LONDON (Reuters) - WPP, the world's biggest advertising group, said it would simplify its structure after it reported a 0.9 percent drop in 2017 net sales, its worst performance since the financial crisis, and forecast no growth for 2018.
The British company has been hit by a reduction in spending from consumer goods giants like Unilever and increasing competition. Analysts had hoped it would join its peers Omnicom and IPG in sounding more upbeat about 2018.
But the company, run by high-profile businessman Martin Sorrell, said the group's budgets for 2018 were being set on the basis it would see flat growth for revenue and net sales, with the headline operating margin also flat in constant currency.
"2017 for us was not a pretty year," Sorrell said. "As our industry continues to undergo fundamental change, we are upping the pace of WPP's development from a group of individual companies to a cohesive global team dedicated to the core purpose of driving growth for clients."
WPP cut its sales outlook three times in 2017 and on Thursday it reported full-year net sales down 0.9 percent on a like-for-like basis, against a forecast given in October of flat growth.
Demand was particularly weak in North America, while Britain was one of the strongest performers.
To counter the problems WPP said it would accelerate a programme to simplify the business, which employs more than 200,000 people in 112 countries. The group, which owns a string of big agencies which often compete with each other, will seek to align digital systems, platforms and capabilities.
(Reporting by Kate Holton, Editing by Paul Sandle)
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