Despite a ‘disappointing’ year for one of its subsidiaries and a ‘difficult’ market in Spain, global advertising and marketing agency M&C; Saatchi has revealed a 10% boost in profits.
For the year ended December 31 2012, the international agency which offers a range of services related to marketing, advertising, digital, mobile, research, social marketing and more, saw profit before tax rise from £15.6 million in 2011, to 17.2 million.
New Offices and New York Relaunch
As unveiled in today's 2012 report, highlights included an 11% increase in revenue, to £169.5 million, compared to £153.1 million in 2011.
Operating profit was also up 11%, to £17.1 million, compared against £15.4 million in 2011. The strong growth in both revenue and earnings, were driven by new business wins and new businesses.
In 2012 the company also invested just shy of £1.5 million on new offices in Abu Dhabi, Singapore and Stockholm and also relaunched its New York office.
Troubles mentioned in the company’s report stemmed from M&C; Saatchi’s global marketing strategy focused subsidiary, Clear Ideas, and Spain also continued to ‘underperform in a very difficult market’.
CRM & Mobile Performing Well
Despite Clear’s issues, M&C; Saatchi’s chief executive David Kershaw, said Clear has now been restructured, resulting in a good start to the year. He also said he is confident the business as a whole will continue to grow in 2013.
"M&C; Saatchi has made very good progress in 2012. The group returned double digit revenue and operating profit growth," Kershaw said.
“This arose from new business success, increasingly international and integrated, the profitable growth of new businesses in the mature markets and the rolling out of proven models across the network. This was while continuing to invest in further new offices and businesses.”
In the UK revenue was up 13%, from £67 million to £75.4 million, with customer relationship management (CRM) businesses and mobile performing particularly well.
"Operating profit was up 17% and the company had a strong run of wins across all of its businesses, including Ballantine's, Center Parcs, National Trust, Harveys, Peroni, Intercontinental Hotels, Viking and Virgin Holidays.
M&C; Saatchi was founded in 1995 and although it started with a strong base in the UK and Australia, it now employs more than 1,708 staff across 20 countries.
Ups & Downs of Europe
In 2012, across Europe revenue was up 11% and operating profit up 14%, in spite of macro-economic challenges.
In particular, Germany, Italy and Switzerland all performed well. Another of its subsidiaries, Sport and Entertainment, launched in Germany and Switzerland and new business was gained from Nestlé.
Kershaw added: “In France, whilst advertising remains slow, we are benefiting from our diversification and were pleased to retain La Banque Postale, a major client.
"Spain continued to underperform in a very difficult market, but as an associate, our investment there is just 25%.”
Growing African Market
Kershaw said the company is also well positioned to take advantage of the growing African market and that good growth was shown in Cape Town and Johannesburg. For the Middle East and Africa region, revenues more than doubled from £3 million to £6.6 million and key wins in the period included Edgars Department Stores and Nedbank's promotional account.
In America revenue was up 19% and across Asia and Australasia, revenues were up 8% and operating profit was up 46%.