:
 Net income............       --        --        --     29,408       --        --           --           --        29,408
 Currency translation
  adjustment...........       --        --        --        --        --        --           --      (100,277)    (100,277)
 Unrealized gains on
  Securities...........       --        --        --        --        --       (506)         --           --          (506)
 Total comprehensive
  income...............       --        --        --     29,408       --       (506)         --      (100,277)     (71,375)
Dividends (per share
 amount:
 ((Euro)0.13)..........       --        --        --    (29,844)      --        --           --           --       (29,844)
Treasury stock
 transactions..........      (151)      --        --        --     (2,995)      --           --           --        (2,995)
Stock option plans.....       --        --      3,944       --        --        --           --           --         3,944
Exercise of stock
 options and warrants..     3,527     1,411    18,245       --        --        --           --           --        19,656
Stock option tax
 benefit...............       --        --      7,511       --        --        --           --           --         7,511
Common stock issuance--
 convertible bonds.....    10,329     4,132    92,420       --        --        --           --           --        96,552
Common stock issuance--
 Snyder
 acquisition(3)........   100,751    40,300 2,091,464       --        --        --           --           --     2,131,764
Unearned compensation
 on unvested options...       --        --        --        --        --        --       (26,602)         --       (26,602)
                          -------   ------- ---------   -------   -------      ----      -------     --------    ---------
Balance at December 31,
 2000..................   260,346   106,599 2,702,591   (17,741)  (16,507)      --       (26,602)     (82,019)   2,666,321
                          =======   ======= =========   =======   =======      ====      =======     ========    =========
</TABLE>
-------
(1) Reflects the effect of May 2000 stock split (see Note 14)

(2) In connection with the conversion of French francs common stock into euro,
    the par value of 50 francs per share has been converted and increased up to
    8 euro per share (the equivalent of 50 francs being 7.62). The effect of
    the increase was deducted from paid-in capital.

(3) Includes the fair value of SNC options at acquisition date

  The consolidated statements of changes in shareholders' equity and
comprehensive income have been prepared in French francs and translated into
euro using the fixed exchange rate as of January 1, 1999 of (Euro)1 =
FF6.55957.

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-5
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                               Years ended December 31,
                                          -------------------------------------
                                            2000      2000      1999     1998
                                          --------  --------  --------  -------
                                           (In US        (In Euro 000's)
                                           Dollar
                                          000's)*
<S>                                       <C>       <C>       <C>       <C>
Cash flows from operating activities
 Net income (loss):.....................    27,608    29,408    25,225  (11,245)
 Adjustments made to reconcile net
  income (loss) to net cash provided by
  operating activities:
 Minority interests.....................     9,345     9,954    15,515    9,270
 Amortization and depreciation..........   104,461   111,271    58,348   44,853
 Stock based compensation--Parent
  company plan..........................     3,820     4,069     1,258   14,252
 Convertible debt expense accrued until
  conversion date.......................       616       656       673    3,948
 (Gain) Loss on disposal of fixed
  assets................................    (4,881)   (5,199)   (4,863)     (13)
 Earning of investees carried under
  equity method in excess of dividends
  received..............................    (1,923)   (2,048)   (4,580)     203
 Deferred tax...........................     9,304     9,910      (697)   7,171
 Change in assets and liabilities:
  Cost billable to clients..............    (5,960)   (6,348)   10,557    3,961
  Accounts receivable...................   (45,507)  (48,473)   34,995  (73,758)
  Prepaid and advances to suppliers.....       463       493    (7,864)  (6,187)
  Other receivables.....................   (20,441)  (21,774)   29,002    3,204
  Other assets..........................       496       528   (29,865)  (3,319)
  Advances from clients.................    12,512    13,328   (48,810)  58,224
  Accounts payable......................   (32,748)  (34,883)  (31,620)  19,739
  Other payables........................    39,157    41,709    59,748    2,495
  Accrued compensation..................     5,094     5,426     9,177   10,080
  Other liabilities.....................       (74)      (79)    2,023    4,007
                                          --------  --------  --------  -------
   Net Cash Provided by Operating
    Activities..........................   101,342   107,948   118,222   86,885
Cash flows from investing activities
 Purchase of tangible and intangible
  assets................................   (79,598)  (84,787)  (44,658) (43,054)
 Purchase of subsidiaries net of cash
  acquired..............................  (162,944) (173,566) (265,306) (41,365)
 Proceeds from sale of tangible and
  intangible assets.....................     6,116     6,515    13,347    4,682
 Proceeds from sale of subsidiaries.....     1,651     1,758   (64,570)   7,395
 Purchase of marketable securities......      (902)     (961)   (1,537)     --
 Proceeds of marketable securities......     2,360     2,514       --       --
                                          --------  --------  --------  -------
   Net Cash Used in Investing
    Activities..........................  (233,317) (248,527) (362,724) (72,342)
Cash flows from financing activities
 Dividends paid in cash.................   (42,547)  (45,320)  (28,628)  (8,961)
 Acquisition of treasury stock..........    (2,812)   (2,995)      --   (10,579)
 Proceeds from issuance of stock and
  disposal of treasury stock............    11,195    11,925    36,217   20,850
 Net borrowings under line-of-credit
  agreements............................  (153,564) (163,575)   39,399   11,572
 Principal payments under capital lease
  obligations...........................    (1,842)   (1,962)   (2,334)  (1,447)
 Proceeds from convertible bonds........   652,334   694,859   225,335      --
 Proceeds from long-term borrowings.....    10,116    10,775    57,589   12,762
 Repayment of long-term borrowings......   (33,415)  (35,593)  (25,355) (13,995)
                                          --------  --------  --------  -------
   Net Cash Provided by Financing
    Activities..........................   439,465   468,114   302,223   10,202
Effect of exchange rate changes on cash
 and cash equivalents...................    (4,002)   (4,263)     (277)  (3,609)
Net increase (decrease) in cash and cash
 equivalents............................   303,488   323,272    57,444   21,136
Cash and cash equivalents at beginning
 of the year............................   254,361   270,943   213,499  192,363
Cash and cash equivalents at end of the
 year...................................   557,849   594,215   270,943  213,499
</TABLE>
-------
* Translation of amounts from euro ("(Euro)") into US dollars ("$") has been
  made solely for the convenience of the reader at the noon buying rate of
  (Euro)1 = $0.9388 on December 29, 2000

  The consolidated statements of cash flows have been prepared in French francs
and translated into euro using the fixed exchange rate as of January 1, 1999 of
(Euro)1 = FF 6.55957.

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                      F-6
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (Thousands of Euro except per share amounts)

1. NATURE OF OPERATIONS

  Havas Advertising, a French corporation listed on the Paris Stock Exchange
and on the Nasdaq National Market system, and its subsidiaries (the "Company"
or "Havas Advertising") operate as a global advertising and communications
group with a worldwide network that offers a complete line of communications
services including general advertising, direct marketing, media planning and
buying, corporate communications, sales promotion, product design, human
resources, multimedia interactive communication and public relations. The
Company operates throughout the world through its network of over 330 agencies
located in over 65 countries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  The consolidated financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the United States
of America.

  All figures are presented in thousands of euro, unless otherwise indicated.
Consolidated financial statements have been prepared in French Francs and
translated into euro using the official rate of 6.55957 Francs for one euro at
January 1, 1999. Translation of amounts in euro ("(Euro)") into US dollar ("$")
has been made solely for the convenience of the reader at the noon buying rate
of (Euro)1 = $0.9388 as at December 29, 2000.

  Although the 1998 consolidated financial statements depict the same trends as
would have been shown had they been presented in French francs, they may not be
directly comparable to the financial statements of other companies that have
also been restated in euro. Prior to the adoption of the euro, the currencies
of other countries fluctuated against the French franc, but because the euro
did not exist prior to January 1, 1999, historical exchange rates for euro are
not available. A comparison of the Company's financial statements and those of
another company that had historically used a reporting currency other than the
French franc that takes into account actual fluctuations in exchange rates
could give a much different impression than a comparison of the consolidated
financial statements and those of another company as translated in euro.

  The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

  A summary of the Company's significant accounting policies is described
below:

2.1. Principles of Consolidation

  Companies over which the Company has direct or indirect control of more than
50% of the outstanding voting shares have been consolidated.

  Companies over which the Company is able to exercise a significant influence
have been accounted for using the equity method.

  All significant intercompany balances and transactions have been eliminated.

2.2. Foreign Currency Translation

  The balance sheets of foreign subsidiaries are converted into French francs
at year-end exchange rates and their income and cash-flows statements are
converted at average rates for the year. Differences arising on translation are
recorded as a separate component of shareholders' equity.

                                      F-7
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)


2.3. Revenue Recognition

  Net revenues include commissions for placement of advertising in various
media and fees for advertising consulting services and production of
advertisements. Commissions are recognized when advertising is placed. Fees for
advertising consulting services and production are respectively recognized when
the services are rendered and when products are delivered to the customer.

2.4. Cash and cash equivalents

  Cash and cash equivalents consist of cash and highly liquid investments with
an original maturity of three months or less.

2.5. Costs billable to clients

  Costs billable to clients generally correspond to production costs of
advertisement and generally include only the cost of external purchases.

2.6. Property and Equipment

  Property and equipment are carried at historical cost. Depreciation is
calculated either on a straight-line basis or using the declining-balance
method over the estimated useful life of the respective asset. Assets acquired
under capital lease agreements are capitalized and amortized on a straight line
basis.

2.7. Goodwill and Other Intangible Assets

  Goodwill corresponds to the excess of the acquisition cost of subsidiaries
over the fair value of the related assets acquired and liabilities assumed.
Goodwill is amortized, using the straight-line method, over 40 years.

  Other intangibles consist mainly of trademarks and customer lists, which are
amortized over their estimated useful life using the straight-line method.

  Goodwill and other intangibles are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of the asset may not
be recoverable; such carrying amounts are compared with the undiscounted
agencies' projected future earnings before interest and after tax over the
related assets economic lives.

