WPP’s Q1: sales down 2.8% after blue-chip client losses in US
WPP announced its earnings results for the first quarter of 2019, revealing a like-for-like sales decline of 2.8%.
Chief executive Mark Read said the performance was “anticipated” on the back of “certain significant client losses in 2018, in particular in the United States” where it saw an 8.5% decline in sales. These accounts included Ford Glaxosmithkline, United Airlines and American Express.
“This performance, whilst disappointing, was in line with our budgets,” said Read.
“The actions we have taken since September with our creative and healthcare agencies, alongside leadership changes, are intended to address the group’s performance in the United States.”
Among the senior execs hired include Publicis Groupe veteran Laurent Ezekiel who was recently brought in as the company's first chief marketing and growth officer.
In the UK, it saw a 0.9% decline in sales, however Asia Pacific, Latin America, Africa & the Middle East performed better with a 2.3% rise.
“Our newly formed agencies are showing initial signs of success in new business pitches. The most recent merger, Wunderman Thompson, has followed VMLY&R’s strong start by winning Duracell’s international creative account. BCW [the merged Burson-Marsteller and Cohn & Wolfe] has brought in nearly $70m in new business in its first year,” continued Read.
“A key priority in 2019 is to invest further in senior creative talent in the United States. As we have said before, it will take time to address the company’s legacy issues, but we are committed to taking all the actions necessary to position WPP for future success.”
One of the steps taken has been a repositioning to put creativity back into the heart of the business with plans to invest £15m per year in creative leadership, with a particular emphasis being placed on the US market.
Little indication was given on when WPP expects to complete the sale of Kantar. The measurement firm, which was recently consolidated under a single brand name to aid the sale, was formally put up for sale last November.
WPP is looking to retain between 25% - 40% of its stake in the business – which is valued at around £3.5bn – as a “financial and/or strategic partner” enters the mix.
In the earnings update WPP said the sale was “progressing well” after receiving interest from a number of buyers and was “line with expectations.”