Stagwell Confident, Acquisitive Despite Q3 Decline

Marcoms group Stagwell, which owns the Harris Poll and Harris X brands as well as Maru Group, has announced a revenue decline of 7% to $618m, for the third quarter of 2023. It has also announced the acquisition of social media marketing solutions provider Movers and Shakers LLC, for c.$15m in cash.

Set up in 2015 by PSB co-founder Mark Penn (pictured), the group bought Nielsen's entertainment research subsidiary NRG the same year; and fourteen months further on it acquired Nielsen's Harris brand and Harris Poll. Three years ago it merged with marcoms group MDC Partners, setting the ambitious target of reaching more than $3bn in revenue by 2025, and it currently employs more than 13,000 people in 34 countries. A year ago Stagwell acquired research and advisory services provider Maru Group, whose expertise it has since been bringing together with that of Harris to launch a range of new services under the Harris Quest brand.

The Group's European and Asian business flourished in Q3, as did its Stagwell Marketing Cloud platform - both saw substantial revenue increases while a sluggish economy in the Americas pulled things back overall. Q3 adjusted EBITDA was $102m, down 12% on the previous year. Chairman and CEO Penn remains bullish, stating, 'Stagwell achieved over $100 million of EBITDA in Q3 and is on course to return to growth over the next two quarters as new business continues to flow in and the tech industry pauses and auto and entertainment strikes which have impacted this sector are ebbing. We are already growing in key areas like media and international and made adjustments to again achieve a 19% margin on net revenue'.

He adds: 'We have trimmed our costs, implemented new systems, reordered our portfolio, and are ready for a strong 2024 as the political cycle kicks in again and as we introduce our cutting-edge AI products within the Stagwell Marketing Cloud'. The firm's guidance for the full year is for organic net revenue decline of about 4%, and adjusted EBITDA of $390m - $410m.

The Movers and Shakers deal is subject to post-closing adjustments, and allows the firm's previous owners contingent consideration up to a maximum value of $35m, subject to meeting future earnings targets.

Group home page: www.stagwellglobal.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.