By Paul Sandle
LONDON (Reuters) -British ad group WPP returned to growth with a better-than-expected 0.5% rise in organic revenue in the third quarter, during which it won business from Amazon, Unilever and Henkel.
The market had expected a 0.2% decline and the beat sent WPP’s shares up by as much as 5% to a four-month high. In the first-half year it had reported a 1% drop in organic revenue.
Chief Executive Mark Read said demand from its top 10 clients had strengthened – up 7% in the quarter – and there had been a broad improvement across most clients sectors, including technology, which had weighed on recent quarters.
WPP, which owns media buyer GroupM and creative agencies Ogilvy and VML, had a good quarter in new business after it sharpened its competitive edge, Read said.
“We won Amazon’s media account outside the Americas with a pitch built around WPP Open and led by a team drawn from across GroupM and WPP, leveraging our unmatched global footprint,” he said. “It’s the world’s largest advertiser, so a very important win for us.”
Geographically, growth in North America, continental Europe and India was partly offset by tough trading in China.
The Chinese consumer was not feeling confident, he said.
“In the short term, trading remains difficult, and that particularly impacts WPP, where we work with a number of luxury, automotive and fast-moving consumer goods companies, three sectors that are under some macro and competitive pressures,” he said, referring to the Chinese market.
The outlook for the U.S consumer was mixed, with pressure persisting at the lower end, he added.
“Companies that have pushed too hard on price have found the market a little bit more difficult,” he said.
Despite the stronger-than-expected quarter, WPP stuck to guidance for organic revenue to be between 1% lower and flat for the full year.
(Reporting by Paul Sandle; editing by Sarah Young and Jane Merriman)
