2019 first half to be challenging due to headwinds from client losses in 2018, says Mark Read of WPP

Along with announcing 2018 preliminary results of WPP, the company’s CEO Mark Read said that the first half of 2019 will be ‘challenging due to headwinds from client losses in 2018’.

In 2018, Read took a few major actions like merging VML with Y&R and JWT with Wunderman and realigned US healthcare agencies. Read said, “We start the year with fewer clients under review than we did in 2018, and investments in creativity and technology will further improve the competitiveness of our offer.”

Pointing out at the VML&Y&R merger, Read said, “Since five months of VML&Y&R merger, the new entity is showing early signs of success in attracting new business and new talent to WPP. The newly formed VMLY&R, for example, has enjoyed a strong start, with client wins totalling $25 million in its first 90 days.”

The company saw a drop of 1.3% in revenue to $20.6 billion and 8.8% EBITDA decreased to £2.3 billion in 2018.

Putting creativity and technology at the heart of WPP’s transformation phase, Read marked 2019 as the beginning of a three-year turnaround plan. “We are at the beginning of a three-year turnaround plan, but WPP’s new positioning as a creative transformation company with stronger, more integrated, more tech-enabled agencies is already proving effective, having driven several of our recent new business successes,” he said.

Last year, WPP agencies had lost its three major accounts. Mindshare lost American Express’ media account to IPG’s UM, Ford was given away to BBDO and United Airlines moved from Wunderman to Dentsu.

Despite these major shocks, Read said, “ The quality of our creative work has been exceptional, with six WPP spots featuring at this year’s Super Bowl and work such as Grey’s ‘The Best Men Can Be’ for Gillette demonstrating once again the global impact of what we do.”

Throwing some light on the 2018 financial results, Read added, “Through 36 disposals since April 2018, we have strengthened our balance sheet and streamlined our business, raising £849 million of cash proceeds in 2018. Our results for 2018 are at the upper end of the guidance we provided in October, with like-for-like revenue less pass-through costs down 0.4%.”

Read said that WPP’ business is performing strongly in Western Continental Europe, Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe. “Important wins such as Volkswagen in North America reflect our creative strengths, and we are making significant investments in talent in our largest market,” he added.

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