2.8. Pension, Retirement and Post Employment Obligations

  In accordance with the laws and practices of each country, the Company
participates in various employee benefit plans offering pensions, retirement,
termination and death and disability benefits.

  Pension plans include flat benefit, final pay plans and multi-employer plans.
For defined contribution plans and multi-employer plans, pension expenses
correspond to the contributions payable. For defined benefit pension plans,
pension costs are determined using the projected unit credit method.

  Individual employment contracts, collective bargaining agreements and statuts
in certain countries where the Company operates generally provide for severance
indemnities in the event of involuntary employee terminations.


                                      F-8
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

  Indemnities may range from generally several months to, for certain key
employees, several years of the related employee's annual salary. Those
severance indemnities that are provided for by collective bargaining agreement
or statuts generally accumulate and when they are probable and can be
reasonably estimated they are accrued ratably over the service period. Those
severance indemnities that are allowed through individual contracts generally
do not vest, nor accumulate and are therefore accrued when the decision to
sever the individual is made. Key employees are also generally subject to non-
compete agreements.

2.9. Income Taxes

  In accordance with the Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes", deferred tax assets and liabilities are recorded
based on differences between the financial reporting and the tax basis of
assets and liabilities and measured by applying enacted tax rates expected to
apply to taxable income in the periods in which the deferred tax liability or
asset is expected to be settled or realized.

2.10. Foreign Currency Transactions

  Foreign currency transactions are converted at the exchange rates prevailing
at the dates of the transactions. Monetary assets and liabilities denominated
in foreign currencies are converted at the respective exchange rates prevailing
at balance sheet date. Exchange gains and losses are included under other
financial income.

2.11. Stock Options

  The Company accounts for its stock-based compensation plans using the
provision of Accounting Principles Board Opinion No. 25 "Accounting for Stock
Issued to Employees". Pro forma disclosure of net income (loss) and earnings
per share is presented in Note 10 as if the fair value based accounting method
in the Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123") had been used.

2.12. Warrants

  Warrants to acquire or subscribe Havas Advertising shares issued for no
consideration to all existing shareholders are not recognized in the
accompanying financial statements. Their effect on diluted earnings per share
is described in Note 14.

2.13. Concentration of Credit Risk

  The Company provides advertising and communications services to a wide range
of clients who operate in many different industry sectors around the world. The
Company grants credit to all qualified clients, but does not believe it is
exposed to any undue concentration of credit risk related to either a specific
country or customer.

2.14. Recently Issued Accounting Pronouncement

  In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities. In June 1999, the FASB issued Statement No.
137, Accounting for Derivative Instruments and Hedging Activities--Deferral of
the Effective Date of FASB Statement No. 133. In June 2000, the FASB issued
Statement 138, Accounting for Certain Derivative Instruments and Certain
Hedging Certain Derivative Instruments and Certain Hedging Activities, an
amendment of FASB Statement No. 133. Statement 133, as amended, ("Statement
133") establishes accounting and reporting standards requiring that every
derivative instrument (including certain

                                      F-9
<PAGE>

                      HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Thousands of Euro except per share amounts)

derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. Statement
133 requires that changes in the derivative instrument's fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met. Special accounting for qualifying hedges allows a derivative instrument's
gains and losses to offset related results on the hedged item in the income
statement, to the extent effective, and requires that reporting companies must
formally document, designate, and assess the effectiveness of transactions
that receive hedge accounting.

  Statement 133, as amended, is effective for fiscal years beginning after
June 15, 2000. Reporting companies may also implement Statement 133 as of the
beginning of any fiscal quarter after issuance (that is, fiscal quarters
beginning June 16, 1998, and thereafter). However, Statement 133 cannot be
applied retroactively. Statement 133 must be applied to (a) derivative
instruments and (b) certain derivative instruments embedded in hybrid
instruments. With respect to hybrid instruments, reporting companies may elect
to apply Statement 133 to (1) all hybrid instruments, (2) only those hybrid
instruments that were issued, acquired, or substantially modified after
December 31, 1997, or (3) only those hybrid instruments that were issued,
acquired, or substantially modified after December 31, 1998.

  Effective January 1, 2001, the Company adopted Statement 133 with respect to
hybrid instruments that were issued, acquired, or substantially modified after
December 31, 1998.

  While the impact of adopting Statement 133 is not expected to be material to
the Company, it could prospectively increase volatility in earnings and other
comprehensive income.

  Currently, the Company hedges intra-group loans denominated in foreign
currency with forward contracts. Special accounting for qualifying hedges
under Statement 133 is not applicable to such transactions and such forward
contracts will be accounted for on a marked to market basis.

  As more fully described in Note 8, the Company entered into a combined
interest and currency swap (the "CIRCUS"), which is accounted for as a hedge
instrument of a deposit in US dollars. Under Statement 133, the CIRCUS will be
accounted for on a marked to market basis.

  Media Planning Group (an equity investee of the Company) hedges variable
debt with a compound interest rate swap that contains a written option
component. Under current GAAP, the Company accounts for the swap like a hedge
of the underlying debt and records interest expense using the revised interest
rate. Under Statement 133, the compound swap will no longer qualify as a
hedging instrument because of its written option component. If Statement 133
had been applied at December 31, 2000, changes in fair value of the compound
swap would increase the Company's assets by 401 with an offsetting amount
recorded in reported earnings.

3. ACQUISITIONS

3.1. Acquisitions in 2000

  On September 27, 2000, the Company acquired all of the outstanding shares of
SNC common stock of Snyder Communications, Inc., a U.S. company. All
outstanding shares of SNC common stock of Snyder Communications, which
consisted of 73,487,270 shares, were exchanged for 100,751,047 Havas
Advertising American Depositary Shares, or ADSs. The Company issued
100,751,047 shares, for a total amount of approximately 2,058,345, in
connection with this acquisition. No shares of Circle.com common stock of
Snyder Communications, representing the Internet services business unit of
Snyder Communications, were exchanged for Havas Advertising ADSs in connection
with this acquisition.


                                     F-10
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

  The total purchase price, including acquisition costs, amounted to 2,149,788.
The Company has allocated the purchase price to the assets and liabilities
acquired using its best judgment as to their respective fair values as of the
date of the acquisition. The Company is in the process of obtaining a fair
market valuation to determine the appropriate values of other intangibles such
as trade names, workforce and customer lists from an independent valuation
firm. At that time, the Company has estimated that an amount of approximately
338,900 will be attributed to such other intangibles to be amortized over a
period of 10 years, generating a deferred tax liability of 135,560. The
residual goodwill has been allocated between the SNC and Circle.com, two
separate business units of Snyder Communications, for an amount of 1,862,272
and 17,019, respectively, based on the relative market capitalization of SNC
common stock and Circle.com common stock at September 22, 2000, and is
amortized over 40 years for SNC and 7 years for Circle.com.

  The acquisition added 210,644 to Havas Advertising's 2000 net revenues.

  Besides the acquisition described above, during 2000, the Company completed
acquisitions of more than 35 small and medium size business entities in the
U.S., Europe and Asia, most of which specialized in marketing services.

  Total consideration for these additional acquisitions was 210,423 in cash,
resulting in 163,380 goodwill amortized over 40 years. As a result of these
additional acquisitions, 136,014 was added to the Company's 2000 net revenues.

3.2. Acquisitions in 1999

  During 1999, the Company completed two principal acquisitions in the U.S.
These acquisitions were accounted for under the purchase method of accounting.

  The Company acquired 100% of the outstanding shares of JORDAN McGRATH CASE &
PARTNERS INC., a U.S. company that specializes in general advertising and
healthcare communications. JORDAN McGRATH has been fully consolidated since
January 1, 1999.

  The Company also acquired 100% of the outstanding shares of DEVON DIRECT
MARKETING AND ADVERTISING, INC., a U.S. company specialized in marketing
services. DEVON DIRECT has been fully consolidated since July 1, 1999.

  Total consideration paid in cash for these two acquisitions amounted to
88,551, resulting in additional goodwill of 86,817 which will be amortized over
40 years.

  These acquisitions completed in the United States during 1999 contributed
53,120 to the Company's 1999 net revenues.

  In June 1999, the Company acquired all of the outstanding shares of LOPEX
Plc, a UK based marketing services and public relations firm, pursuant to a
public tender offer in cash valuing LOPEX Plc at approximately (Euro)100
million ((Pounds) 66 million). The acquisition was accounted for as a purchase
as of July 1, 1999. The total purchase price, including acquisition costs, was
approximately 110,785, resulting in 120,468 of goodwill that will be amortized
over 40 years. This acquisition added 35,050 to Havas Advertising's 1999 net
revenues.

  Besides the three acquisitions described above, during 1999, the Company
completed acquisitions of 40 small and medium size business entities in the
U.S., Europe, Asia and Latin America, most of which specialized in marketing
services.

                                      F-11
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)


  Total consideration for these additional acquisitions was 56,096 in cash,
resulting in 56,404 goodwill amortized over 40 years. These additional
acquisitions have added 48,837 to the Company's 1999 net revenues.

  The following table presents unaudited pro forma financial information as if
the 1999 and 2000 business combinations had been consummated at January 1st of
each of the periods.

<TABLE>
<CAPTION>
                                                      Years ended December 31,
                                                      --------------------------
                                                          2000          1999
                                                      ------------  ------------
                                                      (In Euro 000's except per
                                                           share amounts)
                                                             (unaudited)
   <S>                                                <C>           <C>
   Pro forma Revenues................................    2,268,547     1,923,828
   Pro forma Net Income (Loss).......................      (40,813)       50,946
   Pro forma basic earnings per share (1)............        (0.16)         0.21
   Pro forma diluted earnings per share (1)..........        (0.16)         0.20
</TABLE>
--------
(1)  Reflects the effect of May 2000 stock split (see Note 14)

  Most of the acquisitions, with the exception of the acquisition of Snyder
Communications, specify contingent payments. Most of them will be accounted for
as compensation arrangements as described in Note 9. As a result, the
contingent payments will be treated as additional purchase price when the
conditions are met. Several provide for contingent payments that will be
treated as additional purchase price when the contingency is resolved.

