Mumbai: WPP has reported first half fiscal revenue of 0.1%. LFL revenue grew by 2.6%. H1 revenue less pass-through costs were -3.6%, LFL revenue less pass-through costs were -1.0%.
- Q2 LFL revenue less pass-through costs -0.5%, with North America +2.0% and Western Continental Europe +0.3%, offset by the UK -5.3% and Rest of World -2.2%, with growth in India +9.1% offset by a decline in China -24.2%
- Global Integrated Agencies Q2 LFL revenue less pass-through costs fell by 0.6% with GroupM growing 1.4%, offset by a 2.4% decline at integrated creative agencies
- The top ten clients grew by 2.5% in H1. CPG, TME6 and automotive client sectors grew well in Q2. Technology client sector stabilising, with a decline of 1.0% LFL in Q2, an improvement from Q1’s -9.0%. Healthcare and retail sectors impacted by 2023 client losses
- Progress was made on strategic initiatives with new products and solutions launched within WPP Open, its AI-powered marketing operating system, and Burson, GroupM and VML on track to deliver targetted savings.
- It has sold its majority stake in FGS Global to KKR at an enterprise valuation of $1.7 billion, generating total cash proceeds to WPP of c.£604 million after tax. Proceeds will be used to reduce leverage, implying pro-forma average net debt to EBITDA of c.1.60×8, comfortably within the range of 1.50-1.75x
- H1 headline operating profit was £646 million. Headline operating margin of 11.5% (H1 2023: 11.5%), was up 0.1pt LFL, reflecting disciplined cost management as it continues to invest in its proposition. H1 reported operating profit £423 million up 38.2%, reflecting the above factors and lower restructuring costs of £153 million (H1 2023: £267 million)
- $1.7 billion net new billings (H1 2023: $2 billion), with Q2 net new billings $0.9 billion (Q2 2023: $0.5 billion). New client wins included assignments for AstraZeneca, Colgate-Palmolive, J&J and Government of Canada
- Adjusted net debt as at 30 June 2024 £3.4 billion down £0.1 billion year-on-year
- Interim dividend of 15.0p declared (2023: 15.0p)
- 2024 guidance updated: LFL revenue less pass-through costs of -1% to 0% (previously 0% to 1%), with improvement in headline operating profit margin of 20-40bps (excluding the impact of FX)
WPP CEO Mark Read said, “At our Capital Markets Day earlier this year we set out our strategy to build on and improve the competitiveness of WPP’s offer. I am very pleased with the progress we have made in the past six months against each of our strategic objectives, particularly our continued investment in AI, the creation of VML and Burson, and the simplification of GroupM. We are strengthening our offer for clients while building a more efficient company.
“Our second quarter performance delivered sequential improvement in net sales10 with continued growth in GroupM, Ogilvy and Hogarth and sequential improvement at Burson, VML and our Specialist Agencies. Importantly, we al o saw North America return to growth in the second quarter. That said, we have seen pressure in China and in our project-related businesses which, together with an uncertain macro environment, has led us to moderate our expectations for the full-year.
“The sale of our stake in FGS Global is an excellent outcome less than four years after its creation from three separate businesses within WPP. It will allow us to focus and invest in our core creative transformation offer while significantly strengthening our financial position.
“As a team, our priority continues to be improving our competitiveness by delivering a modern, global, creative and integrated offer for our clients. The steps we have taken since January to integrate our offer, bring in new talent and invest in AI represent strong progress towards delivering on our medium-term financial targets and to shareholders.”
