WPP Results Reveal Burson Decline FGS Continues Growth

(MENAFN- PRovoke) LONDON - The loss of the Pfizer account in 2023 continues to impact revenue at Burson, according to WPP's Q3 trading update, while FGS Global – recently acquired by KKR – continues to grow.

Overall, WPP's PR division – which represented 10% of overall group revenue –grew by 0.5% on a like-for-like basis in Q3 (or 0.2% excluding pass-through costs), following like-for-like growth in Q2 of 1.5% .

During the quarter, Burson – which opened for business in June this year
after the
merger of BCW and Hill & Knowlton – declined by mid-single digits as the business continued to be impacted by the loss of Pfizer business in 2023 and the“impact of macroeconomic uncertainty on some areas of client spending”.

WPP added that Burson“continued to strengthen and broaden its PR offer” three months into the merger, and delivered“new client assignment wins” at Google, Honor and ViiV Healthcare, with multiple SABRE award wins in APAC and LatAm highlighted in the investor presentation.

The agency has also launched more AI tools, including Decipher Health, an extension of BCW's Decipher product launched in 2023.

This revenue loss was offset by“continued strong growth” at FGS Global, according to WPP's statement. The group also confirmed that the planned sale of FGS Global to KKR for $775 million – valuing the firm at $1.7 billion – is now expected to close in Q4 this year, rather than by the end of the third quarter as initially announced in August.

In WPP's other divisions, Global Integrated Agencies recorded 0.5% like-for-like revenue growth, with media planning and buying business GroupM seeing a 4.8% increase, offset by a 3.1% revenue decline from other integrated creative agencies – including Ogilvy and Hogarth – in Q3.

In terms of geography, UK sales were flat in Q3, and down 1.8% on the year to date, while China declined by 21.3%. There was slightly better news elsewhere, with growth of 1.7% in North America and 2.2% in Western Continental Europe.

Sector-wise, WPP said CPG, automotive, travel & leisure and financial services clients grew in the quarter, while the technology sector was stabilising, with growth of 1.3% in Q3 compared with a drop of 5.1% in the first half of the year 2024. Healthcare and retail, however, continued to be impacted by 2023 client losses, including Pfizer.

Chief executive Mark Read said:“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.

“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 10 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.

“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 per cent 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.

“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.”

In October, WPP announced a global technology partnership with
gaming platform Roblox, which it said would“scale expertise among agency teams and brands in leveraging Roblox as a new media channel.”

The holding company also recently acquired independent creative agency New Commercial Arts, whose clients include Sainsbury's, Vodafone, Nando's, MoneySuperMarket and Paramount+.

WPP said its full year guidance was unchanged: the group expects
like-for-like revenue excluding pass-through costs of between -1% and 0%, with operating margins expected to grow by 20 to 40 points.

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