* 2012 organic revenues up 2.9 pct vs forecast 2.6 pct
* Says January growth of 2 pct ahead of budget
* CEO says more confident on outlook than 6 months ago
* 2013 guidance for revenue growth nudged up to 3 pct
By Lorraine Turner
LONDON, March 1 WPP, the world's biggest
advertising company, reported a stronger-than-expected rebound
in revenue growth at the end of 2012 and nudged up its forecast
for this year, citing signs of improving business confidence.
The British firm, a barometer of business sentiment whose
clients include Microsoft, Procter & Gamble and Shell, said on
Friday many of the economic worries raised by companies last
year, including a debt crisis in the euro zone and a potential
sharp slowdown in growth in China, appeared to be easing.
"The euro zone looks a little a bit better ... China seems
to be motoring again, India (had a) good budget this morning,"
chief executive Martin Sorrell said.
"When you pull all that together, there's probably a little
bit more confidence than last year and that may compensate ...
for the lack of big events," he added, comparing a relatively
quiet calendar in 2013 with last year's Olympic Games, U.S.
presidential elections and European soccer championships.
WPP, home to agencies including Ogilvy & Mather and Young &
Rubicam, said organic revenues, which exclude acquisitions, rose
2.5 percent at constant exchange rates in the fourth quarter of
2012, helped by an improvement in all regions except North
America and up from 1.9 in the third quarter.
That lifted revenue growth for the full year to 2.9 percent,
beating analysts' expectations of 2.6 percent.
A strong end to the year echoed the performances of rivals
Omnicom and Publicis, which noted an
improvement in emerging markets and the United States and were
cautiously optimistic on the outlook for 2013.
WPP, which operates in 110 countries across the world,
said the encouraging end to 2012 had continued into January,
with revenues up 2 percent, ahead of the group's budget.
"I probably feel a little bit better about the business,
than I certainly did 3, 6, or 9 months ago," said Sorrell.
The group nudged up its organic revenue growth forecast for
this year to 3 percent, after previously guiding towards 2-3
percent, though it predicted a "demanding" year due to the lack
of major events and uncertainty over the U.S. budget deficit.
All eyes will turn to 2014 for better prospects with the
soccer World Cup in Brazil and the Winter Olympics.
WPP posted headline 2012 pretax profit of 1.3 billion pounds
($1.97 billion) on revenue of 10.4 billion, up 3.5 percent. It
raised its dividend 16 percent to 28.5 pence a share.
"Lots to like about WPP results this morning with 2013
guidance raised, January tracking ahead of budget, and the
dividend payout ratio lifted," said analysts at Jefferies.
WPP's headline operating margin rose 0.5 points to 14.8
percent, in line with expectations, and the firm noted several
big contract wins in the pharmaceutical and healthcare industry.
Shares in WPP were flat at 1050 GMT, just ahead of a 0.3
percent decline in Britain's benchmark FTSE 100 index.
WPP said a decline in organic revenues in continental Europe
eased in the final quarter of 2012, with a fall of 0.7 percent
following a drop of 2.1 percent in the third quarter.