WPP, reported their results over the third quarter and the first nine months of 20009. Third quarter like for like revenue was down 9%
In the third quarter, reported revenues rose by 16.7% to £2.007 billion. Revenues, in constant currencies, were up 6.7%, reflecting both the acquisition of Taylor Nelson Sofres plc (“TNS”) and the weakness of the pound sterling against the US dollar and Euro. Excluding the impact of acquisitions and currency fluctuations, like-for-like revenue growth was down 8.7%, a slight increase on the first half’s decline of 8.3%, but well below the second quarter’s decline of 10.5%.
Like-for-like gross margin, a better measure of competitive performance, was down less at -8.3%. July, August and September all showed “less worse” revenue growth against April, May and June. Clearly, overall conditions are ”less worse,” reflecting no Armageddon and the cycling of easier comparatives.
The geographical pattern of revenue growth varied significantly in the third quarter. There was relative improvement in the United States, with like-for-like growth of -6.1%, compared with -9.4% in the first quarter and -11.3% in the second quarter. There was also some relative improvement in Western Continental Europe and Asia Pacific, but the United Kingdom, the Middle East and Africa and Latin America saw a slight softening compared with the second quarter. Western Continental Europe improved slightly, down 12.5% in the third quarter, compared with -13.0% in quarter two and Asia Pacific also improved, down 10.7% compared with -12.1% in the second quarter. Like-for-like growth in the United Kingdom was down 9.0% and Latin America down 1.2%.
By communications services sector, the pattern of revenue growth also varied significantly, although in a similar way to the first half. All services sectors saw an improvement compared with the second quarter. On a like-for-like basis, branding & identity, healthcare and specialist communications (including direct, internet and interactive) was least affected, with the Group’s healthcare businesses continuing the improvement seen in the second quarter. There was continued pressure on advertising and media investment management in the third quarter, reflecting reductions in clients’ traditional media spending and media deflation, although the Group’s advertising business improved relatively.
Sir Martin Sorell also commented on the result and critisized those that believe the recession is over now that results are flat.
“There are those who think that flat is the new up,” he said, referring to the idea that some observers believe a flat performance in terms of year-on-year ad revenue comparisons to be a good result, given how steep the declines have been over the past year.