Ciesco marketing services holding co_annual results_analysis

3.8%

8.0%

9.5%

12.9%

W. Continental Europe

APAC, LATAM, Africa, ME, Central…

N. America

UK

4.7%

8.0%

8.8%

10.6%

10.8%

US

APAC

All other markets

UK

LATAM

8.2%

5.7%

2.0%

5.5%

2014 Organic revenue growth

WPP use rate of US$1.6475 to the pound (2013: 1.5646)

Publics use rate of US$1.3267 to the euro (2013: 1.3277)

Organic Growth: the year-on-year increase or decrease in revenue from

the prior period, excluding the FX impact and net acquisition revenue

NB: Source data published by each of the four holding companies

WPP posted record profits for 2014, strengthening its position as the world’s

largest marketing services company. The group experienced organic

revenue growth of 8.2% in 2014, with total revenue of £11.5bn ($19bn).

Omnicom’s organic growth was 5.7%, with revenues of $15.3bn. Publicis

experienced weak organic growth with 2%, and revenue of €7.3bn ($9.6bn).

IPG’s organic growth was 5.5%, with revenue of $7.5bn.

WPP announced a headline profit before tax of £1.5bn ($2.5bn), the highest in

its history. Headline EBITDA was £1.9bn ($3.1bn), with a margin of 16.6%.

Omnicom’s EBITDA increased 6.1% to $2.2bn, with a margin of 14.6%. Publicis’

EBITDA increased 6.5% to €1.2bn ($1.7bn), and is still ahead of its peers with a

strong 18% margin. IPG’s EBITDA was up 25.5% to $1bn, but their margin is still

lagging at 13.3%, despite a strong year for McCann Worldgroup, who

recently published a number of new client wins.

The UK remains a robust market for most of the four largest players, with WPP

reporting £1.6bn ($2.7bn) revenue and 12.9% organic growth in the region,

Publicis being the only one of the four being underweight in the UK. IPG

experienced very strong organic growth in the LATAM region, but

underperformed in the US given its size in the market.

Continental Europe was a drag on all four holding companies in 2014. Most of

the major networks are struggling with the shrinking of some of their

fragmented Continental European markets.

Overall a strong 2014 posted by WPP.

1.0%

4.0%

4.5%

5.2%

7.5%

10.1%

Europe

LATAM

APAC

UK

N. America

Africa/ Middle East

2.3%

3.5%

6.7%

N. America

BRIC + MISSAT

Rest of World

Organic revenue growth by region

2014 revenue & EBITDA (US$bn)

EBITDA Revenue

13.3%14.6% 18.0%

19

15.3

16.6%

9.6

7.5

% shows EBITDA Margin

Strong 2014 performance from WPP, led by UK and US, but Continental Europe remains a struggle for the large holding companies

*Europe excludes Russia and Turkey

BRIC: Brazil, Russia, India & China

ME: Middle East

MISSAT: Mexico, Indonesia, Singapore, South Africa & Turkey

3.1 2.21.7 1.0

Europe -1.3%

Europe* -0.6%

APAC, LATAM, ME, Africa,

Central & E. Europe

Snapshot: Marketing services sectorLarge Holding Companies – 2014 annual results analysis

Snapshot: Marketing services sectorLarge Holding Companies – 2014 annual results analysis

James Whyms

Analyst

T 020 3640 8638

E [email protected]

Afsor Miah

Director

T 020 7993 7543

E [email protected]

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