Wpp Plc · LSE:WPP
Wpp — FY2008 Earnings Presentation
93 slides from Wpp's earnings presentation, March 2009
Slide 1: Results for 2008
WPP Results for 2008 London March 2009 1
Slide 2: Agenda
WPP 1 Results for 2008 2 Key Priorities, Objectives and Strategy 3 Conclusions 4 Structure and Competitive Position (Hard Copy Only) 2
Slide 3: Results for 2008
WPP 1 Results for 2008 3
Slide 4: Results for 2008
Results for 2008 Billings up over 16% to £36.9 billion. Reported revenue up almost 21%. On a constant currency basis, revenue up 9%. Like-for-like revenue up almost 3%. Headline PBIT up over 20% to £1,118m from £928m. Headline operating margin unchanged at 15.0% against target of 15.3% including TNS
Slide 5: Results for 2008
Results for 2008 Headline PBT up over 18% to £968m from £817m. Diluted headline EPS up over 21% to 55.5p from 45.8p. Second interim dividend up 12.6% to 10.28p per share, full year dividend up 15% to 15.47p. Estimated net new business billings of almost £2.9 billion ($5.6 billion). 5
Slide 6: Growth vs prior year
Results for 2008 % growth vs prior year Revenue Headline² Headline² PBIT EPS Like-for-like 2.7 n/a n/a Acquisitions 6.3 n/a n/a Constant currency 9.0 6.2 5.5 Foreign exchange 11.9 14.3 15.7 Reportable sterling 20.9 20.5 21.2 Reportable US dollars¹ 9.7 6.4 5.6 ¹ Translated into US$, using among other
Slide 7: Unaudited Headline IFRS Income Statement
Results for 2008 Unaudited Headline¹ IFRS Income Statement Year to 31 December 2008 2007 Change Constant £m £m % Currency % Revenue 7,476.9 6,185.9 20.9 9.0 Headline operating profit 1,071.7 887.4 20.8 6.6 Income from associates 46.5 40.6 PBIT 1,118.2 928.0 20.5 6.2 Net finance costs (149.8) (110.7)
Slide 8: Unaudited IFRS Income Statement
Results for 2008 Unaudited IFRS Income Statement Year to 31 December 2008 2007 Change £m £m % Revenue 7,476.9 6,185.9 20.9 Operating Profit pre-goodwill/ intangibles 1,071.7 887.4 Goodwill/ intangibles charges, FA gains (195.7) (82.7) Operating Profit 876.0 804.7 8.9 Income from associates 46.0 41.4
Slide 9: Headline Performance Versus Consensus
Results for 2008 Headline¹ Performance Versus Consensus Median Actual Consensus Results +/ (-) Revenue £7,271m £7,477m £206m PBIT £1,066m £1,118m £52m Net finance costs £(147m) £(150)m £(3)m PBT £919m £968m £49m Fully Diluted EPS 52.7p 55.5p 2.8p PBIT Margin 14.7% 15.0% +3bpp Fully Diluted Shares 1,
Slide 10: Revenue by Discipline
Results for 2008 Revenue by Discipline 2008 2007 % Change £m £m Reported Constant Like-for- Currency like Advertising, Media Investment Management 3,329.5 2,871.3 16.0 4.4 3.6 Information, Insight & Consultancy 1,301.8 905.4 43.8 27.8 3.0 Public Relations & Public Affairs 752.3 641.4 17.3 6.9 4.9 Br
Slide 11: Revenue by Region
Results for 2008 Revenue by Region 2008 2007 % Change £m £m Reported Constant Like-for- Currency like North America 2,603.2 2,266.7 14.8 4.6 (0.3) UK 954.2 890.3 7.2 7.2 2.2 Continental Europe 2,127.3 1,657.4 28.4 9.6 2.3 Asia Pacific, Latin America, Africa & Middle East 1,792.2 1,371.5 30.7 16.9 8.
