WPP posts worst annual sales since financial crisis

'2017 for us was not a pretty year,' said chief executive Martin Sorrell

Demand was particularly sluggish across North America (PA)

WPP has posted its worst set of earnings since the financial crisis, hit by a slump in spending from some of the largest consumer groups as well as fiercer competition.

The world's biggest advertising company on Thursday said that net sales had slipped by 0.9 per cent last year and that it now expects no sales growth at all in 2018.

According to Thomson Reuters, analysts had expected flat sales for the last year.

The company said that in 2017, demand was particularly sluggish across its North American business. Britain was one of its strongest regions.

WPP has been bruised by companies like Unilever trimming their advertising spend amid tough market conditions. But some of WPP's competitors, like Omnicom and IPG, have struck a more optimistic note for the year ahead.

“2017 for us was not a pretty year, with flat like-for-like, top-line growth, and operating margins and operating profits also flat, or up marginally,” chief executive Sir Martin Sorrell said, commenting on Thursday's results.

As well as tighter advertising budgets, he cited “the impact of technological disruption” for the lacklustre earnings.

"In this environment, the most successful agency groups will be those who offer simplicity and flexibility of structure to deliver efficient, effective solutions – and therefore growth – for their clients,” he said. Based on that, he added that WPP was working on “simplifying” the structure of many of its operations.

WPP currently employs around 200,000 people across more than 100 countries. The group said that, in order to save costs, it would now seek to align digital systems, platforms and capabilities.

Additional reporting by newswires