WPP has seen its share price tumble nearly 20 per cent follow the release of its 2024 preliminary financial results.
It has forecast a 1 per cent drop in organic revenue, missing analyst forecasts of a 0.4 per cent drop.
While WPP did grow 1.4 per cent in Western Continental Europe, it suffered a 1.4 per cent decline in North America, 5.1 per cent in the UK, 4.8 per cent in the Rest of the World, including a significant 21.2 per cent drop in China.
““We achieved significant progress against our strategy in 2024 with the creation of VML, Burson and the simplification of GroupM – some 70 per cent of our business,” said Mark Read, CEO of WPP.
“The top line was lower, however, with Q4 impacted by weaker client discretionary spend. We did see growth from our top 25 clients of 2 per cent and an improving new business performance in the second half of the year with wins from Amazon, J&J, Kimberly-Clark and Unilever reflecting the strength of our integrated offer.
“The actions we are taking across WPP will strengthen our existing client relationships and drive our new business results. We expect some improvement in the performance of our integrated creative agencies in the year ahead. At the same time, we have comprehensive efforts underway to improve our competitive positioning through new leadership at GroupM, with further investment in AI, data and proprietary media.
“Though we remain cautious given the overall macro environment, we are confident in our medium-term targets and believe our focus on innovation, a simpler client-facing offer and operational excellence will support our growth and deliver greater value for our shareholders.”
GroupM grew 2.7 per cent benefiting from continued client investment in media, partially offset by the impact of historical client losses and a more challenging environment in China.
But this growth would be offset 3.9 per cent declined in WPP’s global integrated agencies. Its Hogarth production arm recorded mid-single digit growth.
AKQA experienced a low double-digit decline in revenue less pass-through costs as GroupM said “spend on project-based work remained weak”.
Other Global Integrated Agencies declined 6.5 per cent in Q4, also as a result of those factors and weaker client discretionary spend “than is typically seen” in the final quarter, together with the lap of a particularly strong quarter for variable client incentives in Q4 2023.
During Q4, Burson declined high single digits as the business continued to be impacted by the 2023 loss of assignments with a large healthcare client and a more challenging environment for client discretionary spending.
