1st Quarter Results

WPP Group PLC
20 April 2007



FOR IMMEDIATE RELEASE                                              20 April 2007


                                      WPP
                                        
                                        
                            QUARTERLY TRADING UPDATE
                                        
                                    
                      CONSTANT CURRENCY REVENUES UP OVER 6%
                                        
                                        
                        LIKE-FOR-LIKE REVENUES UP OVER 4%


               FIRST QUARTER OPERATING MARGIN IN LINE WITH BUDGET


               FULL YEAR OPERATING MARGIN FORECAST TO INCREASE IN

                            LINE WITH TARGET OF 15%



Current Trading


Reportable revenues were £1.366 billion, down 0.7%, principally reflecting the
11% decline in the US dollar against sterling. In constant currencies, first
quarter revenues were up 6.3%. On a like-for-like basis, excluding acquisitions
and currency, revenues were up 4.3%. On the same basis, gross margin(1) was up
4.6%. This continues the mid-single digit organic growth rate of the last two
and a half years, which began with the second-half of 2004 and continued through
2005 and 2006. This also reflects the continued strong economic environment
across the world. Some softness in the United States in the last few months,
relative to the strong last half of 2006, has been largely counter-balanced by
improvements in Western Europe.


As shown in the appendix, on a constant currency basis, Asia Pacific, Latin
America, Africa and the Middle East, continue to be the fastest growing region,
with revenues up almost 12%. North America remains strong with revenues up over
6%. Continental Europe was up over 4% with Western Continental Europe continuing
the improvement seen in the second half of 2006. Although the United Kingdom
remained the slowest growing region, revenues were up over 2% and gross margin
up over 3%, reflecting the significance of market research revenues in the
United Kingdom. As more market research is executed on the web, both revenue and
direct costs are reduced. As a result, gross margin is probably the better
measure of performance.


The United States continues to grow, with like-for-like revenues up almost 4%.
The Middle East continues to be the fastest growing area, up almost 22%
like-for-like and Latin America continues the strong growth of 2006, with almost
10% like-for-like growth. Asia Pacific remains strong, with revenues up almost
9%. China and India continued the rapid growth seen in 2006, with first quarter
like-for-like revenues up 25% and over 16% respectively. Western Continental
Europe, although still relatively more difficult, has seen some improvement,
particularly in France, Germany and Italy. The United Kingdom, although better,
remains the slowest growing region in the Group.


By communications services sector, public relations & public affairs showed the
strongest growth with constant currency revenues up almost 13%, with branding &
identity, healthcare and specialist communications (including direct, internet
and interactive) up over 9% and advertising & media investment management up
over 4%. Information, insight & consultancy was up over 1% and gross margin was
up over 5%. Again, as mentioned before, gross margin is a better measure of
performance.


Media investment management and direct, internet and interactive continue to
show strong growth at almost 11% on a like-for-like basis.


Net new business billings of £516 million ($1.007 billion) were won during the
first quarter and the Group continues to benefit from consolidation trends in
the industry, winning several assignments from existing and new clients.


In the first quarter, both operating margins and profitability were in line with
budget. Full year margin forecasts are in line with the Group's margin target
for 2007 of 15.0%.


On a proforma basis, the number of people in the Group, excluding associates,
was up 5.0% or 3,837 at 31 March 2007 to 81,165, as compared to the previous
year. On the same basis, in the first quarter of 2007, the number of people in
the Group averaged 80,867, up 5.1% or 3,937. In line with our strategy,
approximately 70% of these increases were added in the faster growing geographic
markets of Asia Pacific, Latin America, Africa and the Middle East and Central
and Eastern Europe which now account for around 22% of Group revenues.


Balance Sheet and Cash Flow


The Group continues to implement its strategy of using free cash flow to enhance
share owner value through a judicious combination of capital expenditure,
acquisitions and share repurchases, whilst ensuring that these expenditures are
covered by free cash flow. In the twelve months to 31 March 2007, the Group's
free cash flow was £817 million. Over the same period, the Group's capital
expenditure, acquisitions, share repurchases and dividends were £741 million.


Average net debt in the first quarter of 2007 was up £39 million to £1,029
million, compared to £990 million in 2006, at 2007 exchange rates. Net debt at
31 March 2007 was £1,309 million compared to £1,133 million in 2006 (at constant
exchange rates) an increase of £176 million. The current net debt figure
compares with a market capitalisation of approximately £9.7 billion.


In the first quarter of 2007, the Group made acquisitions or increased equity
interests in advertising and media investment management in the United States,
France, Germany, the Netherlands, Russia, Brazil, Colombia, Australia and China;
in information, insight & consultancy in the United States and the United
Kingdom; in direct, internet and interactive in the United States and Mexico.


In the first quarter of 2007, 13.95 million ordinary shares, or over 1% of the
Group's share capital, were purchased at an average price of £7.54 per share and
total cost of £105.2 million. All of these shares were purchased in the market
and subsequently cancelled. As mentioned in the Group's 2006 Preliminary
Announcement, your Board decided to further increase the target percentage for
rolling share buy-backs on the open market, from 2-3% of its share capital each
year, or approximately £200-300 million, to 4-5%, or approximately £400-500
million in each of 2007 and 2008. We are currently running at an annual rate of
over 4%.


Future Objectives


The Group continues to focus on its key objectives of improving operating
profits by 10% to 15% per annum; improving operating margins by a half to one
margin point per annum; improving staff cost to revenue ratios by up to 0.6
margin points per annum; growing revenue faster than industry averages;
continuing to improve our creative reputation and stimulating further
co-operation among Group companies.

    
For further information:
Sir Martin Sorrell          )            [phone]
Paul Richardson             )
Feona McEwan                )
Fran Butera                              (1) 212 632 2235



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 31 March 2007

                                                                 
                                                              Revenue   Constant
                                                               Growth   Currency
Region                                                       Reported  Growth(1)
                        2007        %      2006        %    2007/2006  2007/2006
                          £m    Total        £m    Total          %          %

North America          531.6       39     560.1       41       -5.1        6.5

United Kingdom         206.5       15     202.1       15        2.2        2.2*

Continental Europe     352.5       26     346.3       25        1.8        4.4

Asia Pacific, Latin
America, Africa
& Middle East          275.4       20     267.3       19        3.0       11.7
                       -------   ------   -------   ------  ---------  ---------

TOTAL GROUP          1,366.0      100   1,375.8      100       -0.7        6.3
                       -------   ------   -------   ------  ---------  ---------


*Gross margin up 3.1%

                                                                 
Communications                                                Revenue   Constant
Services Sector                                                Growth   Currency
                                                             Reported    Growth1
                        2007        %      2006        %    2007/2006  2007/2006
                          £m    Total        £m    Total          %          %

Advertising, Media
Investment
Management             630.5       46     644.5       47       -2.2        4.5

Information, Insight
& Consultancy          204.1       15     214.0       16       -4.6        1.4*


Public Relations
& Public Affairs       147.4       11     140.6       10        4.8       12.9

Branding & Identity,
Healthcare and
Specialist             384.0       28     376.7       27        1.9        9.6
Communications         -------   ------   -------   ------  ---------  ---------

TOTAL GROUP          1,366.0      100   1,375.8      100       -0.7        6.3
                       -------   ------   -------   ------  ---------  ---------


*Gross margin up 5.5%


--------------------------

(1) Gross margin is revenue less direct costs




                      This information is provided by RNS
            The company news service from the London Stock Exchange