WPP reports Â£7.2bn revenue in H1 2023, up 6.9% from Â£6.8bn in H1 2022

WPP has reported resilient performance, even though the second quarter was impacted by lower revenues in the US from technology clients and delays in spend on technology projects. WPP expects 2023 LFL growth of 1.5-3.0%, while margin guidance remains at around 15% at 2022 rates.

H1 and Q2 financial highlights

H1 reported revenue grew +6.9% to £7,221 million, LFL revenue +3.5% (Q2 +2.3%)
H1 revenue less pass-through costs +5.5%, LFL revenue less pass-through costs +2.0% (Q2 +1.3%)
In Q2, ex-US growth accelerated to mid-single digits, with China growing albeit less strongly than expected. North America declined in Q2, primarily due to lower revenues from technology clients
H1 headline operating profit margin 11.5%, down 0.1pt, and on a constant FX basis improved by 0.1pt. Efficiency benefits offset by investment in IT and higher severance costs
Trade working capital favourable movement of £165m year-on-year. Non-trade working capital adverse movement of £316m
Adjusted net debt at 30 June 2023 £3.5bn, up £0.3bn year-on-year, £0.4bn lower than Q1 2023. Expect year end net debt to be flat year-on-year

Mark Read, Chief Executive Officer, WPP, remarked, “Our performance in the first half has been resilient with Q2 growth accelerating in all regions except the USA, which was impacted in the second quarter by lower spending from technology clients and some delays in technology-related projects. This was felt primarily in our integrated creative agencies. China returned to growth in the second quarter albeit more slowly than expected. In the near term, we expect the pattern of activity in the first half to continue into the second half of the year.”

Commenting on the road ahead, Read said, “We have exciting future plans in AI that build on our acquisition of Satalia in 2021 and our use of AI across WPP. We are leveraging our efforts with partnerships with the leading players including Adobe, Google, IBM, Microsoft, Nvidia and OpenAI. We are delivering work powered by AI for many clients including Nestlé, Nike and MondelÄ“z. AI will be fundamental to WPP’s future success and we are committed to embracing it to drive long term growth and value.”