M&C Saatchi (SAA) H1 2025 earnings summary

Executive summary

• Net revenue declined 5.1% like-for-like, mainly due to macroeconomic and geopolitical uncertainty and client caution, especially in Australia, which saw a 27% decline and prompted restructuring and leadership changes.

• Excluding Australia, net revenue was nearly flat (-0.7%), with growth in Issues, Media, Middle East (+46.6%), and Europe (+5.7%).

• Operating profit fell 36% like-for-like to £10.3m, with margin down 4.8pps to 9.9%, pressured by prior year investments and Q2 revenue shortfall.

• Responsive cost actions and transformation programs, especially in Australia, targeted at least £12m in annualized savings for FY25.

• Strong client retention (93% of 2024 spend retained) and 171 new business wins in H1.

Financial highlights

• Like-for-like net revenue: £103.8m (down 5.1% YoY); statutory net revenue: £103.8m (down 7.7%).

• Operating profit: £10.3m (down 36.0% LFL); margin: 9.9% (down 4.8pps); EBITDA: £13.8m (down 29.6%).

• Net cash at period end: £11.2m (down 13.2% YoY), with strong operating cash conversion at 137%.

• Basic EPS: 4.2p (down 46.2% LFL); statutory basic EPS: 2.6p (down 60.6%).

• Net working capital decreased by £3.0m since year start.

Outlook and guidance

• FY 2025 profit targeted to be in line with the prior year (£34.3m LFL operating profit), supported by at least £12m in annualized cost savings and an improving H2 pipeline.

• FY revenue expected to be down mid-single digits.

• Medium-term outlook: return to growth at improved margins, leveraging brand, integrated model, and pipeline.

• Portfolio to continue diversifying, with a shift to higher-margin, non-advertising specialisms.

• Robust revenue pipeline for the second half, with confidence in profit recovery.