WPP reported 9.5% organic revenue growth for the first quarter, prompting it to raise its growth outlook for the year to between 5.5% and 6.5%. Previously it had forecast growth of around 5% for the full year.
WPP is the second big holding company to raise its full-year growth outlook recently. Last week Omnicom, posting nearly 12% Q1 growth, raised its full-year outlook to between 6% and 6.5% from the previous 5% to 6%.
But WPP cautioned it was “very mindful” of the macroeconomic environment that could force a change in company outlook later in the year. Issues include inflation, the ongoing Russian-Ukraine war, the pandemic and supply chain shortages.
Reported revenue (less pass-through costs) for the first quarter was 2.57 billion GBP (about $3.22 billion), up 10.3%.
In March the company announced that it was exiting the Russian market due to Russia’s unprovoked invasion of Ukraine and today confirmed that it had reached agreement to divest of its businesses there. It didn’t provide details but earlier had said it would work with local teams, clients and partners on possible ownership transfer deals.
“The year has started very well with continued momentum from 2021 resulting in strong growth across all businesses and regions,” stated WPP CEO Mark Read.
GroupM, part of the company’s global integrated agencies division, posted robust growth of 12.8% in Q1. The entire division was up 8.6%. Excluding GroupM, that figure drops to 5.6%. Excluding GroupM, production unit Hogarth was the strongest performer while, AKQA Group, Ogilvy, Wunderman Thompson all recorded “good growth.” VMLY&R grew albeit against strong comparables to the prior year period.
The company’s largest markets—North America, UK and Western Continental Europe—all posted growth of between 8% and 9%. The company said its remaining regions—Asia Pacific, Latin America, Africa/Middle East and Central and Eastern Europe--grew a combined 11.9%.
Growth in the U.S. was 8.9%, driven mainly by GroupM, Hogarth and brand consulting.
The company also cited strong new business success last year as contributing to momentum in Q1 including the onboarding of the Coca-Cola business which it won last November.
The earnings report comes amid a busy news week for the company. Earlier it announced a new end-to-end D2C ecommerce offering and yesterday disclosed a major reorganization at GroupM including the mergers of Essence and MediaCom and a more complete integration of Mindshare and Neo.