Friday Nov 15, 2024
Friday Nov 15, 2024
Monday, 27 June 2016 00:00 - - {{hitsCtrl.values.hits}}
CANNES (Reuters): British advertising giant WPP warned on Friday it was in danger of losing sway in continental Europe after Britain voted to leave the European Union.
The region represented close to 20% of WPP’s total revenue in 2015 and Germany, France, Italy and Spain are among the group’s top 10 markets.
“We are in danger of losing influence in the western continental European markets,” WPP Chief Executive Officer Martin Sorrell told Reuters in an interview.
“That means that the incremental jobs are less likely to be in the UK, ironically, and more likely to be in Germany, in France, in Italy and in Spain,” he added.
The 71-year-old CEO, who is British, confirmed the company’s full-year guidance, however.
Shares in WPP were down 5.8% at mid-session, slightly underperforming weaker British shares.
Sorrell added that foreign exchange was not an issue for his group, which reports in sterling, after the British currency fell up to 10% following the vote.
“Our revenues and costs are matched by market, because we don’t have cross-border currency exposure,” he said, speaking on the sidelines of the annual Cannes Lions International Festival of Creativity, a conference on marketing and advertising.
Sterling plunged to its lowest in three decades on Friday as Britain’s vote to leave the EU sparked turmoil on global financial markets.
The world’s number one advertising company, whose top global agencies include Ogilvy & Mather, Grey and JWT, has pledged to grow in emerging countries like Brazil, Russia, India and China and South Africa while maintaining a strong foothold in its home region.
The WPP chief predicted that the world economy would slow down as a consequence of the shock British referendum result.
“The world is going at between 3 or 3.5% (growth rate)... My guess is that the next forecast from the World Bank or the IMF is going to be even more conservative.”
The International Monetary Fund forecast in April that the global economy would expand by 3.2% in 2016, while the World Bank cut its 2016 global growth forecast to 2.4% from 2.9% in June. ($ 1 = 0.7306 pounds)