Slide 12: Headline PBIT and Margin by Discipline
Results for 2008 Headline PBIT¹ and Margin¹ by Discipline Headline PBIT Headline Margin 2008 2007 2008 2007 £m £m % % Advertising, Media Investment 581.3 466.9 17.5 16.3 Management Information, Insight & Consultancy 147.6 104.3 11.3 11.5 Public Relations & Public Affairs 124.9 106.5 16.6 16.6 Brandi
Slide 13: Headline PBIT and Margin by Region
Results for 2008 Headline PBIT¹ and Margin¹ by Region Headline PBIT Headline Margin 2008 2007 2008 2007 £m £m % % North America 438.3 391.5 16.8 17.3 UK 124.1 107.1 13.0 12.0 Continental Europe 303.5 223.0 14.3 13.5 Asia Pacific, Latin America, Africa & Middle East 252.3 206.4 14.1 15.0 Total 1,118.
Slide 14: Revenue Growth by Country
Results for 2008 Revenue Growth by Country Revenue Growth¹ Countries 20%+ Argentina, Brazil, India 15-20% Poland, South Africa 10-15% Canada, Denmark, France, Sweden 5-10% Germany, Mainland China², Mexico, UK <5% Australia, Italy, Japan, Netherlands, Singapore, Spain, US 1 Constant currency ² Like-f
Slide 15: Revenue Growth by Category
Results for 2008 Revenue Growth by Category Revenue Growth1 Categories 15-20% Computers, Telecommunications 5-10% Automotive, Financial Services, Food, Personal Care & Drugs, Retail <5% Drinks, Entertainment, Oil 1 Constant currency 15
Slide 16: WPP 2008 – Revenue by Industry
WPP 2008 – Revenue by Industry Quarter 4 2008 Full Year 2008 T&E T&E Auto Auto 4% Telcom 4% 10% 10% Telcom 9% Consumer 9% Consumer Products Products 7% 7% Technology Technology 8% 8% Retail Retail 3% Personal Care FMCG 3% Personal Care FMCG 14% 13% 35% 36% Healthcare Healthcare 11% 10% Food & Drink
Slide 17: Effects of Strength of Sterling
Results for 2008 Effects of Strength of Sterling Currency movements accounted for a 12% increase in revenue, reflecting the weakness of the £ sterling against all major currencies. Sterling was weaker on average in 2008 than in 2007 by 7.4% against the dollar, 13.9% weaker against the euro, and 18.4
Slide 18: Trade Estimates of Major New Business Wins
Results for 2008 Trade Estimates of Major New Business Wins Agency Account Office Billings ($m) Team Chemistry Johnson & Johnson USA 468 mec Novartis² USA 300 MediaCom Time Warner USA 250 MAXUS Fiat Europe 225 Mindshare Estee Lauder¹ Worldwide 200 Ogilvy Motorola EMEA 200 JWT Microsoft Worldwide 200
Slide 19: Trade Estimates of Major New Business Wins
Results for 2008 Trade Estimates of Major New Business Wins Agency Account Office Billings ($m) Mindshare American Family Insurance USA 90 Grey/ Mindshare Hong Kong Tourist Board Asia 84 JWT Diageo Worldwide 80 MediaCom Procter & Gamble Asia Pacific 80 Grey BMW USA 60 Y&R/MAXUS Cellular South USA 60
Slide 20: Trade Estimates of Major New Business Losses
Results for 2008 Trade Estimates of Major New Business Losses Agency Account Office Billings ($m) Mindshare Novartis³ Worldwide 300 MediaCom Eli Lilly USA 250 MAXUS Estee Lauder¹ USA 200 JWT Unilever Worldwide 150 mec Cadbury Schweppes USA 140 mec Cadbury Adams USA 120 Mindshare Kellogg Europe 100 m
Slide 21: Internal Estimates of Net New Business Wins in 2008
Results for 2008 Internal Estimates of Net New Business Wins in 2008 Billings ($m) Creative Media Total Advertising 1,686 2,806 4,492 Other Businesses 1,131 - 1,131 Total 2,817 2,806 5,623 The Group came first in two of the three leading industry new business tables for 2008. 21
Slide 22: Major New Business Wins & Losses Since 1 January
