WPP has reported its Q3 2024 results, touting a modest organic growth of 0.5% off a 1.4% revenue rise to 3.558 billion pounds, or a 4.1% increase in like-for-like terms. Year to date, WPP's revenues are sitting at 10.784 billion pounds, marking a 0.5% increase year-on-year.

In Q3, the multinational communications, advertising, public relations, technology, and commerce holding company reported like-for-like revenue was up by 4.1%, while less pass-through costs saw a slight increase of 0.5%. Across the regions, North America experienced a growth of 1.7%, Western Continental Europe saw a 2.2% increase, while the UK remained flat. This was partially offset by a 2.2% decline in the Rest of the World, reflecting a continued decline in China (-21.3%).

"Our third quarter delivered like-for-like growth in net sales, with a strong performance from GroupM in particular. We saw growth in North America, Western Continental Europe and India, though trading in China remains difficult," said Mark Read, Chief Executive Officer of WPP.

WPP's top 10 clients grew by 7.0% in Q3, with the Consumer Packaged Goods (CPG), automotive, travel & leisure, and financial services sectors performing well in the quarter. The technology client sector also showed stability, with a growth of 1.3% in Q3 versus -5.1% in H1 2024. However, the healthcare and retail sectors continued to be impacted by 2023 client losses.

"Most importantly, we returned to form in new business, winning Amazon's media account outside the Americas and securing our media relationship with Unilever, including taking back the retail media and activation business in the United States. Our success with two of the world's top ten advertisers demonstrates the renewed competitiveness of our offer. We are also proud to be supporting the new Starbucks leadership team with our recent creative win in the United States," Read added.

WPP also launched new products, capabilities, and solutions within WPP Open, its AI-powered marketing operating system. Q3 net new billings were $1.5bn (Q3 2023: $1.4bn), with year-to-date at $3.2bn (YTD 2023: $3.4bn).

"Our people are increasingly embedding AI in the way that we work and deliver creative and media campaigns to clients, with usage of WPP Open up 107% since the beginning of the year. Supporting this, the creation of VML and Burson, and the simplification of GroupM, are delivering a stronger business and structural cost savings," Read commented.

Despite the progress made in the quarter, WPP's full-year growth guidance remains at organic growth of -1% to 0%, implying a continuation of flat trends. The agency giant blamed the impact of recent new business wins primarily affecting 2025 and ongoing macroeconomic pressures.

"We are encouraged by progress during the quarter, but with recent new business wins primarily impacting 2025 and continuing macroeconomic pressures our expectations for the full year remain unchanged," concluded Read.

In a Madison and Wall note, the firm noted WPP's ross revenue growth was up more significantly with a 4.1% like-for-like gain, indicating that pass-through-related activities (not only principal based trading such as with the former Xaxis, now Nexus, but also some event and production activity) was a supporting factor in the outcome.

Concurrently, results were heavily impacted by an improvement at GroupM, which saw 4.8% organic growth in net sales, and offset by continuing declines at the company's creative businesses, which declined -3.1% on this basis. Other businesses represent only 18% of the company's total net revenue base and don't impact overall trends by much, but their net sales were collectively up very slightly (Public Relations was 0.2% and Specialist Agencies grew 0.8%).

Looking forward, WPP's full year growth guidance was reiterated, with organic growth of -1% to 0%, implying a continuation of flattish trends) with a slight improvement in operating profit margins.

"With these results, we now have global and regional growth trends for the four biggest agency groups during 3Q24. Taking the as-reported headline growth rates from WPP, Publicis, Omnicom and Interpublic, we can calculate 3.5% organic growth globally, which represents a sixth consecutive quarter of improvement for the group," Madison and Wall stated.

"However, because Omnicom does not report net revenue or net revenue organic growth and because they book so much principal-based activity as gross revenue, we can be almost certain that the correct organic growth rate is lower. For example, if Omnicom's actual net revenue organic growth rate was 3.5% rather than the as-reported 6.5% gross revenue organic growth rate, the four biggest agencies' quarterly growth rate would collectively be 2.7%.

"Either way, the figure is still 'around' 3%, but nonetheless the following regional growth rates (using net revenue for WPP, Publicis and Interpublic but gross revenue for Omnicom) need to be interpreted with some caution. Moreover, with Havas posting a global organic revenue decline of -2.3% for the quarter and Dentsu likely also negative, any total including the six biggest integrated agency holding companies would be slightly weaker as well.

With that noted, Madison and Wall calculated like-for-like revenue growth in North America was up 3.6%, Europe 2.9%, APAC 0.6% and Latin America 10.3%.

"More specifically, we can also point out that the US was up by 3.4% (implying Canada was probably closer to a 4% growth rate) while the UK was down -0.6%. European growth during 3Q24 benefitted from relative strength in Germany, France and Spain," the firm added.