WPP posts 12.7% revenue growth in 2022; flags ‘continued need’ for brand-building from companies
Global advertising group WPP has seen “strong performance” in its latest financial results, posting a 12.7% increase in revenue from the previous period to £14.4 billion (A$25.4 billion) for 2022.
The holding company joined its global competitors Dentsu, Interpublic Group, Publicis Groupe and Omnicom Group, who have all seen varying degrees of organic growth in the latest full-year reports despite words about brands reining in marketing spending.
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WPP’s reported profit after tax for the financial year was £0.8 billion (A$1.4 billion), compared to £0.7 billion (A$1.2 billion) in 2021. The company proposed a final dividend of 24.4 pence (AU 43 cents), bringing the year’s total dividend to 39.4 pence (69.5 cents).
Like-for-like (LFL) revenue less pass-through cost had a 3.3% growth in Australia for the full year.
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The group’s CEO, Mark Read, said the growth reflected the priority its clients put on communications, customer experience, commerce data and technology despite “the macro challenges”.
“Our adjusted net debt has declined from over £4 billion at the end of 2018 to £2.5 billion (A$4.4 billion), while over £3.4 billion (A$6 billion) has been returned to shareholders via share buybacks and dividends,” he said.
“We enter 2023 in a strong financial position with good momentum from new business and the many opportunities ahead of us.
“While there will no doubt be challenges, the continued need for major companies to build brands, sell products, reinvent and transform their business, understand their data, invest in technology and exploit the potential of AI remains, as does their need for modern partners who can help them navigate this new world.”
The report said client demand was especially strong in commerce services and commerce media. The segment of Global Integrated Agencies (including Ogilvy and GroupM) brought in £12.1 billion (A$21.3 billion) of revenue in 2022, an 11.9% increase compared to 2021.
The Public Relations segment saw the strongest growth with a 28.9% increase in revenue to £1.2 billion (A$2.1 billion) for the year, while Specialist Agencies was up 6.1% to £1 billion (A$1.7 billion).
By sector, clients in the technology, healthcare and pharma and consumer packaged goods sectors represented 55% of WPP’s revenue less pass-through costs for designated clients.
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