Clients including carmakers and consumer goods companies are cutting their advertising spending amid Donald Trump’s tariffs rollout, WPP has said, as it reported a 71% slump in profits and a strategic review.
The advertising agency, formerly the largest in the world, cut its global workforce from 111,000 last year to 104,000 as of the end of June, as it struggles with weak spending and the rise of artificial intelligence.
WPP’s pre-tax profit dropped by 71% to £98m in the first half of its financial year. It has also halved its interim dividend to 7.5p a share before a strategic review that will be led by its incoming chief executive, Cindy Rose. She will take over from Mark Read on 1 September.
The company warned of slowing spending by ad agencies, which worsened between April and the end of June. “I have never seen a more volatile market,” Read said. “I think a lot of clients are distracted by the macro, tariffs, figuring out what to do.”
Read, who announced his departure in June, leaves WPP in a vulnerable state. Shares in the business have fallen by two-thirds during his tenure, and last year the company lost its crown as the biggest ad agency in the world by revenue as it has struggled to keep pace with its peers and compete with the growing use of AI-generated ad campaigns.
Read added that AI developments meant WPP could probably do its work with “fewer people”. “But at the same time, there will be more work in the future that AI will enable,” he said.
Rose, a top executive at Microsoft, has been on the board of WPP since 2019. At Microsoft she has been responsible for working with large clients to use digital technology and AI for business transformation.
Investors hope her appointment will sharpen WPP’s focus on its AI capabilities. Read said it was “only natural” for a new chief executive to look at the strategy of the company.
WPP has recently lost a series of significant client work, including Coca-Cola’s media business in North America, its two-decade relationship with the US media conglomerate Paramount and Mars’s $1.7bn (£1.25bn) global media planning and buying business.
While WPP has increased its annual investment in AI to £300m, it faces intense competition from big tech companies such as the Facebook owner Meta, which has developed AI tools that allow advertisers to fully create and target campaigns on social media sites. These tools are expected to be rolled out by the end of next year.
skip past newsletter promotion
after newsletter promotion
Last month WPP cut its forecast of revenues and profits for this year, blaming a challenging economic backdrop, which prompted the shares to drop by 19%. The stock fell by 4.5% in early trading on Thursday and is down by more than half in the year to date.
A sign with the company logo sits outside of the headquarters of Eli Lilly in Indianapolis, Indiana, on March 17, 2024.
Scott Olson | Getty Images
Eli Lilly on Thursday said the highest dose of its daily obesity pill helped patients lose almost 12% of their body weight, or roughly 27 pounds, at 72 weeks in a late-stage trial, paving way for its entrance into the market.
Shares of the company fell more than 12% in premarket trading on Thursday.
Some doctors said the results appear to be comparable to, if not slightly lower, the level of weight loss seen with Novo Nordisk‘s blockbuster weekly GLP-1 injection for obesity, Wegovy.
The data comes under what some Wall Street analysts were expecting for Eli Lilly’s oral GLP-1, with hopes for weight loss of around 15%. Some doctors also made note of the number of patients on the highest dose of the pill who discontinued treatment due to side effects or any other reason in the trial.
Still, other doctors lauded the results and the potential of the pill to reach new patients, such as those who are afraid of needles.
“This is a strong and promising result for an oral agent,” said Dr. Jaime Almandoz, medical director of the Weight Wellness Program at UT Southwestern Medical Center, calling the weight loss “a significant and clinically meaningful outcome.”
“Injectables have set a high bar, but this study reinforces the potential for an oral GLP-1 to be transformative in obesity care, particularly for patients who are hesitant to start or maintain injectable therapies,” he continued.
Dr. Mihail “Misha” Zilbermint, director of Endocrine Hospitalists at the Johns Hopkins Community Physicians, said he believes the pill “has the potential to be a game changer, as long as people can tolerate the side effects.”
The trial results are among the pharmaceutical industry’s most closely watched studies of the year, and follow positive data in April from a phase three trial examining the experimental pill in diabetes patients. They bring Eli Lilly’s pill, orforglipron, one step closer to becoming the first new, needle-free alternative in the booming market for weight loss and diabetes drugs called GLP-1s.
Eli Lilly expects to submit the data to regulators by the end of the year, with plans to launch the pill in 2026, Ken Custer, president of Lilly Cardiometabolic Health, said in an interview.
That launch could fundamentally shift the space, helping more patients access the treatments and alleviating the supply shortfalls of existing injections. The more convenient and easier-to-manufacturer pill could also help Eli Lilly solidify its dominance in the growing segment as other drugmakers, including its main rival Novo Nordisk, race to bring weight loss pills to market.
Custer said there are roughly 8 million patients on injectable obesity and diabetes drugs, but likely around 170 million who could benefit from the medicines.
