Strong Q3 performance; LFL revenue less pass-through costs +3.8% year-on-year and acceleration of growth on 2019 at +10.9%; update to full year guidance
- Q3 revenue +10.3%; LFL revenue +2.7%
- Q3 LFL revenue less pass-through costs +3.8%
- Acceleration of growth on 2019 levels +10.9% (Q2 +9.7%, Q1 +9.2%)
- Top five markets: USA +4.5%, UK +4.2%, Germany -8.7% (+3.3% excluding the impact of Covid-related contract in prior year), China -9.0%, India +10.7%
- Other major growth markets: Brazil +19.7%, Canada +7.7%
- By business sector: Global Integrated Agencies +4.3% (GroupM +4.7%, ex GroupM +4.0%), Public Relations +5.8%, Specialist Agencies -3.9% (+8.6% excluding Covid-related contract above)
- $1.7 billion net new business won in Q3 and $5.1 billion net year-to-date
- £692 million of share buybacks year-to-date, total of £800 million to be completed in 2022
- Full year 2022 guidance updated: LFL revenue less pass-through costs growth raised to 6.5-7.0% (previously 6.0-7.0%); headline operating margin up 30 to 50 bps (previously up around 50 bps)
Mark Read, Chief Executive Officer of WPP, said:
“WPP continues to show strong momentum, reflecting broad-based growth across our agencies, markets and industry sectors and the investment by our clients in marketing, ecommerce and digital transformation. Our performance on a three-year basis has continued to improve each quarter during 2022.
“Our new business success reflects the quality of our creative work, our strength in media and our ability to deliver integrated solutions to clients. During the quarter we achieved $1.7 billion of net new business, including assignments with Nestlé, Samsung and SC Johnson. Our leading scale and differentiated offer were exemplified by GroupM which led COMvergence’s new business and retention global rankings in the first half of 2022.
“Our growth over the year has been strong with full year like-for-like revenue less pass-through costs now upgraded to 6.5-7.0%. We have continued to invest in our people and in data and technology to support this growth, resulting in headline operating margin now expected to be up 30 to 50 bps. We are on track with the £300m transformation savings and will continue to manage our costs with discipline.
“We enter the last quarter of the year with confidence, based on the leading competitive position of our businesses, our client momentum and the knowledge that the actions we have taken to strengthen WPP leave us well placed to support our clients in navigating the economic uncertainties ahead.”
- Percentage change in reported sterling.
- Like-for-like. LFL comparisons are calculated as follows: current year, constant currency actual results (which include acquisitions from the relevant date of completion) are compared with prior year, constant currency actual results, adjusted to include the results of acquisitions and disposals for the commensurate period in the prior year.
- Certain businesses have been reclassified to associates as the Group no longer controls them. In addition, certain media billings recognised as revenue earlier were re-assessed under IFRS 15: “Revenue from Contracts with Customers” and have been excluded from revenue, but have no impact on revenue less pass-through costs. There are no adjustments to previously reported revenue in the first three quarters of 2021. The adjustments were recorded for the first time for full-year 2021 reporting.
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