WPP reported an 11.3% revenue gain for the first half of 2014 to $9.135 billion, driven by the strength of the British Pound. In sterling, revenues were up 2.7% but up 11.3% on a constant currency basis. Earnings before interest taxes, amortization and depreciation were down 2.7% on a reported basis to $733 million British Pounds but up 8.1% on a constant currency basis.
Organic revenue growth, which excludes the impact acquisitions, divestitures and currency fluctuations, was up 8.7%.
Billings for the first half were down 3% “ravaged by sterling strength,” the holding company reported.
Like-for-like net sales for the group’s advertising and media investment operations were up nearly 6%, the best performing discipline for the period. The Branding & Identity, Healthcare and Specialist Communications units were up 3.8%; PR and Public Affairs up 2.7% and data investment and management up 1.7%.
The company projected that organic revenue growth for full year 2014 would be “up to 5% in line with market growth.”
“It was a strong start to the year with market leading like-for-like revenue growth,” WPP CEO Martin Sorrell told analysts on a Tuesday morning call to discuss first half results.
The company indicated that the strength of the British Pound had about an 8% negative impact on revenues and net sales for the first half while the impact for the full year is projected at between 6% and 7%.
The company also noted that it has launched two major cost savings initiatives including a project to centralize IT operations. The company will take a charge of about $40 million for the full year to implement the project. Also the firm has begun a major outsourcing program within its global financial units, shifting a number of financial-related tasks from North America, Europe and other places to facilities is Asia to reduce costs.
Key new business wins in the first half included the $1 billion Vodafone assignment to MEC, a global creative Burger King assignment ($325 million) and a Pepsi account in China ($250 million).
This story has been updated to include details provided by WPP executives on a conference call with analysts and investors.