WPP Quarterly Trading Update

* First Quarter Reported Revenues Up Over 73%



* Combined WPP & Y&R Constant Currency Revenues Up Over 9%



* Operating Margins on Target to Improve by One Margin Point in 2001



Apr 26, 2001, 01:00 ET from WPP Group plc

    LONDON, April 26 /PRNewswire/ -- WPP Group plc (Nasdaq: WPPGY) today
 announced financial results for the first quarter ended March 31, 2001.
 
     Revenue Growth
     Reported revenues grew over 73%, reflecting organic growth, the first-time
 contribution of Young & Rubicam, Inc. ("Y&R") and other acquisitions and the
 strength of the dollar and major Continental European currencies against
 sterling. In constant currencies, first quarter revenues rose by 64%.
     Combined WPP and Y&R constant currency revenues were up over 9% and on a
 like-for-like basis, excluding acquisitions and currency fluctuations,
 revenues rose 6%.
     As shown in the appendix to this release, on a constant currency basis,
 the geographical pattern of revenue growth varied in the first quarter. In
 North America, revenues were up over 64%. In Europe, the UK was up over 35%
 and Continental Europe up over 90%. Asia Pacific, Latin America, Africa and
 the Middle East grew over 72%. On a combined WPP and Y&R constant currency
 basis, North America was below the average, with the UK and Continental Europe
 above. Asia Pacific and Latin America were above even more.
     By communications services sector, advertising and media investment
 management was up over 64%, information and consultancy up almost 15%, public
 relations and public affairs up almost 117% and branding and identity,
 healthcare and specialist communications over 83%. Again on a combined WPP and
 Y&R constant currency basis, information and consultancy was well above the
 average. Advertising and media investment management, public relations and
 public affairs and branding and identity, healthcare and specialist
 communications were slightly below average.
     Net new business billings of 235 million pounds ($365 million) were won
 during the first quarter. The Group continues to benefit from consolidation
 trends in the industry, winning several large assignments from existing and
 new clients.
 
     Current Trading
     Organic revenue growth in the first quarter, to some extent reflects the
 sharp deceleration in the growth rate of the United States economy that seems
 to have started in the fourth quarter of 2000. The impact of this slowdown has
 primarily impacted the technology, media and telecommunications sectors of the
 economy, although there is some spill over into the "old" economy.
     So far, by region, it has primarily affected North America, with less
 impact on the UK and Continental Europe and even less on Asia Pacific and
 Latin America. As a result our operating companies continue to review their
 costs closely and make adjustments where necessary.
     By communications services sector, it has impacted public relations and
 public affairs, and branding and identity, healthcare and specialist
 communications the most, advertising and media investment management less so,
 and information and consultancy the least.
     First quarter revised forecasts for the year indicate that the Group is on
 target to achieve its objective of a further one point margin improvement in
 operating margins from 14.0% to 15.0% in 2001.
 
     Balance Sheet and Cash Flow
     The Group continues to implement its strategy of using free cash flow to
 enhance share owner value through a combination of strategic acquisitions and
 share purchases.
     In the first quarter of 2001 the Group completed acquisitions in
 advertising and media investment management in the United States, the United
 Kingdom, South Korea and Brazil; in information and consultancy in Germany; in
 public relations and public affairs in the United States, France and South
 Korea; and in branding and identity, healthcare and specialist communications
 in the United States, the United Kingdom, France and Hong Kong.
     Almost 3.8 million WPP shares were purchased during the first quarter at
 an average price of 7.57 pounds and total cost of over 28 million pounds. The
 rolling buy-back program continues at an increased target level of 150 to
 200 million pounds per annum, equivalent to approximately 2% of the current
 market capitalization.
     Average net debt rose during the first quarter to 470 million pounds
 (including Y&R's convertible debt of 195 million pounds) compared to
 239 million pounds in the same period in constant currency and to a market
 capitalization of approximately 9 billion pounds.  This includes the
 653 million pounds spent on capital expenditure, acquisitions, share purchases
 and dividends in the previous 12 months.  Free cash flow over the same period
 was 417 million pounds.
 
     Future Objectives
     The Group continues to focus on its key objectives of improving operating
 profits and margins, increasing cost flexibility (particularly in the areas of
 staff and property costs), using free cash flow to enhance share owner value,
 continuing to develop the role of the parent company in adding value to our
 clients and people, developing our portfolio in high revenue growth
 geographical and functional areas and improving our creative quality and
 capabilities.
 
