WPP posts 16% profit drop after 'brutal' 2009
By Mark Banham, campaignlive.co.uk, Friday, 05 March 2010 09:03AM
LONDON - WPP has recorded a drop in profits of 16% to £812m after what it described as a "brutal" year for the agency network, which owns creative agencies Grey and Ogilvy and media agencies MediaCom and Mindshare.
Revenue across the group fell, with the UK reporting a 6% drop compared to the previous year, while revenue in western Europe fell by 10.2%.
North America added to the decline with an 8% drop in revenue, while Asia Pacific, Latin America, the Middle East and central and eastern Europe regions saw a 6.8% like-for-like revenue fall.
A WPP statement said: "Although 2009 was a brutal year overall the Group adjusted its cost base, after a difficult first six months, to falling like-for-like revenues, achieving the same pro-forma operating margins in the second half of 2009, as in the same half of 2008.
The marketing communications group behind ad agencies Ogilvy and JWT and media agencies MediaCom and Mindshare, did signal some hopes for 2010, with like-for-like revenues for January remaining flat.
WPP has seen growth in net new billings in the first two months of 2010, to nearly $2bn (£1.3 billion) compared with $4.8bn (£3.1 billion) in 2009 as a whole.
Last year was a particularly difficult time for the group as it shed about 12% of its worldwide staff, which totalled 140,000 across the group.
Sir Martin Sorrell, chief executive of WPP, has previously indicated that The Winter Olympic Games in Vancouver, the Asian games in Guangzhou, China and the FIFA World Cup in South Africa are likely to increase revenues at the group this year.
In a statement, WPP said: "Our budgets for 2010 indicate flat like-for-like revenue growth, with a mildly weaker first-half and stronger second-half. The United Kingdom is budgeted flat, with the United States showing a little growth."
WPP clients include Unilever, Ford, HSBC and the COI.
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This article was first published on campaignlive.co.uk