COVID-19 impact: WPP sees drop in March revenue

In India, WPP has reported Q1 LFL revenue less pass-through costs at -1.1% for March

e4m by exchange4media Staff
Updated: Apr 29, 2020 12:51 PM

WPP has reported a revenue from continuing operations in the first quarter of 2020 at £2.8 billion. The revenue less pass-through costs was £2.4 billion, -4.3% on a reported basis, -4.0% in constant currency and -3.3% LFL.

In March, the LFL revenue less pass-through costs was -7.9% as the impact of COVID-19 began to be felt more widely across business.

In the top five markets, WPP's Q1 LFL revenue less pass-through costs stands at US -1.9% (March -3.7%); UK -4.2% (March -9.8%); Germany -4.3% (March -14.9%); Greater China -21.3% (March -29.9%) and India 6.1% (March -1.1%).

Mark Read, Chief Executive Officer of WPP, said: “After a good start to the year, with growth outside of China in January and February, our business started to be materially impacted by COVID-19 in March. Our response has focused on four areas: the health of our people, serving our clients, helping to mitigate the impact of the virus on our communities and ensuring WPP is financially strong.

“Close to 95% of our 107,000 people are working from home, providing uninterrupted service to clients, helping them to communicate their own actions, sustain their brands and develop new ways to market their products. We have also won $1 billion of new business in the first quarter, including the global integrated Intel account, creative duties for Discover and the media accounts for Hasbro and Novo Nordisk.

“We have witnessed a decade’s innovation in a few short weeks, with the way people meet, shop, work and learn increasingly reliant on technology. We are seeing clients rapidly shift emphasis and budget into digital media and direct-to-consumer channels and continue marketing technology investments. And, while many clients are significantly impacted by a reduction in consumer demand, other sectors such as packaged goods, technology and food retail brands have been more resilient. As in previous downturns, those who are most prepared and most far-sighted will be at an advantage when we come through the current situation.

“At a time of great uncertainty, I am very proud of how our people and clients have responded. Despite the economic challenges that will, no doubt, be with us for some time, the way we have come together gives us real confidence in our future.”

In the financial report released, WPP has said that on March 31 a number of measures were designed to strengthen the company’s financial position, including steps to reduce costs and conserve cash, ensuring adequate liquidity and a significant cushion to our covenants, and we provide an update on page 4 of this release.

"The current situation is unprecedented and the immediate future highly uncertain. There are some positive signs. In the past week, we have started to prepare for the reopening of our offices as and when governments begin to lift lockdowns – at substantially lower capacity and with enhanced safety measures in line with official guidance. Clients are also looking ahead. Visibility of a return to normal remains low, but a number of clients are seeking our advice and support on how they should market their brands in the recovery phase."

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