     This press release may contain forward-looking statements within the
 meaning of the federal securities laws.  These statements are subject to risks
 and uncertainties that could cause actual results to differ materially
 including adjustments arising from the annual audit by management and the
 company's independent auditors.  For further information on factors which
 could impact the company and the statements contained herein, please refer to
 public filings by the company with the Securities and Exchange Commission. The
 statements in this press release should be considered in light of these risks
 and uncertainties.
 
               Appendix: Revenue and revenue growth by region and
                         communications services sector
 
     3 months ended March 31, 2001
 
                                                       Revenue      Constant
                                                        Growth      Currency
     Region                                           Reported     Growth(1)
                               2001          2000    2001/2000     2001/2000
                           pounds m      pounds m            %             %
 
     North America            468.9         260.0         80.3          64.1
 
     United Kingdom           150.4         111.1         35.4          35.4
 
     Continental Europe       198.3         101.5         95.4          90.6
 
     Asia Pacific, Latin
       America, Africa
       & Middle East          148.8          85.4         74.2          72.1
                              -----         -----         -----         -----
     Total Group              966.4         558.0         73.2          64.3
                              -----         -----         -----         -----
 
                                                       Revenue      Constant
     Communications services                            Growth      Currency
     sector                                           Reported     Growth(1)
                               2001          2000    2001/2000     2001/2000
                           pounds m      pounds m            %             %
 
     Advertising, media
       investment
       management             431.3         249.5         72.9          64.2
 
     Information &
       consultancy            135.1         113.5         19.0          14.7
 
     Public relations
       & public affairs(2)    130.7          56.2        132.6         116.9
 
     Branding & identity,
       healthcare and
       specialist
       communications         269.3         138.8         94.0          83.3
                              -----         -----         -----         -----
     Total Group              966.4         558.0         73.2          64.3
                              -----         -----         -----         -----
 
     (1) Constant currency growth excludes the effects of currency movements.
 
     (2) The revenue figures submitted to the O'Dwyer Report reflect some
         public relations income which is included here in advertising, media
         investment management and branding & identity, healthcare and
         specialist communications.  Total public relations and public affairs
         revenues grew by over 97% to $205 million in the three months to
         March 31.
 
 

SOURCE WPP Group plc
    LONDON, April 26 /PRNewswire/ -- WPP Group plc (Nasdaq: WPPGY) today
 announced financial results for the first quarter ended March 31, 2001.
 
     Revenue Growth
     Reported revenues grew over 73%, reflecting organic growth, the first-time
 contribution of Young & Rubicam, Inc. ("Y&R") and other acquisitions and the
 strength of the dollar and major Continental European currencies against
 sterling. In constant currencies, first quarter revenues rose by 64%.
     Combined WPP and Y&R constant currency revenues were up over 9% and on a
 like-for-like basis, excluding acquisitions and currency fluctuations,
 revenues rose 6%.
     As shown in the appendix to this release, on a constant currency basis,
 the geographical pattern of revenue growth varied in the first quarter. In
 North America, revenues were up over 64%. In Europe, the UK was up over 35%
 and Continental Europe up over 90%. Asia Pacific, Latin America, Africa and
 the Middle East grew over 72%. On a combined WPP and Y&R constant currency
 basis, North America was below the average, with the UK and Continental Europe
 above. Asia Pacific and Latin America were above even more.
     By communications services sector, advertising and media investment
 management was up over 64%, information and consultancy up almost 15%, public
 relations and public affairs up almost 117% and branding and identity,
 healthcare and specialist communications over 83%. Again on a combined WPP and
 Y&R constant currency basis, information and consultancy was well above the
 average. Advertising and media investment management, public relations and
 public affairs and branding and identity, healthcare and specialist
 communications were slightly below average.
     Net new business billings of 235 million pounds ($365 million) were won
 during the first quarter. The Group continues to benefit from consolidation
 trends in the industry, winning several large assignments from existing and
 new clients.
 
