WPP Records Small Rev Gains, But Bigger Growth Outside U.S.
WPP reported a 2.5% revenue gain to $16.4 billion for full-year 2012 with a pre-tax profit of just over $1.7 billion, up 8.2%. The revenue gain was suppressed partly as a result of currency
fluctuations. As reported in British Pounds, revenues were up 3.5%.
Organic revenue growth for the year was 2.9% -- in the middle of the pack compared to other holding companies. For example, Omnicom reported 2012 organic growth of 4%; Publicis reported it at 2.9%, while Interpublic said its full-year organic growth was less than 1%.
WPP said it was taking a charge against earnings of roughly $140 million related to “certain structural issues within businesses primarily in Western Continental Europe and to balance staffing levels and align staff costs given anticipated levels of revenue.”
That was offset by a gain on the sale of its interest in Buddy Media and a piece of New York real estate that totaled more than $152 million.
While the company took a charge on its Western Europe operations, it was North America that turned in the poorest organic rate of growth with a decline of nearly 1%. WPP noted that advertising and media planning and buying operations turned in “relatively strong” performances in the region that were offset by weaker results in the consumer insight, PR, branding and other specialist areas.
“This seems to be indicative of continued pressure on discretionary client spending,” the company said.
The company’s strongest organic growth was turned in by the Asia-Pacific, Latin American, Central and Eastern European, Africa and Middle East regions, WPP said. Combined, those regions had organic growth of more than 8% for the year.
The company said 2013 would be a “demanding year” and projected organic growth of around 3%, noting continuing worries about the Euro Zone, the U.S. deficit issue, Middle East turmoil and a somewhat uncertain outlook for the BRIC markets. Also cause for concern: a proposed referendum in the UK about whether to remain in the European Union.
The prospects for 2014 look better, WPP said, with big advertising events like the U.S. elections, Olympics and the World Cup teed up.