• by Steve McClellan  @mp_mcclellan, March 8, 2022

Stagwell posted a 10.4% gain in net revenue in the fourth quarter of 2021 to $520 million with organic growth of 11.3%.

For 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.

“We’re on a roll,” said Stagwell CEO Mark Penn, noting during a conference call to discuss earnings that the company last year won eight big pieces of business contributing $10 million or more to the company’s revenues with a ninth win (by media arm Assembly) of that magnitude to be announced shortly. In the fourth quarter alone the firm generated net new business worth $75 million in annualized revenue.

And the firm expects the momentum to continue this year. It’s currently projecting organic net revenue growth of 18% to 22%. The company is on target to achieve $3.4 billion in revenue by 2025.

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.

The merged operation, he said, is “working better and faster than expected,” due in large part to its digital focus, strong balance sheet and the development of 50 international affiliates. He noted that the firm recently received credit upgrades from two of the major credit rating companies.  

Penn also disclosed that it is shutting down its Russian operation as a result of the Ukraine invasion. It’s a small 10-person office with little impact on the company’s overall performance but a step the firm felt was necessary given Russia’s aggression. The firm does not have offices in Ukraine and Penn said the firm’s exposure in other Eastern European markets is limited with most of its business in North America.

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%.