M&C Saatchi Regulatory News (SAA)

M&C SAATCHI PLC

INTERIM RESULTS

SIX MONTHS ENDED

30 JUNE 2016

22 September 2016

M&C Saatchi PLC

Interim results for the six months ended 30 June 2016

22 September 2016

Strong revenue and earnings growth

The highlights are headline results, see note on next page for definition.

Operational Highlights

· Successful first half with strong revenue momentum and earnings growth

· Global Network performed mostly very well:

° UK: like-for-like revenues down 1%

° Europe: like-for-like revenues up 12%

° Middle East and Africa: like-for-like revenues up 19%

° Asia and Australasia: like-for-like revenues up 5%

° Americas: like-for-like revenues up 27%, constant currency revenues were up 93%

o Net borrowing of £8.5m following equity investments in New York

o Interim dividend increased 15% to 1.85p

Commenting on the results, David Kershaw, Chief Executive, said:

"Momentum across the Group remains strong, producing positive revenue and earnings growth over the first six months of 2016.

"We are well positioned and see significant opportunities from our breadth of offer in the fastest growing segments.

"The second half has started well with trading in line with expectations. We continue with the proven strategy."

For further information please call:

M&C Saatchi +44 (0)20-7543-4500

David Kershaw

Tulchan Communications +44 (0)20-7353-4200

Tom Murray

Numis Securities +44 (0)20-7260-1000

Nick Westlake, NOMAD

Charles Farquhar, Corporate Broking

Notes to Editors

Headline results

The term headline is not a defined term in IFRS. The items that are excluded from headline results are the amortisation or impairment of intangible assets (including goodwill and acquired intangibles, but excluding software) acquired in business combinations, changes to deferred and contingent consideration and other acquisition related charges taken to the income statement; impairment of investment in associate; profit/loss on disposal of associates; and income statement impact of put option accounting (whether accounted under IFRS2 or IAS39). See Note 4 for reconciliation between the Group's statutory results and the headline results.

Like-for-like

The like-for-like revenue comparisons referred to in this report are stated after excluding the impact of foreign currency movements and corporate transactions.

Periods compared

This report comments on the unaudited consolidated income statement of M&C Saatchi plc (the "Group") for the six months to 30 June 2016 compared with the unaudited consolidated income statement for the same period in 2015.

SUMMARY OF RESULTS

The first six months of 2016 saw strong revenue momentum and earnings growth. Actual revenues grew by 15%, with constant currency revenues increasing 14%, whilst we increased like-for-like revenues 6%. We returned a headline operating margin of 11.3%, up from 10.6% in 2015. The headline profit before tax advanced 19% to £11.4m and headline net earnings rose 22%.

UK

We posted a small decrease in UK revenues of 1%, with our CRM and mobile operations returning good increases. In addition, M&C Saatchi PR and our Sport & Entertainment division as well as our research operation The Source all performed strongly. However, this growth was offset by the impact of 2015 client losses within the advertising agency.

We experienced a favourable run of account wins across our group of businesses in the first half, including Ageas, Alibaba, the Department of Work and Pensions, E.ON, the Home Office, Open University, Rail Delivery Group and further work for Royal Mail.

The UK headline operating profit was 10% down on 2015 but included restructuring costs of £660k in the advertising agency unit, which if discounted meant operating profit actually grew 2% on 2015. The headline operating margin decreased to 13.0% compared with 2015's 14.2%, but if the restructuring costs are excluded then the margin came in at 14.7%.  These margins exclude the impact of Group recharges. We are also finalising the previously announced sale of 30% of the advertising agency to a new management team following our proven owner-driver model. We are confident that this new team will provide a platform for growth next year.

Europe

We made further positive progress in Europe with like-for-like revenues up 12%. Headline operating profit was up 51%, with a headline operating margin of 16.2% (2015: 12.7%). Our Stockholm office kept up its very good new business record and won the TV and broadband supplier Com Hem. Both Germany and Italy maintained their strong performance, with Italy winning E.ON. In France, advertising remained sluggish but our agency was appointed by YouTube and Google and continues to grow through diversification. Our associate in Spain continues to tick up after a challenging few years.

