CEO Mark Read has suspended WPP's $1.2B stock buyback program and the payment of the final 2019 dividend as part of its battle plan to survive the COVID-19 pandemic, according to a trading update released today.
Since December, WPP has purchased $410M in stock from proceeds of the Kantar sale.
Read anticipates the firm will save $1.4B from suspending the stock buyback and dividend.
WPP has also pulled 2020 financial guidance.
In the update, the firm said the year started "well with strong business momentum" as January and February results were in line with expectations.
Like-for-like revenues rose 0.4 percent, excluding the 16.1 percent revenue plunge in Greater China due to COVID-19.
Business slowed in March as COVID-19 spread beyond China. There was "an increasing volume of cancellations" and the beginning of a decline in project and retained work.
"As we enter the second quarter, it is clear that the impact of COVID-19 on the business will increase, but it is not possible at this stage to quantify the depth or duration of the impact," said WPP in its statement. "As a result, we have decided to withdraw our guidance for the 2020 financial year. We will provide an update when appropriate."
WPP also outlined a series of cost reductions that could result in a savings of $1B this year. They include "freezing new hires; reviewing freelance expenditure; stopping discretionary costs, including travel and hotels and the costs of award shows; and postponing planned salary increases for 2020."
Read, executive committee and board members will take a 20 percent cut in salary and fees for a period of at least three months.
He noted that the sale of $4B in assets during the past 18 months has put WPP in a strong financial position.
"It is clear that the companies in the strongest financial position will be best placed to protect their people, serve their clients and benefit their shareholders during a period of great uncertainty," said Read.
WPP owns Finsbury, Ogilvy, Hill+Knowlton Strategies, GCI Group, Glover Park Group and BCW.
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