WPP AUNZ unveils new corporate strategy after profit drop

Local arm of global advertising and communications business follows up disappointing financial results with a new vision to get back to growth

WPP AUNZ has announced a strategy shake-up after posting disappointing results including a $235.5 million loss during the first-half of its 2020 financial year.

The holding group posted a headline earnings per share loss of 9.6 per cent in the 2019 full-year results with sales down 4.4 per cent, despite strong cashflow conversion and reduced debt from the sale of Kantar, its global data, research, consulting and analytics business. Continuing business contributed net sales of $712.5 million, down 2.6 per cent year-on-year, which converts to before tax and interest earnings of $91.8 million at a margin of 12.9 per cent.

And the disappointing results follow the local Australian and New Zealand outfit’s huge $253.5 million loss in the first half of last year, attributed mostly to the loss of goodwill from soft media spending and loss of customer accounts.

In a statement, WPP said global integrated agencies segment faced headwinds in 2019 from some brands having global and local accounts losses, amplified by a weak media market and economic conditions throughout the year. It expects 2020 to continue to be a challenging environment for this segment.

In response, WPP today announced a raft of changes and new initiatives, all part of a new corporate strategy aimed at returning to positive growth margins. The new strategy for the region, including South-East Asia, centres around the central pillars - transform, strengthen and grow.

The goal is to accelerate organic net sales growth into 2022 by expanding further into experience, commerce and technology offerings and expanding its client base with new clients wins and growing existing accounts with a more coordinated approach to leads and engagements. It also plans on reducing operating costs and embarking on a targeted acquisition program to drive growth.

WPP AUNZ will focus on six key areas: Operating model, clients, talent, platform, solutions and geographies. The group has already commenced the transformation phase of its strategy announcing a new leadership strategy, restructuring New Zealand operations and establishing a centre of excellence to consolidate the technology consulting operations.

Specifically, WPP AUNZ managing director and CEO, Jens Monsees said the business intends to ramp up creative capability and traditional skillset “with technology to capture growing areas of ecommerce, technology and experience”.

“As technology advances, the way consumers connect and communicate with brands is also evolving rapidly,” he said.

The restructure of its operating model, which includes the new centre of excellence, will see a reduction in brands and a boost to data and tech capabilities. WPP said it aims to build a client-first approach and develop talent acquisition and retention programs.

Platform developments include shared services across HR, IT, finances and legal to reduce costs. It will look to selected acquisitions to bolster capabilities and focus on opportunities in the region and house its brands under the oner roof in each of its locations.

“We are confident in our ability to change gear and create a future of opportunity and success. No-one in our market is yet leading the future of consumer communication and that is where we want to be,” Monsees said.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.


Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments
cmo-xs-promo

Latest Videos

More Videos

Great read. I agree that it should be a perfect balance between interacting with your customers and knowing your brand. As a business, yo...

Caroline Scott

7 ways CMOs can improve their customer engagement game

Read more

Very true. Team development helps improve collaboration among the team members. I was able to improve my team's collaboration skills by t...

Quent Sinder

Why empowering others can help make you a great leader

Read more

CRM is a very good software that can help you succeed in your business. In my company, this system has allowed me to improve customer rel...

Anna Janicka

Sensis rebrands to Thryv and brings business software to Australian SMBs

Read more

AI Leasing Assistants have finally arrived for the multifamily industry. With so many to choose from it can be hard to figure out which i...

Alice Labs Pte. Ltd.

CMO's top 8 martech stories for the week - 6 May 2021

Read more

Nowadays, when everything is being done online, it is good to know that someone is trying to make an improvement. As a company, you are o...

Marcus

10 lessons Telstra has learnt through its T22 transformation

Read more

Blog Posts

Unboxing 101 - How savvy influencer engagement can build a brand

The humble unboxing video is a powerful tool. Correctly executed, it harnesses consumer fandom, viral authenticity and brand design magic to deliver a high-impact message to a tightly targeted cohort of consumers.

Gali Arnon

Chief marketing officer, Fiverr

​Power to the people

Purpose is the ultimate statement of intent for many organisations. Why are we here? What are we trying to achieve?

Rich Curtis

CEO, FutureBrand A/NZ

The playbook to develop strategic brand moats

Warren Buffet is an unlikely ally for marketers. But his belief businesses need strategic moats that increase their value in the market while acting as barriers to competitors can offer marketers a new playbook for brand building and driving growth.

Fabian Di Marco

Founder and managing director, Tzu & Co

Sign in