• by Larissa Faw , April 26, 2019

WPP's "legacy issues" are continuing to impact its financial performance amid CEO Mark Read's three-year turnaround plan. North America, with like-for-like net sales down 8.5%, was the weakest-performing region, primarily due to underlying performance issues, industry cutbacks and client losses in 2018, like Ford Motor.

Overall, the company’s first-quarter net sales were down 2.8% year-on-year.

The actions we have taken since September with our creative and healthcare agencies, alongside leadership changes, are intended to address the Group’s performance in the United States, says Read. “The most recent merger, Wunderman Thompson, has followed VMLY&R’s strong start by winning Duracell’s international creative account. BCW has brought in nearly $70 million in new business in its first year."

Revenue in first-quarter 2019 was £3.588 billion ($4.64 billion), up 0.9% compared with the same period last year on a reported basis and -0.6% on a constant currency basis.

Average net debt in the first quarter was £4.163 billion ($5.38 billion), compared to £4.875 billion ($6.31 billion) in 2018 (at 2019 exchange rates), a decrease of £712 million ($920 million). Net debt at the end of March was £4.624 billion ($5.97 billion), compared to £5.500 billion ($7.11 billion) in 2018 (at 2019 exchange rates), a decrease of £876 million ($1.13 billion).

Media investment management showed the strongest growth in the United Kingdom, Asia Pacific and Latin America. Data investment management was up slightly in Q1, with particularly strong growth in Asia Pacific, Latin America and the Middle East. The Group’s public relations and public affairs businesses were down 0.3%, with the strongest growth in Western Continental Europe and the Middle East.

The previously announced sale process of Kantar is "progressing well," in line with our expectations, says Read.

"Although WPP faces a 'challenging year,' especially in the first half, I am encouraged by how well our people, agencies and clients are responding to our new strategic direction," he says. "I want us to be a global enterprise, not just a British company," says Read. "But Rome wasn't built in a day."

Still, Read believes his plan will eventually place WPP on the right financial path, adding the company will not change its forecast for the year, which is a drop of 1.5% to 2% in like-for-like net sales.