WPP reported revenue less pass-through costs increased 9.5% to £2.57bn on a like to like basis in Q1 2022, leading the company to increase its expectation of full-year growth from “around 5%” to 5.5%-6.5%.
The advertising and marketing firm reported a rise in revenue of 8.1% on an LFL basis to £3.09bn.
WPP Top 5 Markets
The company’s top five markets in Q1 in terms of the LFL revenue less pass-through costs growth were the USA, UK, Germany, China, and India.
Like-for-like revenue, excluding pass-through costs, increased by 8.7% in North America. GroupM, Hogarth, and Brand Consulting drove +8.9% growth in the United States.
Landor & Fitch, H+K, AKQA Group, and Hogarth were the best performers in the UK, with like-for-like revenue less pass-through costs up 8.1%.
Like-for-like revenue in Western Continental Europe increased by 8.9% excluding pass-through charges. Germany, Denmark, and Spain all did well, although France, Italy, and the Netherlands took longer to recover.
Like-for-like revenue less pass-through costs increased 11.9% in Asia Pacific, Latin America, Africa & the Middle East, and Central & Eastern Europe.
Latin America, led by Brazil, experienced the most rapid increase. The Asia Pacific region expanded by double digits as well, thanks to strong performances in China and India.
WPP Top Business Sectors
WPP’s top business sectors in Q1 in terms of the LFL revenue less pass-through costs growth were Global Integrated Agencies, Public Relations and Specialist Agencies.
Global Integrated Agencies’ like-for-like revenue less pass-through expenses increased by 8.6%, with GroupM accounting for about 36% of WPP revenue less pass-through costs, which increased by 12.8% in the first quarter.
Global Integrated Agencies was up 5.6% excluding GroupM, with Hogarth being the best performer.
Despite a solid prior period, AKQA Group, Ogilvy, and Wunderman Thompson all saw significant growth, and VMLY&R did as well.
Like-for-like revenue less pass-through costs increased 14.1%, continuing the robust trend of the previous 18 months.
H+K, BCW, and Finsbury Glover Hering, which has now merged with SVC, all grew by double digits on a like-for-like basis.
Specialist Agencies’ revenue increased by 13.0%, continuing a trend that began in 2021 and despite a very strong preceding period. The majority of the larger agencies grew by double digits on a like-for-like basis.
Contracts
WPP experienced great growth across all business sectors and geographies, with strong client demand for its integrated offering which amounted to £1.8bn in new contracts.
WPP has extended its relationship with Mars as their global media partner, added digital to our Sky media remit, won the global creative account for JDE Peet’s, and been named strategic communications partner by Migros, with a focus on commerce strategy, data, and content, in new business reviews so far this year.
It also landed new contracts with Samsung and Square.
WPP Developments
WPP led the holding company rankings for media and effectiveness in 2022, while MediaCom, Mindshare, and Ogilvy were all ranked first in their respective areas.
WPP launched Everymile, a new digital commerce managed service that will provide brands with a fully outsourced direct-to-consumer (DTC) e-commerce solution, this week.
The Metaverse Foundry, a global workforce of over 700 individuals devoted to providing brand experiences for clients in the metaverse from concept to execution, was unveiled by Hogarth, WPP’s speciality global creative content production company, in February.
WPP proceeded to revamp GroupM, its media investment company, to improve client innovation and streamline processes.
Essence and MediaCom will unite to become EssenceMediacom, a new agency offering that combines Essence’s digital and data-driven methodology with MediaCom’s scalable multichannel audience planning and strategic media capabilities, the company announced yesterday.
WPP is also forming GroupM Nexus, the world’s top media performance organisation, by combining Finecast, Xaxis, and GroupM Services, GroupM’s global community of activation professionals.
Mindshare will also finalise its merger with Neo, a worldwide performance agency.
Mark Read, Chief Executive Officer, WPP, said, “The year has started very well with continued momentum from 2021 resulting in strong growth across all businesses and regions. Demand is strong for our services, particularly in digital media, ecommerce, data and marketing technology.
“We continue to see strong demand for our services from our clients and to invest in the many opportunities for growth driven by the digital transition, including Choreograph and the recent launch of Everymile.”
“As a result of a strong first quarter, we now expect our growth to be in the range of 5.5% to 6.5%, up from around 5% at the start of the year. We remain very mindful of the impact of the broader macroeconomic environment on our business and will respond quickly to any changes as the year progresses.”
WPP shares gained 0.2% to 992p on Wednesday after the company raised expectations for 2022 final results.