WPP CEO says April "materially better" than March
LONDON (Reuters) - WPP (WPP.L), the world's second-largest advertising firm, saw trading in April in western Europe return to similar levels as those in January and February, Chief Executive Martin Sorrell said on Thursday.
WPP's shares dropped almost 8 percent in April after the group released first-quarter results that showed revenue growth to be towards the lower end of forecasts after a slight slowdown in Western Europe in March.
But speaking at the Reuters Global Technology, Media and Telecoms Summit from a video link in London, Sorrell said it had since improved.
"March was a strange month," he said. "April came back, in other words, very similar to January and February," he said without giving any numbers or further information. "It was materially better than March."
Sorrell also said advertising markets in the United States had continued to hold up well and were performing better than most people had expected at the start of the year.
"For the first third of the year I think the U.S. has been better than Western Europe," he said.
WPP, whose agencies include JWT and Ogilvy & Mather, said at the time of the first-quarter results that indications continued to show the full-year like-for-like revenue growth growing faster than in 2007.
To boost its presence in the market research industry, which analysts expect to stand up well in any economic downturn, WPP has recently submitted two cash and share offers for Britain's Taylor Nelson Sofres TNS.L.
But each bid has so far been rejected as too low and TNS has said it prefers instead to continue looking at a possible nil-premium merger with German firm GfK (GFKG.DE). It has said it will give an update on these plans shortly.
"It is taking a long time for them (TNS) to come out with anything," Sorrell said, while describing what he would like to achieve with a combination of TNS and WPP's market research unit Kantar and its advantages over a TNS-GfK merger.
"We have some very strong ideas on how the business will look and how it will look in terms of geographical spread, functional cohesion and we think the overlap between the businesses is much more constructive (than between TNS and GfK)," he said.
"The GfK-TNS businesses are very concentrated in continental Europe. Germany, I think, would be something like 20 percent of their combined business and continental Europe, which is the slowest growth region in the world, would be about 70 percent.
"Obviously the opportunities in Asia, Latin America, Africa, Middle East and even Central and Eastern Europe, we think, will be superior and then the functional combinations will be superior in both syndicated and custom."
Sorrell declined to comment on whether he had had any contact with TNS shareholders and said simply that he was waiting for an update from TNS on what synergies they expect to achieve with GfK.
"We're neither optimistic nor pessimistic," he said. "We're just waiting for Godot."
(For summit blog: summitnotebook.reuters.com/)
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