Results for 2008 Trade Estimates of Major New Business Wins & Losses Since 1 January Agency Account Office Billings ($m) mec Sony Latam 150 WINS MAXUS Yili Dairy China 50 Wunderman Nokia Worldwide Not disclosed mec Canon EMEA 75 LOSSES mec Long John Silvers USA 35 22
Slide 23: Cash Flow
Results for 2008 Cash Flow 2008 2007 £m £m Operating profit 1,072 888 Non-cash compensation 62 62 Depreciation & amortisation charges 173 144 Net interest paid & similar charges (134) (106)¹ Tax paid (182) (151) Net cash generation 991 837 23 ¹ Includes £22m of 1% rolled-up coupon on maturity of the
Slide 24: Uses of Cash Flow
Results for 2008 Uses of Cash Flow 2008 2007 £m £m Net cash generation 991 837 Capital expenditure (221) (171) Acquisition payments: − Net initial payments¹ TNS (2007 – 24/7 Real Media) (736) (290) Other (242) (978) (289) (579) − Earnout payments (68) (94) − Loan note redemptions (3) (2) (1,049) (67
Slide 25: Net Finance Costs / (Income)
Results for 2008 Net Finance Costs / (Income) £m 2008 2007 B/(W) Interest on net debt 155.9 108.0 (47.9) Investment income (9.7) (9.2) 0.5 IAS 19 (Pensions) 9.2 7.2 (2.0) Earnout interest 0.5 1.7 1.2 IAS 32 (Convertibles) (6.1) 3.0 9.1 (6.1) 2.7 8.8 Headline finance costs 149.8 110.7 (39.1) IAS 39 (
Slide 26: Net Debt - December 2008
Results for 2008 Net Debt - 31 December 2008 2008 2007 % £m £m Variance YTD average net debt on constant (2,206) (1,592) (39%) currency basis YTD average net debt on reportable (2,206) (1,459) (51%) currency basis Net debt at 31 December (3,068) (1,286) (139%) Headline finance costs (150) (111) Inte
Slide 27: Debt Maturity Profile
Results for 2008 Debt Maturity Profile £m As at 31 December 2008 Maturity Total Total 2009 2010 2011 2012 2013 2014 2015 2016 2017 . 2020 Credit Drawn £ bonds £200m (6.375% ’20) 200 200 200 £ bonds £400m (6% ’17) 400 400 400 Eurobonds €750m (6.625% ’16) 718 718 718 Eurobonds €500m (5.25% ’15) 479 47
Slide 28: Banking Facility Covenants
Results for 2008 Banking Facility Covenants No covenants or ratings triggers on public bonds. Bank Revolver and new TNS facilities subject to the following covenants: – Net Debt/EBITDA ≤ 3.5 measured half yearly – EBITDA/Net Interest ≥ 5.0 measured half yearly – The covenant definitions for EBITDA a
Slide 29: Historic Average Net Debt/EBITDA
Results for 2008 Historic Average Net Debt/EBITDA £ million Average debt/ EBITDA 2,400 3.0 2,200 2,000 1,800 2.5 1,600 1,400 1,200 2.0 1,000 800 600 1.5 400 200 0 1.0 2002 2003 2004 2005 2006 2007 2008 29 Average net debt EBITDA Average net debt/EBITDA
Slide 30: Roll Forward of Net Debt
Results for 2008 Roll Forward of Net Debt £ millions 4,500 £294m cash inflow pre FX and M&A 4,000 92 162 112 221 990 3,500 109 313 3,000 Acquisition 3,068 payment £736m 2,500 1,314 Debt acquired 2,000 £578m 1,500 449 1,000 1,286 500 0 Dec 07 net FX TNS Other M&A Working Capex Share Dividends Other C
Slide 31: Pensions Deficit
Results for 2008 Pensions Deficit £m 2008 2007 Deficit B/F (135) (187) Service cost (17) (14) Deficit interest charge (39) (34) Funding 44 47 Investment returns (net) (50) 58 Acquisitions (TNS) (16) - Other movements (4) (2) Movements in the year excluding FX (82) 55 Foreign exchange impact (55) (3)
Slide 32: Earnout Accrual
Results for 2008 Earnout Accrual 2008 Rollforward £m Expected Payments £m 31 Dec 07 319 2009 90 Earnouts paid (68) 2010 128 Revised estimates (32) New acquisitions 37 2011 97 TNS earnouts 23 2012 53 Reduction excluding FX (40) 2013 8 Foreign exchange impact 97 31 Dec 08 376 Total 376 32
