WPP, one of the world’s leading advertising firms which is a bellwether in the industry may suffer from Russian sanctions. Sir Martin Sorrell, who built the advertising giant from the bottom-up, indicated that sanctions will have a negative effect on businesses, and therefore, world economies.
Russia has kicked McDonald’s aside, but so have many, for health rather than political reasons. Companies like Carlsberg, which get a lion’s share of their revenues from Russia are likely to see hard times ahead.
Much of the European Union and the U.S. imposed sanctions on Russia for its aggressive movement into the Ukraine, and in retaliation, Russia has refused goods from certain countries. Sir Martin Sorrell says WPP has revised down forecasts in terms of marketing spend, but he insists “it remains a strong market.” He is less concerned about the effect on Britain than other countries: “Western continental Europe, particularly France and Italy, continues to raise some concern. Recent statistics on GDP growth, or lack of it in France, and negative growth in Italy, are troubling.”
The company will report earnings, which are expected to be flat with falling revenues. One bright spot is that WPP is likely to increase its dividend payout.