4. MARKETABLE SECURITIES

  In accordance with the Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," available-
for-sale securities are reported at fair value with unrealized gains and
losses, net of tax, included as a separate component of shareholders' equity.

  As of December 31, 1999, available-for-sale securities stated at market value
included gross unrealized gains of 844. The Company's marketable securities
consist primarily of mutual fund investments and any gains and losses are
determined using the specific identification method.

  As of December 31, 2000, available-for-sale securities stated at market value
included gross unrealized losses of 306. The Company's marketable securities
consist primarily of mutual fund investments and any gains and losses are
determined using the specific identification method which was reflected in
income statement under financial expense.

5. PROPERTY & EQUIPMENT, NET

  Property and equipment are comprised of the following:
<TABLE>
<CAPTION>
                                                              As of December
                                                                    31,
                                                    Useful   ------------------
                                                    lives      2000      1999
                                                  ---------- --------  --------
   <S>                                            <C>        <C>       <C>
   Land..........................................        --     7,573     7,579
   Buildings.....................................   25 years  101,986    51,220
   Furniture, fixtures and equipment............. 5-10 years  435,906   254,830
                                                             --------  --------
                                                              545,465   313,629
   Less: Accumulated depreciation................            (279,509) (180,822)
                                                             --------  --------
                                                              265,956   132,807
                                                             ========  ========
</TABLE>


                                      F-12
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

  Depreciation expense amounted to 61,911, 37,790 and 28,750 for the years
ended December 31, 2000, 1999 and 1998, respectively.

  Certain land and buildings (0 and 18,694 as of December 31, 2000, and 1999,
respectively) may not be disposed of without the prior approval of a bank.

6. GOODWILL AND OTHER INTANGIBLES ASSETS, NET

  Goodwill and other intangibles consist of the following:

<TABLE>
<CAPTION>
                                                            As of December 31,
                                                            -------------------
                                                              2000       1999
                                                            ---------  --------
   <S>                                                      <C>        <C>
   Goodwill................................................ 2,945,406   904,809
   Patents and licenses....................................    11,522     7,667
   Other intangibles.......................................   320,185       --
   Trademarks..............................................    14,330    14,330
                                                            ---------  --------
                                                            3,291,444   926,806
     Less: Accumulated amortization........................  (208,507) (157,757)
                                                            ---------  --------
                                                            3,082,937   769,049
                                                            =========  ========
</TABLE>

  In 2000, 1999 and 1998, goodwill and other intangible assets amortization
expense amounted to 49,360, 20,558 and 16,103, respectively.

7. EQUITY INVESTMENTS

<TABLE>
<CAPTION>
                              2000       2000        2000         1999        1999
                            --------- ---------- ------------- ---------- -------------
                            Ownership Investment Equity in net Investment Equity in net
                            interest    amount   income (loss)   amount   income (loss)
                            --------- ---------- ------------- ---------- -------------
   <S>                      <C>       <C>        <C>           <C>        <C>
   Media Planning Group....     45%     44,437       8,228       40,988       5,036
   Data Force..............    N/A         --          --         3,975        (711)
   Others..................              5,438         969        4,318         255
                                        ------       -----       ------       -----
     Equity investments....             49,875       9,197       49,281       4,580
</TABLE>

  In 1999, the shareholders (the "Previous Shareholders") of Media Planning,
S.A. (a Spanish corporation) and Havas Advertising signed an Agreement to
combine their respective media planning and buying activities. Havas
Advertising businesses included subsidiaries and operations located in France,
United-Kingdom, the Netherlands, the United States of America, Italy and Spain
while Media Planning, S.A.'s operations were mainly located in Spain, Portugal
and Latin America. The business combination transaction was completed on
October 5, 1999 when Havas Advertising contributed its media planning and
buying businesses (the "Contributed Business") to Media Planning Group (a
Spanish corporation) for a 45% interest in that company, the Previous
Shareholders retaining a 55% interest in the company. A shareholders agreement
governs the relationships between the Previous Shareholders and Havas
Advertising and the governance of Media Planning Group. Havas Advertising also
agreed to compensate Media Planning Group for the loss, if any, of certain
clients provided that the loss takes place before December 31, 1999. The
expected cost to the Company, based upon the formula provided in the agreement,
is approximately (Euro)8 million and has been recorded as a liability as of
December 31, 1999.

  For accounting purposes the transaction was treated as an exchange of similar
assets and, at the date of the business combination transaction, the investment
in Media Planning Group was accounted for at the carryover

                                      F-13
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

basis cost of the underlying assets and liabilities of the Contributed Business
plus transaction direct costs and the contingent consideration described above
((Euro)36 million); the excess of Havas Advertising 45% equity in Media
Planning Group ((Euro)37 million) over such historical cost is being amortized
over a 16 year period based on the expected useful life of underlying assets in
the equity investee. Media Planning Group accounted for the acquisition of the
Contributed Business under the purchase method and preliminarily allocated the
excess of purchase price over the net assets acquired ((Euro)131 million) to
customer base as an intangible asset amortized over 12.5 years in the amount of
(Euro)103 million, related deferred tax liability in the amount of (Euro)36
million and residual goodwill amortized over 20 years in the amount of (Euro)64
million. The accompanying financial statements include the accounts of the
Contributed Business until the date of the business combination transaction and
a 45% interest in Media Planning Group from that date until December 31, 1999.

  The transaction may be summarized as follows (all amounts in Euro millions):

<TABLE>
    <S>                                                        <C>
    Media Planning Group, post acquisition:
    Media Planning Group's purchase cost of Havas Advertising
     net assets received as a contribution from Havas
     Advertising.............................................. 138 (a)
    Less: Havas Advertising net assets (excluding goodwill in
     Havas Advertising books).................................  (7)
                                                               ---
    Step-up recognized in Media Planning Group financial
     statements............................................... 131
                                                               ---
    Capital increase subscribed by Havas Advertising..........   3 (b)
    Media Planning Group net assets (before combination)......  21 (c)
                                                               ---
    Media Planning Group equity post acquisition.............. 162 (a)+(b)+(c)
                                                               ---
    Havas Advertising share in Media Planning Group (45%).....  73 (d)
    Media Planning Group investment account in Havas
     Advertising books:
    Net assets at carryover cost (including net goodwill in
     Havas Advertising books for 17)..........................  24
    Capital increase subscribed in Media Planning Group.......   3
    Transaction costs.........................................   1
    Contingent consideration..................................   8
                                                               ---
    Total.....................................................  36 (e)
    Negative goodwill.........................................  37 (d)-(e)
                                                               ---
</TABLE>

  For tax purposes the transaction is taxable but the payment of the related
tax is deferred until the investment is disposed of and will be determined as
described hereafter. If the sale takes place after a five-year period the gain
will be computed on the basis of the tax bases at contribution date (historical
cost) and should approximate to (Euro)19 million using tax rate prevailing at
merger date. However, the Company might reduce that amount if the long-term
capital loss carryforward (the "Long-Term Carryforward") currently available
has not expired or been used; assuming a maximum utilization of the Long-Term
Carryforward, such tax would be reduced to (Euro)13 million using tax rates at
the date of the business combination transaction. If the sale takes place
within five years the tax that would have been payable at the date of the
business combination transaction would become immediately payable with late
payment penalties computed as if the tax had been due at the date of the
business combination transaction. Such amount could be reduced because of the
existence of the Long-Term Carryforward if, meanwhile, they have not been used.
Any loss on the sale would give rise to a tax deduction at the time of the
sale.

  Havas Advertising has granted jointly to the Previous Shareholders a put
option on their Media Planning Group shares. The strike price will be based
upon the market price as defined in the agreement (the "Market

                                      F-14
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

Price") plus a control premium of 20%, increased to 30% if a Competitor (as
defined in the contract) acquires a larger interest in Havas Advertising than
Havas SA (presently the largest Havas Advertising shareholder). The put option
may be exercised during the July 1--September 30, 2001 period and April 1--June
30 period of the years 2002 to 2007 and upon certain events including change in
control of Havas Advertising involving a Competitor, proposed unwinding of the
Media Planning Group transaction by certain shareholders (which would involve
the allocation of the business, assets and liabilities of the Media Planning
Group to its shareholders) and acquisition, under certain circumstances, by
Havas Advertising of shares resulting in Havas Advertising owning 51% of all
Media Planning Group shares and disposition by Havas Advertising of Euro RSCG
network agencies (the Company's main advertising network).

  In addition, Media Planning Group has a right to acquire any of the remaining
media planning and buying assets of Havas Advertising. In the event this right
is exercised, the price to be paid by Media Planning Group is to be agreed upon
by the parties or referred to an independent expert.

  Media Planning Group is reporting in accordance with generally accepted
accounting principles in Spain.

  The summarized financial information presented under Spanish GAAP relating to
Media Planning Group as of December 31, 2000 and 1999, for the year ended
December 31, 2000, and for the period from the date of the business combination
transaction to December 31, 1999 is presented below:

<TABLE>
<CAPTION>
                                                                2000     1999
                                                              --------- -------
   <S>                                                        <C>       <C>
   Earnings data
   Net sales................................................. 1,666,066 426,982
   Income from operations....................................    34,213  12,894
   Net income................................................    19,042   9,511
   Balance sheet data
   Current assets............................................   949,584 824,211
   Noncurrent assets.........................................   190,401 191,649
   Current liabilities.......................................   909,036 790,763
   Noncurrent liabilities....................................    13,082  11,450
   Equity....................................................   217,867 213,647
</TABLE>

  The undistributed earnings relating to equity investments and included in
consolidated retained earnings amounts to 6,891 and 5,036 at December 31, 2000
and 1999, respectively.

8. CONVERTIBLE BONDS AND LONG-TERM AND SHORT-TERM BORROWINGS

  Convertible Bonds

  On December 22, 2000, the Company received net proceeds of (Euro)695.0
million from the issuance of 708,848 of its bonds which are convertible and/or
exchangeable into new and/or existing shares of the Company. The bonds are due
January 1, 2006 and have a coupon rate of 1% per year, with a gross yield at
maturity of 4.25% and an implicit interest rate, including issue costs, of
4.67%. Each bond may be converted by the holder into one Havas Advertising
share, which may, at the Company's option, be a newly-issued share, a treasury
share, or a combination thereof.

