WPP records £3 billion pretax loss on ravages of the pandemic
Global advertising behemoth WPP has recorded a £2.79 billion, approximately €3.25 billion, pretax loss for the year to December 2020 as the global effects of COVID-19 continues to be felt across sectors with companies cutting spending on marketing and advertising.
The decline was a contrast to a €1.4 billion profit the advertising giant recorded in 2019. Revenue also fell by 9 per cent to €14billion.
Mark Read, CEO, WPP: “2020 was a tough year for everyone, including our people who faced the personal and professional challenges of COVID-19. Their commitment to our clients, support for one another and contribution to the communities we serve have been a constant source of inspiration and pride.
WPP’s performance has been remarkably resilient, thanks to these efforts and the demonstrable value of what we do for our clients. While revenue was significantly impacted as clients reduced spending, our performance exceeded our own expectations and those of the market throughout the year. There is no doubt that the actions we took during the previous two years to transform and simplify the business and reduce debt – to a 16-year low at the end of 2020 – played a crucial role in the strength of our response.”
The company had last year announced a raft of measures to insulate itself from the vagaries of the pandemic including voluntary salary sacrifices from its top management, delaying pay rises, freezing recruitment, cancelling discretionary costs and reviewing spending on freelancers.
Mark Read: “At the height of the pandemic we saw five years’ worth of innovation in five weeks, with a dramatic shift to digital media and ecommerce as people’s lives went online – trends on which we based our vision for WPP. Having modernised our client offer, refined our structure and strengthened our agency brands, we were well prepared for this shift and saw the benefits of this acceleration in parts of our business. Our strategic progress was also evident in our very strong new business performance, with key wins including Alibaba, HSBC, Intel, Uber and Unilever.”
WPP is optimistic of a positive outlook as businesses resume operations.
Mark Read: “In December 2020, we outlined our plans to continue to transform our business, to accelerate our growth and to put purpose at the heart of what we do. We see many areas of attractive growth for WPP, from the permanent shift to ecommerce, the digitisation of media and the need from our clients to convert brand purpose into action. The past 12 months have demonstrated the importance and impact of communications. The demand from clients for simple, integrated solutions that combine outstanding creativity with sophisticated data and technology capability is only set to grow and, while uncertainties remain around the impact of the vaccine roll-out and economic growth, we continue to expect 2021 to be a year of solid recovery.”