S4 Capital reported Q3 financials today that were below expectations, prompting the Martin Sorrell-led firm to downgrade its full-year growth outlook again. Company shares fell more than 17% in London Exchange trading on the news.  

The firm now says it will have an organic net revenue decline for the full year without offering a specific range as to how sharp that decline will be. In July S4 cut its full-year organic growth guidance to between 2% and 4% from the previously stated 6% to 10%.   

“The challenging trading conditions we saw in the first half have intensified in Q3,” the firm stated. Billings were down 7.0% on a reported basis and organic net revenue was down 10%.   

CEO Sorrell stated: "Trading in the third quarter was difficult, reflecting the global macroeconomic conditions with continued client caution to commit and extended sales cycles, particularly for larger projects and to some extent clients in the Technology sector.”  

On a positive note, he said, “we continue to see year to date growth from our top clients with like-for-like revenue growth at our top 20 clients up 2.9% and at the top 50 up 4.6%.”  

Sorrell also said Q4 should be the company’s most profitable quarter of 2023, driven by seasonal client activity, as well as cost-cutting and other measures.   

“We remain confident our strategy, business model and talent, together with scaled client relationships position us well for above average growth in the longer term,” Sorrell said.   

The firm’s major regions — Americas, EMEA and APAC — were all down in Q3 on a net organic revenue basis. For the first nine months of the year, the Americas was up slightly while EMEA and APAC are down.