WPP AGM Trading Update
June 13 2018 - 7:00AM
Business Wire
- Reported revenue for first four
months down 3.4% at £4.822 billion, currency headwinds of 6.1%
resulting in constant currency revenue up 2.7% at $6.633 billion,
like-for-like revenue up 1.4%
- Reported revenue less pass-through
costs1 down 5.0% at £3.969 billion, currency
headwinds of 6.1% resulting in constant currency up 1.1%,
like-for-like revenue less pass-through costs up
marginally
- Constant currency net debt at 30
April 2018 up £66 million on same date in 2017, down significantly
compared with the first quarter, with average net debt in first
four months of 2018 up by £360 million over same period in 2017,
similar to first quarter
WPP (NYSE:WPP) today reported its 2018 Annual General Meeting
Trading Update.
The following Chairman’s statement will be referred to at the
Company’s 46th Annual General Meeting held in London at noon today
and is available on the Company’s website.
In the first four months of 2018, the Group’s like-for-like
revenue less pass-through costs was up marginally, a slight
improvement over the first quarter’s -0.1%, with Western
Continental Europe, Latin America and Central & Eastern Europe
up strongly in April, and Asia Pacific also improving compared with
the first quarter. North America remains difficult, particularly in
the Group’s advertising and data investment management businesses,
but the Group’s media investment management and healthcare
businesses were up strongly. Functionally all sectors except data
investment management grew, with strong performance in the Group’s
media investment management, public relations & public affairs,
direct, digital & interactive, health & wellness and
specialist communications businesses in April.
Regional review
North America, with year-to-date like-for-like revenue
less pass-through costs down 2.4%, the same as the first quarter,
continued to be the weakest performing region, with advertising,
data investment management and parts of the Group’s brand
consulting businesses weaker, partly offset by strong growth in the
Group’s media investment management, health & wellness and
specialist communications businesses.
The United Kingdom, with year-to-date like-for-like
revenue less pass-through costs up 0.8%, was slightly weaker than
the first quarter, with advertising & media investment
management and brand consulting weaker in April, partly offset by
strong growth in public relations & public affairs, direct,
digital & interactive and the Group’s specialist communications
businesses.
Western Continental Europe, with year-to-date
like-for-like revenue less pass-through costs growth of 0.9%, was
up significantly compared with the first quarter, with particularly
strong growth in Germany, Denmark, Italy, Norway, Spain, Sweden and
Turkey in April.
Asia Pacific, Latin America, Africa & the Middle East and
Central & Eastern Europe, with year-to-date like-for-like
revenue less pass-through costs growth of 2.1%, was down slightly
compared with the first quarter growth of 2.3%. All sub-regions,
except Africa & the Middle East, grew in April, with strong
growth in Latin America and Central & Eastern Europe across all
of the Group’s major markets. In Asia Pacific, Greater China,
Indonesia, Japan, Korea and Malaysia were up strongly in April with
India and Singapore down slightly.
Operating profitability
As indicated in the first quarter trading update, our quarter
one revised forecasts are in line with budget, with a slightly
stronger second half, at the revenue less pass-through costs level
and show flat like-for-like revenue less pass-through costs
compared with last year, with the revenue less pass-through costs
operating margin also flat.
For the remainder of 2018, the focus remains on improving
revenue less pass-through costs growth and concentrating on meeting
our operating margin objective, by managing absolute levels of
costs and increasing our cost flexibility, in order to adjust our
cost structure to significant market changes.
Balance sheet highlights
Average net debt in the first four months of this year was
£4.885 billion, compared to £4.525 billion in 2017, at 2018
exchange rates. This represents an increase of £360 million, very
similar to the first quarter increase of £354 million. Net debt at
30 April 2018 was £5.182 billion, compared to £5.116 billion in
2017 (at 2018 exchange rates), an increase of £66 million, a
significant improvement compared with the £354 million higher net
debt at the end of the first quarter of 2018.
This announcement has been filed at the Company Announcements
Office of the London Stock Exchange and is being distributed to all
owners of Ordinary shares and American Depository Receipts. Copies
are available to the public at the Company’s registered office.
The following cautionary statement is included for safe harbour
purposes in connection with the Private Securities Litigation
Reform Act of 1995 introduced in the United States of America. This
announcement may contain forward-looking statements within the
meaning of the US federal securities laws. These statements are
subject to risks and uncertainties that could cause actual results
to differ materially including adjustments arising from the annual
audit by management and the Company’s independent auditors. For
further information on factors which could impact the Company and
the statements contained herein, please refer to public filings by
the Company with the Securities and Exchange Commission. The
statements in this announcement should be considered in light of
these risks and uncertainties.
1 The Group has changed the description of ‘net sales’ to
‘revenue less pass-through costs’ based on the adoption of new
accounting standards and recently issued regulatory guidance and
observations. There has been no change in the way that this
measure is calculated
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version on businesswire.com: https://www.businesswire.com/news/home/20180613005516/en/
WPPMark ReadAndrew ScottPaul RichardsonLisa HauChris Wade+44 20
7408 2204orKevin McCormackFran Butera+1 212 632 2235orJuliana
Yeh+852 2280 3790www.wppinvestor.com
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