WPP Reports 6.7% Growth in First Quarter, Just Ahead of Omnicom and Publicis

Chief Martin Sorrell Will Focus on Small and Medium Acquisitions in New Markets and New Media

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WPP reported organic growth of 6.7% for the first quarter of 2011, virtually the same as Havas Group, which announced 6.8% growth yesterday, and slightly ahead of rivals Publicis Groupe and Omnicom Group at 6.5% and 5.2% respectively. WPP's revenue for the first quarter was up by 7% to $3.7 billion.

Like its competitors, WPP highlighted continuing recovery in the U.S. market, with organic growth of 9.1% in the first quarter of 2011.

WPP, owner of JWT, Ogilvy and Group M, said that its advertising and media agencies showed the strongest organic growth, with revenues up 12.9%, while "consumer insight" revenues were up just 3.4%, despite the group's $2 billion purchase of TNS in 2008.

Due to improved debt levels, WPP has lifted a self-imposed $170 million limit on acquisitions, and, according to a statement, Chief Executive Martin Sorrell will focus on small and medium-size acquisitions in new markets and new media. Earlier this month WPP bought German marketing group Commarco. Mr. Sorrell spent most of this week in Brazil, where Publicis Groupe announced two acquisitions, buying local agency GP7 on Tuesday and a second agency, Tailor Made, on Wednesday. In the first quarter of 2011, the U.S. grew by 9.1%, following 9.9% growth in the third quarter of 2010, and Latin American growth was 10.4%;

WPP reported growth of 18.4% for mainland China and India, as Asia grew 12.5%, or 13.8% excluding Japan. That ad market, the world's second largest, was flat after suffering what WPP described as "years of stagnation. ... And now triple hit by the dreadful earthquake, tsunami and nuclear disasters."

The Middle East was affected by political turmoil, posting only 1.5% growth, while Central and Eastern Europe grew at 9.1%, driven primarily by Russia and Poland. The U.K. grew by 7.7%, although western continental Europe was up only 2.2%, with France and Spain the worst performing markets.

WPP is forcasting that revenue will exceed $1 billion this year in China, $650 million in Brazil, $450 million in India and $200 million in Russia. WPP said in a statement that the faster-growing markets were the last into the recession and the last to come out of it. Asia, Latin America, Africa and the Middle East, and Central and Eastern Europe are all growing faster than last year.

New business for the quarter totaled $1.35 billion, down slightly from the same period last year. Staff numbers are up by 4.2% from a year ago, with 106,825 people working at WPP companies in March 2011.

WPP said it expects continued strong growth in 2011, and is optimistic for 2012, when the Olympic Games in London, European football championships and the U.S. presidential election will all help to boost growth.

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