WPP, the largest advertising group in the world, believes the worst of the advertising recession is over and expects emerging markets and digital sales to help it record flat revenues in 2010.
WPP, which has the likes of Unilever, Vodafone, HSBC and Ford as clients, reported 2009 organic revenues down 8.1 per cent today, at the lower end of a range of forecasts, but showed signs its operating margins were improving after it cut jobs.
Chief executive Martin Sorrell said the group had recovered in 2009 after initially being slow to cut head count. He said he now expected 2010 like-for-like revenues to be flat, with margins up to 12.7 per cent from 11.7 per cent in 2009.
It said expects a slightly stronger second half.
Analysts said the like-for-like revenue figure, a closely watched industry metric which strips out foreign currency impact and recent acquisitions, was slightly light but said the firm had done well to manage its operating margins in such tough conditions.
Its margin for the year was 11.7 per cent and 15.4 per cent in the second half.
Shares in the group were down 1.28 per cent in early morning trading.
WPP reported 2009 like-for-like revenues down 8.1 per cent and down 7 per cent in the fourth quarter.
French advertising group Publicis said in February it believed the worst of the economic downturn was over and said it aimed to return to sales growth this year and achieve stable margins.
Its forecast for flat margins however disappointed the market.
Publicis reported a fourth-quarter organic sales decline of 5.4 per cent while the same metric fell 6.3 per cent at Omnicom.
Mr Sorrell said earlier this week he had seen a "significant" change in trading in November and said the firm had now hit a stabilisation phase.
"Like-for-like revenues were almost the same in January 2010, against January 2009, an encouraging return to stability, a trend first indicated in November 2009," the company said.
"Although this return to stability seems widespread both geographically and functionally, there is no marked growth as yet, even against weak comparatives."
Reuters