  On February 12, 1999, the Company issued 2.18% implicit interest rate
convertible bonds due to mature on January 1, 2004 with an aggregate principal
amount of 230,000. The bonds are convertible into shares of Havas Advertising
at the option of the holder. Under the conversion terms of the bonds, the bonds
may be

                                      F-15
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

tendered for conversion into Havas Advertising common share at a conversion
price of 188 per share. At December 31, 2000 bonds totaling 759,390 have been
converted into 15,187,800 shares.

  Long-Term Borrowings

  Long-term borrowings consist of the following:

<TABLE>
<CAPTION>
                                                             As of December
                                                                   31,
                                                             ----------------
                                                              2000     1999
                                                             -------  -------
   <S>                                                       <C>      <C>
   US dollar denominated bank loans, at primarily variable
    rates ranging from 6.9% to 9.5%, due 2001 to 2006.......  95,967  112,219
   British pound denominated bank loans, at primarily fixed
    rates from 8.3% to 11.0%, due 2000 to 2002..............     --       404
   Deutsche mark denominated bank loans, at primarily
    variable rates ranging from 4.4% to 9.7%, due 2001 to
    2002....................................................     409    2,659
   Convertible bonds of a subsidiary (Evelink plc) with a
    fixed rate of 7.6%(a)...................................  64,092      --
     Less: Sales forward agreement on Evelink shares(a)..... (41,415)     --
                                                             -------
   Other--weighted average interest 6.4%....................   4,225    3,328
                                                             -------  -------
                                                             123,278  118,610
     Less: Current maturities of long-term borrowings....... (24,719) (28,213)
   Long-term borrowings.....................................  98,559   90,397
                                                             =======  =======
</TABLE>
--------
(a) Convertible bonds of Evelink Plc

  On January 19, 2000, Evelink plc, an indirect, wholly owned subsidiary of the
Company, issued a (Euro)64.1 million convertible bond (the "Evelink Bonds") due
July 19, 2007 to Banque Nationale de Paris S.A. The Evelink Bonds bear interest
at the rate of 7.6% per annum and is convertible at any time from January 19,
2000 until January 19, 2007 into ordinary shares of Evelink plc at the option
of the holder. In addition, Evelink plc issued a warrant to Banque Nationale de
Paris S.A. authorizing the holder of the warrant, upon payment of (Euro)64.1
million, to purchase from Evelink plc 117,131 ordinary shares of Evelink plc on
January 19, 2007. The right to purchase such ordinary shares under the warrant
will lapse in the event that the conversion right of the Evelink Bonds are
exercised.

  On the same date, Havas Advertising International S.A., a wholly owned
subsidiary of the Company, and Banque Nationale de Paris S.A., as the initial
holder of the bond, entered into a Forward Sale Agreement under which Havas
Advertising International S.A. paid (Euro)41.4 million to Banque Nationale de
Paris S.A. for the future purchase of the same number of Evelink plc ordinary
shares as issuable on conversion of the Evelink Bonds.

  In the absence of a right of setoff, the Evelink Bonds and the investment of
(Euro)41.4 million resulting from the Forward Sale Agreement is presented
separately in the table above. The interest expense related to the Evelink
Bonds is determined using the net proceeds ((Euro)24.0 million) as a basis for
applying the effective rate of 7.605%. Such net proceeds are presented under
proceeds from borrowing in the consolidated statements of cash flow.

  In 1999, a U.S. subsidiary of the Company borrowed $30 million ((Euro)31
million) from an international bank (the "Bank"). In connection with this loan,
Havas Advertising agreed with the Bank to make a deposit in the same amount to
allow the subsidiary to borrow the funds. The deposit has been classified as
restricted

                                      F-16
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

deposits under "Other assets" (32,241 as converted at spot rate at the closing
date for the loan) in the balance sheet as of December 31, 2000 (29,865 as of
1999). The terms of the agreement call for the deposit and debt to mature
simultaneously in six equal annual installments from June 4, 2001 to June 5,
2006. The debt bears interest at LIBOR plus a margin and interest on the
deposit is at LIBOR less a margin. Havas Advertising entered into a CIRCUS with
the Bank with the effect of transforming this US dollar deposit into a French
franc deposit of 187,800 (28,630) at Euribor less a margin. The CIRCUS
maturities match exactly those of the deposit both in terms of dates, currency
and amounts. As of December 31, 2000, an exchange loss on the CIRCUS was
recorded under "Other liabilities" for 3,611 (1,235 as of 1999) which is equal
to the unrealized exchange gains on the deposit.

  Future minimum payments as of December 31, 2000, on long-term borrowings,
excluding capital leases, are as follows:

<TABLE>
<CAPTION>
     Year                                                                2000
     ----                                                               -------
     <S>                                                                <C>
     2001..............................................................  24,719
     2002..............................................................  24,705
     2003..............................................................  20,206
     2004..............................................................  20,364
     2005..............................................................  15,021
     Thereafter........................................................  18,263
                                                                        -------
                                                                        123,278
                                                                        -------
     Less: Current maturities.......................................... (24,719)
                                                                        -------
                                                                         98,559
                                                                        =======
</TABLE>

  Short-Term Borrowings

  Included in short-term borrowings in the amounts of 56,880 and 38,579 at
December 31, 2000 and 1999, respectively, are primarily borrowings by
subsidiaries under the terms of various short-term borrowing arrangements. The
weighted-average interest rate on these short-term borrowings outstanding at
December 31, 2000 and 1999, was 7.0% and 5.6%, respectively. Also included in
short-term borrowings in the amounts of 127,581 and 100,728 at December 31,
2000 and 1999, respectively, are overdraft amounts resulting from various lines
of credit of subsidiaries. These overdraft amounts bear interest at the
prevailing market rates in the countries of the subsidiaries. In the aggregate,
the Company had unused lines of credit available under short term and overdraft
borrowing arrangements carrying interest at prevailing market rate of 70,011
and 63,659 at December 31, 2000 and 1999, respectively.

  Covenants

  The Company's borrowings require certain subsidiaries to meet restrictive
covenants related to total borrowing levels at either the subsidiary level or
country level. However, the Company guarantees significant loans of
subsidiaries. Covenants on Company debt include total borrowing levels in some
countries and minimum shareholders' consolidated equity, among others. At
December 31, 2000, the US subsidiary, EWDB North America Inc., did not meet the
financial covenants for one credit facility due to the level of debt involved
in the acquisition of Snyder Communications. However, the issuing bank agreed
to a provisory non-appliance of the covenants and has committed to issue a
waiver of default. As of December 31, 2000, the Company was in compliance with
all other debt covenants related to the above borrowings.

  As of December 31, 1999, the Company was in compliance with all debt
covenants related to the above borrowings.

                                      F-17
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)


9. COMPENSATION TO SHAREHOLDERS OF ACQUIRED BUSINESSES

  In connection with business combinations the Company enters into agreements
with some or all selling shareholders (the "Agreements") that generally provide
for the payment of contingent consideration based upon a multiple of future
earnings and conditioned by their continuing employment ("Earn-Out"). Their
rights to such contingent consideration are generally partially or totally
forfeited if they leave the Company at the Agreements dates or before certain
future dates. EITF consensus on issue No. 95-8 requires that in such
circumstances the amount paid in excess of what the selling shareholders would
get if they left the Company at the Agreements dates be recorded as
compensation expense. The amounts recorded in each of the periods presented
have been determined on the basis of the earnings formula upon which the
contingent consideration is based and allocated on a straight-line basis over
the period the employees are required to stay with the Company to obtain the
maximum amount of the Earn-Out. Estimates used in connection with such
computations are based upon the latest available earnings data and the related
formulas and are revised every year.

   In case of partial acquisitions the purchase contracts (the "Purchase
Contracts") generally include put and call agreements to buy the remainder of
the equity at some future date (the "Buy-Out"). The price for the Buy Out is
generally based upon a multiple of future earnings (the "Formula") and
conditioned by the continuing employment of the related shareholders (the
"Minority Shareholders"). The Company accounts for these arrangements as
restricted stock plans. The Formula is applied at the end of every period on
the basis of latest available earnings data and any amount in excess of what
the employee would get if he left the company at the Purchase Contract dates is
treated as compensation expense, which is allocated to every period presented
under a method similar to the one used for Earn-Out Provisions. The share in
the earnings of the related subsidiaries attributable to the Minority
Shareholders, included in such amounts, is presented as "Minority interests".

  Compensation expense related to the arrangements described above were:

<TABLE>
<CAPTION>
                                                           2000   1999   1998
                                                          ------ ------ ------
   <S>                                                    <C>    <C>    <C>
   Earn out..............................................  3,858 10,250  4,088
   Buy out............................................... 17,962 16,305  9,295
                                                          ------ ------ ------
     Total............................................... 21,820 26,555 13,383
                                                          ====== ====== ======
   Recorded as Compensation to shareholders of acquired
    businesses........................................... 16,363 17,442  6,725
   Recorded as Minority interests........................  5,457  9,113  6,658
</TABLE>

  As of December 31, 2000, the contingent payments expected to be made based
upon the assumptions used for the determination of compensation expense
amounted to approximately 55,687, of which 38,086 are accrued as of the same
date.

  As of December 31, 1999, the contingent payments expected to be made based
upon the assumptions used for the determination of compensation expense
amounted to approximately 63,459, of which 29,835 are accrued as of the same
date.

  For tax purposes the above expenses are generally included as part of the
purchase price of the related subsidiary. The tax effect of this excess of the
tax basis over the financial reporting basis is not recognized until the
disposition of such subsidiaries.

