Stagwell Advertising Group reviews unbiased outcomes

The results show significant growth, including a 29.1% increase in GAAP revenue $ 209.6 million and a 39.5% increase in net sales $ 181.8 million for Q2 2021 vs. Q2 2020.

Adjusted for acquisitions, foreign exchange, and the election cycle, GAAP revenue increased 43.9% for the quarter, on net revenue growth of 42.0%.

Net profit increased to in the second quarter $ 18.7 millionwhich corresponds to a growth of 285.1% compared to the second quarter of 2020.

Adjusted EBITDA increased 91.5% in the second quarter of 2021 compared to the second quarter of 2020.

HIGHLIGHTS OF THE STAGWELL MARKETING GROUP: 2ND QUARTER AND YTD JUNE 30, 2021

2nd quarter 2021:

  • GAAP sales was $ 209.6 millionwhat represents a growth of $ 47.2 million, or 29.1% compared to Q2 2020 of $ 162.3 million.
    • Organic GAAP revenue growth was $ 38.7 million, or 23.8%.
    • Adjusted for acquisitions, currency effects, and the election cycle, organic GAAP revenue growth for the quarter was 43.9%.
  • Net sales was $ 181.8 millionwhat represents a growth of $ 51.5 million, or 39.5% compared to Q2 2020 of $ 130.4 million.
    • Organic growth in net sales was $ 43.0 million, or 33.0%.
    • Adjusted for acquisitions, exchange rate effects and the election cycle, organic net sales growth for the quarter was 42.0%.
  • Net income was $ 18.7 millionwhat represents a growth of $ 13.8 million, or 285.1% compared to the same period last year.
  • Adjusted EBITDA was $ 38.7 millionwhat represents a growth of $ 18.5 million, or 91.5% compared to the same period last year.

Year to date June 30, 2021:

  • GAAP sales was $ 390.8 millionwhat represents a growth of $ 43.9 million, or 12.7% compared to YTD 2020 of $ 346.9 million.
    • Organic GAAP revenue growth was $ 25.9 million, or 7.5%.
    • Adjusted for acquisitions, currency effects, and the election cycle, organic GAAP revenue growth for the quarter is 24.0%.
  • Net sales was $ 339.9 millionwhat represents a growth of $ 58.7 million, or 20.9% compared to YTD 2020 of $ 281.2 million.
    • Organic growth in net sales was $ 40.8 million, or 14.5%.
    • Adjusted for acquisitions, exchange rate effects and the election cycle, organic net sales growth for the quarter was 26.1%.
  • Net income was $ 23.3 millionwhat represents a growth of $ 5.9 million, or 34.2% compared to the same period last year.
  • Adjusted EBITDA was $ 62.6 millionwhat represents a growth of $ 20.7 million, or 49.5% compared to the same period last year.
  • Cash flow from operating activities of $ 39.2 million, a decrease of $ 7.6 million, or 16.2%, mainly due to increased working capital requirements due to sales growth.

Stagwell Marketing Group, which officially merged with MDC Partners to form Stagwell Inc. (Nasdaq: STGW) on August 2nd, announced separate financial results for Stagwell Marketing Group LLC (“Stagwell” or the “Company”) for the past three and six months June 30, 2021.

Current President of Stagwell Inc. and former partner of the Stagwell Group, Jay Leveton, said, “The quarterly results for the standalone Stagwell Marketing Group show industry leading double-digit net sales growth in each of our businesses. As the effects of the pandemic wear off, marketers are investing in research and data analysis to better understand the changes taking place in their stakeholders and improve their connection with them through digital channels – areas where Stagwell companies excel. We have an excellent dynamic in founding Stagwell Inc. “

Current COO of Stagwell Inc. and former CFO of the Stagwell Group Ryan Green commented: “In the second quarter of 2021, Stagwell’s net sales grew robustly 39.5% due to its digital nature and EBITDA increased 91.5%, as did net income 285.1% year over year. At a time when older holding companies are working to regain pre-2019 revenue levels, Stagwell’s GAAP revenue is more than 20% higher and EBITDA more than 40% higher than in Q2 2019.

Stagwell Marketing Group’s independent financial results in the second quarter and since the beginning of 2021

GAAP revenue up for the second quarter of 2021 $ 47.2 million, or 29.1% $ 209.6 million. This included organic sales growth of $ 38.7 million, or 23.8%. Inorganic receipts were $ 7.5 million and we reported an impact of foreign exchange rates on GAAP revenue of approx. $ 1.0 million. Our GAAP sales include direct third-party costs, ie expenses incurred by third-party providers when Stagwell acts as the principal in the provision of services for its customers. Third party direct costs were $ 27.7 million compared to $ 32.0 million for the second quarter of 2020, which corresponds to a decrease of 13.3%.

