LONDON: Client wins with Uber, Alibaba and HSBC helped the world's biggest advertising company WPP deliver an improvement in third-quarter underlying trading, particularly in Britain and the United States.
The British owner of the Ogilvy, Grey and GroupM agencies, already rebuilding after several years of tech-led turmoil in the ad industry, is now recovering from the abrupt cancellation of spending by companies desperate to save cash in the pandemic.
While businesses in consumer packaged goods, pharmaceuticals and technology have increased their spending, those in the automotive and luxury sectors are stabilising, while travel and leisure industries remain weak.
Overall, underlying net sales fell by 7.6per cent in the three months to the end of September, an improvement on the 15.1per cent drop in the previous three months, and WPP said it remained on track to cut costs and hit its downgraded outlook.
"Given the tightening of COVID restrictions around the world and uncertainty in the global economic outlook, we remain cautious about the pace of recovery," Chief Executive Mark Read said on Thursday.
WPP secured US$1.6 billion of new business and said late on Wednesday it had extended its ties with Walgreens Boots Alliance, one of the biggest pitches of the year.
Citi analysts said the improvement was all the more impressive because, unlike peers Publicis, Omnicom and IPG, WPP has a lower exposure to the United States and has also not benefited from buying assets of late.
Underlying net sales were down by 5.1per cent in North America, compared with a 10.2per cent drop in the second quarter, and down 6.5per cent in Britain, after a 23.3per cent plunge in the previous quarter.
As a result, the company expects to deliver a full-year result within analyst forecasts of a drop between 8.5per cent and 10.7per cent in like-for-like net sales, with a midpoint of down 9.6per cent. That compares with a range midpoint given in August of down 10.75per cent.
Analysts said the results were ahead of expectations, but traders said the shares fell to a month low, down 3.5per cent, on the cautious outlook.
(Reporting by Kate Holton; editing by Sarah Young and Mark Potter)