WPP forecasts lower profit and revenue growth in 2025 citing tough market conditions

WPP has issued a trading update for the first half of 2025, revising its full-year outlook downward as the company faces intensifying macroeconomic pressures and softer-than-expected new business performance.

The global advertising and communications group reported that performance deteriorated through the second quarter, leading to a projected decline in like-for-like (LFL) revenue less pass-through costs of between -4.2% and -4.5% for the first half of the year.

For the second quarter alone, the anticipated decline is deeper, in the range of -5.5% to -6.0%, a result that WPP acknowledged falls below expectations, even when accounting for one-off factors

The company now expects headline operating profit for H1 to come in between £400 million and £425 million, reflecting a year-on-year margin contraction of 280 to 330 basis points, excluding foreign exchange impacts. The reduction is also attributed to severance actions taken within WPP Media as part of broader cost-saving measures.

Looking ahead, WPP has revised its full-year 2025 forecast in response to ongoing economic headwinds and slower client spending. The group now expects LFL revenue less pass-through costs to decline between -3% and -5%, compared to a previously guided range of flat to -2%. Headline operating profit margin is expected to decline by 50 to 175 basis points year-on-year, as the company continues efforts to streamline operations and manage structural costs.

WPP emphasized its commitment to balancing long-term investment in the business with short-term cost discipline in response to a tougher trading environment.

Mark Read, Chief Executive Officer, WPP: “Since the start of the year, we have faced a challenging trading environment with macro pressures intensifying and lower net new business. While we expected the second quarter to be similar to the first quarter, performance in June was worse than anticipated and we expect this pattern of trading in the first half to continue into the second half.

“As a result, we are updating our guidance for the full year and reducing our expectations on LFL revenue less pass-through costs growth to -3% to -5% (from flat to -2%) with a year-on-year decline in headline operating profit margin of 50 to 175 bps (vs. around flat previously).

“Our focus remains on ensuring the right balance between investing in the business for the long-term and continuing to reduce structural costs, while taking appropriate actions to respond to the current trading environment.”

www.wpp.com

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