Third Quarter Trading Update 2024

23 Oct 2024

LFL growth of 0.5% in Q3. Continued progress against our strategic objectives with important client wins and retentions. Full year guidance reiterated

Third Quarter £m +/(-) % reported1 +/(-) % LFL2
Revenue 3,558 1.4 4.1
Revenue less pass-through costs 2,765 (2.6) 0.5
         
Year to date        
Revenue 10,784 0.5 3.1
Revenue less pass-through costs 8,364 (3.3) (0.5)

Q3 highlights

  • Q3 reported revenue +1.4%, LFL revenue +4.1%
  • Q3 LFL revenue less pass-through costs +0.5%, with North America +1.7%, Western Continental Europe +2.2% and UK flat, partially offset by a 2.2% decline in Rest of World, reflecting a continued decline in China (-21.3%)
  • Global Integrated Agencies Q3 LFL revenue less pass-through costs grew 0.5% (Q3 2023: +0.1%). GroupM growth improved sequentially to 4.8% (Q3 2023: +1.6%), offset by a 3.1% decline at integrated creative agencies (Q3 2023: -1.1%)
  • Top ten clients3 grew 7.0% in Q3. CPG, automotive, travel & leisure and financial services client sectors grew well in the quarter. Technology client sector stabilising, with growth of 1.3% in Q3 vs -5.1% in H1 2024. Healthcare and retail sectors continued to be impacted by 2023 client losses
  • Strong progress on strategic initiatives with new products, capabilities and solutions launched within WPP Open, our AI-powered marketing operating system. Burson, GroupM and VML on track to deliver targeted savings and build simpler, stronger businesses
  • Q3 net new billings4 $1.5bn (Q3 2023: $1.4bn). Year-to-date $3.2bn (YTD 2023: $3.4bn). Encouraging success in recent pitches built around WPP Open
  • Client wins in Q3 included Amazon (media ex Americas), Unilever (media, retail media and activation, and creative) and Henkel (media). Strong start to Q4 with Starbucks (US creative) and Honor (global media including China)
  • Adjusted net debt as at 30 September 2024 £3.6bn, down £0.3bn year-on-year
  • Agreement to sell WPP’s majority stake in FGS Global on track to close in Q4, generating net cash proceeds to WPP of c.£604m after tax. Proceeds will be used to reduce leverage
  • 2024 guidance unchanged: 2024 LFL revenue less pass-through costs of -1% to 0%, with Q4 facing a tougher comparative than Q3 and macro uncertainty. Improvement in FY24 headline operating profit margin of 20-40bps (excluding the impact of FX)

Mark Read, Chief Executive Officer of WPP, said:

“Our third quarter delivered like-for-like growth in net sales5, with a strong performance from GroupM in particular. We saw growth in North America, Western Continental Europe and India, though trading in China remains difficult.

“Most importantly, we returned to form in new business, winning Amazon’s media account outside the Americas and securing our media relationship with Unilever, including taking back the retail media and activation business in the United States. Our success with two of the world’s top ten advertisers demonstrates the renewed competitiveness of our offer. We are also proud to be supporting the new Starbucks leadership team with our recent creative win in the United States.

“Our people are increasingly embedding AI in the way that we work and deliver creative and media campaigns to clients, with usage of WPP Open up 107%6 since the beginning of the year. Supporting this, the creation of VML and Burson, and the simplification of GroupM, are delivering a stronger business and structural cost savings.

“We are encouraged by progress during the quarter, but with recent new business wins primarily impacting 2025 and continuing macroeconomic pressures our expectations for the full year remain unchanged.”

  1. Percentage change in reported sterling.
  2. Like-for-like. LFL comparisons are calculated as follows: current year, constant currency actual results (which include acquisitions from the relevant date of completion) are compared with prior year, constant currency actual results from continuing operations, adjusted to include the results of acquisitions and disposals for the commensurate period in the prior year.
  3. Growth in Q3 2024 for the top 10 clients by revenue less pass-through costs in YTD 2023. Growth rate includes the adverse impact of a client loss in the healthcare sector.
  4. As defined in the glossary on page 43 of WPP’s 2024 Interim Results. Note Q3 net new billings include expanded scope won alongside retentions at Unilever, Honor and Henkel.
  5. “Net sales” refers to revenue less pass-through costs.
  6. Increase in monthly active users January to September 2024.

Third Quarter Trading Update 2024 PDF 286 KB

For further information:

Investors and analysts
Tom Waldron +44 7788 695864
Anthony Hamilton +44 7464 532903
Caitlin Holt +44 7392 280178

[email protected]

wpp.com/investors

Media
Chris Wade +44 20 7282 4600

Richard Oldworth, +44 7710 130 634
Buchanan Communications +44 20 7466 5000

[email protected]