Stagwell posts significant growth in Q4, full-year 2021
By Abimbola Mohammed
Stagwell Inc., a global marketing solution network, has announced its gained 10.4% in net revenue in the fourth quarter of 2021 to $520 million with organic growth of 11.3%.
According to a statement on the company’s website, its full-year 2021 net revenue reached $1.93 billion with organic growth (which excludes M&A and currency impact) of 14.5%.
For comparative purposes, those numbers are pro forma figures that assume the MDC Partners merger into Stagwell occurred in January 2020. The merger was actually completed in August of last year.
Mark J. Penn, chairman/ CEO, Stagwell, said: “2021 was a breakthrough year for Stagwell. Our full-year results and 2022 outlook are a clear affirmation of the combination and Stagwell’s unique position as the challenger that will transform marketing. We delivered pro forma organic net revenue growth of 14.5% for the year and an even more impressive 18% organic growth when excluding our Advocacy businesses, which lapped the 2020 election cycle.”
Penn continued: “Our record year was driven by tailwinds across our high concentration of leading digital capabilities, including digital transformation, influencer and global performance marketing; as well as a rapid acceleration in large contract wins. Our robust 2022 outlook reflects our expectation for continued digital strength; continued acceleration in scaled, integrated contract wins; and significant growth in the second-half in our Advocacy businesses driven by an anticipated record year of spend during the 2022 U.S. mid-term elections.”
In the same development, Frank Lanuto, Chief Financial Officer, said that the company reported strong fourth quarter net revenue of $520 million, representing pro forma net revenue growth of 10.4% year-over-year with 11.3% organic growth.
“Strong operating performance led to pro forma adjusted EBITDA margins of 19.9% for the quarter. Effective cash flow management permitted our continued acquisitions of both minority interests in our fastest growing subsidiaries as well as the acquisition of Good stuff in the UK while lowering our net leverage ratio from the prior quarter,” he said.
Fielding questions in a separate interview with MARKETING EDGE on why many Nigerian agencies don’t make their earnings public, Rotimi Bankole, Group CEO, SBI Stagwell, mentioned that his agencies (SBI & Streams Media) post their growth and earnings regularly, noting that it has never been a hidden thing from the group’s investors.
“It is not a particularly Nigeria issue, most private companies, especially the small ones worldwide are not obligated to show their books to the general public. Sometimes when they share, perhaps it is to help publicize their growth while they seek funding for investors.
“But as long as a private company’s owners and the tax man have a full picture of its financial performance, the company is doing its job with regards to disclosure. When it comes to publicly listed companies, however, their books are routinely published,” he said.
“But we at SBI Media and Streams Media regularly disclose our growth to our investors,” he added.
Recall that in a bid to deepen its footprint in African marketing service, Stagwell partnered with SBI Media and two other agencies in Africa recently, which transformed it into SBI Stagwell.
The company is also projecting pre-tax earnings of between $450 million and $480 million this year and free cash flow growth of about 30%. Penn said that cash will be used for acquisitions, investment in its digital operations and paying off debt.
In the U.S., the company posted Q4 organic growth of 7% and FY 2021 growth of 14%. By capability in Q4, creative and communications contributed nearly half of the firm’s revenue (47%). Digital transformation services added 23%, performance, media and data accounted for 21% and consumer insights and strategy contributed 9%.
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