WPP, the world’s biggest advertising company, expects to return to its 2019 level of net sales by 2022 after the pandemic accelerated its strategy switch to providing more digital services for clients.
The British group set out its medium-term targets in a trading update that revealed its key measurement of underlying net sales had fallen by 6.7% in the two months to November, an improvement on the 7.6% drop in the quarter to end September.
For the year, it sees a drop of 8.4%.
The owner of the Ogilvy, Grey and GroupM agencies was hit earlier this year when clients slashed spending to conserve cash during the pandemic, but it has since performed strongly in winning new work to help businesses build out their e-commerce operations.
A return to the 2019 level of total net sales would imply a 2021 underlying growth rate of 4.7% and 4.5% in 2022, slightly ahead of market expectations.
The group, which plans to make targeted acquisitions and invest further in technology, will also resume its share buyback in 2021 and intends to grow its dividend with a pay-out ratio around 40% of headline earnings per share.
“The events of 2020 have only accelerated the structural changes in our industry, from the expansion of digital channels to growing demand for ecommerce solutions,” Chief Executive Mark Read said.