M&C Saatchi, hosting an event in London for institutional investors and analysts, is about the reveal a new strategy for high-margin, digitally led growth.
The advertising group, having turned the company around, is now focused on the delivery of creative solutions.
It will use its specialist expertise connected through data and tech to deliver “meaningful commercial and societal” change.
Part of the plan is the appointment of Justin Graham, CEO of M&C Saatchi Group Australia, to the addtional role of global head of advertising network.
Graham is charged with defining and leading a unified global advertising proposition for M&C Saatchi, as well as building core capabilities within key regional hubs and helping drive the global client base.
CEO Moray MacLennan, speaking before the presentation: "Today is about launching the next stage in our transformation journey.
“Over the past two years we have delivered on the strategy we set out, demonstrated by successive sets of record results.
“M&C Saatchi: Moving Forward lays out our plans to accelerate high-margin, digital led growth, through targeted investments and a more efficient, streamlined operating model.
“It is about demonstrating our resilience to macroeconomic uncertainties through our operational and financial strength and counter-cyclical and resilient specialisms, underpinned by a committed and experienced management team."
Highlights
- Building new capabilities, with a focus on data, technology and digital transformation.
- Identifying new opportunities, shifting from start-ups to targeted M&A and partnerships.
- Embedding a new, more efficient operating model, delivering significant cost savings and enhancing productivity.
New financial targets, 2022 - 2027:
- Net revenue growth of 8% CAGR (to £400m from £271m).
- Operating profit growth of 16% CAGR (to £74m from £35m).
- Operating profit margin of 18% by 2027, top end of the industry range.
- Improved margins in all specialisms, with higher-margin specialisms expected to represent 60%of group net revenue by 2027.
- Headline earnings growth of 22% CAGR to £50m (from £18m).
- Net cash improvement of 45% CAGR (to £195m from £30m).
Outlook
Net revenue in the year to the end of December is expected to be £271.4m, representing growth of 9% versus 2021 (FY 2021: £249.3m).
Full year 2022 headline profit before tax is expected to be £31.8m, slightly ahead of previous expectations set out in April 2022 and representing growth of 16% versus 2021 (FY 2021: £27.3m).
While conscious of the macro environment, the trading through the December quarter and the start of 2023 continues to be in line with management expectations.
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