WPP says 2019 net sales to fall by up to 2 percent

WPP, the world`s biggest advertising company, said it expected organic growth to drop by as much as 2 percent in 2019 following the loss of major clients, but said it had seen a good reaction to its restructuring.

The British group said on Friday underlying net sales fell 0.4 percent in 2018, compared with a forecast of down 0.5 percent, with the United States particularly weak.

For 2019 it said underlying net sales would be down between 1.5 percent and 2 percent, with stronger headwinds in the first half of the year.

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The headline operating margin is forecast to be down around 1.0 margin point.

The British company is in the middle of a three-year overhaul launched by new boss Mark Read after a loss of key clients led to several profit warnings in 2018 and a 40 percent drop in market value in the last year.

Read, who is investing to hire new creative staff while merging agencies and cutting jobs and costs, had flagged that 2019 would be a difficult year. Under his plan he hopes to bring WPP back in line with peers by the end of 2021.

Read replaced founder Martin Sorrell during a period of turmoil for the company last year.

"As we have said previously, 2019 will be challenging – particularly in the first half – due to headwinds from client losses in 2018," he said.

"However, we start the year with fewer clients under review than we did in 2018, and investments in creativity and technology will further improve the competitiveness of our offer."