“In order to meet that demand, we’re going to need other options, including oral small molecules like orforglipron, which use different means of production and also don’t need as sophisticated of a supply chain to distribute it to patients,” he said.
Dr. Amy Sheer, professor of medicine and program director of the Obesity Medicine Fellowship at University of Florida, said she hopes the pill will be less expensive than existing injections, which are costly largely due to the devices they come in. She said lower prices could help eliminate barriers to access for patients, potentially making insurers more willing to cover the drug.
Many insurers still don’t cover GLP-1s for obesity. Wegovy and other drugs have list prices of roughly $1,000 before insurance.
Detailed trial results
The highest dose of Eli Lilly’s pill helped more than 59% of patients lose at least 10% of their body weight and more than 39% of patients lose at least 15% of their weight, according to the trial results.
Almandoz said the proportion of people who achieved “greater magnitudes” of weight loss was “very impressive for an oral agent,” adding that many people “often overlook the proportion of people achieving these high weight loss categories” and typically focus closely on the average weight loss
Orforglipron also helped lessen cardiovascular risk factors.
But data on how well some patients tolerated the pill in the trial came under some analysts’ estimates.
About 10.3% of patients who took the highest dose of the pill — 36 milligrams — discontinued treatment due to side effects, compared with around 2.6% of those who took placebo. Those side effects were mainly gastrointestinal, such as nausea and vomiting, and mild to moderate in severity. An estimated 24% of those who took the highest dose experienced vomiting, while 33.7% and 23.1% had nausea and diarrhea, respectively.
Ahead of the data, BMO Capital Markets analyst Evan Seigerman said he expected less than 10% of patients on the highest dose of the pill to discontinue treatment due to side effects and lower rates of vomiting, nausea and diarrhea.
More patients stopped taking the pill due to side effects compared with existing GLP-1s on the market, said Dr. Caroline Apovian, co-director of the Center for Weight Management and Wellness at Brigham and Women’s Hospital. The discontinuation rates due to side effects in late-stage trials on Wegovy and Eli Lilly’s weekly obesity injection Zepbound are around 7% or less.
She noted that almost a quarter of patients on the highest dose of the pill discontinued treatment for any reason, cautioning that the enthusiasm for orforglipron should be tempered “because we get all this excitement, and then the pill comes out, and then nobody can take it.”
It’s unclear why, apart from side effects, those patients discontinued the pill.
But University of Florida’s Sheer said she doesn’t believe the discontinuation rates or side effects will be a deciding factor for physicians when prescribing the pill.
She believes an oral option could actually make more physicians more comfortable prescribing a GLP-1 to patients. Some physicians are currently hesitant to prescribe injections because they “may not know how to tell patients how to use them,” Sheer added.
Almandoz said prescribing decisions are going to depend on the patient’s specific needs and preferences, as well as access and affordability. An injectable GLP-1 may be the preferred option for patients whose priority is a greater level of weight loss or those who have significant cardiometabolic complications, or health issues that arise from cardiovascular diseases and metabolic disorders.
But an oral GLP-1 could be the best fit for those who “prioritize simplicity or convenience or have these logistical challenges with injections,” he said.
The detailed results from the trial will be presented in September at a European medical meeting and published in a peer-reviewed journal. More phase three trial results on the pill will be shared later this year, including from a study on adults who have obesity or are overweight and have Type 2 diabetes.
Wegovy, Eli Lilly’s pill, orforglipron and Novo Nordisk’s diabetes pill Rybelsus all work by targeting a gut hormone called GLP-1 to promote weight loss and regulate blood sugar. But unlike those other medications, Eli Lilly’s pill is not a peptide medication. That means it is absorbed more easily in the body and doesn’t require dietary restrictions like Rybelsus does.
Eli Lilly is currently about three years ahead of other drugmakers developing pills, including Pfizer, AstraZeneca, Roche, Structure Therapeutics and Viking Therapeutics, Guggenheim analyst Seamus Fernandez previously CNBC.
Some analysts expect the market for GLP-1s to be worth more than $150 billion annually by the early 2030s. Oral GLP-1s could grow to be worth $50 billion of that total, Fernandez said.
— CNBC’s Angelica Peebles contributed to this report.
Originally set up by Kering and Conservational International in 2021, with Inditex joining in 2023, the Regenerative Fund for Nature has been supporting the transition to regenerative agricultural practices in fashion’s supply chains, building healthier ecosystems, supporting farmers, and strengthening communities.
The Regenerative Fund for Nature’s 2024 Annual Report is a testament to its efforts on the ground and in the landscapes where fashion begins, highlighting the measurable progress and positive impact the Fund has achieved over the year. With a focus on cotton, wool, leather and cashmere production systems, the Fund has continued to expand since its launch by adding more hectares and beneficiaries through new projects. By the end of 2024, the portfolio included thirteen projects in eight countries with 1.1 million hectares and 105,000 beneficiaries enrolled, directly or indirectly impacted by the Fund’s investments.
