WPP reported a return to quarterly organic sales growth for the first time in over a year on Friday, with a new strategy from boss Mark Read helping the world's biggest advertising company to attract talent and win more work.
The British company, which has been hit in recent years by major client losses in North America, said despite the improving trajectory it maintained its cautious 2019 outlook because there would be twists and turns ahead.
The upbeat statement shows WPP has avoided the problems ensnaring French rival Publicis, which spooked markets earlier this month when it cut its sales outlook, and was moving more in the direction of the solidly performing American groups Omnicom and IPG.
Mr Read, a company veteran who took over from founder Martin Sorrell last year, has merged agencies and changed incentive schemes to provide a more streamlined service after clients complained that the owner of Ogilvy, Grey and Finsbury had become too unwieldy.
Results released on Friday showed organic growth less pass-through costs, its key sales measurement, rose 0.7 per cent in the third quarter, an improvement on the first half, when it dropped 2 per cent and against a consensus of down 0.6 per cent.
For the year it reiterated its expectation of a drop of 1.5-2 per cent and a one-point drop in headline operating margin.
WPP's performance has steadily improved through the year as it recovered from the loss of work from clients such as Ford and American Express. It is hiring new staff in the United States to rebuild its creative agencies and says it is merging some operations to provide a more joined-up service for customers.
Net sales in North America dropped 3.2 per cent, an improvement on the 5.9 per cent drop in the second quarter and 8.8 per cent in the third.
The group showed improvement across all regions, helped by contract wins in the quarter, including Mondelez and eBay.
Analysts at Citi said WPP still traded at more than a 20 per cent discount to US peers and the stock had room to recover. – Reuters