April 27, 2018 / 4:42 PM / 4 months ago

WPP digital boss Read prepares to step into Sorrell's shoes for first quarter results

LONDON (Reuters) - WPP’s digital boss Mark Read will get the chance to stake his claim to the top job at the world’s biggest advertising company when he helps to present its first set of results without founder Martin Sorrell on Monday.

FILE PHOTO: Martin Sorrell, when CEO of WPP, attends the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 17, 2017. REUTERS/Ruben Sprich/File Photo

Sorrell, who built a two-man business into one of Britain’s biggest companies with operations in 112 countries, never missed a quarterly results presentation and routinely appeared on TV and radio shows to discuss everything from advertising trends to global economic events and politics.

He stood down two weeks ago after the board opened an investigation into allegations of personal misconduct, sparking a hunt for a replacement after 33 years and at a time when the company is facing challenges on every front.

Sorrell denied the allegations and the company has said they will not be made public.

Read is seen as the leading internal candidate to become chief executive after he spent almost nine years on the WPP board from 2006 to 2015. He has also worked on strategy, acquisitions and digital operations since he wrote to Sorrell and secured a job in 1989.

On Monday, he will join his co-chief operating officer Andrew Scott, Finance Director Paul Richardson and Executive Chairman Roberto Quarta in presenting the first-quarter results, while Read will also speak to the media.

“I’ve spent as much time as possible speaking to our people and clients,” Read wrote in a memo to staff last week. “There’s universal admiration for Martin’s achievements, and sadness about his departure.

“At the same time, there’s a huge amount of support and goodwill for the company, and no shortage of confidence about the future.”

The company will consider internal and external candidates.

Whoever takes over the top job will face a difficult task, however, after the group published in March its weakest results since the financial crash due to lower spending from consumer goods groups like Unilever and P&G and competition from Google and Facebook.

It forecast no growth in net sales in 2018 and analysts are expecting a first-quarter figure of down 1 percent or worse.

“Despite the change of CEO, other things are unlikely to change at WPP near term,” Morgan Stanley said in a note. “We expect WPP to stay with its guidance which is for organic flat net sales growth in 2018 and a flat underlying margin in constant currency.”

The sudden departure of Sorrell has also sparked speculation as to whether the holding group can remain in its current form of employing 200,000 people in more than 400 agencies now that clients want a more joined-up offering.

Read told colleagues he did not believe breaking the business up made sense. “In a world where clients need faster, more agile, integrated solutions, we need to get closer together, not further apart,” he said.

WPP is the last of the big four advertising agencies to update the market after Omnicom (OMC.N), Publicis (PUBP.PA) and IPG (IPG.N) all reported strong first-quarter results.

Reporting by Kate Holton; Editing by Mark Potter

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