* Net sales returns to growth, up 3.1%
* Company had expected growth by Q2
* CEO says clients spending ahead of a recovery
* Shares up 4%
(Adds shares, trading details)
By Kate Holton
LONDON, April 28 (Reuters) - WPP, the world's
biggest advertising company, returned to underlying growth in
the first quarter of the year after clients launched new
products and brands ahead of an expected global economic
recovery.
Mirroring the improving picture at rivals Omnicom
and Publicis, Chief Executive Mark Read said bosses
could see the recovery coming and even though COVID restrictions
remained, companies and consumers have found ways to spend.
Having posted a 6.5% drop in underlying net sales in the
fourth quarter, the group said sales jumped by 3.1% in the first
three months as clients "seek to transform their offer for
future growth".
Analysts had expected the group's net sales to drop 1.5%.
WPP's shares rose 4% as the group reported its first
quarterly rise in underlying net sales since the third quarter
of 2019, and its biggest rise in the key figure since 2016.
Trading was helped by a sales jump of 18% in Greater China.
"There's been a lot of innovation in the last year and
consumers have found ways to spend money," Read told Reuters.
"Those parts of the economy that have innovated are seeing
growth.
"There is a lot of strategic corporate activity as companies
figure out how to prosper in a post COVID world," he added.
The recovery at the owner of the Ogilvy, Grey and GroupM
agencies comes after Read sought to better combine the group's
digital and data capabilities with its creative agencies, a new
approach that had been demanded by clients.
Since the start of the pandemic it has also won work by
helping companies build e-commerce and digital offerings to
reach consumers when traditional commerce routes had to close.
Analysts at Citi said the growth rate put WPP ahead of
peers. "The most encouraging thing about this, though, is not
the magnitude of the beat but the broad-based nature of it,"
they said.
The British company, which had said it expected to return to
growth in the second quarter, also won $1.3 billion of new work
from companies such as Absolut and JP Morgan Chase, helping it
to reiterate its full-year outlook.
(Reporting by Kate Holton
Editing by Michael Holden, Keith Weir & Simon Cameron-Moore)