We’re well in line with our 3-yr plan to double organically in 3 years: Martin Sorrell

“Our second full financial year was again outstandingly successful. Having established brand awareness and secured brand trial in the back end of 2018 and in 2019, we set about converting client relationships at scale and now have five “Whoppers” secure or in sight, in line with our ultimate 20 squared objective, that is 20 clients each generating revenues of over $20 million per annum,” said Sir Martin Sorrell, Executive Chairman, S4Capital plc, while commenting on the unaudited 2020 preliminary results.

S4Capital has reported gross billings of £653.4 million, up 43.4% reported, and up 19.6% like-for-like. The 2020 revenue was up 59.3% at £342.7 million, from £215.1 million, and like-for-like up 15.2%. Gross profit was up 72.3% to £295.2 million in 2020, from £171.3 million, like-for-like up 19.4%.

Meanwhile, operational EBITDA reported a growth of 86.1% to £62.2 million in 2019, while like-for-like it was up 18.3%. Operational EBITDA margin was reported at 21.1%, up 1.6 margin points on 2019 reported, like-for-like down 0.2 margin points. Operating profit in 2020 stood at £8.1 million versus an operating loss of £3.8 million in 2019. Operating profit is after charging £49.9 million of Adjusting Items relating to acquisitions, amortisation and share based payments (including £7.4 million in deferred, contingent combination payments tied to continued employment).

S4Capital has reported a good start to 2021 with like-for-like January gross profit well ahead of budget and with budgeted gross profit growth like-for-like for 2021 of 25%.

Sorrell added, “2021 has started strongly, well in line with our latest three-year plan to double organically in three years and we are focused on three objectives for the year – to bed down our two new “Whoppers” and develop and identify five more; to roll-out our unitary branding; and to continue to broaden and deepen our digital client offering by combination. We believe 2021 and 2022 will be very strong years economically, as the world rebounds from the pandemic and spends and invests the huge pandemic-driven fiscal and monetary stimulus. Digital marketing expenditure is closely correlated, but not dependent on GDP growth, just as traditional media spending used to be in the last century.”

In terms of client acquisition, in addition to new client BMW/MINI and the significant broadening of S4Capital’s relationship with MondÄ“lez, there were major new remits from clients such as Google, Facebook, Amazon, Netflix, Procter & Gamble, T-Mobile, Bayer & HP and major new assignments from Cisco, Embibe, Harley Davidson, PayPal, LA28, Shopify and Verizon, amongst others, reflecting the strong tech orientation of the company’s client base and the growing healthcare and FMCG focus.