                                      F-18
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)


10. EMPLOYEE STOCK OPTION PLANS

  The statuts of the Havas Advertising stock option plan for the years ended
December 31, 2000 (with the except of options issued in connection with Snyder
acquisition which are separately disclosed below) and 1999 is as follows. All
share and per share figures are presented after giving effect to the May 2000
stock split (see Note 21).

<TABLE>
<CAPTION>
                                         Years ended December 31,
                             ---------------------------------------------------
                                       2000                      1999
                             ------------------------- -------------------------
                                           Weighted                  Weighted
                               Shares    Average Price   Shares    Average Price
                             ----------  ------------- ----------  -------------
   <S>                       <C>         <C>           <C>         <C>
   Outstanding at the
    beginning of the year..  14,227,380       5.51     14,370,080       4.37
     Options granted.......   5,241,620      19.99      2,075,220      11.52
     Options exercised.....  (2,350,920)      4.00     (2,197,680)      3.70
     Options forfeited.....                    --         (20,240)      4.47
                             ----------                ----------
   Outstanding at the end
    of the year............  17,118,080      10.15     14,227,380       5.51
                             ==========                ==========
   Exercisable at the end
    of the year............   4,721,120       7.18      5,532,420       4.52
                             ==========                ==========
   Weighted-average fair
    value of options
    granted................                   7.91                      5.89
</TABLE>


  The following table summarizes information about fixed stock options
outstanding at December 31, 2000:

<TABLE>
<CAPTION>
                       Number     Weighted-average Exercise price    Number
     Exercise        outstanding     Remaining       Weighted-     exercisable
      Prices        at 12/31/2000 Contractual life    average     at 12/31/2000
     --------       ------------- ---------------- -------------- -------------
     <S>            <C>           <C>              <C>            <C>
      3.35........        8,120      1.2 years          3.35            8,120
      3.34........    1,170,720        2 years          3.34        1,170,720
      4.23........    1,351,340        3 years          4.23        1,351,340
      4.61........    6,000,000      3.5 years          4.61              --
      6.35........    1,295,060        4 years          6.35          765,060
      7.63........      710,220      5.1 years          7.63          710,220
      9.10........      300,000      5.5 years          9.10          100,000
     10.85........      200,000      5.7 years         10.85           66,660
     15.70........      841,000      5.9 years         15.70          149,000
     27.65........      888,120      6.2 years         27.65              --
     25.00........      400,000      6.4 years         25.00          400,000
     17.76........    3,953,500      6.8 years         17.76              --
                     ----------                                     ---------
                     17,118,080                                     4,721,120
                     ==========                                     =========
</TABLE>

  As a result of the acquisition of all SNC common stock of Snyder
Communications, all SNC options outstanding on September 26, 2000 were
converted into options to purchase Havas Advertising shares. Each SNC options
was converted to 1.371 Havas Advertising options, the same ratio used to
exchange SNC common stock for the Company's ADSs.

                                      F-19
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)


  A summary of the Company's option activity within the Amended Stock Plan, for
the period from September 26, 2000 through December 31, 2000, is set forth
below:

<TABLE>
<CAPTION>
                                                       Weighted    Weighted
                                          Options      Average      Average
                                        Outstanding    Exercise    Exercise
                                            2000      Price 2000  Price 2000
                                       -------------- ---------- -------------
                                       (In Thousands)  (In USD)  (In Euro) (1)
   <S>                                 <C>            <C>        <C>
   Outstanding at Beginning of year...       --           --           --
     Exchanged at September 26, 2000
      SNC Merger date.................     9,495        11.23        11.96
     Exercised........................      (514)        7.61         8.11
     Forfeited or expired.............      (249)       10.34        11.01
                                           -----        -----        -----
   Outstanding at End of year.........     8,732        11.47        12.22
                                           =====        =====        =====
   Exercisable at end of year.........     3,530        11.28        12.02
                                           =====        =====        =====
   Weighted-average fair value of
    options exchanged.................                   8.05         8.58
</TABLE>
--------
(1) Converted for convenience at (Euro)1 = $0.9388

  The Havas Advertising options outstanding at December 31, 2000 have exercise
prices that range from $0.01 to $18.55. The weighted average remaining
contractual life on the Havas Advertising options outstanding at December 31,
2000 is 7.56 years.

  The compensation expense related to Havas Advertising stock-based
compensation is presented under "Stock Based Compensation" and amounted to
5,340, 1,258 and 14,252 in 2000, 1999 and 1998, respectively.

  In addition, certain subsidiaries have granted stock options to some of their
employees on their own stocks. The strike is usually based on a multiple of
current earnings at the award date (the "Multiple"). Such options are generally
exercisable five to seven years after award date and require continuing
employment. The parent companies of such subsidiaries have the option to buy
back the shares if and when acquired by the employees and the employees have
the option to put these shares to such parent companies. The buyback price is
generally based upon the multiple applied to the earnings level when the option
is exercised. The employees are required to put the shares when they leave the
Company. Under US GAAP, such plans are performance plans and variable plan
accounting is required. Accordingly the Company makes an interim measurement of
compensation on the basis of the formula price at the end of each period based
upon the most recent available earnings data and allocates such costs to
expense over the period from award date to exercise date. As of December 31,
2000, 1999 and 1998, accrued compensation related to such plans amount to
2,818, 5,622 and 7,099, respectively. The related compensation recorded for the
years ended December 31, 2000, 1999 and 1998 amounted to (580), 3,367 and
2,148, respectively and is presented under "Stock Based Compensation".

  The effect of the measurement of compensation in accordance with FASB
Statement No. 123 on the Company's net income and earnings per share is as
follows:

<TABLE>
<CAPTION>
                                                           2000   1999   1998
                                                          ------ ------ -------
   <S>                                                    <C>    <C>    <C>
     Net income, as reported............................. 29,408 25,225 (11,245)
     Net income, pro forma............................... 12,268 14,250  (7,459)
     Basic EPS, as reported..............................   0.16   0.18   (0.09)
     Basic EPS, pro forma................................   0.07   0.10   (0.06)
     Diluted EPS, as reported............................   0.15   0.16   (0.09)
     Diluted EPS, pro forma..............................   0.07   0.10   (0.06)
</TABLE>

                                      F-20
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)


  The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model using the following assumptions:

<TABLE>
<CAPTION>
                                                             2000       1999
                                                           ---------  ---------
   <S>                                                     <C>        <C>
     Expected life (in years).............................         7          7
     Risk-free interest rates............................. 5.48/5.22% 3.65/4.86%
     Expected dividend yield..............................      0.85%      1.18%
     Expected volatility..................................        30%        30%
</TABLE>

11. PENSIONS AND OTHER BENEFITS

  In accordance with the laws and practices of each country, Havas Advertising
participates in employee benefits pension plans offering death and disability,
retirement and special termination benefits. Those plans provide benefits of
various types from flat currency amounts per year of service to final pay plans
integrated with social security and multi-employer plans.

  For defined contribution plans, expenses correspond to the contributions
paid. For defined benefit pension plans, accruals and prepaid expenses are
determined using the projected unit credit method.

  Disclosures in accordance with SFAS 132 are as follows:

<TABLE>
<CAPTION>
                                                  Pension           Other
                                                 Benefits         Benefits
                                              ----------------  --------------
                                               2000     1999     2000    1999
                                              -------  -------  ------  ------
   <S>                                        <C>      <C>      <C>     <C>
   Change in benefit obligation
   Benefit Obligation at beginning of the
    year....................................  (50,869) (12,011) (8,627) (9,045)
   Service cost.............................   (1,868)    (450)   (657)   (553)
   Interest cost............................   (3,407)  (1,460)   (343)   (272)
   Plan participants contributions..........     (377)    (177)    --      --
   Acquisition/disposal.....................  (28,027) (37,991)   (245)  1,122
   Actuarial gain (loss)....................     (119)     547   5,666     --
   Benefits paid............................      830      673      80     121
   Others (foreign currency translation)....      232
                                              -------  -------  ------  ------
   Benefit Obligation at end of the year....  (83,605) (50,869) (4,126) (8,627)
   Change in plan assets....................
   Fair value of plan assets at beginning of
    the year................................   40,329      --      --      --
   Actual return on plan assets.............    2,676      917     --      --
   Company contributions....................      878      450     --      --
   Plan participants contributions..........      377      177     --      --
   Acquisition/disposal.....................   29,013     (466)    --      --
   Business combination.....................      --    39,251     --      --
   Benefits paid............................     (582)     --      --      --
   Octuarial loss (gain)....................     (186)     --      --      --
   Others (foreign currency translation)....     (239)     --      --      --
                                              -------  -------  ------  ------
   Fair value of plan assets at end of the
    year....................................   72,266   40,329     --      --
                                              =======  =======  ======  ======
   Funded statuts of the plan...............  (11,339) (10,540) (4,126) (8,627)
   Unrecognized actuarial loss..............       30     (788) (5,666)    --
   Unrecognized actuarial prior service
    cost....................................      --       --      --      --
   Unrecognized actuarial transition
    obligation..............................      --       --      --      --
                                              -------  -------  ------  ------
   (Accrued) prepaid benefit cost...........  (11,309) (11,328) (9,792) (8,627)
                                              =======  =======  ======  ======
</TABLE>


                                      F-21
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

  Actuarial assumptions have been determined by actuaries and were as follows:
<TABLE>
<CAPTION>
                                                 Pension           Other
                                                Benefits         Benefits
                                             ----------------  --------------
                                              2000     1999     2000    1999
                                             -------  -------  ------  ------
   <S>                                       <C>      <C>      <C>     <C>
   Discount rate............................    5.5%     4.0%    5.5%    4.0%
   Rate of compensation increase............    3.0%     3.0%    na      na
   Expected return on plan assets...........    6.5%     6.5%    na      na
<CAPTION>
                                                 Pension           Other
                                                Benefits         Benefits
                                             ----------------  --------------
                                              2000     1999     2000    1999
                                             -------  -------  ------  ------
   <S>                                       <C>      <C>      <C>     <C>
   Annual cost
   Service cost.............................   1,868      450     657     553
   Expected interest cost...................   3,407    1,460     343     273
   Expected return on plan assets...........  (2,676)    (676)    --      --
   Amortization of unrecognized prior
    service cost............................     --       --      --      --
   Amortization of actuarial net loss
    (gain)..................................     --       --      --      --
   Amortization of net transition
    obligation..............................     --       --      --      --
   Curtailments/Settlements.................     --       --      --      --
                                             -------  -------  ------  ------
   Net periodic benefit cost................   2,599    1,234   1,000     826
                                             =======  =======  ======  ======

  Health care costs are assumed to increase (inflation excluded) by 4.2% in
2000, 3.9% in 2001 and 3.6% in 2002 and later.

