WPP Posts Q3 Organic Revenue Growth Of 4.6%

WPP has reported 5.9% third-quarter revenue gain to 2.927 British pounds, or approximately $4.533 billion. 

Organic revenue growth for the period was 4.6% and organic net sales growth was 3.3%. Organic revenue growth strips out currency fluctuations, acquisitions and dispositions and organic net sales growth factors in cost of media sold directly to clients.

Nine months' reported revenue was up 6.9% to 8.766 billion British pounds, or approximately $13.434 billion. Organic revenue growth for the nine-month period was 4.8%, and organic net sales were up 2.6%.

By comparison, Omnicom last week posted organic revenue growth of 6.1% for Q3 and 5.5% for the first nine months. The comparable figures for IPG were 7.1% and 6.5%, respectively, and for Publicis Groupe, 0.7% and 1%. Omnicom, IPG and Publicis do not break out organic net sales figures.

WPP’s net new business (on a billings basis) for the first nine months was 3.312 billion pounds, or about $5.1. For Q3, the total was 1.9 billion pounds or $3.1 billion. Of that Q3 total, GroupM media shops accounted for 1.52 billion pounds, or $2.4 billion.

By region, North America was a strong performer in Q3, with organic revenue growth of 6.8% and net sales growth of 3.7%. For the first nine months, the comparable figures were 6.2% and 3.1%. North America is the company’s largest region accounting for 37.2% of group revenues.

The company said organic revenue growth in the third quarter was “slightly lower” than Q2 “as parts of the Group’s advertising and media investment management, data investment management and healthcare businesses softened.” That softening was, “partially offset by “strong growth in public relations and public affairs and direct, digital and interactive.”

Third-quarter organic revenue growth was 1.1% in the UK, 6.1% in Western Continental Europe and 4.6% in the firm’s remaining regions.

Looking at the macroeconomic picture, WPP stated that “country specific slowdowns in China and Brazil and geopolitical issues remain top of business leaders’ concerns, such as ongoing events in the Ukraine and Middle East.

“A continued but somewhat patchy United States recovery and United Kingdom and Indian strength may help confidence,” the company said. So-called “grey swans” include future action by the U.S. Federal Reserve and the UK’s European Union referendum.

Clients remain focused on costs, not revenue growth. WPP said it expects spending by clients in the remaining quarter of 2015 as well as next year to remain similar to the first nine months of 2015. Next year’s quadrennial events including the Olympics and political elections could boost spending by 1%.

WPP said its 3%-plus organic net sales growth target for full year 2015 remains in place.

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