BARCELONA (Reuters) - WPP (WPP.L), the world’s biggest advertising company, is working on an assumption that its 2018 organic net sales will be flat following a sharp slowdown in 2017, its chief finance officer said on Thursday.
Speaking at the annual Morgan Stanley European TMT conference in Barcelona, Paul Richardson said he did not expect a dramatic change in the global economic environment.
“On day one, the going in assumption I suspect would be for no dramatic change in the global economic environment,” he said.
Asked about the company’s forecast for 2018 organic revenue growth, he said: “if we’re expecting the year 2017 to be flat, it’s a good working assumption on day one to use that for budgets for 2018.”
The British company, led by high-profile businessman Martin Sorrell, has been hit hard this year by a slowdown in spending from some of its largest customers - the consumer goods giants such as Unilever and P&G that are cutting spending as consumers turn to more niche brands.
Shares in WPP have fallen 26 percent this year after the company lowered its net sales forecast on several occasions, moving from a 3.1 percent growth level in 2016 to a 2017 target of flat growth given in October.
Richardson said the group had recently won some more media accounts following two big losses, giving him more confidence for 2018, and said the final quarter of 2017 could yet be boosted by clients spending late money to drive sales in the run up to Christmas.
“We only find out in November and December but it is a common occurrence,” he said.
Reporting by Douglas Busvine; Writing by Kate Holton; Editing by Hugh Lawson