India helps WPP on path to sustainable growth in first quarter of 2019

India helps WPP on path to sustainable growth in first quarter of 2019

Greater China and India accounted for almost half of the region’s revenue grew strongly.

WPP

MUMBAI: Asia Pacific, Latin America, Africa & the Middle East and Central and Eastern Europe (AP, LA, AME, CEE) were the strongest performing regions, with like-for-like revenue less pass-through costs up 2.3 percent for advertising, public relations, media and market research Group WPP plc  during the first quarter of 2019 . WPP said in an earnings release that there was strong growth in Latin America, Central & Eastern Europe and South East Asia, with Australia and New Zealand being more difficult. In Asia Pacific, Greater China and India, which accounted for almost half of the region, grew strongly, with Malaysia, Thailand and Vietnam more challenging. In Latin America, four of the group’s top five markets showed particularly strong growth. In central & eastern Europe, all markets, with the exception of Russia and Hungary, were up.

AP, LA, AME, CEE revenue for the quarter grew to £867 million from £862 million in the corresponding year ago quarter. The other three regions – North America, United Kingdom and West Continental Europe saw like for like revenue less pass through costs declines of 8.5 percent, 0.9 percent and 0.3 percent respectively.

Company Speak

WPP CEO Mark Reid said: “We continue to make good progress in implementing our three-year strategy to return WPP to sustainable growth. “As anticipated, our first quarter trading update reflects the impact of certain significant client losses in 2018, in particular in the United States. Although we face a challenging year, especially in the first half, I am encouraged by how well our people, agencies and clients are responding to our new strategic direction. Our expectations for the full year are unchanged. As we have said before, it will take time to address the company’s legacy issues, but we are committed to taking all the actions necessary to position WPP for future success.”

“In March, five of our companies were recognised in Gartner’s influential Magic Quadrant study of the world’s leading and most forward-looking agencies, while WPP topped the WARC Effectiveness and Media 100 lists. This month, the Effie Index ranked us as the world’s most effective communications company for the eighth successive year, demonstrating our enduring ability to deliver tangible business results for our clients. LinkedIn named WPP as one of the top 50 companies people want to work for in the United States, and we continue to attract top talent to the business. A key priority in 2019 is to invest further in senior creative talent in the United States. “Our newly formed agencies are showing initial signs of success in new business pitches. The most recent merger, Wunderman Thompson, has followed VMLY&R’s strong start by winning Duracell’s international creative account. BCW has brought in nearly $70 million in new business in its first year,” further informed Reid.

Let us look at the numbers reported by WPP

WPP’s revenue in the first quarter of 2019 was £3.588 billion, up 0.9 percent compared with the £3.555 billion for the same period last year on a reported basis and -0.6 percent on a constant currency basis. Like-for-like revenue was 1.3 percent lower as compared with last year. Revenue less pass-through costs was £2.926 billion, down 0.7 percent on a reported basis as compared to £2.948 billion in the corresponding year ago quarter, and down 2.3 percent in constant currency and 2.8 percent lower like-for-like.

From the business sector point of view, in the first quarter of 2019, like-for-like revenue less pass-through costs in the group’s advertising and media investment management (AMIM) sector was down 4.8 percent, with the USA down significantly, primarily due to the underlying legacy issues in the creative businesses and client losses in 2018. Media investment management sector showed strong growth in the United Kingdom, Asia Pacific and Latin America. Data investment management sector was up slightly in the first quarter, with particularly strong growth in Asia Pacific, Latin America and the Middle East. The group’s public relations and public affairs businesses were down 0.3 percent, with strong growth in western continental Europe and the Middle East. Brand consulting, health & wellness and specialist communications was down 2.1 percent, with health & wellness, in particular, under considerable pressure in the USA following client losses in 2018.