London: Global advertising and communications giant WPP has lowered its full-year 2025 guidance following a sharper-than-expected decline in second-quarter performance, citing continued macroeconomic pressures and weaker-than-anticipated net new business.
In a trading update ahead of its interim results on August 7, WPP said it now expects like-for-like (LFL) revenue less pass-through costs to decline between 4.2% and 4.5% in the first half of the year, with Q2 alone falling by 5.5% to 6.0%. This downturn, exacerbated by one-off factors, marks a deterioration from earlier expectations and signals persistent client caution in a challenging economic environment.
The group anticipates headline operating profit for H1 2025 to be in the range of £400 million to £425 million, down significantly year-on-year. This corresponds to a margin decline of 280 to 330 basis points (bps) compared to the previous year, excluding foreign exchange effects.
FY2025 Guidance Cut Amid Ongoing Macro Uncertainty
Looking ahead, WPP has revised its full-year 2025 guidance, projecting a like-for-like revenue decline of 3% to 5%, compared to the previous forecast of flat to -2%. The company now also expects a decline in headline operating profit margin of 50 to 175 bps, reflecting pressure on revenues despite cost-saving initiatives, including recent severance actions at WPP Media.
WPP CEO Mark Read commented, “Since the start of the year, we have faced a challenging trading environment with macro pressures intensifying and lower net new business. While we expected Q2 to be similar to Q1, performance in June was worse than anticipated, and we expect this pattern of trading to continue into H2.”
He added, “Our focus remains on ensuring the right balance between investing in the business for the long term and continuing to reduce structural costs.”
Segment and Regional Trends
The company reported continued weakness in North America, where revenues are expected to decline in the low single digits for H1. The Global Integrated Agencies segment — including WPP Media and Ogilvy — is expected to post a mid-single-digit decline, impacted by lower client spending and reduced net new business. Other regions also remain under pressure, despite easier year-on-year comparisons.
Cost Action and Restructuring
WPP stated that severance actions taken at WPP Media are expected to deliver annualised gross cost savings exceeding £150 million. However, the near-term impact of these savings will be neutralised by associated costs, implying limited benefit for 2025 margins.
The group plans to provide further financial guidance and strategic updates during its interim earnings announcement next month.
Shares in WPP were expected to react to the update when markets open, as investors weigh the company’s cautious tone and reduced outlook amid a volatile advertising landscape.
