Revenue by region
The pattern of revenue growth differed regionally. The table below gives details of the proportion of revenue and revenue growth by region for the first six months of 2011:
a % of Total
|Western Continental Europe||24.1||4.8||4.2||2.9|
|Asia Pacific, Latin America,
Africa & Middle East
and Central & Eastern Europe
- 1Constant currency growth excludes the effects of currency movements
- 2Like-for-like growth excludes the effects of currency movements and the impact of acquisitions
- 3Gross margin like-for-like growth 8.5%
- 4Gross margin like-for-like growth 6.8%
As shown above, on a constant currency basis, the Group’s revenues grew at 8.1%, with like-for-like revenues up 6.1%. Gross margin, probably a better indicator of top-line growth, was up 8.8% on a constant currency basis and up 6.8% like-for-like. Geographically, as in the first four months, the US has continued to show remarkably strong growth, with constant currency revenues up 7.6% in the first half. The UK, also continued to show strong growth, with constant currency revenues up over 7% in the first half and gross margin up over 10%. Western Continental Europe, although relatively more difficult, showed considerable improvement in the second quarter, with constant currency revenues up almost 6% compared with just over 2% in the first quarter. Austria, Denmark, Finland, Germany, Ireland, the Netherlands and Turkey, all showed double-digit growth in the second quarter, but France, Greece, Portugal and Spain remain tougher. In Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe revenues were up over 11% in the second quarter following over 12% growth in the first three months, driven by continued strong growth in Latin America, Australia, South East Asia and Africa, with revenues in each of these areas showing double-digit growth. Latin America showed the strongest growth of all our regions in the second quarter, with revenues up over 12%. In Central and Eastern Europe, revenues were up almost 9%, with the second quarter similar to the first quarter, with strong growth in Russia, Poland and the Ukraine, but Hungary and Czech Republic were more challenging. Growth in the BRICs was up almost 16%, on a like-for-like basis, in the first six months, with Next 11 and CIVETS up almost 14% and well over 13% respectively on the same basis.
In the first half of 2011, over 28% of the Group’s revenues came from Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe, an increase of 1.0 percentage point compared with the first half of last year and against the Group's strategic objective of 35-40% in the next three to four years.
Estimated net new business billings of £1.201 billion ($1.922 billion) were won in the first half of the year. The Group continues to benefit from consolidation trends in the industry, winning assignments from existing and new clients, wins that continued into the second half of the year with several very large industry-leading advertising, digital and media assignments, which will have a significant positive impact on Group revenues late this year and in 2012. On a more negative note, there is some recent evidence of heavy competitive fee discounting or dumping and 'nicking' of people, which may have resulted in the operating margin erosion seen in the recent results of two of our competitors.