Post-pandemic WPP hits recovery targets a year early

For once WPP will be happy to follow in the footsteps of its peers: matching the likes of Omnicom and Publicis as growth returned with a vengeance in Q2 of 2021.

Like for like revenue less pass-through costs (WPP’s somewhat lumpy definition of organic growth) was 19.3% in Q2 (11% for the half year) with the US up 12.6%, UK 31.8%, Germany 20.3%, Greater China 1.4%, Australia 8.4% and India 30%.

WPP helpfully provides a comparison with 2019 which shows growth of 1.3%, underlining that the company is back where it was pre-pandemic but also indicating the challenge it faces in adding real growth to its historic performance.

Revenue growth was 9.8% and WPP returned to profit after swingeing write-offs in 2020. Net debt fell £1.2bn to £1,5bn, which gives WPP headroom for acquisitions.

CEO Mark Read (above) says: “I’m delighted with our performance in the first six months of the year, at a time when COVID continues to take a toll on many countries. The like-for-like revenue less pass-through costs growth rate of 19.3% in the second quarter is our highest on record, as clients reinvest in marketing, particularly in digital media, ecommerce and marketing technology. We have returned to 2019 levels in 2021, a year ahead of our plan, with good momentum into 2022.

“We’ve also made very good strategic progress. Our recognition as the most awarded company at the 2021 Cannes Lions Festival reflects our investment in creative talent and the strength of our creative work over the past two years. Our focus on data, commerce and technology, through strategic acquisitions, organic investments and the launch of Choreograph, has supported a strong new business performance. Key assignment wins include AstraZeneca, Bumble, JP Morgan Chase and Pernod Ricard.”

CEO Read is to be congratulated on achieving most of what he set out to do when he succeeded founder Sir Martin Sorrell in controversial circumstances. WPP’s non-advertising commerce business is now just over a quarter of the total which indicates the company is becoming the more rounded entity Read hopes for.

As he reflects on these numbers Read might also wonder how WPP is still enmeshed in the “white, stale male” controversy at Wunderman Thompson. CEOs have to take decisions that upset their managers (as opposed to employees) sometimes.

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