WPP's India revenue de-grows for fourth straight quarter, Q1 2021 shows 0.5% decline

Barring India, the other major markets (US, UK, Germany, and Greater China) of the conglomerate reported revenue growth

e4m by Javed Farooqui
Updated: Apr 30, 2021 8:45 AM

Advertising giant WPP has reported a 0.5% decline in its revenue less pass-through costs from the Indian market in Q1 2021. This is the fourth straight quarter of revenue de-growth for the advertising conglomerate in India.
In Q2 2020, the revenue had declined by a whopping 25.1% due to the economic devastation caused by the pandemic-led lockdown. The revenue de-growth stood at 16.3% and 8.9% in Q3 and Q4 respectively as the Indian economy had failed to fully recover from the downslide.
India is among the Top 5 markets for WPP globally besides the US, UK, Germany, and Greater China. Barring India, the advertising major reported revenue growth from other top 5 markets. Email sent to WPP India's PR agency did not elicit any response till the time of filing this report.
WPP's revenue less pass-through costs was up 3.1% at $3.2 billion. In terms of business sectors, the revenue less pass-through costs from Global Integrated Agencies was up 2.8% (GroupM +5.8%), Public Relations +2.0%, and Specialist Agencies +7.5%. The company won $1.3 billion in net new business.

Commenting on the Q1 results, WPP CEO Mark Read said, “WPP has had a strong start to the year with a return to growth in all business lines and most major markets. Our strengths in e-commerce, digital media, and technology, combined with our ongoing investment in creative talent, are resonating with clients as their markets recover and they seek to transform their offer for future growth. This week’s launch of our new global data company, Choreograph, adds a further dimension to the WPP proposition as clients look for trusted partners to help them navigate a fast-changing data landscape.

“We have already secured a number of important assignments in 2021, including Absolut (global creative), JP Morgan Chase (global media), Salesforce (technology operations), and Sam’s Club (US creative). We were also delighted to renew our valued partnership with the US Navy.

“Last week we made an industry-leading commitment to target net-zero carbon emissions across our entire supply chain by 2030, putting our $60 billion of media billings behind this initiative. We will work with our clients, media owners, and the industry on this collaborative effort.

"The roll-out of vaccines is improving visibility in many markets, although there is inevitable uncertainty over the pace of recovery. We are making good progress on our transformation programme, which will deliver significant efficiencies to reinvest in growth, and are confident of delivering our growth and profitability guidance for 2021.”

WPP noted that the client spends on marketing services during the quarter showed increasing resilience despite further waves of the coronavirus in some markets. The company achieved like-for-like growth in 15 of its top 20 countries. "The vast majority of our people are still working from home, but continue to deliver an outstanding service for clients despite the challenges faced," the company stated.

Revenue less pass-through costs in the first quarter was down 1.4% year-on-year to $3.25 billion, and up 2.9% on a constant currency basis. Excluding the impact of acquisitions and disposals, like-for-like growth was 3.1%. All regions and business segments witnessed an improving trend over the fourth quarter of 2020.

North America saw like-for-like revenue less pass-through costs up 1.6% at $1.2 billion. The US returned to growth, with VMLY&R as the best performer. Canada grew strongly, on the back of new business wins.

In the United Kingdom, like-for-like revenue less pass-through costs was up 3.9% at $447.8 million, a significant improvement on 2020’s full-year performance. GroupM, VMLY&R and AKQA Group all performed well, growing double digits year-on-year. Western Continental Europe like-for-like revenue less pass-through costs grew by 3.7% to $686.35 million. Italy, Germany, the Netherlands and Denmark all grew in the first quarter, while France and Spain faced relatively strong comparative periods.

Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe like-for-like revenue less pass-through costs was up 4.7% at $885.84 million. There was strong growth in Latin America and Eastern Europe, while the Middle East and Africa were down year-on-year. In the Asia Pacific, China recovered very strongly, driven mainly by GroupM, after the significant impact of COVID-19 in the comparative period.

In 2020, WPP had announced the intention to combine Grey and AKQA into AKQA Group and to bring Geometry and GTB into VMLY&R, and International Healthcare into VMLY&R and Ogilvy. As a result, AKQA, Geometry, GTB and International Healthcare are now reported within Global Integrated Agencies, having previously been reported within Specialist Agencies. 2020 comparable revenue and revenue less pass-through costs figures have been adjusted by a total of £246 million and £225 million respectively to reflect this change.

Global Integrated Agencies like-for-like revenue less pass-through costs was up 2.8% at $2.6 billion. VMLY&R was the best performer, continuing to demonstrate improving business momentum. GroupM recovered strongly, with like-for-like revenue less pass-through costs up 5.8%. Wunderman Thompson’s performance significantly improved quarter-on-quarter, returning to growth in the first quarter of the year. Of the other integrated agencies, Ogilvy and AKQA Group showed improved performance compared with the fourth quarter of 2020 but were still down year-on-year.

Public Relations like-for-like revenue less pass-through costs was up 2% at $287 million. Specialist Public Relations, driven by Finsbury Glover Hering, and H+K both saw growth in the first quarter.

Specialist Agencies, with like-for-like revenue less pass-through costs up 7.5% at $270.63 million, was the best performing sector. All of the main agencies saw improved performance, with its Brand Consulting businesses, Landor, Superunion and DesignBridge, growing year-on-year. CMI Media, WPP's healthcare media business, saw strong growth year-on-year off the back of new client wins.

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