WPP PR arm grows 5.8 per cent in Q3

WPP's PR arm had the strongest growth of its divisions in the third quarter of 2022, although growth slowed to 5.8 per cent on a like-for-like basis.

Revenue in the PR division - which includes Hill+Knowlton, FGS Global and BCW - was £296m in Q3. Like-for-like growth of 5.8 per cent (excluding 'pass through' costs) compares to +7.3 per cent in Q2 and +14.1 per cent in Q1.

PR was WPP's fastest-growing division in the quarter, ahead of Global Integrated Agencies and Specialist Agencies, which grew 4.3 per cent and -3.9 per cent respectively on a like-for-like basis. (Revenue in these divisions was affected after WPP restated figures from the prior year to reflect the reallocation of some businesses between them).

WPP said of the PR arm in Q3: "BCW, H+K and FGS Global continued to perform well, reflecting the strong demand from clients for strategic advice in a heightened political environment."

The holding company pointed out that like-for-like PR revenue was 19.1 per cent higher than in the same quarter in 2019, showing growth since the pre-COVID era.

Overall, WPP said it "performed well" in the third quarter, as like-for-like revenue excluding pass-through costs grew 2.7 per cent to £2.99bn. Comparing growth to 2019, it accelerated in the quarter to +10.9 per cent (Q2: +9.7 per cent, Q1: +9.2 per cent).

Like-for-like growth was +4.5 per cent in the US and +4.2 per cent in the UK, while other major growth markets included Brazil (+19.7 per cent) and Canada (+7.7 per cent) also performed strongly.

Like-for-like growth was -8.7 per cent in Germany, or +3.3 per cent excluding the impact of COVID-related contracts in the prior year, according to WPP. Revenue fell nine per cent in China on a like-for-like basis.

WPP raised its guidance for the full year, with like-for-like revenue less pass-through costs now expected to be 6.5-7 per cent (up from 6-7 per cent). Less positively, headline operating margin is expected to increase by between 30 and 50 points - the previous expectation was around +50 points.

WPP chief executive Mark Read 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 $1.7bn of net new business, including assignments with Nestlé, Samsung and SC Johnson.

“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 per cent. 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.”

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