On 28th January 2021 M&C Saatchi Group hosted a virtual capital markets event for institutional investors and analysts, where we announced a new strategy, operating model and medium-term financial targets.
We set out a new customer-focused strategy and operating structure to address changing client needs whilst improving operational efficiency, with the presentation covering:
- Building from Strength
- Clear Mission: Meaningful Change
- New Strategy: Connected Growth
- New Operating Model: Five Specialist Divisions
- New Growth Drivers
We also set out a number of financial targets to be achieved over the course of 2020 to 2025:
- Net revenue growth of 6% CAGR (FY 2020 to 2025)
- Operating profit growth of >25% CAGR (FY 2020 to 2025)
- Strong operational leverage and tight cost control; £30m pa of cost savings initiated in 2020
- A Group operating margin of 18% by 2025
- Improved margins projected for all Regions and Specialist Divisions
- Strong Free Cash Flow
- Limited additional investment will be required due to strong existing foundations
Moray MacLennan, Chief Executive Officer, commented:
"Today we are announcing the start of a new chapter for M&C Saatchi: a chapter of Meaningful Change. This will be at the heart of both our offering to clients and how we run and grow the company."
“Thank to the resilience, agility and determination of our people, and the loyalty of our clients, we have emerged from the most difficult period in our history – amidst a global pandemic – with real strengths. We have a strong, diverse client base; we continue to win significant new business; our capabilities are broad and deep, across the digital marketing landscape; we have a strong presence in major markets and companies that are recognised as leaders in their field; we have strengthened our governance and controls.”
“The marketing landscape is changing in profound ways. M&C Saatchi’s belief in the power of communications and creativity to change the world is as relevant and important as ever, but we also need to evolve. We will be a simpler, better-connected global company, with technology working hand-in-hand with creativity, led by a clear mission: to navigate, create and lead meaningful change. We see great opportunity ahead and I am confident that this renewed focus will enable us to capture it.”
Our new strategy has been created to enable clients to navigate, create and lead meaningful change. Meaningful Change addresses clients most complex business problems. It is purpose driven, impact orientated and signifies a substantial reset for the Group.
To achieve this, we are moving to a new, simpler model, operating through five specialist divisions, each created to meet a clear and growing client need, to build on an area of existing strength, and so that when connected together they add up to a complete, differentiated, end-to-end capability:
Five Specialist Divisions
- Global and Social Issues: focused on deploying behaviour change expertise and strategic communications to tackle some of the world’s most challenging problems. M&C Saatchi is already a leader in this field, addressing issues including climate change, national security, human rights, social justice and conflict prevention.
- Brand, Experience and Innovation: offering market-leading expertise in brand strategy, identity, customer experience design and innovation.
- Connected Creativity: comprising brand reputation, creative content throughout the digital ecosystem, and messaging across the customer journey.
- Performance Media: focused on connecting brands to today’s connected consumers.
- Passion Marketing: connecting brands to people – on and offline – through their passions, whether they be sport, music, film or fashion. This helps clients build enduring and measurable relationships with their customers. In addition, it has a unique talent management capability, representing broadcast celebrities and key online influencers.
These divisions will be fuelled by five growth drivers and connect the Group to focus on larger, more complex, international client assignments.
- Growth platform: focused on driving revenue growth through connecting the Group’s current capabilities and attracting new larger assignments. The growth team will project a simpler more unified M&C Saatchi Group to current and potential clients.
- Data insight and analytics: launching a new M&C Saatchi Data Consultancy, Fluency. Launching publicly in February 2021, this is already enabling the Group to help its clients analyse data and utilise it to deliver their marketing objectives.
- Technology: continuing to expand its capabilities and investments in ad tech to drive efficiency, effectiveness, and growth.
- Digital innovation: launching a new breed of digital innovation studio in 2021 that will design, prototype, and incubate high growth ventures that get to market fast, helping clients build top line growth.
- Sustainability: Over the next decade consumers, investors and talent will be drawn to ambitious brands making the most positive impact. In the first half of 2021 the Group will launch a new sustainability practice combining world leading sustainability expertise with world class communications. It will help businesses accelerate positive impact and build brand value. The Sustainability Practice will fuel the growth of divisions and the overall M&C Saatchi Group.
The presentations and a video recording of the event are available here.