Sir Martin Sorrell, CEO of the holding company, acknowledged in the earnings statement that 2009 was a “brutal year” but that he expected 2010 to be more stable with a stronger second half. He noted that the second quarter may return the first organic growth for the company in six quarters.
Total global revenues were $13.1 billion in 2009, compared to $11.3 billion in 2008. WPP said like-for-like revenues, excluding the impact of acquisitions and on a constant currency basis, for the holding company as a whole were down 8%.
After-tax profit fell 1.4% to $767.8 million in 2009, compared to $778.3 million in 2008.
The PR and public affairs division, which includes Burson-Marsteller, Hill & Knowlton, Cohn & Wolfe, Ogilvy PR Worldwide, and Public Strategies, makes up 9% of WPP's business.
While organic revenues were down 8% for PR and public affairs in the first half of 2009, the division reported that revenues decreased 6% for the second half of the year. Third quarter results showed an 8.5% like-for-like drop for PR and public affairs.
“In the final two quarters, public relations has rebounded somewhat,” said Paul Richardson, finance director for WPP, in the earnings call.
Mark Penn, worldwide CEO of Burson-Marsteller, told PRWeek that he started to see business pick up for the firm after Labor Day with the US leading the turnaround. He noted that the Asia market continued to grow during 2009.
“We saw an increase in business wins,” he said. “In particular, we saw a lot of smaller clients begin to come back. Big clients may have cut back but they continued their programs. A lot of smaller clients had really turned off their programs and they started to turn them back on.”
Burson-Marsteller's fourth quarter results were “low, single-digits off" in terms of revenue and “almost not at all off on the bottom line,” said Penn.
Chief executives at Ogilvy PR and Cohn & Wolfe were not immediately available, while H&K CEO Paul Taaffe declined to comment.
In the earnings statement, WPP reported that cost reductions in PR and public affairs cut average headcount “significantly.”
The total number of staff, excluding associates, was 98,759 as of December 1, 2009, a 12% drop compared to the 13,904 reported December 1, 2008.
*All figures were converted from the British pound to the US dollar using the XE currency converter.