WPP reports 2.3% India revenue growth aided by GroupM, Marketing & Advertising News, ET BrandEquity

WPP reported a 2.3 per cent revenue growth in India, driven by strong performance in new business, media, and consumer packaged goods (CPG). Overall, Q3 revenue increased by 1.4 per cent, with like-for-like (LFL) revenue rising 4.1 per cent. LFL revenue, excluding pass-through costs, grew by 0.5 per cent. Regional highlights include North America up 1.7 per cent, Western Continental Europe up 2.2 per cent, and the UK flat, while the Rest of World declined by 2.2 per cent, mainly due to a significant 21.3 per cent drop in China.

In the Global Integrated Agencies segment, Q3 LFL revenue less pass-through costs grew 0.5 per cent, an improvement from 0.1 per cent in Q3 2023. GroupM’s growth improved to 4.8 per cent, compared to 1.6 per cent in the previous year, but was offset by a 3.1 per cent decline at integrated creative agencies, which had previously been at -1.1 per cent.

WPP in its earnings release stated that the top ten clients saw a 7.0 per cent increase in Q3, with notable growth in the consumer packaged goods, automotive, travel & leisure, and financial services sectors. The technology sector stabilized, showing growth of 1.3 per cent in Q3 after a -5.1 per cent decline in the first half of 2024. However, healthcare and retail sectors continued to face challenges due to client losses in 2023.

“WPP made strong progress on strategic initiatives, launching new products and solutions through WPP Open, their AI-powered marketing operating system. Key agencies like Burson, GroupM, and VML are on track to achieve targeted savings and simplify operations,” said WPP.

Net new billings for Q3 were $1.5 billion (compared to $1.4 billion in Q3 2023), bringing the year-to-date total to $3.2 billion (down from $3.4 billion in YTD 2023). Recent client wins included Amazon (media excluding the Americas), Unilever (media, retail media, activation, and creative), and Henkel (media). A strong start to Q4 was noted with new projects for Starbucks (US creative) and Honor (global media including China).

WPP said that as of September 30, 2024, adjusted net debt was £3.6 billion, a decrease of £0.3 billion year-on-year. “WPP is on track to finalize the sale of its majority stake in FGS Global in Q4, expected to generate net cash proceeds of approximately £604 million after tax, which will be used to reduce leverage.”

The 2024 guidance remains unchanged, projecting LFL revenue less pass-through costs between -1 per cent and 0 per cent, with Q4 anticipated to be more challenging than Q3 amid macroeconomic uncertainties. An improvement in the FY24 headline operating profit margin of 20-40 basis points is expected, excluding foreign exchange impacts.

Mark Read, Chief Executive Officer of WPP said that the agency’s third quarter delivered like-for-like growth in net sales, with a strong performance from GroupM in particular. “We saw growth in North America, Western Continental Europe and India, though trading in China remains difficult.”

He further added, “Most importantly, we returned to form in new business, winning Amazon’s media account outside the Americas and securing our media relationship with Unilever, including taking back the retail media and activation business in the United States. Our success with two of the world’s top ten advertisers demonstrates the renewed competitiveness of our offer. We are also proud to be supporting the new Starbucks leadership team with our recent creative win in the United States.”

“Our people are increasingly embedding AI in the way that we work and deliver creative and media campaigns to clients, with usage of WPP Open up 107 per cent6 since the beginning of the year. Supporting this, the creation of VML and Burson, and the simplification of GroupM, are delivering a stronger business and structural cost savings. We are encouraged by progress during the quarter, but with recent new business wins primarily impacting 2025 and continuing macroeconomic pressures our expectations for the full year remain unchanged.”

• Published On Oct 23, 2024 at 03:50 PM IST

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