WPP reported a nearly 12% drop in net revenue for the third quarter to £2.4 billion ($3.1 billion) with a 7.6% organic revenue shortfall. The results were an improvement over the second quarter as the pandemic continues to take a toll on industry performance.
In the U.S. the organic decline was 5.5% while the drop in the UK was 6.5%. Greater China experienced a 16.7% dip and India was down 16.3%.
The company reported net new business of $1.6 billion (billings) during the quarter and year-to-date new business of $5.6 billion.
“WPP continues to demonstrate its resilience in a challenging market,” said company CEO Mark Read. “We have maintained our new business momentum as clients seek out our creativity and our skills in media, technology, data and ecommerce.”
He noted recent new assignments from Uber, Alibaba, Dell, HSBC, Intel as well as the retention of the Walgreen Boots Alliance global business announced late yesterday.
But the outlook remains murky. “Given the tightening of COVID restrictions around the world and uncertainty in the global economic outlook, we remain cautious about the pace of recovery,” Read added. “It is important that we maintain our strong financial position and we are on track to achieve cost savings towards the upper end of our £700- 800 million target,” or upwards of $1 billion.
The company said that the full-year organic revenue decline is expected to be within analyst estimates of 8.5% to 10.7% although that assumes no further widespread lockdowns in any of the firm’s major markets for the rest of the year, which at this point is far from a sure bet.
The holding company’s big agency networks narrowed revenue declines, as a group posting a 6.7% dip in Q3 versus 15.7% in the previous quarter. VMLY&R was cited as the best performing global agency in the quarter, down just slightly versus a year ago.
GroupM was said to have “recovered strongly” as client media expenditure picked up in the quarter.
PR remains the best performing segment with organic revenue dipping just 2.9%. Specialist agencies remained challenged, collectively down 13.9% in the quarter.
For the first nine months of the year the company's net revenue is down 10.8% to £7.1 billion ($9.1 billion) with an organic decline of 8.9%.