Advertiser WPP unveils slight drop in annual profits
WPP on Friday announced a small drop in the global advertiser's annual net profits as European financial strains offset strong growth in emerging markets, while the company forecast a tough year ahead.
Earnings after tax fell 2.1 percent to £822.7 million ($1.24 billion, 949 million euros) last year compared with the level in 2011, the British firm said in a results statement. Revenues advanced 3.5 percent to £10.37 billion.
WPP said it took a restructuring charge of £93 million in 2012, "the majority of which is to address certain structural issues within businesses primarily in western continental Europe and to balance staffing levels and align staff costs."
The company added: "Although, Mario Draghi, as president of the ECB, has certainly improved the prospects of the eurozone in the last year or so, it seems that, slow or stagnant growth in western continental Europe is likely to continue for some time."
WPP, which owns the Young & Rubicam and Ogilvy advertising agencies among others, noted that "the pattern for 2013 looks very similar to 2012."
It added: "2014 looks a better prospect, however, with the World Cup in Brazil, the Winter Olympics in Sochi and... another United States election -- the mid-term Congressionals.
"The first two events will continue to reposition Brazil and Latin America and Russia and Central and Eastern Europe in the world's mind, just like the Beijing Olympics did for China and Asia and the World Cup did for South Africa and the continent of Africa -- and, possibly, London 2012 did for the UK."
WPP said that the three maxi-quadrennial events of 2012 -- the UEFA football championships in central and eastern Europe, the summer Olympics and Paralympics in London and the US Presidential elections in November did not underpin the advertising industry's growth as much as had been expected.
The London-listed group added that companies had in 2012 decided to switch money from existing budgets to fund such events.
Also last year, the advertiser suffered a major revolt by shareholders who voted in the majority against the company's latest remuneration report.
Shareholders had been angered by the award of a pay package worth almost £6.8 million to WPP's chief executive and founder Martin Sorrell for his work in 2011. A total of 59.53 percent of proxy votes were against the pay report, but the result was non-binding.
© 2013 AFP