WPP plc, the world’s largest agency network, has revealed strong first half across the business. According to the report, the owner of agencies Ogilvy and GroupM has grown its revenues back to pre-pandemic levels a year sooner than expected because of a record-setting rebound in global marketing spend.
For the first half of 2021, WPP revealed year-on-year reported revenue growth of 9.8% to $854 million (6,133 million pounds) and a reported operating profit increase of 54.4% to $821 million (590 million pounds).
Mark Read, Chief Executive Officer, WPP:
“I’m delighted with our performance in the first six months of the year, at a time when COVID continues to take a toll on many countries.
“We’ve also made very good strategic progress. Our recognition as the most awarded company at the 2021 Cannes Lions Festival reflects our investment in creative talent and the strength of our creative work over the past two years. Our focus on data, commerce and technology, through strategic acquisitions, organic investments and the launch of Choreograph, has supported a strong new business performance. Key assignment wins include AstraZeneca, Bumble, JP Morgan Chase and Pernod Ricard.
H1 and Q2 financial highlights
- Q2 LFL revenue less pass-through costs 19.3%: US 12.6%, UK 31.8%, Germany 20.3%, Greater China 1.4%, Australia 8.4%, India 30.0%
- Q2 LFL revenue less pass-through costs on 2019 1.3%: US 1.8%, UK 1.1%, Germany 6.3%, Greater China -1.7%, Australia -13.6%, India -2.6%
- Strong new business performance: $2.9 billion net new billings in H1
- H1 headline operating margin 12.1%, up 3.9 pt on the prior year with strong top-line growth supporting significant reinvestment in incentives
- H1 headline operating margin pre incentives up 7.8 pt to 17.0%
- Net debt at 30 June 2021 £1.5 billion, down £1.2 billion year-on-year reflecting good working capital management
Strategic progress, shareholder returns and outlook
- Shifting business mix: growth areas of experience, commerce and technology represented 26% of revenue less pass-through costs in H1
- Launch of Choreograph, future-ready data and analytics company
- M&A to simplify and grow: buy-in of WPP AUNZ minorities; technology acquisitions in Brazil and UK; Kantar agreed to acquire Numerator
- Continued recognition of creativity and effectiveness: most creative company at Cannes, collecting 190 Lions including 12 Grand Prix, 1 Titanium, 28 Gold, 57 Silver and 92 Bronze
- Industry-leading commitment to net-zero carbon emissions across the entire supply chain by 2030
- £248m share buyback in H1, £350m planned for H2; 12.5p 2021 interim dividend declared, +25%
- Full-year 2021 LFL revenue less pass-through costs growth now expected to be 9-10%; headline operating margin towards the upper end of the 13.5-14.0% range
“In procurement, property and shared services, we are making strong progress as part of our overall transformation programme. We have significantly increased our incentive pools in the first half, to reflect the tremendous contribution of our people in these challenging times, and in line with our intention to reinvest in talent announced at our Capital Markets Day in December 2020.
“We expect our strategy to translate into benefits for all of our stakeholders: a powerful, modern offer to support our clients’ growth; a great place for our people to work; a positive contribution to communities and the environment; and good financial returns for shareholders, with the interim dividend raised 25% and £600 million of share buybacks planned in 2021.”, said Mark
WPP is a British multinational communication, advertising, public relations, technology, and commerce holding company headquartered in London.