WPP PR, public affairs revenue down 3.1% in Q2

The London-based holding company reported a 3.1% like-for-like drop in PR and public affairs revenue in Q2 and a slightly larger decrease for the first half of the year.

LONDON: WPP Group's PR and public affairs revenue dropped 3.1% on a like-for-like basis in the second quarter of 2013 to nearly $366 million.

PR and public affairs was the only sector of the holding company's communications and marketing services business that saw a decline in the period.

WPP's PR and public affairs unit has reported a revenue decrease in a string of recent earnings reports. In the first quarter of 2013, it saw a 4.1% like-for-like drop in revenue to about $341.7 million. Like-for-like revenue was down 1% for full-year 2012, and it decreased 1.7% in Q3 2012. In the second quarter of last year, the PR and public affairs group reported like-for-like revenue growth of 0.3%.  

The unit also saw a decrease of 3.6% in the first six months of the year on a like-for-like basis to $710 million.

WPP, which owns Burson-Marsteller, Cohn & Wolfe, Hill+Knowlton Strategies, and Ogilvy Public Relations, said in an earnings statement that the drop in PR revenue was mostly due to “continuing client examination of discretionary spending, particularly in mature markets."

The holding company said the US, Western Continental Europe, Africa, the Middle East, and Asia-Pacific saw some improvement in PR and public affairs, while the UK's progress was slower. C&W, H+K, Penn Schoen & Berland, and RLM Finsbury were all mentioned in the earnings report for “showing improving margins in the first half” of 2013. 

Overall, WPP posted a 2.7% revenue increase on a like-for-like basis in Q2 to $4.3 billion, compared with the same period of 2012. In the first half of the year, the London-based company reported a 2.4% increase on a like-for-like basis to nearly $8.3 billion.

The holding company earned about $4.2 billion in net new business in the first half of 2013, up from $3.8 billion in the first six months of last year.

Revenue in North America grew 2.4% on a like-for-like basis in Q2 to nearly $1.5 billion. In the first half of the year, North America saw a 0.8% revenue increase on a like-for-like basis to $2.5 billion.

Western Continental Europe is the only region that saw a revenue drop for Q2 and 1H, decreasing 1.2% and 1%, respectively, on a like-for-like basis.  

WPP's Q2 and half-year results are the first financials the holding company has posted since rivals Publicis Groupe and Omnicom Group announced their merger to form the world's largest marketing umbrella firm, worth $23 billion, in late July. The combined company, which faces shareholder votes and regulatory hurdles in dozens of countries, would knock WPP from the top spot as the world's largest holding company. 

Executives from Burson declined to comment on the earnings, and executives from C&W, Ogilvy, and H+K were not available for comment.

Like-for-like growth represents change in revenue without taking into account the impact of currency change, acquisitions, or disposals.

*Note: All figures were converted from British pounds to American dollars using the XE Currency Exchange calculator.

This story was updated on August 29 to correct WPP's overall like-for-like revenue increase in Q2. It was up 2.7% in the second quarter.

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