Middle East and Africa

Like-for-like revenues in the Middle East and Africa were up 19%, with a slow start as last year but a stronger second half anticipated. In South Africa we lost Edgars but quickly won Sun International. Our Abu Dhabi and Dubai offices are both growing steadily, as is our Tel Aviv office. Overall with the slow start, the operating profit off a low base was up 33% and the headline operating margin increased to 7.9% from 6.8% in 2015.

Asia and Australasia

In Asia and Australasia, like-for-like revenues increased 5% in the period. Our Australian offices are doing very well and following their win of Woolworths in February without a pitch, have since won BBQ Galore, eBay and Menulog.

Otherwise, our associate in China, aeiou, continues to perform favourably and impress network clients. Malaysia is still excelling and won the KLIA account. Singapore is developing positively and picked up some Shell business. Japan has continued to underperform and we have therefore reduced our holding to 10%.

The headline regional operating margin was 11.9% (2015: 12.0%), with the headline operating profit ahead 4% on the same period last year.

Americas

Constant currency revenues increased 93%, with like-for-like up 27%. There was an excellent 95% increase in operating profit to £3.4m and a headline operating margin of 17.1% (2015: 17.3%). Mobile are doing exceptionally well and building a strong client base across the US. The SS+K relationship in New York is thriving. In the light of this outstanding growth, we increased our shareholding in SS+K from 33% to 51% in March. In March, we also acquired 51% of MCD Partners in New York and Chicago to develop our US CRM offer. They are working very positively with LIDA and building a good relationship.

Our office in Los Angeles lost the UGG account but has since been converting new business including some Reebok and BMW. Macro-economic factors in Brazil have materially slowed the advertising market there and trading is currently tough.

Outlook

Momentum across the Group remains strong, producing positive revenue and earnings growth over the first six months of 2016. We have not seen any impact as a result of the Brexit decision, other than a positive foreign currency impact. We are well positioned and see significant opportunities from our breadth of offer in the fastest growing segments. The second half has started well with trading in line with expectations. We continue with the proven strategy.

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED INCOME STATEMENT

ENDED 30 JUNE 2016

Reconciliation of the above numbers to the Headline numbers, discussed in the front of this report, can be found in note 4 on pages 16 to 18.

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

ENDED 30 JUNE 2016

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 30 JUNE 2016

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED BALANCE SHEET (CONTINUED)

AT 30 JUNE 2016

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

SIX MONTHS ENDED 30 JUNE 2016

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

SIX MONTHS ENDED 30 JUNE 2016

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

SIX MONTHS ENDED 30 JUNE 2016

M&C SAATCHI PLC

UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

SIX MONTHS ENDED 30 JUNE 2016

1. GENERAL INFORMATION

The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 36 Golden Square, London W1F 9EE.

The Company has its primary listing on the AIM market of the London Stock Exchange.

This consolidated half-yearly financial information was approved for issue on 22 September 2016.

These results do not constitute the Group's statutory accounts. The information presented in relation to 31 December 2015 is extracted from the statutory financial statements for the year then ended and which have been delivered to the Registrar of Companies. The auditor's report on the statutory financial statements for the year ended 31 December 2015 was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report(s) and did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.

2. Basis of preparation

This consolidated half-yearly financial information for the half-year ended 30 June 2016 has been prepared in accordance with the AIM Rules for companies. The half-yearly consolidated financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2015.

3. Accounting policies

The financial information in these interim results is that of the holding company and all of its subsidiaries (the Group). It has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended31 December 2015 and which will form the basis of the 2016 financial statements.

4. Earnings per share and reconciliation between headline and statutory results

The analysis below provides a reconciliation between the Group's statutory results and the headline results.

The Directors believe that the headline results and headline earnings per share provide additional useful information on the underlying performance. The headline result is used for internal performance management, calculating the value of subsidiary convertible shares and minority interest put options. The term headline is not a defined term in IFRS.

The items that are excluded from headline results are the amortisation or impairment of intangible assets (including goodwill and acquired intangibles, but excluding software) acquired in business combinations, changes to deferred and contingent consideration and other acquisition related charges taken to the income statement; impairment of investment in associate; profit/loss on disposal of associates; and income statement impact of put option accounting (whether accounted under IFRS2 or IAS39).