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International: WPP's revenue, profit up in '06

26-February-2007
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International: WPP's revenue, profit up in '06

Leveraging solid performances by operating units across all geographies and marketing disciplines, WPP Group today reported a 15 percent increase in 2006 pre-tax profit to $1.26 billion on a 10 percent revenue rise to nearly $11 billion, compared to the previous 12 months.

On an organic basis, excluding currency fluctuations and the impact of acquisitions, revenue at the London-based holding company rose 5.5 percent.

WPP also said its operating margin improved to 14.5 percent, compared to 14 percent in 2005.

"These record results again reflect the continued steady strength of the world economy positively impacting almost all disciplines and geographies and the strength of the group's operating brands and franchise," the company said in a statement.

WPP's financial performance in the year mirrored the continued strong economic conditions in its global markets, with even the weakest geographical region, Western Europe, picking up in the second half. Events such as the Winter Olympics in Turin, the FIFA World Cup in Germany and the mid-term congressional elections in the United States helped boost the bottom line, WPP said.

"Corporate profitability remains at historically high levels on both sides of the Atlantic. This resulted in continued high levels of new business activity," WPP said.

Revenue grew nearly 10 percent in the Asia-Pacific, Africa, Middle East and Latin America regions. (Mainland China and India were the best performers, with like-for-like growth rates exceeding 20 percent.) Growth was about 5 percent in both Continental Europe and North America. Revenue improved approximately 2 percent in the U.K.

Overall, the company said it added nearly $6.5 billion in net new business in 2006.

Key WPP agencies include Grey, JWT, Ogilvy & Mather, Young & Rubicam, Mediaedge:cia and MindShare.

WPP's numbers were in line with one of its main competitors, Omnicom Group, which this month reported full-year 2006 profit up 9.5 percent to $865 million on an 8.5 percent revenue spike to $11.4 billion.

Paris-based agency holding company Publicis Groupe recently reported a full-year 2006 revenue increase of about 6 percent, while Havas, also in Paris, registered an essentially flat '06 performance.

Interpublic Group will release its full-year financials next week.

Source: Adweek

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