British advertiser WPP profits soar in 2010
Marketing giant WPP said Friday that net profits leapt by more than a third in 2010 as the global advertising market recovered in step with the world economy.
Profits after tax jumped 33.9 percent to £586 million (£952 million, 682 million euros) last year from £437.7 million in 2009, WPP said in a results statement. Revenues rose 5.6 percent to £9.33 billion.
"Following a brutal 2009, when the post-Lehman (Brothers) financial world did not come to an end, as some had feared, 2010 was a year of significant recovery," the Dublin-based firm said.
"Clients re-focused on top-line sales growth and expansion, particularly in faster-growth geographic markets, as well as continued cost containment in the slower-growth markets of the United States and Western Europe.
"The recovery from the dark days of 13/14 September 2008 has been remarkable," it added, referring to when US investment bank Lehman Brothers collapsed, sparking the global financial crisis.
WPP owns a number of advertising agencies including Ogilvy & Mather, Young & Rubicam, JWT and also Taylor Nelson Sofres, which it bought in 2008.
"The strong finish to 2010 has continued into 2011, with like-for-like revenues in January 2011 up over eight percent," it said.
"Geographically, we are seeing stronger growth in both Asia and Latin America and with the United States remaining strong."
Profit before tax and excluding exceptional items rose 21 percent last year to £1.23 billion. That beat market expectations for £1.21 billion, Dow Jones Newswires said.
The advertiser was boosted by emerging markets but signalled stubborn concerns about the eurozone debt crisis, the US public finances and the impact of ongoing turmoil in the Middle East and North Africa region.
"Clients seem to be increasingly focused on expansion in the faster-growing markets and cost containment and caution in the West," WPP noted.
"Worries remain around Euro-contagion and the lack of willingness, at least in front of a United States Presidential election in 2012, to tackle United States deficit reduction.
"An additional concern has also developed in recent weeks over developments in Tunisia, Egypt, Bahrain, Libya and the implications for other countries such as Jordan or Saudi Arabia."
WPP said that the Middle East region currently accounts for just 1.7 percent or $300 million of the group's estimated $16 billion of revenues that are forecast by analysts.
© 2011 AFP