Strategic transformation continues to drive advertising giant WPP (WPP.US)'s H1 revenue and profit decline, but better than expected, the stock price soared 23% before the market

The Zhitong Finance App learned that WPP (WPP.US)'s profit for the first half of the year exceeded analysts' expectations, mainly due to the cost reduction measures implemented by this advertising company in a sluggish market environment. According to the financial report released by WPP on Thursday, current operating profit fell 3.4% to 398 million pounds ($536 million), higher than analysts' average expectations of 347.2 million pounds; revenue without passing costs fell 5.6% to 4.75 billion pounds, higher than analysts' average expectations of 4.65 billion pounds.

CEO Cindy Rose (Cindy Rose), who took office in September last year, has been dealing with declining revenue and loss of customers. In February of this year, Ross announced the new strategic plan “Elevate28”. The core goal is to transform WPP from a traditional holding structure to a streamlined and efficient single operating company.

Ross implemented a series of streamlining measures to reorganize the company's business into four divisions: Creative, Media, Production, and Enterprise Solutions, with the goal of achieving “accelerated, high-quality” growth by 2028.

WPP also plans to achieve £500 million in annual cost savings over the next few years, and reinvest those savings into growth areas.

As the strategic transformation progressed, WPP announced in early July the expansion of its AI-focused business division, WPP Enterprise Solutions. The department will launch a series of AI-based business portfolios, covering fields such as AI transformation consulting, intelligent e-commerce agents, customer data management, user loyalty operations, and content automation.

WPP said the company works with customers such as Ikea, Ford, L'Oréal and Nestlé, and has partnered with technology companies such as Adobe, AWS, Google, and Microsoft.

By business, in the first half of the year, sales of the WPP media division decreased by 5.4%, sales in the creative sector (including enterprise solutions) fell by 4.9%, and sales in the production department increased by 1.6%

By region, sales declined 6.0% in North America, 4.3% in Europe, the Middle East, and Africa, 3.8%, and in Latin America, 1.2%.

Ross said in a statement on Thursday that the company's performance in the first half of the year was in line with overall expectations, even though the loss of existing customers still dragged down the results. Ross also said, “We are steadily advancing the first phase of the Elevate28 program to stabilize the business. The goal for the first half of the year was to establish a new organizational structure, which has now been completed.”

WPP's stock price has fallen by about 24% over the past 12 months, and the company was excluded from the FTSE 100 index in December last year.

Before the US stock market on Thursday, as of press release, WPP's stock price surged 23%.