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Business Services Industry

WPP Quarterly Trading Update

Business Wire, April 25, 2008

Reportable Revenues up over 14%

First Quarter Reportable Revenues Exceed $3 Billion for the First Time

Constant Currency Revenues up 9%

Like-for-Like Revenues up Almost 5%

First Quarter Operating Margin Ahead of Budget

The Group Remains on Course to Achieve Its Full Year Margin Objective of 15.5%

NEW YORK & LONDON -- WPP (NASDAQ: WPPGY) today reported its 2008 First Quarter Trading Update.

Current Trading

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In the first quarter of 2008, reported revenues rose by 14.1% to PS1.558 billion. Revenues in constant currency were up 9.0%, reflecting the strength of the Euro overcoming the weakness of the US dollar against the pound sterling. On a like-for-like basis, excluding the impact of acquisitions and currency fluctuations, revenue growth was almost 5%, continuing the growth rates seen throughout 2007 and before. First quarter growth reflected the continued steady overall economic environment, despite the continuing uncertainty stimulated by the credit and liquidity crisis and the much heralded slowdown in the United States.

Whilst January and February were strong across the board, both geographically and functionally, and indeed stronger than last year, March was slower, somewhat surprisingly in Western Continental Europe. Throughout the quarter, North America remained relatively strong and better than last year and global revenues were in line with budget. Eastern Continental Europe, Latin America, Asia Pacific, Africa and the Middle East remained in good shape and the United Kingdom was stable.

As shown in appendix 1, on a constant currency basis, Asia Pacific, Latin America, Africa and the Middle East, continues to be the fastest growing region, with revenues up well over 15%. North America, despite the talk of recession and the continuing crisis affecting the major financial institutions in the United States, remains strong with revenues up almost 10%. On a like-for-like basis revenues were up over 5%, an improvement over the second half of 2007. On a constant currency basis, Continental Europe was up over 5% but at two speeds, with Western Continental Europe up just over 3% and Eastern Continental Europe up almost 26%. The United Kingdom remained the slowest growing region, with revenues up almost 5%, although showing an improvement over the final quarter of 2007, and gross margin up almost 6%, reflecting the significance of market research revenues.

As mentioned above, North America continues to grow faster than commentators might expect, with like-for-like revenues up over 5%, an improvement on the last half of 2007. Eastern Continental Europe, is now the fastest growing area, marginally ahead of the Middle East, with both over 21%. Latin America continues the strong growth of 2007, with almost 15% like-for-like growth, reflecting double digit growth in the Group's media investment management, information, insight & consultancy and specialist communications businesses. Asia Pacific remains reasonably strong, with revenues up 6%, reflecting stronger growth in South East Asia and weaker growth in Japan, Australia and New Zealand. Mainland China and India continued the rapid growth seen in 2007, with first quarter like-for-like revenues up over 19% in both markets. As mentioned before, Western Continental Europe, showed some softening in March, particularly in the major markets of Germany, France and Spain. The United Kingdom showed some improvement with growth of almost 2%, a small increase over the last half of 2007.

By communications services sector, branding & identity, healthcare and specialist communications (including direct, internet and interactive), showed the strongest growth, with constant currency revenues up 18%, with public relations & public affairs up almost 10%, information, insight and consultancy up over 6% and advertising & media investment management up over 4%.

In the Group's 2007 interim and preliminary results announcements, additional information was provided showing the first half and full year results in reportable US dollars, to allow for better comparison with a number of our competitors, who report in US dollars and, particularly, because significant weakness in the US dollar sometimes makes comparisons difficult. Appendix 2 shows revenue growth by geography and communications services sector in reportable US dollars, for the first quarter of 2008. US dollar reportable revenues were up 15.6% in the first quarter, primarily reflecting the strength of the Euro against the US dollar.

Net new business billings of PS564 million ($1.100 billion) were won during the first quarter and the Group continues to benefit from consolidation trends in the industry, winning several assignments from existing and new clients.

In the first quarter, both operating margins and profitability were ahead of budget and last year. The Group remains on course to achieve its margin objective of 15.5% for 2008.

We are in the process of compiling our quarter one full year revised forecasts, but early indications continue to show like-for-like revenues growing faster than 2007.

Business Services Industry

WPP Quarterly Trading Update

Business Wire, April 25, 2008

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