S4 Capital, Martin Sorrell’s bigger-than-a-peanut new age digital-marketing firm, posted year-end 2018 results today, reporting a 58% boost in pro-forma revenue to about $180 million. Pro-forma gross profits were up 49% to about $139.4 million.
The company was formed last May and in short order acquired content marketing company MediaMonks — outbidding WPP, where Sorrell ruled for 30-some years — and programmatic shop MightyHive. Pro forma results report numbers as if the company had been operating for the full-year.
Sorrell told analysts earlier today the company will continue its focus on digital and in particular the “three legs” of analysis — with a focus on first party, content and media-planning/delivery.
Sorrell said the firm intends to double revenue and gross profits between 2109 and 2021. Currently, about two-thirds of its business is generated in the Americas, 30% in EMEA and 6% in APAC. By function, about 75% of the business is content and 25% is programmatic.
The firm currently operates in 16 countries with 1,200 employees.
The company is also making a push in Asia, as evidenced by the recent hiring of two WPP alum: Michel de Rijk as CEO S4 Capital APAC and Poran Malani as director of the firm’s newly established India operation.
The company’s new business wins last year included assignments from Procter & Gamble, Nestle, Avon, Mondelez, Shiseido and Bayer, among others.
“It is clear that the company’s purely digital model based on first-party data-fueling digital content and programmatic is resonating with clients,” Sorrell said.
On the call, Sorrell passed on an opportunity to take another swipe at WPP (the split, as you know, was pretty acrimonious.) He even used the word “great” in describing his former employer’s media operations.
Of course, WPP recently agreed to pay its former CEO a multimillion incentive bonus it had threatened to withhold after S4 won the MediaMonks bidding. Is there a connection?
How long is a 77% profit margin sustainable?