WPP reveals 8.1% revenue increase and ‘strong growth’ in first-quarter results
WPP has released its financial results for the first quarter of 2022 / The Drum
The UK-based advertising giant, which owns global agencies such as Ogilvy, VMLY&R and GroupM, also revised its full-year market guidance upwards, predicting that it would increase revenues over 2022 by 6.5%.
Chief executive Mark Read said: “The year has started very well with continued momentum from 2021 resulting in strong growth across all businesses and regions. Demand is strong for our services, particularly in digital media, e-commerce, data and marketing technology.”
How has WPP performed in the first quarter?
Net revenue for the last three months at WPP was £2.6bn ($3.2bn), an increase of 9.5% on the same period last year. Global integrated agencies – WPP’s terminology for its major agency networks such as AKQA, Ogilvy and Wunderman Thompson – increased net revenue 8.6%. GroupM increased its net revenue 12.8% and accounted for a significant proportion of agency growth; it also accounted for 36% of WPP’s overall net revenue in the first quarter.
Public relations agencies continue to be a driver of growth for WPP, with H+K and the newly-merged Finsbury Glover Hering seeing “double-digit like-for-like growth,” according to the company’s statement.
As well as recent investments in e-commerce and GroupM, the holding company bought back £362m of its own shares, though its debt rose to the tune of £600m. WPP put that increase down to “seasonal working capital movements” and its share purchases; it plans on share buybacks equal to around £800m this year.
“We continue to see strong demand for our services from our clients and to invest in the many opportunities for growth driven by the digital transition, including Choreograph and the recent launch of Everymile,” said Read. “As a result of a strong first quarter, we now expect our growth to be in the range of 5.5% to 6.5%, up from around 5% at the start of the year. We remain very mindful of the impact of the broader macroeconomic environment on our business and will respond quickly to any changes as the year progresses.”
Has the war in Ukraine affected business?
WPP was the first advertising holding company to pull out of Russia, back on March 4. The company hasn’t revealed how much its departure from Russia cost, though its statement notes that the market represented approximately 0.6% of its 2021 net revenue (approximately £62m).
Read revealed that the company had helped to raise $150m for the UNHCR and matched $1.3m of its own employees’ donations to people affected by the war. He added: “The war in Ukraine has created an appalling humanitarian crisis. We continue to support our people in Ukraine, many of whom are now displaced, with financial and practical assistance.”