WPP Revenue Up 2.9% But Profit Down 60%

WPP has reported that its 2023 financial year profit is up 2.9 per cent in its preliminary results but its operating profit was down a whopping 60.9 per cent year-on-year.

Lead image: Mark Read, CEO, WPP.

The holdco, which owns the GroupM media buying business, took home £14.85 billion ($AU28.66 billion) in the financial year and reported a profit of £531 million ($AU1.025 billion) — in 2022 it recorded £1.36 billion in operating profit ($AU2.62 billion).

WPP reported, however, that it had seen “solid” new business performance, bringing in $US 4.5 billion ($AU6.86 billion) — though this itself was down $US1.5 billion ($AU2.29 billion) on the previous year.

In its earnings release, WPP reminded investors that its strategic priorities for the year ahead was further consolidation and that its “simplification plan” was “on track.

VML launched in January following the merger of VMLY&R and Wunderman
Thompson with senior leadership appointed. Burson, created from the merger of Hill & Knowlton and BCW, is scheduled to launch in July.

It also said that its 2020 transformation program saw the holding company save £475 million ($AU917 million) in 2023 compared to a baseline figure set in 2019. It had estimated to save £450 million ($AU868.77 million), based on efficiencies gained from its campus programme, procurement initiatives, simpler WPP and lower travel costs.

“AI will be fundamental for our business and we are embracing the opportunities that it presents, putting it at the heart of our operations and our work for clients. Our AI-powered platform, WPP Open, is now being used by more than 30,000 people across WPP with growing adoption by our clients,” said Mark Read, CEO, WPP.

“While 2023 was more challenging than we expected due to cuts in spending by technology clients, we delivered a resilient performance for the year with 0.9% like-for-like growth and a 0.2 point improvement in our headline operating margin at constant currency. This was driven by disciplined cost control while continuing to invest in AI, data and technology.

“Our net new business of $4.5bn in 2023 included major new assignments with clients such as Allianz, Krispy Kreme, Mondelēz, Nestlé, PayPal and Verizon and reflects a stronger year-on-year performance in the fourth quarter.

“We are optimistic about the strategic opportunities ahead of us and are confident that we can deliver accelerated and increasingly profitable growth over the medium term.”

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