LONDON (Reuters) - WPP (L:WPP), the world's biggest advertising company, expects business to recover in 2021 but needs first to get through what could be a difficult six months up to the end of the first quarter, Chief Executive Mark Read said on Friday.
While a COVID-19 vaccine would not be an immediate panacea, Read said a successful shot next year would show companies the likely path ahead, encouraging them to spend again.
"It promises to be a good year overall, with a tough Q1 coming into a much stronger second half of the year," he told Morgan Stanley (NYSE:MS)'s Technology, Media and Telecoms conference.
Read said he was not changing WPP's net sales guidance for the fourth quarter.
"We're still in the range of analysts' expectations and you know it's possible that Q4 could be a little bit tougher than Q3," he said. "I think Q1 next year is likely to be negative. But I do think we'll see a pretty strong recovery in Q2, Q3, Q4 2021."
Like all advertising groups, the British owner of the Ogilvy, Grey and GroupM agencies has been hit hard by the abrupt cancellation of spending by companies desperate to save cash in the pandemic.
It is now slowly recovering - its shares are up 24% in the last six months - as companies spend to build e-commerce services, and Read said its performance had been more resilient than expected.
The company said in October it expected to deliver a full-year result within analyst forecasts of a drop between 8.5% and 10.7% in like-for-like net sales, with a mid-point of down 9.6%. That compared with a range mid-point given in August of down 10.75%.