LONDON: WPP Group's PR and public affairs revenue dropped 1.7% on a like-for-like basis in 2013 to about $1.53 billion. In the fourth quarter, the holding company's PR and public affairs group saw 1.2% revenue growth on a like-for-like basis.
The holding company, which owns Burson-Marsteller, Cohn & Wolfe, Hill+Knowlton Strategies, and Ogilvy Public Relations, among others, saw significant growth in all regions and sectors last year except for PR and public affairs, according to its earnings statement.
Geographically, WPP reported solid growth in Asia-Pacific, Latin America, Africa, the Middle East, and the UK.
“In constant currencies, the group's PR and public affairs businesses returned to top-line growth in the fourth quarter, as forecast at the third-quarter results presentations, with constant currency revenues up 2.4% and like-for-like growth of 1.2%,” the holding company said in its earnings statement. “However, overall 2013 was difficult for many of the group's public relations and public affairs brands, particularly in North America, Continental Europe, Latin America, and the Middle East.”
Operating profit margin for the PR and public affairs firms was 14.7% in 2013, down from 15.1% in the previous year. WPP is the world's largest marketing services holding company until the completion of Omnicom Group's merger with Publicis Groupe, which would see the combined firm surpass WPP in terms of revenue.
WPP CEO Martin Sorrell told PRWeek via email that “although margins were down slightly, they're very robust.”
Last year, the holding company reported that its 2012 PR and public affairs revenue was down 1% to $1.4 billion on a like-for-like basis compared with 2011.
For full-year 2013, the company saw 3.5% overall like-for-like revenue growth to $18.3 billion. In the second half of the year, revenues were up 4.6% on a like-for-like basis.
Change in revenue on a like-for-like basis excludes the impact of currency and acquisitions.
Throughout last year, the group garnered $9.8 billion in net new business, up 57% year-over-year. It also reported an operating profit of about $2.6 billion and profit before tax of nearly $2.2 billion, up 19% compared with the year prior.
Overall, North American revenue grew 2.9% on a like-for-like basis last year to about $6.2 billion. The UK saw 4.8% like-for-like revenue growth in 2013, while Western Continental Europe reported a slight increase of 0.5%. WPP's Asia-Pacific, Latin America, Africa and the Middle East, and Central and Eastern Europe group grew 6.1% in revenue on a like-for-like basis.
WPP has “four strategic priorities,” including new markets, new media, data-investment management, and horizontality, which is “ensuring our people work together through client teams and country managers to the benefit of clients,” the group said in the earnings statement.
Earlier this month, Interpublic Group's Constituency Management Group, which contains its PR agencies, reported organic revenue growth of 11.7% in the final quarter of 2013 to $374.8 million. The unit's revenue was up 7.8% organically for the full year.
Also, Omnicom Group reported a 3.7% drop in fourth-quarter PR revenue and a 1.5% increase for full-year 2013.
Publicis Groupe, which does not break out PR revenue, said it saw 0.7% growth in Q4 revenue and a 2.6% organic revenue growth rate for the full year.
Organic growth represents change in revenue without taking into account the impact of acquisitions or disposals.
Chief executives from WPP's major PR agencies could not be immediately reached for comment on the results.
Note: All currency conversions for this story were made using Google.
This story was updated on February 27 at 11:52 am with additional information and comment from WPP Group.