Following a turbulent first half of 2024, WPP has opted to downwardly revise its yearly forecast, predicting growth of -1% to 0%, as opposed to its previous H1 guidance of 0% to 1%.
In a further indication of the tough period faced by the firm, WPP also revealed that headcount had fallen by as much as 3,000 to around 111,000 by the end of H1 2024 – down from the 114,173 employees it had at the end of December. This does however follow on from the mergers of VML and Burson as well as ‘simplifications’ within GroupM.
WPP has also seen its organic growth drop by 3.6% despite a significant £604 million after tax windfall resulting from its sale of advisory firm FGS Global to KKR.
The slump in organic growth was largely driven by a particularly bad quarter in China where growth was down by an immense 24.2%. The United Kingdom declined 2.6% in H1, with growth at Ogilvy and Hogarth offset by declines at other agencies.
There was a more positive outlook across the rest of the group’s international markets, with North America growing by 2% and western continental Europe 0.3%. WPP’s ‘Rest of World’ division saw its revenue decline by 2.2% however.
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Nevertheless, WPP’s operating profit rose by 38.2% to £423m from £306m in the first half of 2023. Meanwhile, revenue saw a slight uplift from £7.221bn to £7.227bn.
“Our second quarter performance delivered sequential improvement in net sales with continued growth in GroupM, Ogilvy and Hogarth and sequential improvement at Burson, VML and our Specialist Agencies,” CEO Mark Read said on the publication of the results.
“Importantly, we also 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.
He continued: “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.”
