FGS Global “continued to grow strongly in 2023”, holding company WPP said, while Hill & Knowlton “delivered modest growth lapping strong performance in 2022”. This was “partially offset by a weaker year for BCW”, it said.

WPP earlier reported a like-for-like decline of 0.9 per cent in the PR arm in the third quarter, with the division “impacted by client caution”.

Across 2023, PR revenue grew 1.4 per cent on a like-for-like basis to £1.26bn. Operating profit fell from £192m to £191m as margin dipped from 16.5 to 16.2 per cent.

PR outperformed WPP’s other divisions in Q4, with Global Integrated Agencies seeing like-for-like revenue growth of 0.7 per cent and Specialist Agencies experiencing a 6.8 per cent dip.

WPP reiterated its plan to complete the high-profile merger of BCW and Hill & Knowlton in July.

Across the group, like-for-like revenue (excluding ‘pass through’ costs) grew 0.9 per cent to £11.86bn. Headline pre-tax profit fell 4.8 per cent to £1.53bn and headline operating profit margin increased 0.2 points on a like-for-like basis to 14.8 per cent.

In Q4, like-for-like revenue (excluding ‘pass through’ costs) grew 0.3 per cent, although growth excluding the US was 3.1 per cent. The quarter saw “strong growth in the UK and India partially offset by declines in Germany and China”. A decline of 4.5 per cent in the US in Q4 was “primarily due to lower spend by technology, healthcare and retail clients, partially offset by growth in CPG, telecoms and automotive sectors”.

For 2024, the holding company said it expects like-for-like revenue (excluding ‘pass-through’ costs) to grow between zero and one per cent, and for headline operating margin to improve by 20 to 40 basis points (excluding currency fluctuations).

WPP chief executive Mark Read said: “While 2023 was more challenging than we expected due to cuts in spending by technology clients, we delivered a resilient performance for the year with 0.9 per cent like-for-like growth and a 0.2 point improvement in our headline operating margin at constant currency. This was driven by disciplined cost control, while continuing to invest in AI, data and technology.

“Our net new business of $4.5bn in 2023 included major new assignments with clients such as Allianz, Krispy Kreme, Mondelēz, Nestlé, PayPal and Verizon and reflects a stronger year-on-year performance in the fourth quarter.

“We are optimistic about the strategic opportunities ahead of us and are confident that we can deliver accelerated and increasingly profitable growth over the medium term.”

AI adoption

More than 30,000 people across WPP’s businesses are now using WPP Open, the group’s AI-powered platform, Read said. The platform is also seeing “growing adoption by our clients”.

It follows last month’s announcement that WPP plans to invest about £250m a year in proprietary technology to support its AI and data strategy.

Read said today: “AI will be fundamental for our business and we are embracing the opportunities that it presents, putting it at the heart of our operations and our work for clients.”

This article originally appeared on PRWeek US.