M&C Saatchi, like most of its peers, has been dragged down by a contraction in ad spend by the technology sector.
This led to a weaker revenue in 2023, sparking a restructure to create a leaner, more agile business.
Part of that was a review of loss-making businesses. M&C Saatchi has been closing, winding down or selling to local executives its offices throughout the world, including Sweden, South Africa, China, Hong Kong, Indonesia and Singapore.
Asia and Australia have been merged into a new APAC region, managed from Australia by Justin Graham.
And M&C Saatchi is on course to deliver £6.1 million of annualised savings by the end of 2024, totalling £10 million.
The company reported a 31% fall to £7.3 million in statutory operating profit for the year to December. Before tax profit was down 87% to £0.7 million. Net revenue for 2023 was down 7%, and 2% like-for-like, to £252.8 million.
But the second half of the year performed better than the first, arresting the decline to “significantly improve profitability”.
Pressure was easing on client marketing budgets pointing to an improving market backdrop.
Combine this with a “global efficiency program” and the company is forecasting a better year ahead.
“Lots of the big tech heavy media businesses had a hard time last year,” Zillah Byng-Thorne, executive chair, told market analysts in a briefing.
And M&C is seeing client wins.
“We've seen a really good combination of new client wins, but also growth in clients,” said Zillah Byng-Thorne, executive chair.
“I think it is a tough market. We all know that people are slow to make decisions. When we talk about work, lead times are a little bit longer.”
However, M&C is seeing growth return in the March quarter.
“And really pleasingly the profit margin is materially better than it was this time last year,” she said.
She acknowledged redundancies.
In Australia, M&C Saatchi has made a “small number” of people redundant as it reorganises its creative team.
“Staff retention is really high,” Zillah Byng-Thorne said. “It's a good place to work. We do great work and we work with great clients. And so most people who come to work at M&C Saatchi come to work because of the work that we do.
“Obviously, you know, we've been doing some transformation work, we've been making some non voluntary attrition but that's part of any transformation activity from that perspective.
“We're a people business and people are emotional. So you know, it would be crazy of me to say that there won't be any bumps along the road.
“You want to treat people respectfully and humanely and so when we're making those decisions, we want to do that in the best way possible. It's never nice, but you can still treat people well.”
A slide from M&C Saatchi's results presentation:
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.