     Current Trading
     Organic revenue growth in the first quarter, to some extent reflects the
 sharp deceleration in the growth rate of the United States economy that seems
 to have started in the fourth quarter of 2000. The impact of this slowdown has
 primarily impacted the technology, media and telecommunications sectors of the
 economy, although there is some spill over into the "old" economy.
     So far, by region, it has primarily affected North America, with less
 impact on the UK and Continental Europe and even less on Asia Pacific and
 Latin America. As a result our operating companies continue to review their
 costs closely and make adjustments where necessary.
     By communications services sector, it has impacted public relations and
 public affairs, and branding and identity, healthcare and specialist
 communications the most, advertising and media investment management less so,
 and information and consultancy the least.
     First quarter revised forecasts for the year indicate that the Group is on
 target to achieve its objective of a further one point margin improvement in
 operating margins from 14.0% to 15.0% in 2001.
 
     Balance Sheet and Cash Flow
     The Group continues to implement its strategy of using free cash flow to
 enhance share owner value through a combination of strategic acquisitions and
 share purchases.
     In the first quarter of 2001 the Group completed acquisitions in
 advertising and media investment management in the United States, the United
 Kingdom, South Korea and Brazil; in information and consultancy in Germany; in
 public relations and public affairs in the United States, France and South
 Korea; and in branding and identity, healthcare and specialist communications
 in the United States, the United Kingdom, France and Hong Kong.
     Almost 3.8 million WPP shares were purchased during the first quarter at
 an average price of 7.57 pounds and total cost of over 28 million pounds. The
 rolling buy-back program continues at an increased target level of 150 to
 200 million pounds per annum, equivalent to approximately 2% of the current
 market capitalization.
     Average net debt rose during the first quarter to 470 million pounds
 (including Y&R's convertible debt of 195 million pounds) compared to
 239 million pounds in the same period in constant currency and to a market
 capitalization of approximately 9 billion pounds.  This includes the
 653 million pounds spent on capital expenditure, acquisitions, share purchases
 and dividends in the previous 12 months.  Free cash flow over the same period
 was 417 million pounds.
 
     Future Objectives
     The Group continues to focus on its key objectives of improving operating
 profits and margins, increasing cost flexibility (particularly in the areas of
 staff and property costs), using free cash flow to enhance share owner value,
 continuing to develop the role of the parent company in adding value to our
 clients and people, developing our portfolio in high revenue growth
 geographical and functional areas and improving our creative quality and
 capabilities.
 
     This press release may contain forward-looking statements within the
 meaning of the federal securities laws.  These statements are subject to risks
 and uncertainties that could cause actual results to differ materially
 including adjustments arising from the annual audit by management and the
 company's independent auditors.  For further information on factors which
 could impact the company and the statements contained herein, please refer to
 public filings by the company with the Securities and Exchange Commission. The
 statements in this press release should be considered in light of these risks
 and uncertainties.
 
               Appendix: Revenue and revenue growth by region and
                         communications services sector
 
     3 months ended March 31, 2001
 
                                                       Revenue      Constant
                                                        Growth      Currency
     Region                                           Reported     Growth(1)
                               2001          2000    2001/2000     2001/2000
                           pounds m      pounds m            %             %
 
     North America            468.9         260.0         80.3          64.1
 
     United Kingdom           150.4         111.1         35.4          35.4
 
     Continental Europe       198.3         101.5         95.4          90.6
 
     Asia Pacific, Latin
       America, Africa
       & Middle East          148.8          85.4         74.2          72.1
                              -----         -----         -----         -----
     Total Group              966.4         558.0         73.2          64.3
                              -----         -----         -----         -----
 
                                                       Revenue      Constant
     Communications services                            Growth      Currency
     sector                                           Reported     Growth(1)
                               2001          2000    2001/2000     2001/2000
                           pounds m      pounds m            %             %
 
     Advertising, media
       investment
       management             431.3         249.5         72.9          64.2
 
     Information &
       consultancy            135.1         113.5         19.0          14.7
 
     Public relations
       & public affairs(2)    130.7          56.2        132.6         116.9
 
     Branding & identity,
       healthcare and
       specialist
       communications         269.3         138.8         94.0          83.3
                              -----         -----         -----         -----
     Total Group              966.4         558.0         73.2          64.3
                              -----         -----         -----         -----
 
     (1) Constant currency growth excludes the effects of currency movements.
 
     (2) The revenue figures submitted to the O'Dwyer Report reflect some
         public relations income which is included here in advertising, media
         investment management and branding & identity, healthcare and
         specialist communications.  Total public relations and public affairs
         revenues grew by over 97% to $205 million in the three months to
         March 31.
 
 SOURCE  WPP Group plc