Advantage Solutions said today it grew fourth-quarter adjusted earnings by 2% and full-year 2023 revenue by 4.3% to $4.2 billion, reflecting a trendline of improving financial performance amid a broad organizational transformation.
Company executives also said they project 2024 revenue and adjusted earnings before income taxes, depreciation and amortization (EBITDA) to grow low single digits.
Advantage, a leading provider of sales and marketing services to consumer goods manufacturers and retailers, booked fourth-quarter operating income of $46.2 million and adjusted EBITDA of $115 million, a 2% increase from the same quarter a year ago.
Excluding foreign exchange and divestitures, full-year 2023 revenue grew 6.8%, while adjusted EBITDA declined 1.7% to $424.3 million.
Advantage also said it reduced debt in 2023 by $168.2 million and repurchased $6.4 million of its outstanding shares.
“Our ongoing efforts to strengthen our culture, simplify our operations, improve our financial discipline and enhance our processes as a unified company resulted in solid fourth-quarter performance,” said Advantage CEO Dave Peacock. “I am incredibly proud of our team’s success as we delivered full-year revenue growth and Adjusted EBITDA results ahead of expectations.”
Advantage said its 2023 revenue growth was driven primarily by the continued recovery of in-store sampling and demonstration services, pricing realization and increased volume in its sales segment. Those gains were partially offset by a series of divestitures and an intentional client exit in late 2022.
Business transformation
Peacock, who joined Advantage a year ago, has taken a number of actions over that time to fortify the company’s long-range plan to create a more unified enterprise with a streamlined, simplified structure designed to drive greater collaboration, efficiency and accountability.
Among those moves:
- The company on Jan. 31 divested its foodservice businesses, most notably Waypoint, to Prospect Hill Growth Partners LP. As part of the sale, the foodservice businesses were combined with KeyImpact Sales & Systems Inc. to form Acxion Foodservice. Advantage received total proceeds of approximately $100 million in mostly cash and an ongoing 7.5% stake in the combined entity.
- Advantage also on Jan. 31 said it entered into two separate agreements with third-party technology companies to optimize back-office costs and effectiveness. It signed an agreement with Genpact to build an innovative, proprietary digital solution designed to streamline and automate processes behind Advantage business processes and administrative services. A separate collaboration calls for Tata Consultancy Services to provide Advantage with certain IT services.
- Advantage announced late last year it would reorganize its commercial operations under three distinct segments: branded services, retailer services and experiential services. The company also said it would centralize its shared services as part of a new planned structure designed to help the company focus on its core mission of generating demand for consumer brands and retailers, converting shoppers into buyers in any way they shop.
- Finally, late last year Advantage reduced its stake in Advantage Smollan Limited, a joint venture with the Smollan Group in Europe, from a majority stake under 60% to a minority position of 49.6% in exchange for cash and other considerations. The transaction restructured the European operation by reducing back-office complexities and expenses and simplified the company’s overall financial reporting.
Each of these moves, Peacock said in a call with investors, “will allow us to focus our efforts and reinvest in enhancing our capabilities – from talent to technology.”
Taken together, he said, they “will make Advantage stronger, more nimble, more competitive, and better enable us to drive our brand clients’ and retail customers’ businesses.”
Peacock said the company continues to evaluate its service offerings as it seeks to generate more cash to invest in the business and position Advantage for long-term success.
