WPP’s 2021 interim results reveal strong first-half and return to pre-pandemic levels ahead of forecast

WPP has released its 2021 interim results which report a strong first-half across the business, returning to pre-pandemic levels a year ahead of forecasts.

The company’s results showed its like-for-like revenue up 16.1%  in the past six months and 26.4% for the three months up to 30 June, with the company planning a £350 million (A$658 million) buyback in H2.

Revenue in the first half was £6.1 billion (A$11.4 billion), up 9.8% from £5.6 billion (A$10.5 billion) in the first half of 2020, and up 16.1% like-for-like. Revenue less pass-through costs was £4.9 billion (A$9.2 billion), up 5% from £4.7 billion (A$8.8 billion) in the first half of 2020, and up 11% like-for-like.

Reported billings were £23.4 billion (A$45. 9 billion), up 12.2%, and up 19.3% like-for-like. Reported revenue from continuing operations was up 9.8% at £6.1 billion (A$11.4 billion).

Revenue on a constant currency basis was up 15.8% compared with last year. Net changes from acquisitions and disposals had a negative impact of 0.3% on growth, leading to a like-for-like performance, excluding the impact of currency and acquisitions, of 16.1%.

By region, the UK was among the strongest performer, up 31.8% in Q2 and 16.9% in H1. North America was up 13.7% in Q2 and 7.5% in H1; Western Continental Europe was up 27.1% in Q2 and 15% in H1; and the rest of the world, including Asia-Pacific, was up 16.1% in Q2 and 10.5% in H1.

Source: WPP [click to enlarge]

Shifting business mix: growth areas of experience, commerce and technology represented 26% of revenue less pass-through costs in H1.

The Group incurred exceptional items of £107 million (A$201 million) in the first half of 2021, mainly relating to restructuring and transformation costs and the amortisation and impairment of acquired intangibles, partially offset by the Group’s share of gains in relation to a disposal made by Kantar.

This compares with a net exceptional loss in the first half of 2020 of £3.1 billion (A$5.8 billion), which included impairments of £2.8 billion (A$5.8 billion)

Organic growth (defined as like-for-like revenue less pass-through costs growth) of 9-10% (previously mid-single-digits %) are returning to 2019 levels a year ahead of the company’s predictions.

Mark Read, chief executive officer, WPP said of the results: “I’m delighted with our performance in the first six months of the year, at a time when COVID continues to take a toll on many countries. The like-for-like revenue less pass-through costs growth rate of 19.3% in the second quarter is our highest on record, as clients reinvest in marketing, particularly in digital media, ecommerce and marketing technology.

“We’ve also made very good strategic progress. Our recognition as the most awarded company at the 2021 Cannes Lions Festival reflects our investment in creative talent and the strength of our creative work over the past two years. Our focus on data, commerce and technology, through strategic acquisitions, organic investments and the launch of Choreograph, has supported a strong new business performance,” Read said.

Key assignment wins for the company include AstraZeneca, Bumble, JP Morgan Chase and Pernod Ricard.

WPP now expects to do better than expected, with the like-for-like revenue less pass-through up costs growth to be 9-10%, with headline operating margin towards the upper end of the 13.5-14% range.

“We have returned to 2019 levels in 2021, a year ahead of our plan, with good momentum into 2022. In procurement, property and shared services, we are making strong progress as part of our overall transformation programme. We have significantly increased our incentive pools in the first half, to reflect the tremendous contribution of our people in these challenging times, and in line with our intention to reinvest in talent announced at our Capital Markets Day in December 2020.

“We expect our strategy to translate into benefits for all of our stakeholders: a powerful, modern offer to support our clients’ growth; a great place for our people to work; a positive contribution to communities and the environment; and good financial returns for shareholders, with the interim dividend raised 25% and £600 million of share buybacks planned in 2021,” Read concluded.

In Q1 2021, WPP reported a 1.8% increase in revenue for the three months to 31 March, compared to the corresponding period in 2020. The group recorded a quarterly revenue of  £2.897 billion (US$4.039 billion).


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.