WPP India’s revenue drops 1.4% YoY in Q1 due to macroeconomic uncertainty

Apart from India, the other countries included in the top five markets for WPP are- USA (+2.3%), UK (+7.4%), Germany (+4.0%) and China (-13.0%)

WPP has released its quarterly revenue report for the period of January-March 2023. As per the report, WPP India registered a decline of 1.4% in Like-for-Like (LFL) revenue due to macroeconomic uncertainty faced at the beginning of the quarter, as phased against the comparative quarter (Q1 2022) which saw growth of 25.1%.

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The report further said that declines in India, China, and Brazil were partially offset by growth in Japan, Australia and smaller markets.

Globally, the advertising network saw revenue of 3,460 million pounds in Q1 of 2023, reporting an 11.9% YoY increase. LFL revenue rose by 4.9% in the January-March quarter compared to the same period in the previous year. WPP won net new business of $1.5 billion including from Adobe, Ford, Maruti Suzuki, Mondelēz and Swissport.

The report further said that GroupM, media planning and buying business, performed strongly, reflecting
its global scale and the strength of its integrated digital and offline offer.

The group is also invested organically to accelerate its data and technology capabilities. They believe that AI will be fundamental to WPP’s business and are excited by its transformational potential. There are many applications of AI today in the work we do for clients, particularly in GroupM, their media planning and buying business, and in Hogarth, their creative production business. They are using AI to automate workflows, speed the process of ideation and concepting, and produce innovative creative work for clients, such as its work for Cadbury’s in India which used AI to allow Bollywood superstar Shah Rukh Kahn to produce personalised ads for local businesses.

Speaking about the quarter performance, Mark Read, Chief Executive Officer of WPP, said, "We have seen a positive start to the year, in line with expectations, reflecting continued spending by clients in communications, customer experience, commerce, data and technology to support their businesses and brands. We are continuing to strengthen the company – winning new clients, hiring new creative leadership, investing in our technology platforms and data, making three acquisitions in the growth areas of healthcare and influencer marketing and bringing in a minority partner to FGS Global. Our focus on AI over the last five years is paying off, with many examples of our work with clients, using the main AI platforms, in-market today. We remain on track to deliver our full year guidance, thanks to the competitiveness of our offer and our role as a modern, trusted partner to clients in a world further disrupted by technology.”

Sharing their outlook for the future, WPP report said:
-WPP anticipates mergers and acquisitions will add 0.5-1.0% to revenue less pass-through costs growth
-Headline income from associates is expected to be around £40 million
-Effective tax rate (measured as headline tax as a % of headline profit before tax) of around 27.0%
-Capex £300 million
-Restructuring costs of around £180 million
-Trade working capital expected to be broadly flat year-on-year with operational improvement offsetting increased client focus on cash management
-Average net debt/EBITDA within the range of 1.5x-1.75x