WPP reported net revenues in the second quarter of £2.9 billion ($3.5 billion) with organic growth for the period of 9.3%.
First half revenues totaled £5.5 billion ($6.64 billion) with organic growth (which factors out M&A and currency fluctuations) of 8.9%.
While results were strong, WPP shares fell 8% amid investor concerns of an economic slowdown and how that will affect future company performance.
Like other major holding companies, WPP raised its growth outlook for the full year to between 6% and 7%. That’s up from the previous estimate of 5.5% to 6.5%.
Commenting on the company’s strong first half results, CEO Mark Read declared that its multiyear effort to streamline operations is succeeding with more work to come. He also told analysts that so far there were no signs of client cutbacks in response to macroeconomic concerns.
“Our clients are continuing to invest in WPP’s services, which reflects our attractive industry exposure in technology and healthcare, our broad global footprint, and the importance of what we do for their businesses,” he stated. “The actions we have taken over the last four years leave WPP much better positioned with a more uncertain economic environment ahead.”
The company said it was on track to reduce annual expenses by about $360 million this year with a broader plan to achieve about $720 million in annual efficiencies by 2025.
The firm now as has around 50,000 people occupying 34 campuses, including newly opened campuses this year in Santiago, Tokyo and Toronto in 2022. By the end of the year, the company will have four more new hubs open and around half of all staff working from a campus building.
In a bid to enhance corporate efficiency WPP is rolling out cloud-based enterprise resource planning systems Workday and Maconomy. It’s also established IT hubs in Chennai and Mexico.
In North America organic growth was 9.5% in the first half and 10.2% in the second quarter. On a three-year basis, North America operations have grown organically by 10.5% for the first half, “with an improving trend in the second quarter.” Growth this year has been driven predominantly by GroupM, along with strong growth in production unit Hogarth, branding group Superunion and PR outfit H+K.
UK organic growth was 7.1% in the first half and 6.2% in the second quarter. AKQA Group, H+K and Landor & Fitch all grew double digits in the first half. VMLY&R and GroupM saw slower growth versus strong performances in the prior period.