WPP top-line decline eases to 2.8% as media-buying recovers

WPP's Q2 revenue less pass-through costs fell 2.8% like-for-like, beating the 6.3% decline analysts expected as media-buying recovered.

"Q2 saw a further sequential improvement in LFL growth, highlighting the momentum we are building across the company," Cindy Rose, chief executive officer of WPP, said. "Our objective for the first half was to put in place the building blocks of the new organisational structure and this is now complete."

H1 revenue less pass-through costs of £4,745m fell 4.7% LFL, with reported revenue of £6,373m down 4.4%. WPP Media declined 2.8% in Q2, improving from an 8.3% drop in Q1, while WPP Creative fell 3.5% and WPP Production grew 1.3%. Headline operating profit was £398m, a margin of 8.4%, up 0.2 percentage point LFL, helped by lower severance costs and cost savings. Reported operating profit rose 18.1% to £261m, mainly on lower impairment charges.

The London-based advertising group maintained its full-year headline operating margin guidance of 12% to 13% and expects H2 LFL revenue less pass-through costs to decline low to mid-single digits. The board proposed an interim dividend of 7.5p, unchanged from a year earlier, keeping the total annual payout at 15.0p per share.

Elevate28 turnaround

WPP is executing the first phase of its Elevate28 plan to stabilize the business, consolidating from a holding company into four operating units across four regions. The company targets £500m in gross annualized cost savings by 2028, with £100m of in-year savings expected in 2026. First-half new business wins included consolidated mandates for The Estée Lauder Companies, Henkel and Wendy's, alongside retentions including Skechers, Tesco and Huawei.

By geography, North America declined 6.0% in H1, EMEA fell 4.3%, APAC dropped 3.8% and LATAM slipped 1.2%. China returned to growth, up 2.6% in H1 with Q2 rising 15.6%, while the Middle East & Africa fell 9.2% on geopolitical tensions. Adjusted net debt stood at £2,935m at 30 June, down from £3,261m a year earlier. The company expects asset disposal proceeds of over £200m this year as part of its portfolio rationalization.

The improving trajectory suggests the worst of WPP's account losses is passing, though organic growth remains negative. Investors will watch the H2 performance and the pace of cost savings delivery for signs the Elevate28 plan is translating into sustained revenue recovery.

This article is for informational purposes only and does not constitute investment advice.