The former siblings both reported higher profits and strong new-business gains for 1998, their first full year as independent agency networks. And while both said they are not currently looking at mergers or acquisitions, each has proved it can survive independently.
Cordiant reported net billings from new business more than doubled in 1998 to $580 million, from $250 million the previous year. And pre-tax profit rose by 19.9% to $43 million. Group revenue -- a figure that includes European second network Scholz & Friends, Hamburg -- fell slightly to $501 million, from $504.4 million the year earlier.
'99 OUTLOOK 'MORE OF THE SAME'
Saatchi & Saatchi last week reported 1998 revenue of $602.6 million, up 5.9%. Pre-tax profit rose 30.6% to $51 million. Saatchi also said its net new billings essentially doubled, to $500 million from $255 million.
"The outlook is for more of the same in 1999," said Bob Seelert, Saatchi & Saatchi chairman. "We'll continue to raise revenues above the market. It's not a flash in the pan."
For both Cordiant and Saatchi, which were joined under the Saatchi & Saatchi Co. holding company umbrella until their December 1997 demerger, comparative figures for 1997 are presented on a pro forma basis.
Zenith Media, owned jointly by Saatchi and Cordiant, also had a good year. Revenue rose 8.6% in 1998, Mr. Seelert said. Although Zenith has held discussions with other media-buying groups, no deal seems imminent.
"There are a myriad of possibilities. We've got to figure out a way through all the chess pieces," Mr. Seelert said.
Saatchi and Cordiant each said they have already added $200 million each in new business so far in 1999.
Both companies' share prices rose after their financial results were announced. The share prices also were bolstered by an influential two-volume analysts' report issued last week in London by stockbroker WestLB Panmure. A buy recommendation for Cordiant was headlined "Independence suits 'em!"
Saatchi and Cordiant both frequently deny speculation they are acquisition targets for other networks.
"The reality is we don't need a partner," Mr. Seelert said. "We're solidly positioned on the worldwide stage. We have P&G in 58 countries and Toyota in 31. The vision for the company is very focused -- a creative ideas company that builds our clients' business. We find that a very comfortable place to be."
U.K. TRADE PRESS TALK
He also dismissed recent speculation in the U.K. trade press that Maurice Saatchi, ousted in 1995 as chairman of the now-defunct holding company, wants to merge his 4-year-old M&C Saatchi network with Saatchi.
"Seventy percent of their billings conflict with ours," Mr. Seelert noted. "With that level of conflict, there's nothing to it."
Cordiant's Bates network has suffered from both weakness in the U.S. and lack of substantial global business. In an effort to address that, the company said multinational business grew from 30% to 33% of revenue last year, with a target of 40% by 2000. And North America accounted for 24% of revenue, up from 22% in 1997, with a goal of 30% by 2000.
For Saatchi, the three most appealing growth markets are the U.S., U.K. and