WPP cuts 2024 forecast, expects revenue decline
By Oluwaseyi Lawal
After a challenging first half of 2024, WPP has adjusted its annual growth forecast downward, now anticipating growth between -1% and 0%, a change from its earlier projection of 0% to 1% growth.
Highlighting the difficulties faced, WPP also reported a reduction in its workforce by approximately 3,000 employees, bringing the total down to around 111,000 by the end of H1 2024, compared to 114,173 at the end of December. This decrease follows the mergers of VML and Burson, as well as restructuring efforts within GroupM.
Despite a substantial £604 million post-tax gain from the sale of advisory firm FGS Global to KKR, WPP experienced a 3.6% decline in organic growth. This decline was largely driven by a significant 24.2% drop in growth in China during the second quarter. In the United Kingdom, growth decreased by 2.6% in H1, with positive performances at Ogilvy and Hogarth being outweighed by declines in other agencies.
However, the company saw better performance in other international markets, with North America achieving 2% growth and western continental Europe seeing a 0.3% increase. The ‘Rest of World’ division experienced a 2.2% decline in revenue.
Despite these challenges, WPP’s operating profit increased by 38.2%, reaching £423 million, up from £306 million in the first half of 2023. Additionally, revenue experienced a slight rise from £7.221 billion to £7.227 billion.
Speaking on this, the CEO Mark Read said “Our second quarter performance delivered sequential improvement in net sales with continued growth in GroupM, Ogilvy and Hogarth and sequential improvement at Burson, VML and our Specialist Agencies,”
“Importantly, we also saw North America return to growth in the second quarter. That said, we have seen pressure in China and in our project-related businesses which, together with an uncertain macro environment, has led us to moderate our expectations for the full-year.
He continued: “The sale of our stake in FGS Global is an excellent outcome less than four years after its creation from three separate businesses within WPP. It will allow us to focus and invest in our core creative transformation offer while significantly strengthening our financial position.”
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