M&C Saatchi reported a 7% organic revenue decrease for the first half of the year citing the industrywide issue of a significant slowdown in spending by clients in the technology sector. Net revenue was also down 7% to 120.4 million GBP.
Media revenues were down 30% and advertising division revenue fell 16%.
The good news: two newer specialist units posted double digit growth in the period including a purpose driven unit focused on global and social issues that was up 22%. Also, the agency’s “Passions” operation, focused on sponsorships and related sports, entertainment and culture projects, was up 10%.
The London-based agency has also implemented a cost-cutting program that is projected to save 10 million GBP annually.
New clients in the first half of the year included Unilever, Channel 4 and JP Morgan. New assignments were awarded by Diageo, Samsung and PepsiCo.
Outgoing CEO Moray MacLennan said the growth at the new units and cost-cutting steps “have ensured good momentum going into the second half.” MacLennan is stepping down at the end of the month after 30 years with the agency. Zillah Byng-Thorne, currently non-executive chair, will serve as executive chair of the company until a new CEO joins.
The agency said that 85% of its forecasted full-year revenue was booked as of the end of August. It’s projecting improvement in the second half albeit with a “small single digit net revenue decline expected.”
The agency also noted that it is streamlining its executive leadership team from 20 to 13 while adding several new leadership roles to “drive creativity, execution and efficiency.” The new roles include a chief creative officer and chief operating officer.
Going forward, the agency plans to ramp up data, tech and digital transformation capabilities and increase M&A and partnership activities.