Advertising group WPP says it is outperforming its biggest rivals thanks to a strong performance in the UK, but chief executive Sir Martin Sorrell warned that “Germany is a challenge” along with France and much of the rest of western Europe.

Asked whether Germany can avoid slipping back into recession, he said: “It’s going to be tough for Germany. Western continental Europe is not a pretty place at the moment.”

Famous for his talk of letter-shaped economic slumps and recoveries, the advertising magnate stuck to his “square root-shaped” vision of the current recovery. “2009 was a V-shaped recession and 2010 a sharp recovery, then a gentle sloping upwards, a moderate recovery [in the coming years] and 2015 will be the same.”

WPP, whose agencies include Grey, JWT and Ogilvy & Mather, saw sales rise 3.1% to £2.76bn between July and September. In the UK, sales were up nearly 15% while western Europe posted a 2.5% drop. Like-for-like revenues rose 7.6% overall, led by 10.2% growth in the UK while North America was up 7.8% and western Europe 4.3%.

The company outdid its main rivals, France’s Publicis and US firms Omnicom and Interpublic.

WPP, which employs nearly 180,000 people across 111 countries, reiterated its full-year sales target but highlighted various risks. “All in all, while clients may be more confident than they were in September 2008, they broadly remain unwilling to take further risks, particularly given multiple geopolitical flash points,” the company said.

In the third quarter, the spread of Ebola in west Africa, the rise of Isis in the Middle East and the pro-democracy demonstrations in Hong Kong posed the greatest challenges, Sorrell said, eclipsing the Ukraine crisis which was the main worry in the second quarter.

He said he was “bullish” about China, WPP’s third-largest business, but warned: “If China sneezes we all catch a cold.”