Ad group WPP beats expectations as growth rebounds to pre-pandemic levels

  • The British group on Thursday upgraded its full-year outlook to growth of 9-10%, with a headline operating margin towards the upper end of the 13.5%-14.0% range.
  • Shares in the ad group are up 58% in the last year.

WPP, the world's biggest advertising company, said underlying net sales jumped 19.3% in the second quarter, beating expectations and taking first-half growth to 11%, ahead of 2019 as clients ramped up spending in the Covid recovery.

Chief Executive Mark Read said the second-quarter growth was its highest on record, as clients reinvested in marketing, particularly in digital media, e-commerce and technology.

It meant WPP had bounced back to 2019 levels a year ahead of its forecasts.

"Clients are seeing a strong economic outlook for the second half of the year and into next year, and they're choosing to invest in their brands," he said in an interview on Thursday.

"They're shifting a lot of money into digital media," he said. "We're seeing continued growth in public relations and public affairs given the importance of employee communications and corporate reputation."

The British group on Thursday upgraded its full-year outlook to growth of 9-10%, with a headline operating margin towards the upper end of the 13.5%-14.0% range.

Shares in the British group are up 58% in the last year, helped by a surge in demand from clients launching new products and brands to consumers in advanced economies who are willing to spend again on items such as luxury goods and domestic holidays.

Its strong performance mirrors that of its peers, with Omnicom, IPG and France's Publicis all beating quarterly forecasts in July.

The recovery at WPP, the owner of the Ogilvy, Grey and GroupM, comes after Chief Executive Mark Read sought to better combine the group's digital and data capabilities with its creative work, a new approach that had been demanded by clients.

The pandemic has also enabled it to win work to help companies build e-commerce and digital offerings when traditional commerce routes shut suddenly.

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