WPP Q3 Earnings Call Highlights

Key Points

• WPP’s third-quarter momentum improved: like-for-like revenue less pass-through costs fell 2.1%, while organic revenue rose 0.5%. WPP Media returned to growth at 0.3%, but WPP Creative declined 5.1%, partly due to lower client spending.
• The company reaffirmed its full-year outlook, including a 12%–13% headline operating profit margin and £800 million–£900 million in adjusted operating cash flow before working capital. WPP expects fourth-quarter revenue performance toward the better end of its projected low- to mid-single-digit decline.
• WPP is advancing its Elevate28 turnaround plan: it remains on track for £100 million in 2026 structural savings and expects £250 million in annualized savings by 2027. The company is also reducing debt, pursuing portfolio-asset disposals and plans to reinvest savings in media, data, commerce and Enterprise Solutions.

WPP NYSE: WPP reported improving third-quarter momentum as its media division returned to growth for the first time since 2024, while the advertising group reiterated its full-year guidance and said it remains focused on executing its Elevate28 turnaround plan.

Like-for-like revenue less pass-through costs declined 2.1% in the third quarter, representing a sequential improvement from the prior quarter. Organic revenue growth, a measure WPP said may better support peer comparisons, rose 0.5%. Reported net revenue declined 2%, with M&A and foreign-exchange effects described as negligible.

Chief Executive Officer Cindy Rose said the company was moving toward the “build phase” of its three-year plan, which is intended to return WPP to consistent and sustainable growth. WPP continues to expect to return to growth during 2027.

Media Returns to Growth; Creative Remains Under Pressure

WPP Media grew 0.3% on a like-for-like basis in the third quarter, compared with declines of 8.3% in the first quarter and 2.8% in the second. Chief Financial Officer Joanne Wilson said the result benefited from easier comparisons and some timing effects, though she characterized the timing benefit as not material to the division’s overall performance. She expects that benefit to unwind in the fourth quarter.

Wilson said WPP Media’s improvement reflected new-business wins ramping up, as well as growth from existing clients, particularly in the U.S. However, the net effect of new business remained a drag because the company is still absorbing the impact of prior client losses.

WPP Production posted 2.5% like-for-like growth, accelerating from 1.3% growth in the second quarter. By contrast, WPP Creative declined 5.1%, worsening from a 3.5% decline in the second quarter. Wilson attributed the creative performance principally to lower client spending, partly offset by new-business ramp-ups.

Within WPP Creative, brand and design continued to grow, while public-relations business Burson returned to low- to mid-single-digit growth. Wilson said PR represents about 7% of WPP net sales and noted particularly strong Burson performance in the U.S., despite pressures in the Middle East.

WPP’s Enterprise Solutions business performed slightly better than the overall creative unit, Wilson said. The company plans to begin separately reporting Enterprise Solutions’ like-for-like performance from Jan. 1, 2027.

Regional Trends and Client Wins

North America declined 1.8% and the U.K. fell 0.2%, but both markets improved sequentially. Germany and India returned to growth, while China declined by a high-single-digit percentage. WPP said the year-to-date Chinese trend nevertheless represented stabilization compared with the past two years.

The Middle East, representing just under 2% of WPP’s business, declined about 13% in the quarter. Wilson said the region remains a source of uncertainty heading into the fourth quarter.

Revenue from WPP’s 25 largest clients declined 2.7% on a like-for-like basis, including the effect of particular client losses. Excluding those losses, the client group grew at a low- to mid-single-digit rate, according to Wilson.

Rose highlighted several client wins and retentions during the quarter, including WPP’s renewal of its global relationship with Coca-Cola for media, data, technology and creator marketing in markets where it competed. WPP also retained its role as Coca-Cola’s global creative partner. Rose said WPP did not participate in Coca-Cola’s North American pitch because it chose to focus resources on delivering work it had already won in other markets.

• WPP expanded its global media partnership with DoorDash to more than 40 markets.
• Alphabet’s Waymo appointed WPP as media partner across North America and EMEA.
• Nestlé selected WPP Open | China for its first fully integrated content model in Greater China.
• Godrej Consumer Products consolidated international media operations with WPP Media across several markets.
• The U.K. Electoral Commission named WPP its integrated agency partner for voter communications across Great Britain.

Cost Savings, Asset Sales and Balance Sheet

WPP said it remains on track to deliver £100 million in in-year structural cost savings in 2026 under Elevate28. The company expects annualized savings from actions taken this year to total £250 million in 2027, including a further £150 million next year. WPP has targeted £500 million of structural savings through 2028.

Wilson said the company intends to reinvest savings in growth areas including media, data, commerce and Enterprise Solutions, as well as rebuilding employee incentive pools. She did not specify how much of 2027 savings would be reinvested.

Average adjusted net debt stood at £3.2 billion at Sept. 30 and continued to decline year over year. WPP repaid a €750 million bond that matured in September and said all debt maturities are covered through 2028 following recent issuances. Wilson said approximately 90% of the company’s interest exposure is fixed.

WPP also expects at least £200 million of cash-flow contribution from disposal-related activity this year, including direct disposal proceeds and associate dividends. The company said it is advancing processes to assess potential sales of certain portfolio assets.

Guidance Reaffirmed

WPP reiterated its outlook for like-for-like revenue less pass-through costs to decline by a low- to mid-single-digit percentage in the second half, with fourth-quarter performance expected toward the better end of that range. Wilson said the company still expects a negative, though easing, net-new-business drag in the fourth quarter.

The company maintained guidance for a full-year headline operating profit margin of 12% to 13%. It also continues to expect adjusted operating cash flow before working capital of £800 million to £900 million, or £1 billion to £1.1 billion excluding anticipated restructuring costs tied to Elevate28 and prior programs.

Rose said transformation would take time and that progress may not be linear, but she said client feedback, new-business activity and retention trends support the company’s confidence in its strategy. WPP plans to provide a further strategy update with full-year results in late February.

About WPP (NYSE:WPP)

WPP plc is a global marketing and communications services company headquartered in London. Through its agencies and specialist businesses, the company helps clients develop brands, create advertising campaigns, plan and buy media, manage customer relationships, and use data and technology to support marketing and business transformation.

WPP's businesses provide creative services, media investment, public relations, branding, experience design, commerce, and digital marketing. Its operations include GroupM, a media investment business, as well as a broad network of agencies serving clients across sectors such as consumer goods, technology, financial services, healthcare, automotive, and retail.

The company traces its origins to Wire and Plastic Products, which was established in 1971 and later transformed into a marketing services group through acquisitions and international expansion.

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