WPP reports strong Q3 trading, raises full year guidance

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Global media giant WPP reported a robust trading period for the third quarter of the year, with reported revenue up 10.3%.

The FTSE 100-listed company, which includes advertising agencies, PR companies and media businesses, said it earned £3.57 billion during the quarter.

Included in the figure was $1.7bn (£1.47bn) in new revenue. 

WPP ups guidance 

WPP also nudged up its full year revenue guidance confirming that like-for-like revenue less pass-through costs growth was raised to 6.5-7.0% from the previously stated 6.0-7.0%.

The company’s strong performance comes as the UK, one of its key markets, faces unprecedented hardship with a cost-of-living-crisis, soaring energy prices due in pat to the Russian-Ukrainian war and rampant inflation.

Commenting on the results, Mark Read, Chief Executive Officer of WPP, said: “WPP continues to show strong momentum, reflecting broad-based growth across our agencies, markets and industry sectors and the investment by our clients in marketing, ecommerce and digital transformation. 

“Our performance on a three-year basis has continued to improve each quarter during 2022.

“Our new business success reflects the quality of our creative work, our strength in media and our ability to deliver integrated solutions to clients. 

“During the quarter we achieved $1.7 billion of net new business, including assignments with Nestlé, Samsung and SC Johnson. 

“Our leading scale and differentiated offer were exemplified by GroupM which led COMvergence’s new business and retention global rankings in the first half of 2022.

“Our growth over the year has been strong with full year like-for-like revenue less pass-through costs now upgraded to 6.5-7.0%. 

“We have continued to invest in our people and in data and technology to support this growth, resulting in headline operating margin now expected to be up 30 to 50 bps. 

“We are on track with the £300m transformation savings and will continue to manage our costs with discipline.

“We enter the last quarter of the year with confidence, based on the leading competitive position of our businesses, our client momentum and the knowledge that the actions we have taken to strengthen WPP leave us well placed to support our clients in navigating the economic uncertainties ahead.”

Global Integrated Agencies 

WPP said like-for-like revenue less pass-through costs was up 4.3% in its Global Integrated Agencies group.

GroupM, which was approximately 37% of WPP revenue less pass-through costs in the third quarter, grew 4.7% in Q3 and showed an improving three-year trend from 15.9% in Q2 to 20.0% in Q3.

Excluding GroupM, Global Integrated Agencies was up 4.0%. Hogarth was the standout performer in the quarter, while Ogilvy and AKQA also saw strong growth.

Public Relations 

In its Public Relations business grouping, like-for-like revenue less pass-through costs was up 5.8% and up 19.1% over 2019.

Agencies BCW, H+K and FGS Global continued to perform well, reflecting the strong demand from clients for strategic advice in a heightened political environment, WPP said.  

Specialist Agencies 

Like-for-like revenue less pass-through costs in its Specialist Agencies group was down 3.9%, and up 17.1% over 2019.

Excluding the impact of the Covid-related contract in Germany, growth was 8.6% year-over-year, fuelled by CMI, our healthcare media business, which grew double-digits.

Despite the strong set of trading numbers, investors remained cautious with WPP’s shares trading 3.3% lower at £7.42 in London on Wednesday morning.