  Amounts recognized in the statement of financial position:
<CAPTION>
                                                 Pension           Other
                                                Benefits         Benefits
                                             ----------------  --------------
                                              2000     1999     2000    1999
                                             -------  -------  ------  ------
   <S>                                       <C>      <C>      <C>     <C>
   Accrued benefit liability................ (11,964) (12,020) (9,792) (8,627)
   Prepaid benefit cost.....................     655      692     --      --
                                             -------  -------  ------  ------
   Net amount accrued for................... (11,309) (11,328) (9,792) (8,627)
                                             -------  -------  ------  ------
   Accumulated other comprehensive income...     --       --      --      --
                                             -------  -------  ------  ------
   Net amount recognized.................... (11,309) (11,328) (9,792) (8,627)
                                             =======  =======  ======  ======
</TABLE>

  Regarding the other benefits plans, a one-percentage-point change in assumed
health care cost trend rates would have the following effects:
<TABLE>
<CAPTION>
                                                                      1-
                                                 1-Percentage-   Percentage-
                                                     Point          Point
                                                   Increase        Decrease
                                                 --------------  ------------
                                                  2000    1999   2000   1999
                                                 ------  ------  ----- ------
   <S>                                           <C>     <C>     <C>   <C>
   Effect on total of service and interest cost
    components..................................   (195)   (305)  150     152
   Effect on the postretirement benefit
    obligation.................................. (1,223) (2,287)  961   1,829
</TABLE>

12. INCOME TAX

  At December 2000 and 1999, the deferred tax assets and liabilities in the
balance sheet were as follows:

<TABLE>
<CAPTION>
                                                           For the Years ended
                                                              December 31,
                                                           ---------------------
                                                              2000       1999
                                                           ----------  ---------
   <S>                                                     <C>         <C>
   Deferred tax asset--Current............................     60,090    19,484
   Deferred tax asset--Noncurrent.........................    109,273    15,215
   Deferred tax liability--Current........................    (15,035)   (1,250)
   Deferred tax liability--Noncurrent.....................   (121,459)   (2,434)
                                                           ----------  --------
     Net deferred tax asset...............................     32,869    31,015
                                                           ==========  ========
</TABLE>

                                      F-22
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

  The Company's provision for income tax includes the following components:

<TABLE>
<CAPTION>
                                                         For the Years ended
                                                             December 31,
                                                         ----------------------
                                                          2000    1999    1998
                                                         ------  ------  ------
   <S>                                                   <C>     <C>     <C>
   Current
     France............................................. 12,153  13,856  11,194
     State..............................................  1,707   3,173   1,241
     Foreign............................................ 41,522  23,255  14,180
                                                         ------  ------  ------
       Total............................................ 55,382  40,284  26,615
                                                         ------  ------  ------
   Deferred
     France.............................................  6,226  (3,266)  3,435
     State..............................................   (967)   (529)   (435)
     Foreign............................................  1,603   2,890   4,172
                                                         ------  ------  ------
       Total............................................  6,862    (905)  7,172
                                                         ------  ------  ------
   Provision for income tax............................. 62,244  39,379  33,787
                                                         ======  ======  ======
</TABLE>

  The provision for income tax differs from the amount computed by applying the
French income tax rate as a result of the following:

<TABLE>
<CAPTION>
                                                        For the Years ended
                                                           December 31,
                                                       -----------------------
                                                        2000    1999    1998
                                                       ------  ------  -------
   <S>                                                 <C>     <C>     <C>
   Net income/(loss).................................. 29,408  25,225  (11,245)
   Minority interests.................................  9,954  15,515    9,270
   Provision for income tax........................... 62,244  39,379   33,787
   Equity in (earnings) losses of investees........... (9,197) (4,580)     203
                                                       ------  ------  -------
   Income before tax and equity in (earnings) losses
    of investees(1)................................... 92,409  75,539   32,015
                                                       ======  ======  =======
   Provision for income tax using rates of 38%, 40%
    and 41.67% in 2000, 1999 and 1998, respectively... 35,115  30,215   13,340
   Stock based compensation...........................  1,810   1,850    6,834
   Earn out--buy out compensation expense.............  6,218   6,977    2,802
   Non deductible goodwill amortization............... 12,894   7,379    8,235
   Other permanent differences........................  5,224  (5,055)   1,043
   Tax credits........................................    --      665       64
   Difference between French and foreign rates........    872   1,797   (1,346)
   Change in valuation allowance......................    111  (4,449)   2,815
                                                       ------  ------  -------
   Provision for income tax........................... 62,244  39,379   33,787
                                                       ======  ======  =======
</TABLE>
--------
(1) Of which 26,646, 3,277 and (2,016) originating from French companies for
    2000, 1999 and 1998, respectively.

                                      F-23
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)


  Temporary differences that give rise to deferred tax assets and liabilities
consist of the following:

<TABLE>
<CAPTION>
                                                                For the Years
                                                               ended December
                                                                     31,
                                                               ----------------
                                                                2000     1999
                                                               -------  -------
   <S>                                                         <C>      <C>
   Tax effect on tax loss carryforwards
     Long-term capital losses.................................  18,688   18,042
     Ordinary tax loss carryforwards..........................  73,891   43,266
                                                               -------  -------
   Temporary differences
     Accrued Vacation Pay.....................................   1,268    1,236
     Long-term incentive plan.................................  12,789    9,979
     Accrued pension costs....................................   7,961    7,249
     Leases...................................................     --        41
     Amortization.............................................  79,538      --
     Accrued expenses.........................................  17,224      695
     Other temporary differences..............................  15,934    4,329
                                                               -------  -------
   Total temporary differences................................ 134,714   23,529
   Deferred tax assets, gross................................. 227,293   84,837
                                                               =======  =======
   Tax effect of temporary differences related to:
     Deductible goodwill amortization.........................   7,493    2,434
     Unrealized gain on marketable securities.................     --       337
     Intangibles.............................................. 124,873      --
     Other....................................................   4,128      912
                                                               -------  -------
   Deferred tax liabilities................................... 136,494    3,683
                                                               -------  -------
     Less: Valuation allowance................................ (57,930) (50,139)
   Net deferred tax...........................................  32,869   31,015
                                                               =======  =======
</TABLE>

  Deferred tax assets are reduced by a valuation allowance when it is more
likely than not that a portion thereof will not be realized, generally because
of a history of operating losses.

  The Company's share of undistributed earnings of foreign subsidiaries that
could be subject to additional income tax if remitted was approximately 342,254
and 286,227 as of December 31, 2000 and 1999. No provision has been recorded
for the French and foreign taxes that could result from the remittance of such
undistributed earnings since the earnings are permanently reinvested outside of
France and it is not practicable to estimate the amount of such taxes.

  As of December 31, 2000, expiration dates of operating loss carryforwards are
as follows:

<TABLE>
<CAPTION>
                                                                       As of
                                                                    December 31,
                                                                        2000
                                                                    ------------
     <S>                                                            <C>
     December 31, 2001.............................................    13,336
     December 31, 2002.............................................     4,368
     December 31, 2003.............................................     2,549
     December 31, 2004.............................................    17,998
     Thereafter....................................................   346,705
                                                                      -------
                                                                      384,956
                                                                      =======
</TABLE>


                                      F-24
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

13. RELATED PARTY TRANSACTIONS

  The Company rendered advertising services to Vivendi, the ultimate parent
company of Havas S.A. (Havas Advertising's largest single shareholder), and
affiliates of the "Vivendi Group," in the amount of 20,236 and 18,606 for the
years ended December 31, 2000 and 1999, respectively. The Company also
purchased media space from certain affiliates of Vivendi Group on behalf of its
clients. The accounts receivable and payable (including payable to media
companies belonging to Vivendi Group) in connection with these services
amounted to 9,604 and 2,959 as of December 31, 2000 (8,179 and 3,109 as of
December 31, 1999).

  The Company was invoiced by Havas S.A. for the use of the Havas trademark for
305 and 610 in 2000 and 1999 respectively.

  In certain Media Planning Group subsidiaries, excess cash is lent to the
Company at a money market rate. As of December 31, 2000, the Company debt to
Media Planning Group included under "Related parties payables" amounted to
90,904. Interest charged from the date of the business combination transaction
to December 31, 2000 (note 7) amounted to 2,864.

  The Company used certain Media Planning Group services in connection with
media planning activities. Commissions charged by Media Planning Group from the
date of the business combination transaction to December 31, 2000 amounted to
17,193 and were rebilled to clients for the same amount. As of December 31,
2000, the related accounts payable (including payable to media companies)
amounted to 40,542.

14. EARNINGS PER SHARE

  Basic earnings per share is computed on the basis of the weighted-average
number of Havas Advertising shares issued after deduction of the weighted
average number of treasury stock.

  Diluted earnings per share take into account share equivalents having a
dilutive effect. Potential common shares include: convertible bonds (Note 8),
stock-options to employees (Note 10), stock-options issued by Snyder
Communications for SNC shares (Note 10) and warrants to subscribe for Havas
Advertising shares (6,695,621 warrants were issued on May 13, 1998 to all
shareholders for no consideration and mature on May 13, 2001. 20 warrants give
the right to subscribe for twenty Havas Advertising shares for 1,200 francs
(182.94 euro), 5,034,041 and 5,696,261 warrants were outstanding as of December
31, 2000 and 1999, respectively). Net income is adjusted for after tax interest
expense related to convertible bonds. The dilutive effect of stock options and
warrants is calculated using the treasury stock method.

