APCO Worldwide - 'A good year of modest growth'

Brexit impact on U.K. revenue was the only serious negative in a modest year for the independent firm

Principals: Margery Kraus, founder and executive chairman; Brad Staples, global CEO; and James Acheson-Gray, MD, London
Subsidiary: StrawberryFrog
Offices: Global: 31; U.S.: 6
Revenue: Global: $120.6 million; U.S.: $66.5 million
Headcount: Global: 672; U.S.: 249
U.K. revenue: £5,353,154; Headcount: 54

APCO Worldwide founder and executive chairman Margery Kraus describes 2016 as a "good year of modest growth" for the firm. Its U.S. and global revenue saw a 0.5% and 0.6% increase, respectively. But in the U.K., revenue fell 1.8% to £5.35 million.

"I attribute the U.K. result to Brexit," Kraus says. "That hit everybody. The numbers are not apples to apples because you have to rebalance for currency."

Revenue and growth performance were in line with expectations, notes Kraus. Forty percent of the firm’s growth was due to existing clients. Expansion in certain regions, particularly the Middle Eastern gulf and North America, drove top-line performance in 2016. Bottom-line growth primarily stemmed from a focus on margins and decreasing costs.

The top three performing regions were the Middle East, U.S., and Europe. Broken down by office, Washington, DC, had the highest revenue, and the fastest-growing offices were Dubai and New York.

The latter "grew a lot and has become a hub for anchoring big corporate clients," Kraus explains.

Top services used by clients included corporate services, positioning, thought leadership, and branding. In November, APCO expanded its digital analytics capabilities by rolling out Sonar and Campfire to help clients track audience perception and influencer behavior. Sectors that saw the most growth included energy, food, consumer, and tech. A quarter of the firm’s work is focused on the healthcare industry.

Wins across multiple regions
APCO has 646 retained clients. Of the firm’s 2016 and early 2017 wins, 60% were across three or more countries. Significant wins included: in Europe, Boehringer Ingelheim; and in the U.S., Consumer Reports, Exelon/Pepco Holdings, Expo 2017, Nuclear Energy Institute, and U.S. Embassy for Switzerland.

In the UAE, APCO won Emirates Diplomatic Academy and World Government Summit 2017. In the U.K., wins included the Polish Cultural Institute and Thrombosis U.K. Client expansions included Equinix, WorldVentures, and Welltower.

Johnson Controls completed its merger with Tyco last September, ending APCO’s relationship with the company. The firm’s nine-year AOR relationship with the Clinton Global Initiative also ended in 2016.

New York grew a lot and has become a hub for anchoring big clients

Margery Kraus

In the wake of last year’s vote by the U.K. to leave the European Union, APCO has been looking at Europe for greater expansion and opened a new office in Frankfurt, Germany, in January 2017.
The firm also refreshed its European leadership with Claire Boussagol, MD of APCO’s Brussels office, taking over as chair of Europe, and Nicolas Castex joining the firm as MD of operations in France after the departure of Nicolas Bouvier, MD of APCO in France and chair of Europe, who went to Brunswick.

"We opened an office in Frankfurt as a result of Brexit because that is one of those markets that might grow because of it," explains Kraus.

In Asia, APCO created a One China strategy, combining the resources of its China offer.

"We still have three offices [in Beijing, Shanghai, and Hong Kong], but the way we work together has enhanced our ability to service businesses across the spectrum in China," she notes. "We are marrying resources from a business center such as Shanghai with a political center such as Beijing."

In May, APCO’s corporate headquarters in Washington, DC, moved 200 staffers "two blocks and one century" away, Kraus says. "It is very open. It’s put the company on a track forward."

Staff turnover was 21%. The firm’s U.S. staff dropped from 265 to 249. Globally, it employs 672.

"We made key hires in our global tech practice, in North America and Europe, to help clients stay ahead of the increasing disruption so many sectors are facing from developments in tech," she explains, referring to the hires of Andreas Constantinides, chair of technology practice for Europe, and Michael Thomas, chair of tech practice for North America.

Departures included Marilyn Fancher, chief creative officer, and Kathryn Medina, chief talent officer.

Kraus says this year she expects business to increase more rapidly than it has been. "We are fueled in the U.S. by big wins at the end of 2016 and enhanced relationships with big corporations," she notes.

Priorities for 2017 include aiding clients in navigating the "fake news" phenomenon and political change in key markets.

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