WPP's third-quarter revenue slips
WPP reported a 9.8% slip in third-quarter revenue to $3.8 billion, or a 5.5% decrease in like-for-like revenue. The holding company posted an 11.9% decrease, or 7.6% decline in revenue less pass-through costs for the third quarter, on a like-for-like basis.
But despite the continued revenue declines, WPP's third-quarter results show signs of improvement.
By region, WPP reported the U.S. saw a 5.5% decline in revenue less pass-through costs in the third quarter, the U.K. fell 6.5%, Germany decreased 1.8%, Greater China slipped 16.7% and India declined 16.3%. In North America, like-for-like revenue less pass-through costs fell 5.1%, an improvement from the 10.2% decline it saw in the second quarter.
WPP CEO Mark Read said the company has been able to maintain "our new business momentum as clients seek out our creativity and our skills in media, technology, data and e-commerce," which has offset some of the downturn in the business. The holding company reported that it generated $1.6 billion in new business in the third quarter.
“WPP continues to demonstrate its resilience in a challenging market," he said.
Read said WPP was helped in the quarter by recent wins of Uber, which consolidated its media account with MediaCom earlier this month, as well as Alibaba, Dell, HSBC, Intel, Unilever and Whirlpool.
WPP also announced on Wednesday evening that it was retained by Walgreens Boots Alliance, the parent of Walgreens, to be its global marketing and communications agency of record. The drugstore giant first began working with WPP three years ago via a dedicated unit called Team WBA.
Still, Read said WPP remains "cautious about the pace of recovery" from the pandemic. The company expects full-year like-for-like revenue less pass-through costs to be down between 8.5% and 10.7%, which is better than its previous estimates, made in the first half of the year, calling for a fall of between 10% and 11.5%.
“Our people have done a superb job in serving our clients, largely working from home, but the events of 2020 have of course created new pressures for everyone," he said. "We have increased our investment in employee support services, with a particular focus on mental health and wellbeing, and this will be an ongoing priority for our leadership.”
WPP called out VMLY&R as "the best performing global agency" in the third quarter, with revenue down "only slightly year-on-year." The company said GroupM also "recovered strongly as client media expenditure picked up." Overall, WPP reported that its global integrated agencies saw a 6.7% decline in like-for-like revenue less pass-through costs, compared to a decrease of 15.7% in the second quarter.
Public relations also improved, with like-for-like revenue less pass-through costs down 2.9% in the third quarter, compared to 7.5% in the second quarter, according to WPP. Specialist agencies saw only a slight improvement, the company reported, of a decline of 13.9% in like-for-like revenue less pass-through costs in the third quarter, compared to a 16.3% decrease in the second quarter.