WPP sees modest growth in full-year 2023 revenue, announces AI strategy
By Ibidunni Banjoko
WPP, one of the world’s largest advertising and marketing services companies, has reported its full-year 2023 financial results, showing a slight increase in net revenue. The company’s net revenue for the year reached £11.9 billion, marking a 0.5% growth compared to the previous year. Despite facing challenges, WPP managed to achieve organic revenue growth of 0.9% for the same period.
In the fourth quarter of 2023, WPP experienced organic growth of 0.3%, indicating a steady but modest performance in the last quarter of the year.
Looking ahead to 2024, WPP expects organic growth to range between 0% and 1%, with a potential improvement in operating profit margin of up to 0.4%. However, the news of the modest growth led to a decrease in the company’s shares, which fell by more than 5% following the announcement.
CEO Mark Read acknowledged the challenges faced by the company in 2023, particularly due to reduced spending by technology clients. Despite this, he emphasized WPP’s resilience and the solid performance achieved throughout the year.
Among WPP’s divisions, GroupM stood out as the growth driver, with a 4.9% increase in revenue for the full year, including a 5.7% gain in the fourth quarter. However, creative agency operations reported a decline of 1.6% for the year and 3.4% for the fourth quarter.
Regionally, North America experienced a decline of 2.7% in revenue for 2023, mainly attributed to lower revenues from technology clients and the retail sector. On the other hand, the UK saw a notable increase of 5.6% in revenue for the year.
Globally, WPP’s consumer packaged goods (CPG) business saw significant growth of 14.2% in 2023, while the technology and digital services category experienced a decline of 6.9%, and retail declined by 11.3%. The telecom, media, and entertainment sector, however, saw a modest increase of 2.9%.
In terms of new business, WPP secured approximately $4.5 billion in net new business billings, with notable assignments from major brands such as Adobe, Estée Lauder, Ford, Nestlé, and others.
Looking to the future, WPP has earmarked £250 million for additional investments in data and technology in 2024 to support its AI strategy. CEO Mark Read emphasized the importance of AI in the company’s operations and its potential to drive accelerated and profitable growth over the medium term. WPP’s medium-term organic growth target is set at 3%.
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