WPP 2016 First Quarter Trading Update

28 April, 2016


  • Reported billings up 8.3% at £11.922 billion and up 6.7% in constant currency
  • Reported revenue up 10.5% at £3.076 billion, up 4.6% at $4.402 billion, up 6.3% at €3.989 billion and up 0.9% to ¥506.611 billion, reflecting volatile foreign exchange rates
  • Constant currency revenue up 9.0%, like-for-like revenue up 5.1%
  • Constant currency net sales up 6.7%, like-for-like net sales up 3.2%
  • First quarter revenue, net sales and profit well above budget and ahead of last year
  • Share buy-backs of £62 million, representing 3.9 million shares or 0.3% of the issued share capital purchased in first quarter
  • Constant currency net debt at 31 March 2016 up £701 million on same date in 2015, with average net debt in first quarter of 2016 up by £767 million over same period in 2015, reflecting strong acquisition and buy-back activities
  • Recent new business activity and net new business wins continue, chiefly reflecting the Company’s success in the recent United States media “tsunami” and its strategic emphasis on technology, data and content, in addition to talent and pricing

Quarter 1 highlights
  • Revenue growth of 10.5%, with constant currency growth of 9.0%, like-for-like growth of 5.1%, 3.9% growth from acquisitions and 1.5% from currency, reflecting the weakness of sterling against the US dollar and the euro
  • Net sales growth of 8.1% in sterling (up 2.2% in dollars, up 4.0% in euros and down 1.3% in yen), with constant currency growth of 6.7%, like-for-like growth of 3.2%, 3.5% growth from acquisitions and 1.4% from currency
  • Like-for-like revenue growth in all regions and business sectors, characterised by particularly strong growth geographically in the United States, strong growth in the United Kingdom and Western Continental Europe and functionally in advertising and media investment management and sub-sectors direct, digital and interactive
  • Like-for-like net sales growth of 3.2%, with all regions and sectors, except data investment management (which was flat), showing growth. The difference compared to revenue growth is similar to the first quarter of 2015, reflecting the scale of digital media purchases in media investment management and data investment management direct costs
  • Constant currency average net debt in the first quarter increased by £767million to £3.689 billion compared to the same period in 2015. This continued to reflect significant incremental net acquisition spend and dividends of £493 million in the twelve months to 31 March 2016, compared with the previous twelve months, more than offsetting the improvements in working capital seen in the second half and final quarter of last year
  • Net new business of $1.779 billion in the first quarter, compared to $1.0 billion in the first quarter last year, with the Group continuing to lead net new business league tables.
Current trading and outlook
  • FY 2016 quarter 1 preliminary revised forecasts | Similar to budget, with like-for-like revenue and net sales growth up over 3% and a headline net sales margin target of 0.3 margin points improvement on a constant currency basis
  • Dual focus in 2016 | 1. Stronger than competitor revenue and net sales growth due to leading position in faster growing geographic markets and digital, premier parent company creative and effectiveness position, new business, horizontality and strategically targeted acquisitions; 2. Continued emphasis on balancing revenue and net sales growth with headcount increases and improvement in staff costs/net sales ratio to enhance operating margins   
  • Long-term targets | Above industry revenue and net sales growth due to geographically superior position in new markets and functional strength in new media and data investment management, including data analytics and the application of new technology, data and content; improvement in staff costs/net sales ratio of 0.2% per annum or more depending on net sales growth; net sales operating margin expansion of 0.3% margin points or more on a constant currency basis, with an ultimate goal of almost 20%; and headline diluted EPS growth of 10% to 15% per annum from revenue growth, margin expansion, strategically targeted small and medium-sized acquisitions and share buy-backs

Download full WPP 2016 First Quarter Trading Update
(pdf)



For further information:
Sir Martin Sorrell }
Paul Richardson }
Chris Sweetland } +44 20 7408 2204
Feona McEwan }
Chris Wade }

Kevin McCormack }
Fran Butera } +1 212 632 2235

Juliana Yeh            +852 2280 3790

This announcement has been filed at the Company Announcements Office of the London Stock Exchange and is being distributed to all owners of Ordinary shares and American Depository Receipts. Copies are available to the public at the Company’s registered office.

The following cautionary statement is included for safe harbour purposes in connection with the Private Securities Litigation Reform Act of 1995 introduced in the United States of America. This announcement may contain forward-looking statements within the meaning of the US federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially including adjustments arising from the annual audit by management and the Company’s independent auditors. For further information on factors which could impact the Company and the statements contained herein, please refer to public filings by the Company with the Securities and Exchange Commission. The statements in this announcement should be considered in light of these risks and uncertainties.


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