WPP has slashed its full-year growth forecast for revenues and net sales to between zero and 1%, as clients cut their marketing budgets. For the second quarter, like-for-like revenue in the Data Investment Management (DIM) division fell 4.6% to £669m.
Q2 DIM revenue across Western Continental Europe, Asia Pacific and Africa and the Middle East, declined from the first quarter, while North America, the UK and Latin America saw growth. Like-for-like net sales were down 2.8% compared with -0.8% in the first quarter, with all regions, except Latin America slowing. DIM aside, there was constant currency group revenue growth in all regions and business sectors.
Overall for the group, on a like-for-like basis, second quarter revenue was down 0.3%. Reported revenue was up 13.3%, with 2.2% from acquisitions and 11.4% from currency, which WPP says primarily reflected the weakness of sterling against the US dollar, the euro and other major currencies. Like-for-like reported net sales were down 0.5% to £6.3bn, or up 13.7% on a reported basis: 2.7% from acquisitions and 11.5% from currency. Reported headline EBITDA was up 14.2%, crossing £1 billion for the first time in a half-year, with constant currency growth up 1.7%, and reported headline operating costs up 14.0%.
Previously, CEO Sir Martin Sorrell (pictured) had forecast that WPP would see growth of 3% during the year, but cut this to 2% in March to reflect 'tepid economic growth' and weak new business trends. In a statement, WPP said that following the pressure on client spending in the second quarter, particularly in the FMCG / packaged goods sector, the full-year revised forecast has been revised down further, with both like-for-like revenue and net sales forecast to be between zero and 1.0% growth. In a press briefing, Sorrell said there were no major job cuts planned imminently, explaining that the 1,400 staff losses which took place in the first half of the year, were mainly due to 'IT transformation'. 'We are controlling our headcount reasonably well,' he added.
Web site: www.wpp.com .