Net sales for the second quarter of 2021 were after deducting third-party direct costs $ 181.8 million compared to $ 130.4 million for the same period in 2020. This corresponds to an increase of $ 51.5 million or 39.5%. This included organic sales growth of $ 43.0 million, or 33.0%. The organic increase in sales is essentially due to double-digit organic growth in almost all non-political segments. Inorganic conversion of $ 7.5 million included acquisitions that expanded our digital transformation and digital platform management offerings. We also had a currency impact on net sales of $ 1.0 million.

The net income for the second quarter of 2021 was $ 18.7 million compared to net income of $ 4.8 million in the second quarter of 2020 an increase of $ 13.8 million, or 285.1%. Our operating costs have increased $ 30.5 million, which related to additional personnel and customer delivery costs incurred to support the above sales growth, plus additional costs related to acquired brands. In addition, general expenses increased $ 11.4 million across a range of brands and our non-operating expenses increased $ 2.9 millionwhich mainly related to an increased provision for income taxes.

Adjusted EBITDA for the second quarter of 2021 was $ 38.7 million compared to $ 20.2 million in the second quarter of 2020 an increase of $ 18.5 million, or 91.5%. The increase was due to the strong sales performance, which was partially offset by the above-mentioned increase in operating expenses. Our Adjusted EBITDA margin was 18.5% of GAAP revenue and 21.3% of net revenue, down from 12.5% ​​and 15.5%, respectively, in the second quarter of 2020.

GAAP revenue increased for the first six months of 2021 $ 43.9 million, or 12.7%, too $ 390.8 million. This included organic sales growth of $ 25.9 million, or 7.5%. Inorganic receipts were $ 17.1 million, and we had a currency impact on GAAP sales of $ 0.9 million. Organic sales growth was mainly due to a $ 26.2 million Increase in organic sales from our Digital Marketing segment, partly due to an organic sales decline of. was balanced $ 18.6 million from our segments communications, public affairs and advocacy as well as digital content. All other segments recorded organic sales growth of $ 18.4 million. Total inorganic conversion $ 17.1 million and included $ 15.0 million from investments that have expanded our digital transformation offerings, and $ 2.2 million from investments that have expanded our range of strategic corporate communications. Third party direct costs were $ 50.9 million compared to $ 65.7 million for the first six months of 2020, a decrease of 22.5%.

Net sales for the first half of 2021 were after deducting direct third-party costs $ 339.9 million compared to $ 281.2 million for the first half of 2020, which is an increase by $ 58.7 million or 20.9%. This included organic sales growth of $ 40.8 million, or 14.5%. All segments except digital content, which continued to be affected by the travel restrictions imposed in response to COVID, posted double-digit organic growth. Inorganic receipts were $ 17.1 million and included $ 15.0 million from investments that have expanded our digital transformation offerings, and $ 2.1 million from investments that have expanded our range of strategic corporate communications. We also had a currency impact on net sales of $ 0.9 million.

The net income for the first half of 2021 was $ 23.3 million compared to net income of $ 17.3 million in the first half of 2020 an increase of $ 5.9 million, or 34.2%. Our operating costs have increased $ 31.9 million, which related to additional operating expenses from our existing brands to support the above sales growth as well as additional costs related to acquired brands. General expenses increased $ 20.4 million across brands and our non-operating expenses (after other income) $ 6.1 million, which mainly relates to an increased income tax provision of 3.4 million $ 2.2 million.

Adjusted EBITDA for the first six months of 2021 was $ 62.6 million compared to $ 41.8 million in the first half of 2020 an increase of $ 20.7 million, or 49.5%. Here, too, the increase was due to the strong sales performance, which was partially offset by the above-mentioned increase in operating expenses. Additionally, the Adjusted EBITDA margin was 16.0% of GAAP revenue and 18.4% of net revenue, compared to 12.1% and 14.9%, respectively, for the first six months of 2020.

Conference call from Stagwell Inc.
Management will host a video webcast and conference call on Wednesday, August 4, 2021 8:30 a.m. (ET) to discuss stand-alone results for Stagwell Marketing Group LLC and MDC Partners Inc. for the past three and six months June 30th, 2021 The video webcast will be available at https://kvgo.com/openexchange-inc/mdca-stagwell-earnings-call. An investor presentation has been posted on our website at www.stagwellglobal.com and will be available for reference during the conference call.

A replay of the conference call will be available one hour after the conference call and will be available for ninety days at www.stagwellglobal.com.

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