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WPP Reports 2020 Decline
WPP has reported a 9.3% fall in revenue to £12bn in 2020 from £13.2bn the previous year, while turning a 2019 profit of £1.3bn into a 2020 loss of £2.3bn. Despite this, the group says it has cut debt to its lowest level in sixteen years.
 In the final quarter of the year, like-for-like revenue less pass-through costs was down 6.2% in the US, 7.4% in the UK, 0.8% in Germany, 8.9% in India, and 12.1% in Greater China. For the year as a whole, the figure fell 8.2%.
Net debt on 31st December 2020 was £0.7bn, which the firm said was better than expected and down £0.8bn year-on-year.
The company is also resuming its previously suspended plan to buy back £620m of shares from investors in Kantar, of which 60% was sold to private equity firm Bain Capital in 2019 for £3.2bn. Up to £300m of this buy-back will occur during the next three months.
The group made cost cuts last year including reducing travel expenses by almost 60%, property by 5%, and staff costs by 7.9%; and says travel costs could be reduced by up to another 40% with staff now hosting virtual client meetings. Total headcount was down by more than 6,000 to just under 100,000.
In an investors' call, CEO Mark Read (pictured) said it has been exactly one year to the day since everyone at WPP was asked to work from home, if they weren't working from home already. He added: 'We entered 2021 in a good place. Despite our net sales being down 2.2%, we saw a 1.4% decline in our operating margin, and very pleasingly, our net debt ended the year £700m, the lowest since 2004. So, we've made a lot of progress during the year'.
Web site: www.wpp.com .
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