Management announced increased annual organic revenue
targets, expanded M&A commitments, and plans to bolster its
capabilities across high-growth digital marketing services
including cloud suite of digital SaaS and DaaS products
NEW YORK, Nov. 10, 2021 /CNW/ -- (NASDAQ:
STGW) – Stagwell announced several strategic growth
targets at the company's first in-person and virtual presentation
for investors and analysts. Those include:
- Increased targeted combined GAAP revenue for 2025 to
$3.4B versus $3B previously, based on:
-
- Increased target of 7-9% annual organic revenue growth compared
to 5% previously, leading to double digit overall annual revenue
growth. The increase is driven by 1) an increased mix of digital
revenue targeted to grow at a blended 10-15% per year, 2) increased
confidence in higher growth of conventional marketing driven by
success in winning larger pitches, and 3) increased confidence in
secular growth in advocacy.
- Increased incremental revenue target from M&A and
associated organic growth of acquisitions to $450M by 2025 versus prior target of $325M. (Increased levels of cash flow due to
business outperformance are expected to be dedicated to
acquisitions in synergistic geographies and capabilities, in
addition to faster growing digital areas.)
- Stagwell Marketing Cloud announced to service in-house
marketers with suite of digital SaaS and DaaS products is targeted
to generate ~$75M in revenue by
2025.
- Proportion of New Revenue derived from digital services —
including digital transformation, performance marketing & data,
and online research — targeted to grow to 65% by 2025, up from 48%
of pro forma venue in Q3 2021.
- Adjusted EBITDA margin expansion of 25 to 50 basis points per
year, driven by a combination of synergies and increased mix of
higher margin digital services, partially offset by normalization
of travel & entertainment.
"Stagwell is demonstrating new levels of growth and
profitability that go beyond simple pandemic recovery, bolstered by
our best-in-class digital services," said Mark Penn. "The combination has set us up to
deliver record year-end growth and we are confident that doubling
down on our aggressive investment in connected, integrated
marketing solutions is the key to further sustained growth."
These targets follow strong Q3 2021 performance from the world's
newest marketing services network, including 22.8% pro forma net
organic revenue and 25.2% year over year pro forma net organic
revenue. GAAP Revenue for the quarter was $466.6 million.
Stagwell last week revised its full year-end guidance, which had
previously been revised higher in Q2. The company now expects to
end the year with pro forma revenue of $2.15B-$2.18B and
is raising its Adjusted EBITDA expectations for a second time to
$370M-$380M from $325-$340 at the
beginning of the year.*
A replay of Stagwell's November 8,
2021 Investor Day, including copies of all management
presentation materials, is available at
www.stagwellglobal.com/investors/
*The Company has excluded a quantitative reconciliation with
respect to the Company's 2021 guidance under the "unreasonable
efforts" exception in Item 10(e)(1)(i)(B) of Regulation S-K.
About Stagwell
Stagwell is the challenger network built to transform marketing.
We deliver scaled creative performance for the world's most
ambitious brands, connecting culture-moving creativity with
leading-edge technology to harmonize the art and science of
marketing. Led by entrepreneurs, our 10,000+ specialists in
20+ countries are unified under a single purpose: to drive
effectiveness and improve business results for their
clients. Join us at www.stagwellglobal.com.
Forward Looking Statements & Other Information
This press release contains forward-looking statements.
Statements in this press release that are not historical facts,
including without limitation the information under the heading
"Financial Outlook" and statements about the Company's beliefs and
expectations, earnings (loss) guidance, recent business and
economic trends, potential acquisitions, and estimates of amounts
for redeemable noncontrolling interests and deferred acquisition
consideration, constitute forward-looking statements. Words such as
"estimates", "expects", "contemplates", "will", "anticipates",
"projects", "plans", "intends", "believes", "forecasts", "may",
"should", and variations of such words or similar expressions are
intended to identify forward-looking statements. These statements
are based on current plans, estimates and projections, and are
subject to change based on a number of factors, including those
outlined in this section. Forward-looking statements speak only as
of the date they are made, and the Company undertakes no obligation
to update publicly any of them in light of new information or
future events, if any. Forward-looking statements involve inherent
risks and uncertainties. A number of important factors could cause
actual results to differ materially from those contained in any
forward-looking statements. Such risk factors include, but are not
limited to, the following:
- risks associated with international, national and regional
unfavorable economic conditions that could affect the Company or
its clients, including as a result of the novel coronavirus
pandemic ("COVID-19");
- the effects of the outbreak of COVID-19, including the measures
to reduce its spread, and the impact on the economy and demand for
our services, which may precipitate or exacerbate other risks and
uncertainties;
- an inability to realize expected benefits of the combination of
the Company's business with the business of MDC (the "Business
Combination" and, together with the related transactions, the
"Transactions");
- adverse tax consequences in connection with the Transactions
for the Company, its operations and its shareholders, that may
differ from the expectations of the Company, including that future
changes in tax law, potential increases to corporate tax rates in
the United States and
disagreements with the tax authorities on the Company's
determination of value and computations of its attributes may
result in increased tax costs;
- the occurrence of material Canadian federal income tax
(including material "emigration tax") as a result of the
Transactions;
- the impact of uncertainty associated with the Transactions on
the Company's businesses;
- direct or indirect costs associated with the Transactions,
which could be greater than expected;
- risks associated with severe effects of international, national
and regional economic conditions;
- the Company's ability to attract new clients and retain
existing clients;
- reduction in client spending and changes in client advertising,
marketing and corporate communications requirements;
- financial failure of the Company's clients;
- the Company's ability to retain and attract key employees;
- the Company's ability to achieve the full amount of its stated
cost saving initiatives;
- the Company's implementation of strategic initiatives;
- the Company's ability to remain in compliance with its debt
agreements and the Company's ability to finance its contingent
payment obligations when due and payable, including but not limited
to those relating to redeemable noncontrolling interests and
deferred acquisition consideration;
- the successful completion and integration of acquisitions which
complement and expand the Company's business capabilities; and
- foreign currency fluctuations.
Investors should carefully consider these risk factors and the
additional risk factors outlined in more detail under the caption
"Risk Factors" in Exhibit 99.2 to our Current Report on Form 8-K,
filed with the Securities and Exchange Commission (the "SEC") on
August 10, 2021, and accessible on
the SEC's website at www.sec.gov., and in the Company's other SEC
filings.
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SOURCE Stagwell Inc.