WPP sees 2009 pre-tax profit fall by 16%
WPP, owner of agencies including Grey, Ogilvy and JWT, has reported its 2009 pre-tax profits fell 16% to £812m last year, with the economic downturn contiributing to a “brutal” year for the business.
The agency network giant says like-for-like revenues fell 8% as Sir Martin Sorrell’s marketing services company tried its best to weather the recession.
In total, earnings before interest, tax, depreciation and amortisation fell 3.7% to £1.2bn in a year the company described as a “game of two halves”.
The agency network was forced to cut 14,000 jobs globally – 12.3% of its workforce – during the recession. In its results, it reported revenue of £8.68bn and a full-year margin of 11.7%.
“We seem to have moved from staring into the abyss post the Lehman Brothers crisis, to a ’less worse’ phase in the second half of 2009 and a stabilisation phase towards the end of 2009 and the beginning of 2010,” the company says.
Like-for-like revenue in the UK fell by 6% year on year, western continental Europe dropped by 10.2% and North America declined by 8%. Asia Pacific, Latin America, the Middle East and central and eastern Europe saw a 6.8% like-for-like revenue fall.
However, WPP said that the market has become more stable in 2010 with like-for-like revenues in January flat.
“Although this return to stability seems widespread both geographically and functionally, there is no marked growth as yet, even against weak comparatives,” the company adds.
WPP claims that solid growth in new media and the application of technology in the form of internet, PC, mobile, video content, search and social networks, has seen 27% of group revenues come through digital marketing.
Sir Martin Sorrell (pictured), told the BBC that last year he had been “staring into the abyss”, but the corner had now been turned.
Growth is expected to continue to come from the so-called Bric countries – Brazil, Russia, India and China and big events like the Winter Olympic Games in Vancouver, the Asian games in Guangzhou, China and the FIFA World Cup in South Africa will help to bolster its revenue in 2010.
