WPP CEO Read toasts return to growth as revenues pick up 1.8%

What do WPP’s latest earnings reveal?

• The UK’s outsize agency holding group is in the throes of a major reorganization at Read’s behest, with 1.8% first-quarter growth vindicating the direction of travel by significantly outpacing 0.6% growth at Omnicom – though falling short of the 2.8% expansion recorded by Publicis.

• WPP’s recovery is founded on a 3.1% rise in organic revenues for the period, smashing analyst expectations of a 1.5% decline as 15 of its top 20 markets all flipped back into positive territory.

• In global terms, Britain emerged as a star performer in the western world, with a healthy 3.9% increase set against more muted growth in the US of 0.7% and Germany which managed a respectable 2.5%.

• The UK picture was thrown in the shade by rising superpower China, which went gangbusters in the first quarter on 18.4% growth, even as rival India slid to a 0.5% decline.

• WPP’s position is further bolstered by a succession of business wins over the past three months, such as Absolut’s global creative account, the global media pitch for JP Morgan Chase and tech operations for Salesforce.

• On a more granular level, VMLY&R turned in the best numbers among WPP’s big integrated agencies, with organic sales growth of 2.8%. GroupM, the group’s media buying arm, saw like-for-like revenues surge 5.8%.

‘A strong start to the year’

• Read remarked: “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.”

• With yesterday’s launch of Choreograph, a new global data firm, WPP is positioning itself as the go-to destination for clients wishing to navigate a data landscape that is transforming before our eyes, most notably with Apple’s latest operating system which is rebalancing control of data back towards individuals.

• Looking ahead with optimism, Read added: “The roll-out of vaccines is improving visibility in many markets, although there inevitably was uncertainty over the pace of recovery. We are making good progress on our transformation program, which will deliver significant efficiencies to reinvest in growth, and are confident of delivering our growth and profitability guidance for 2021.”

• E-commerce has been a big growth area over the past year for WPP. Read has overseen multiple major acquisitions already in 2021, predominantly in the digital shopping arena, including Brazilian software firm DTI Digital and mobile commerce shopping app platform NN4M, positioning WPP as a ‘global commerce leader’ according to Forrester.

• Evolving on all fronts last week, WPP committed itself to achieve net-zero across its entire $60bn supply chain before this decade is out.