WPP (LSE:WPP) reiterated its full-year guidance on Thursday, telling investors it still expects a headline operating profit margin of 12% to 13% for 2026 after third-quarter revenue less pass-through costs fell 2.1% on a like-for-like basis.
The London-listed advertising and communications group said the decline marked a sequential improvement from a 2.8% fall in the second quarter. Revenue less pass-through costs from its top 25 clients fell 2.7%, compared with a 3.2% decline in the previous quarter.
Third-quarter revenue rose 0.5% to £3,274m on both a reported and like-for-like basis, while revenue less pass-through costs fell 2.0% reported to £2,411m.
For the nine months to September, reported revenue was down 2.8% to £9,647m, a 1.9% like-for-like decline, while revenue less pass-through costs fell 4.4% reported and 3.9% like-for-like to £7,156m.
Chief executive Cindy Rose said the group was "on track to deliver phase one of Elevate28: stabilising our business performance and laying the foundations for a simpler, more unified WPP," adding that client demand "remains healthy" for its AI-enabled media, creative and production offerings built around its WPP Open platform.
WPP Media returned to growth of 0.3% in the quarter, a reversal from a 2.8% decline in the second quarter, while WPP Production grew 2.5%; WPP Creative continued to decline, down 5.1%, a deterioration from a 3.5% fall in the prior quarter.
All four regions posted declines in the quarter: North America fell 1.8%, EMEA 1.7%, APAC 4.3% and LATAM 1.2%, though North America and EMEA both showed sequential improvement from the second quarter.
APAC's decline was driven by China, which contracted 8.7% in the quarter after growing 15.6% in the second quarter, which the company attributed to timing factors; India returned to growth of 2.9%.
The company secured new business and renewals during the quarter including a renewed global media partnership with The Coca-Cola Company, an expanded relationship with DoorDash, and new assignments with Nestlé, Uber and Waymo.
Average adjusted net debt over the twelve months to 30 September was £3.2bn, down from £3.4bn a year earlier, while adjusted net debt at the period end stood at £3bn, against £3.6bn at the same point last year.
WPP confirmed it still expects like-for-like revenue less pass-through costs to decline by low to mid-single digits in the second half, with the fourth quarter "towards the better end of this range," and reiterated its target for adjusted operating cash flow before working capital of £800m to £900m, or £1bn to £1.1bn excluding anticipated restructuring costs.
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The company also confirmed it continues to target gross run-rate savings of £250m by the end of the year under its Elevate28 restructuring plan, equivalent to around £100m of in-year savings, and still expects disposal-related cash proceeds of at least £200m.
Chief financial officer Joanne Wilson is stepping down but will remain while a successor is appointed. Jon Cook will leave his leadership roles in March 2027, with Tyler Turnbull joining as WPP Creative chief executive in early 2027 and Eric Campbell becoming VML global chief executive in March.
Rose said the third-quarter results showed "further sequential improvement in LFL growth, in line with our expectations," as the group prepares for what it calls the "Build" phase of Elevate28 and targets a return to organic growth during 2027.