The Regenerative Fund for Nature is forging an exciting and innovative path toward transformational change for the fashion industry, pooling resources, sharing knowledge and spearheading innovative projects for a nature-positive future.
Airlink and Azorra have finalized a lease agreement that will see the Johannesburg-headquartered airline acquire 10 new Embraer E195-E2 twin-engine passenger aircraft, with the first delivery scheduled for later this year.
This follows the previously announced selection of the E195-E2s by Airlink, South Africa’s leading full-service airline.
Azorra, the Fort Lauderdale-based lease, finance and asset management firm will supply the newly-built aircraft which will augment Airlink’s current 68-strong fleet.
Deliveries of the 10 E195-E2s from Embraer’s facilities in Brazil, will begin later this year and be completed in 2027. Airlink has operated Embraer aircraft since 2001.
The new aircraft, which will seat up to 136 passengers in a two-by-two cabin layout, will provide Airlink with additional capacity to enhance its competitiveness on high-density routes and their additional range will create opportunities to open new routes to serve more destinations across sub-Sahara Africa.
Airlink will derive additional savings from the high degree of operating, maintenance, training and equipment commonality between its existing E-Jets and the new E2s, including similar flightdecks, operating procedures and handling. This will also ensure a streamlined entry into service.
Airlink CEO, de Villiers Engelbrecht, says: “It is an exciting and daunting moment for Airlink. Exciting because it heralds the next phase of Airlink’s development and growth as the leading regional airline in Southern Africa and now possibly beyond. Daunting, as there is a lot to do in the weeks ahead before the first aircraft enters service, hopefully in December this year, but I have no doubt that the Airlink team will deliver, as they always do.”
John Evans, CEO at Azorra, says: “This is an exciting step forward in our partnership with Airlink. The addition of the E195-E2 to their fleet highlights our shared commitment to operational efficiency, sustainable growth, and increased capacity and service. We’re proud to work alongside Embraer and Pratt & Whitney to bring next-generation aircraft to Airlink, supporting enhanced connectivity across Africa.”
Arjan Meijer, President and CEO Embraer Commercial Aviation, says: “We are proud to deepen our long-standing partnership with Airlink as it takes this next step into the future with the E195-E2. This aircraft is the most efficient single-aisle jet in its class and perfectly suited to support Airlink’s ambitious growth plans across Southern Africa. We look forward to seeing the E2 in Airlink’s livery, delivering unmatched performance, comfort, and sustainability.” Images: https://embraer.imagerelay.com/fl/13349ba48bf34f808a9a418b20beaa11
Further to Baker McKenzie’s mandate supporting Tata Autocomp Systems Limited (TACO) with its majority acquisition of Artifex Interior Systems Limited (Artifex) earlier this year, the Firm has advised Tata Autocomp on its acquisition of IAC Group (Slovakia) s.r.o. (IAC Slovakia) though its subsidiary, Artifex.
With revenues of $190 million in FY24, IAC Slovakia manufactures automotive interior and exterior components, including door and trim systems, pillars, instrument panels, cockpits, and consoles, for global original equipment manufacturers (OEMs) including Jaguar Land Rover and Volkswagen. With this acquisition, TACO continues to strengthen its presence in Europe’s automotive sector.
Completion of this transaction is subject to receipt of relevant regulatory approvals and certain other matters.
The Baker McKenzie team was led by London Corporate Partner, Ash Tiwari, and Senior Associate, Priya Shah, with London Partners, Sue McLean and Natalie Ellerby, leading on the transitional services and IP licensing workstreams respectively.
The wider Baker McKenzie London team included:
• Corporate: Ambrose Teo, Eli Clinton-Davis, Samuel Trevor • Competition: Luis Gomez, Zareenah Rasool • Intellectual Property: Lucy Robertson • Restructuring & Insolvency / Banking: Priyanka Usmani, Matthieu Hucker • Tax: Matthew Legg, Taras Varava, Fewa Olu-Martins
Co-Head of the M&A Practice Group of Baker McKenzie Prague, Alexandr César, and Senior Associate, Jan Dudík, provided Slovak law advice, together with Slovak law firm, Marek Partners.
Commenting on the transaction, Baker McKenzie London Corporate Partner, Ash Tiwari, said: “We are delighted to have partnered with TACO again to continue supporting their expansion strategy to become the partner of choice for global OEMs. This has been a transaction of significant complexity which has drawn on Baker McKenzie’s cross-specialist expertise across commercial, competition, intellectual property, tax, restructuring and insolvency and banking related matters. We look forward to a successful closing.”
