In its earnings release today, Stagwell reported full-year organic net revenue growth of 14.5% compared to 2020 and fourth-quarter organic net revenue growth of 11.3%
The results were calculated on a pro-forma basis, as if the company’s merger had been completed on Jan. 1, 2020. Pro-forma net revenue was $519.7 million in the fourth quarter, an increase of 10.4% compared to last year. Full-year pro-forma net revenue was $1.93 billion, an increase of 16.4%
The holding company has a strong outlook for 2022 as well, predicting net revenue growth to be between 18% and 22%.
Response to Ukraine-Russia War
Before getting into Stagwell’s earnings this morning Stagwell CEO and Chairman Mark Penn addressed the current Russian invasion of Ukraine.
“I want to take a moment to address the international situation while we all watch the horror of what's happening in Ukraine and are doing what we can to support those there, Penn said. “I know that Stagwell has no offices in the country and only a less than 10-person office in Russia, which we are in the process of now closing down.”
Penn confirmed that the office belongs to its media agency Assembly. When asked whether or not the employees will be compensated, Penn responded that the company will follow any “rules and regulations” involved in the process. Last week, WPP also announced it will be halt its business in Russia, affecting 1,400 employees. This has become a trend among brands as well as companies have continued to cancel all business in the country.
“In order to avoid direct war with Russia, I think the West chose to wage economic war and hopefully that economic war will be successful,” Penn said. “I think people are responding appropriately. Some clients have to think long and hard about what makes the most sense, but I think that American businesses here and and businesses around the world are sending a message to Russian and Russian people that this invasion is unacceptable and is a catastrophe and has to be stopped.”
Penn said that the current situation will not deter Stagwell from any European acquisitions moving forward. Stagwell has made it a point to increase its global footprint and recently reached its goal of having over 50 global “affiliates” or company partners.
The digital landscape
When questioned by an analyst about how other holding companies have been responding to the MDC-Stagwell merger, Penn said, “I've seen Omnicom make some acquisitions that were, I thought a response to the kind of areas that we're having very strong success in. So I have seen the competition respond, I think ultimately we're gaining share and have an opportunity to continue to gain share, because no matter what kind of acquisitions the large players make, they really can't be at 51% true digital assets the way we are, and therefore are not showing the kind of growth rates that we're showing moving forward after the pandemic.”