  The following tables present a reconciliation of the basic earnings per share
and the diluted earnings per share for each period presented:

<TABLE>
<CAPTION>
                                                                      Per share
                                         Net income  Number of shares  amount
                                        ------------ ---------------- ---------
                                        (In Millions
                                          of Euro)
   <S>                                  <C>          <C>              <C>
   2000
   Basic earnings per share............    29,408      180,318,635       0.16
     Stock options Havas Advertising...       --         9,698,548       0.00
     Stock options SNC.................       --           665,018       0.00
     Warrants..........................       --         3,199,125       0.00
     Convertible bonds.................     1,678       13,244,769      (0.01)
                                           ------      -----------      -----
   Diluted earnings per share..........    31,086      207,126,095       0.15
                                           ======      ===========      =====
</TABLE>

                                      F-25
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

<TABLE>
<CAPTION>
                                                                      Per share
                                       Net income   Number of shares   amount
                                      ------------ ------------------ ---------
                                      (In Millions
                                        of Euro)
   <S>                                <C>          <C>                <C>
   1999
   Basic earnings per share(1).......    25,225       138,809,700        0.18
     Stock options...................       --          8,262,500       (0.01)
     Warrants........................       --          1,060,780        0.00
     Convertible bonds...............     2,570        21,333,300       (0.01)
                                        -------       -----------       -----
   Diluted earnings per share........    27,795       169,466,280        0.16
                                        =======       ===========       =====
   1998
   Basic earnings per share(1).......   (11,245)      125,420,200       (0.09)
     Stock options...................       --                --          --
     Warrants........................       --                --          --
     Convertible bonds...............       --                --          --
                                        -------       -----------       -----
   Diluted earnings per share........   (11,245)      125,420,200       (0.09)
                                        =======       ===========       =====
</TABLE>
--------
(1) Adjusted for 20 for 1 stock split

  On May 23, 2000, the shareholders of Havas Advertising approved a 20 for 1
stock split. As a result, each Havas Advertising share, nominal value (Euro)8
per share, was exchanged for 20 Havas Advertising shares, nominal value
(Euro)0.40 per share, on May 26, 2000. Unless otherwise indicated, share
amounts set forth in these consolidated financial statements and notes to
consolidated financial statements give effect to this 20 for 1 stock split.

  In 1998, certain securities having a potential dilutive effect were not
included in the computation of diluted earnings per share because the Company
incurred a net loss and a loss from continuing operations for that period:

  .  options to purchase 899,980 of Havas Advertising shares at a range of
     (Euro)3.34 to (Euro)4.82 per share exercised during the year for the
     period before they were exercised;

  .  options outstanding at the end of the year to purchase 8,370,080 of
     Havas Advertising shares at a range of (Euro)3.34 to (Euro)6.35 per
     share;

  .  options to purchase 6,000,000 of existing Havas Advertising shares at
     (Euro)4.61 per share;

  .  warrants to purchase 6,690,620 of Havas Advertising shares at (Euro)9.15
     per share; and

  .  convertible bonds issued in 1992 and 1994 remaining outstanding at the
     beginning of the year and totally converted in Havas Advertising shares
     during 1998.

                                      F-26
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)


15. LEASES

  The Company leases certain premises and equipment under both capital and
operating leases. The following is a schedule of future minimum lease payments
for capital and operating leases in effect at December 31, 2000:

<TABLE>
<CAPTION>
                                                              Capital  Operating
   Years Ending December 31,                                  Leases    Leases
   -------------------------                                  -------  ---------
   <S>                                                        <C>      <C>
   2001......................................................  5,419     94,556
   2002......................................................  4,673     88,048
   2003......................................................  7,840     73,861
   2004......................................................    137     69,165
   2005......................................................     65     57,321
   Thereafter................................................    --     252,741
                                                              ------    -------
   Total minimum lease payments.............................. 18,134    635,692
                                                              ------    -------
   Less: Amount representing interest........................ (2,175)
                                                              ------
   Total obligation under capital leases..................... 15,959
                                                              ------
   Less: Current portion..................................... (4,279)
                                                              ------
   Long-term portion......................................... 11,680
                                                              ======
</TABLE>

  As of December 31, 2000 and 1999, assets are presented under "Property and
equipment" respectively for 29,183 and 25,065 held under capital leases.

  Net rental expense for all operating leases was 74,368, 39,560 and 40,093 in
2000, 1999 and 1998, respectively.

16. SEGMENT DATA

  The Company's revenues and operating results are derived from three agency
networks utilizing independent brands. This organization was mainly designed
for the Company to be able to provide advertising and communications services
to clients with competing product and services and to permit the expansion of
certain specialty advertising and communication services. The decisions made by
the Company's chief operating decision maker about resources to be allocated to
the operating divisions are not based on the actual performance of such
divisions but on their needs to enhance their service capabilities and
geographic coverage. These three divisions have substantial similarities in the
nature of services provided, the delivery process for rendering their services,
the customers they serve and their economics. Therefore, the Company considers
that it is operating in one segment: advertising and communications.

  Geographical information required by SFAS 131 is as follows:

<TABLE>
<CAPTION>
                                       United  United  Rest of
                               France  States  Kingdom Europe   Other    Total
                               ------- ------- ------- ------- ------- ---------
   <S>                         <C>     <C>     <C>     <C>     <C>     <C>
   2000
   Net revenues............... 322,778 625,347 315,659 207,107 172,749 1,643,640
   Long lived assets..........  42,656 169,899  20,782  16,179  16,440   265,956

   1999
   Net revenues............... 290,975 369,304 191,744 162,152 110,205 1,124,380
   Long lived assets..........  39,476  49,508  21,052  12,893   9,878   132,807
</TABLE>

  Net revenues and long-lived assets are attributed to countries based on
location of operating unit.

                                      F-27
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)


17. FAIR VALUE OF FINANCIAL INSTRUMENTS

  The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:

  Cash and cash equivalents and short-term debt

  The carrying value of cash and cash equivalents and short term debt
approximate fair value because of the relatively short maturity of these
instruments.

  Restricted deposit

  Restricted deposit carries a variable interest rate and its fair value is
close to its carrying amount.

  Long-term debt

  The fair value of long-term debt is substantially the same as its carrying
amount in the financial statements because the majority of the Company's long-
term debt is at variable rates and approximates fair value.

  Convertible bonds

  The fair value of the bonds was determined by reference to quotations
available in markets where these issues were traded estimated using quoted
market prices and amounts.

  Combined interest and currency swap ("CIRCUS")

  The estimation of the CIRCUS fair value involves splitting the swap into its
borrowing and lending elements and discounting the future expected currency
cash flows relating to each element. The present value calculated have been
converted at the year-end rate and netted to give an estimated fair value.

  Forward Contracts

  In some cases, the Company hedges intercompany loans denominated in foreign
currency with forward contracts. Due to the short maturities of these forward
exchange contracts, the fair value of the contracts were determined to be the
difference between the contract rate and the market forward rate multiplied by
the foreign currency amount.

  The following table presents the carrying amounts and estimated fair values
of the Company's financial instruments as of December 31, 2000 and 1999.
Amounts in parenthesis represent liabilities.

<TABLE>
<CAPTION>
                                              2000                1999
                                        ------------------  ------------------
                                        Carrying    Fair    Carrying    Fair
                                         amount    Value     amount    Value
                                        --------  --------  --------  --------
                                                  (In Euro 000's)
   <S>                                  <C>       <C>       <C>       <C>
   Cash and cash equivalents..........   594,215   594,215   270,943   270,943
   Restricted deposit.................    32,241    32,241    29,865    29,865
   Long-term borrowings including
    current maturities................  (123,278) (125,246) (118,610) (121,368)
   Convertible bonds..................  (797,407) (864,427) (185,650) (406,887)
   CIRCUS.............................    (3,611)   (3,417)   (1,235)   (1,362)
   British pound denominated forward
    contracts.........................       (25)       12       --        --
   Canadian dollar denominated forward
    contracts.........................         5      (141)      --        --
</TABLE>


                                      F-28
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

18. SUPPLEMENTAL CASH FLOWS INFORMATION

<TABLE>
<CAPTION>
                                                   Years ended December 31,
                                                   --------------------------
                                                     2000      1999    1998
                                                   ---------  ------  -------
                                                       (In Euro 000's)
   <S>                                             <C>        <C>     <C>
   Cash paid for interest.........................    30,006  14,519   23,128
   Cash paid for income taxes.....................    38,292  33,234   16,431
   Non Cash items:
     Equipment purchased under capital lease......     5,501   3,974      180
     Increase in shareholders' equity related to
      conversion of bonds.........................
       Convertible debt carrying amount net of
        deferred issue expenses...................    95,478  44,884  163,062
       Interest expenses..........................       656     673    3,948
       Deferred tax transferred to equity.........      (251)   (269)  (5,760)
     Increase in shareholders' equity related to
      the SNYDER acquisition...................... 2,058,343     --       --
     Dividends paid in common stocks..............       --      --    10,275
</TABLE>

19. CONTINGENCIES

  The French tax authorities have asserted that the Company acquired certain
investments from employees at overstated prices. The Company and its tax
counsels believe that the position of the tax authorities is unfounded and are
defending this matter vigorously. The Company brought the matter before the
Paris Tribunal Administratif (tax court). The trial is pending. Based upon the
current assessment established by the Tax Authorities the possible maximum
liability would approximate (Euro)5 million. Based upon presently available
information the Company is not in a position to give an estimate of a range of
possible loss.

  The Company is also involved in various routine legal proceedings that arise
in the ordinary course of its business. The Company believes that the outcome
of all pending legal proceedings and unasserted claims in the aggregate will
not have a material adverse effect on its financial position, results of
operations or liquidity.

