WPP Group today reported a 3.5 percent increase in 2012 revenue to $15.6 billion thanks to “strong growth” in advertising, media investment and specialist communications.
Profit before interests and taxes climbed 7 percent to $2.31 billion and the company posted a nearly 3 percent rise in organic growth.
It was a more difficult year for WPP’s public relations and consumer insight operations, whose revenue was flat due to slower growth in mature markets like North America, the U.K. and Western Europe, according to WPP.
The industry’s largest holding company said like-for-like revenue rose more than 2 percent in January, "ahead of budget," and similar to performance in the fourth quarter. For all of 2013, WPP is projecting 3 percent revenue growth.
In 2012, the company experienced solid growth in Asia Pacific, Latin America, Africa and the Middle East. In North America, revenue rose nearly 5 percent while in Western Europe it dropped almost 3 percent. Latin America posted the strongest growth of all subregions, with an 11 percent revenue gain.
WPP said it reached its 2012 targets “but got there ugly” after budgeting for 4 percent growth for the year. That growth was on course with results in the first quarter but then slowed subsequently with WPP making cost adjustments in the third and fourth quarters. With an eye toward margin improvement, the company will continue to focus on improving its staff costs-to-revenue ratio. In 2012, WPP’s gross margin rose 0.6 margin points to 16.1 percent.
The company's biggest concern in 2013 is the U.S. deficit and record level of debt. While marketers are in a solid position, post-Lehman, with stronger balance sheets, profits and share prices, WPP warned investors that its clients remain cautious about the unknowns in America and in the larger global marketplace.