In Asia Pacific, revenue was down 7.5% to $36.9 million and the group made an operating loss of $4.7 million, leading the agency to admit it is "monitoring the progress of our operations with great care."
A "sustained program of heavy investment," has been made in China, where the group "continues to grow profitably," and additional resources have been poured into the region to support new-business assignments from clients, the company says.
Nevertheless, Saatchi claims results for its first six months show the network has been "invigorated by independence," with the performance of its North American operations, which account for nearly half of group revenue, "particularly encouraging."
The group reported operating profit (including associate income) up 23.8% on the same period in 1997 to $25 million, and revenue of $306 million, an increase of 0.5%.
The results are compared with pro forma information prepared last year that reflects the changes that have occurred to the advertising network, plus its trading and financing arrangements with Zenith Media Worldwide, in which Saatchi and Cordiant Communications Group each hold 50%.
Additional revenue across the group was attributed to additional assignments from existing clients such as Procter & Gamble Co.'s Oil of Olay and Sunny Delight brands, and further country wins from Toyota, along with new-business wins including Beck's Bier, Commerzbank, France Telecom, Provident Insurance and Opel Astra.
In an expected move, Charlie Scott will give up his chairmanship at Saatchi & Saatchi plc, making way for Bob Seelert, who will take up that position January 1, 1999. He will be replaced as chief executive by Kevin Roberts, currently CEO of Saatchi & Saatchi Worldwide, the advertising network.
Copyright August 1998, Crain Communications Inc.