20. RESERVE FOR DOUBTFUL ACCOUNTS

  Change in the Company's reserve for doubtful accounts for the years ended
December 31, 2000 and 1999 were as follows:

<TABLE>
<CAPTION>
                               Charge to
                      Opening  Costs and                       Other   Closing
                      Balance  Expenses  Reversal Deductions Movements Balance
                      -------  --------- -------- ---------- --------- -------
   <S>                <C>      <C>       <C>      <C>        <C>       <C>
   Year 2000......... (15,573)  (9,586)     578     2,929     (14,950) (36,602)
   Year 1999......... (16,233)  (3,815)   2,026     3,389        (940) (15,573)
</TABLE>

21. SUBSEQUENT EVENTS

  21.1. Contemplated merger with Snyder Communications

  On February 5, 2001, the Company, HAS Acquisition II Corporation, a wholly
owned subsidiary of Havas Advertising ("Merger Subsidiary"), and Snyder
Communications, Inc., a majority-owned subsidiary of Havas Advertising, entered
into a merger agreement pursuant to which Merger Subsidiary will be merged with
and into Snyder Communications, with Snyder Communications surviving as a
wholly owned subsidiary of Havas

                                      F-29
<PAGE>

                       HAVAS ADVERTISING AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                  (Thousands of Euro except per share amounts)

Advertising (the "Merger"). As a result of the Merger, Havas Advertising will
acquire all of the tracking stock of Circle.com, the Internet professional
services business unit of Snyder Communications, in exchange for Havas
Advertising ADSs. The consummation of the Merger is subject to certain
conditions, including approval by the stockholders of each of Snyder
Communications and Havas Advertising and receipt of all required regulatory
approvals.

  21.2. Circle.com litigation

  On June 4, 2001, two holders of Circle.com common stock filed a purported
class action lawsuit in Delaware Chancery Court against Snyder Communications,
Havas Advertising and each director of Havas Advertising. The lawsuit sought a
preliminary and permanent injunction, or, alternatively, monetary damages. The
lawsuit alleges that Havas Advertising and the board of directors of Snyder
Communications breached their fiduciary duties owed to the Circle.com
stockholders when considering and negotiating the proposed merger of Snyder
Communications with a subsidiary of Havas Advertising by failing to create an
independent negotiating structure, failing to seek truly independent advice,
concealing material information from the Circle.com stockholders, and unfairly
timing the proposed merger to the disadvantage of the Circle.com stockholders.
Subsequent to the filing of the lawsuit, the purported representatives of the
purported Circle.com stockholder class withdrew their application for a
preliminary injunction and expedited discovery and Havas Advertising agreed to
waive any objection to jurisdiction it may otherwise assert under French law,
and, in the event the court enters a judgment for money damages in favor of
Circle.com stockholders, to waive any right Havas Advertising may have under
French law to assert that such judgment is not enforceable against it and any
defendant indemnified by Havas Advertising.

  Snyder Communications, Havas Advertising and the directors of Snyder
Communications and Havas Advertising deny all liability with respect to the
claims alleged in the complaint and believe those claims to be without merit.
Snyder Communications and the other defendants to the lawsuit intend to defend
themselves vigorously in such action. Havas Advertising is currently unable to
assess the impact that the litigation will have, if any, on its financial
statements.

  21.3. Acquisition of the remaining 55% of Media Planning Group

  On January 20, 2001, Havas Advertising, which owns 45% of the shares of Media
Planning Group, entered into an agreement to acquire the remaining 55% of the
shares of Media Planning Group from the other shareholders of Media Planning
Group in exchange for 28.8 million new Havas Advertising shares and a cash
payment of (Euro)51.2 million. The transaction is subject to the approval of
the shareholders of Havas Advertising and customary closing conditions.

                                      F-30
<PAGE>

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
 Exhibit No.                             Description
 -----------                             -----------
 <C>         <S>
    1.1      Statuts (Articles of Association) of Havas Advertising (English
             translation) (incorporated by reference to Exhibit 3.1 to Havas
             Advertising's registration statement on Form F-4
             (Reg. No. 333-43362)).

    2.1      Form of Deposit Agreement among Havas Advertising, Morgan Guaranty
             Trust Company of New York and all holders from time to time of
             Havas Advertising ADSs (incorporated by reference to Exhibit 4.1
             to Havas Advertising's registration statement on Form F-4 (Reg.
             No. 333-43362)).

    2.2      Note d'Operation (Prospectus) dated February 3, 1999 for the
             issuance of convertible bonds by Havas Advertising (incorporated
             by reference to Exhibit 4.2 to Havas Advertising's registration
             statement on Form F-4 (Reg. No. 333-43362)).

    2.3      Note d'Operation (Prospectus) dated December 12, 2000 for the
             issuance of convertible bonds by Havas Advertising (incorporated
             by reference to Exhibit 4.3 to Havas Advertising's registration
             statement on Form F-4 (Reg. No. 333-59880).

    4.1*     Fourth Amendment to Lease dated January 1, 2000, between EWDB
             North America Inc. and The Rector, Church-Wardens and Vestrymen of
             Trinity Church in the City of New York.

    4.2*     Protocol Agreement and Commercial Lease dated as of April 2, 2001
             by and between Havas Advertising and Suresnes Immobilier
             (summary).

    4.3      Agreement and Plan of Merger dated February 5, 2001 among Havas
             Advertising, HAS Acquisition II Corporation and Snyder
             Communications (incorporated by reference to Exhibit 2.1 to Havas
             Advertising's registration statement on Form F-4 (Reg. No. 333-
             59880)).

    4.4      Amendment No. 1 to Agreement and Plan of Merger dated May 14, 2001
             among Havas Advertising, HAS Acquisition II Corporation and Snyder
             Communications (incorporated by reference to Exhibit 2.1A to Havas
             Advertising's registration statement on Form F-4 (Reg. No. 333-
             59880).

    4.5      Amended and Restated Agreement and Plan of Merger dated as of
             August 3, 2000 among Havas Advertising, HAS Acquisition
             Corporation and Snyder Communications (incorporated by reference
             to Exhibit 2.1 to Havas Advertising's registration statement on
             Form F-4 (Reg. No. 333-43362)).

    4.6      Second Supplemental and Amendment Agreement to the Merger
             Agreement dated October 5, 1999 between Advertising Antwerpen
             B.V., Cantabro Catalana de Inversiones, S.A., Compania de Cartera
             e Inversiones, S.A., Deya, S.A., Havas Advertising S.A., Havas
             Advertising International S.A., Martinez-Rovira Family and Media
             Planning Group S.A. (incorporated by reference to Exhibit 2.4 to
             Havas Advertising's registration statement on Form F-4 (Reg. No.
             333-43362)).

    4.7      Agreement to Contribute dated as of January 20, 2001 between Havas
             Advertising and Advertising Antwerpen B.V., Banco Santander
             Central Hispano, S.A., Compania de Cartera e Inversiones S.A.,
             Deya S.A., Mr. Jose Martinez-Rovira Vidal, Mrs. Maria Luisa Munoz
             Alvarez, Mrs. Cristina Martinez-Rovira Munoz, Mrs. Sandra
             Martinez-Rovira Munoz and Havas Advertising S.A. (incorporated by
             reference to Exhibit 2.7 to Havas Advertising's registration
             statement on Form F-4 (Reg. No. 333-59880))

    4.8      Trademark License Agreement dated December 7, 1999 by and between
             Havas S.A. and Havas Advertising (incorporated by reference to
             Exhibit 10.6 to Havas Advertising's registration statement on Form
             F-4 (Reg. No. 333-43362)).

    4.9      Guaranty dated as of February 20, 2000 by EDWB North America,
             Inc., in favor of Snyder Communications (incorporated by reference
             to Exhibit 10.9 to Havas Advertising's registration statement on
             Form F-4 (Reg. No. 333-43362)).
</TABLE>

<PAGE>

<TABLE>
 <C>      <S>
  4.10    U.S. $400,000,000 Multicurrency Term Loan Facility dated as of May
          18, 2000 among Havas Advertising, Havas Advertising International SA,
          HAS Acquisition Corp. and EWDB North America Inc., as borrowers, the
          guarantors listed in Schedule 2 to the Loan Facility, as guarantors,
          the lenders listed in Schedule 1 to the Loan Facility, J.P. Morgan
          Securities Ltd. and Societe Generale, as arrangers and Morgan
          Guaranty Trust Company of New York, as agent (incorporated by
          reference to Exhibit 10.10 to Havas Advertising's registration
          statement on Form F-4 (Reg. No. 333-43362)).

  4.11    Loan Amendment Agreement dated as of June 15, 2000 among Havas
          Advertising, as borrower's agent, Morgan Guaranty Trust Company of
          New York and Societe Generale, as lenders, J.P. Morgan Securities
          Ltd. and Societe Generale, as arrangers, and Morgan Guaranty Trust
          Company of New York, as agent (incorporated by reference to Exhibit
          10.11 to Havas Advertising's registration statement on Form F-4 (Reg.
          No. 333-43362)).

  4.12    Guarantee and Indemnity dated as of June 15, 2000 among Havas
          Advertising, Havas Advertising International SA, HAS Acquisition
          Corp., EWDB North America Inc. and Evelink plc, as guarantors, and
          Morgan Guaranty Trust Company of New York, as agent (incorporated by
          reference to Exhibit 10.12 to Havas Advertising's registration
          statement on Form F-4 (Reg. No. 333-43362)).

  4.13    Trademark License Agreement dated October 2, 2000 by and between
          Havas S.A. and Havas Advertising (incorporated by reference to
          Exhibit 2.1 to Havas Advertising's registration statement on Form F-4
          (Reg. No. 333-59880)).

  4.14*   Registration Rights Agreement dated as of May 14, 2001 among Acacia
          ISP, S.L., Banco Santander Central Hispano, S.A., Compania de Cartera
          e Inversiones S.A., Deya S.A., Jose Martinez-Rovira Vidal, Maria
          Luisa Munoz Alvarez, Cristina Martinez-Rovira Munoz and Sandra
          Martinez-Rovira Munoz.

  8.1     List of subsidiaries (incorporated by reference to Exhibit 21.1 to
          Havas Advertising's registration statement on Form F-4 (Reg. No. 333-
          59880)).
</TABLE>
--------
*Filed herewith