WPP has reported that its total revenue for the third quarter was down 0.8% to 3.76 billion pounds ($6.8 billion) while like-for-like revenue less pass-through costs was down 1.5% when compared to the previous year.
The company also cut its guidance for full-year net sales, saying they could fall as much as 1%. It had told investors three months ago that sales would grow by 0.3% this year.
WPP has called out APAC and Europe specifically for being “weaker than forecasted”. It is in fact a cause for concern for the company as it has triggering the biggest share slump in almost two decades due to the downgrading on the company’s prospects. The Company now expects sales to fall this year and its profit margin to decline as its missed the third-quarter earnings target.
Sources close to WPP said the poor performance of the APAC region were one of the reasons behind the resignation of AUNZ CEO Mike Connaghan this week.
Mark Read, who took over from Sorrell earlier this year, acknowledged the company’s difficult quarter, losing United Airlines, Ford, Mercedes and American Express, and under performance on the creative side of the business.
At the same time, Read reflected on how the business has defended Adidas, BP, Hilton, Mars, Mondelez, Shell, T-Mobile and GSK’s Panadol.
He also confirmed the speculation that WPP would sell a majority stake in Kantar, adding that the group has received a lot of interest in the market research business.
The new forecast means a turnaround pledged by Read will take longer to deliver, but the former Wunderman CEO said he and other WPP leaders are working hard to turn the company around after an “extended period of underperformance”.
He said “decisive action and radical thinking” is needed moving forward, adding the company needs to “accelerate at pace” in response to the changing advertising landscape.