WPP records UK growth, but continues to struggle in the US
WPP's struggles in its largest market have continued into the second quarter of the year, with the company reporting a 5.4% decline in North American like-for-like net sales.
The drop follows a 8.5% plunge during the first quarter, which WPP attributed to a loss of clients in the automotive, pharmaceutical and FMCG sectors.
Overall, the ad network's net sales (also known as revenue less pass-through costs) were down 2% during the first half of 2019 to £6.1bn. However, the rate of decline slowed during the second quarter, with net sales down 1.4% in Q2 compared to a 2.8% drop in Q1.
Elsewhere, the UK market has returned to growth, up 1.3% in Q2 after tumbling 0.9% in Q1.
As such, WPP has not changed its outlook for the year, continuing to forecast a drop in like-for-like net sales of between 1.5% and 2%.
“WPP’s performance in the second quarter was slightly ahead of our internal expectations but in line with our full-year guidance and three-year strategic targets," said Mark Read, CEO of WPP.
"Clients are responding well to our new offer, as evidenced by recent wins and expanded assignments including from eBay, Instagram and L’Oréal. An encouraging number of our businesses and markets are achieving good growth."
However, WPP is still in the "early stages" of its three-year turnaround plan, Read added, which includes an ongoing programme of investment with focus on the US, and further simplifying the organisation through disposals.
The network has agreed to sell 60% of its data and insights consultancy, Kantar, to private equity firm Bain Capital in July. The balance of the proceeds - approximately $1.2 billion - is to be returned to shareholders.
Meanwhile, headline profit before tax was down 18.4% to £605m during the first six months of the year.