WPP reports 1.6% jump in revenue in Q2

The WPP revenue on a constant currency basis was flat compared with last year

e4m by exchange4media Staff
Updated: Aug 9, 2019 11:50 AM
WPP

WPP has reported a 1.6% jump in revenue to £7.616 billion. The Reported billings were down 0.5% at £26.533 billion, and down 2.0% in constant currency. The estimated net new business billings of $2.934 billion were won in the first half of the year, a return to a strong performance.

Revenue on a constant currency basis was flat compared with last year, the difference to the reported number reflecting the weakening of the pound sterling in the first half, primarily against the US dollar and euro.

On a like-for-like basis, which excludes the impact of acquisitions and currency, revenue was up 0.1% in the second quarter, a significant improvement compared with the first quarter of -1.3%, giving -0.6% for the first half. Revenue less pass-through costs was down 1.0% in the second quarter on a constant currency basis, and down 1.4% like-for-like, as with revenue, a significant improvement on the first quarter of -2.3% and -2.8% respectively. In the first half like-for-like revenue less pass-through costs was down 2.0%.

EBITDA7 was down 7.7% to £875 million, down 8.9% in constant currency. Headline operating profit was £730 million, down 6.8%, down 8.0% in constant currency. Headline PBIT was down 8.5% to £751 million from £821 million, down 9.6% in constant currency. Headline operating margin, which includes the impact of IFRS 16 of +0.5 margin points in the first half, was down 0.8 margin points at 11.9%, down 0.8 margin points in constant currency, and down 1.2 margin points on a like-for-like basis.

Mark Read, Chief Executive Officer, WPP, said: “WPP’s performance in the second quarter was slightly ahead of our internal expectations but in line with our full-year guidance and three-year strategic targets. Clients are responding well to our new offer, as evidenced by recent wins and expanded assignments, including from eBay, Instagram and L’Oréal. An encouraging number of our businesses and markets are achieving good growth.”

 “That said, we are still in the early stages of our three-year turnaround plan, and we remain focused on returning the company to sustainable growth over that period. Our guidance for the full year is unchanged. We continue to simplify WPP, with a more integrated offer for our clients, better, more collaborative working environments for our people, and less complicated management structures. “When the Kantar transaction completes, our disposal programme will have generated proceeds of c.£3.6bn, allowing us to return significant amounts to shareholders and reduce our leverage to the low end of the target range. “The progress we have made and the positive new business momentum are reasons for optimism. As a creative transformation company with stronger, more tech-enabled agencies, we are well placed for the future as clients look for modern partners to help them navigate an increasingly complex and challenging marketing landscape,” he added.

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