Slide 33: Share Buybacks and Capital Allocation
Results for 2008 Share Buybacks and Capital Allocation In the first half of 2008 18.8m shares, equivalent to 1.6% of share capital, were acquired at a cost of £112m. The Group was required to withdraw from the buyback market during the TNS bid process. At the time of the TNS offer, the Group stated
Slide 34: Ordinary Shares - Basic
Results for 2008 Ordinary Shares - Basic December December 2008 2007 No. of Shares (million) Actual Actual 1 January 1,191 1,241 Share buybacks (19) (57)¹ Option exercise 2 7 TNS 81 - 31 December 1,255 1,191 -5.4% Weighted Average 1,187 1,218 ESOP, Treasury & Other (43) (41) Average Basic 1,144 1,17
Slide 35: Ordinary Shares – Diluted
Results for 2008 Ordinary Shares – Diluted December December 2008 2007 No. of Shares (millions) Actual Actual Average Basic 1,144 1,177 +2.8% Share Option Dilution 3 16 Other Potentially Issuable Shares 16 25 Sub-Total 1,163 1,218 Convertibles: Grey $150m ¹ 7 9 Fully Diluted Shares 1,170 1,227 +4.6%
Slide 36: Earnings and EPS
Results for 2008 Earnings and EPS¹ Earnings (£m) 2004 UK GAAP IFRS 700 55.5p 21% 600 9% 45.8p 42.0p 17% 500 36.0p 32.3p 29% 400 11% 27.9p 29.0p 300 200 100 0 2003 2004 2005 2006 2007 2008 ¹ Diluted Headline Earnings and Diluted Headline EPS 36
Slide 37: Key Priorities, Objectives and Strategy
WPP 2 Key Priorities, Objectives and Strategy 37
Slide 38: Key Priorities, Objective and Strategy: Long-term factors
Key Priorities, Objective and Strategy Long-term factors Globalisation / Americanisation / BRICs Overcapacity, shortage of human capital The Web (internet penetration, e-commerce, mobile) Internal communications Retail concentration Corporate responsibility and the environment Global and local struc
Slide 39: Key Priorities, Objectives and Strategy
Key Priorities, Objectives and Strategy Faster growing markets to be one third of total group. Marketing services including new media to be two thirds of total group. Quantitative disciplines including consumer insight to be one half of total group. 39
Slide 40: Faster Growing Markets to be One Third of Total Group
Key Priorities, Objectives and Strategy Faster Growing Markets to be One Third of Total Group Today¹ Today Including Associates¹ Tomorrow Faster growing markets including Central & 33% 24% Eastern Europe 27% 28% 34% 29% 33% 3% 3% 40% 33% 40% N. America Europe Asia Pacific, Latin America, Africa & Mi
Slide 41: WPP's Performance Strong in BRIC Markets
Key Priorities, Objectives and Strategy WPP’s Performance¹ Strong in BRIC Markets Revenue $’m 800 700 600 Associates @ 100% 500 400 300 200 100 0 07 00 08 00 07 08 07 00 00 08 08 07 20 20 20 20 20 20 20 20 20 20 20 20 China (including Hong Brazil India Russia Kong and Taiwan) 41 ¹ 2008 adjusted to i
Slide 42: WPP's Performance in Other Faster Growing Markets
Key Priorities, Objectives and Strategy WPP’s Performance¹ in Other Faster Growing Markets Revenue $’m 700 600 500 Associates @ 100% 400 300 200 100 0 00 07 08 00 07 08 00 07 08 00 07 08 20 20 20 20 20 20 20 20 20 20 20 20 Middle East Eastern Europe Indonesia Vietnam 42 ¹ 2008 adjusted to include a
Slide 43: WPP in Faster Growing Markets
Key Priorities, Objectives and Strategy WPP in Faster Growing Markets Region Market Billings1 % Share¹ Rank¹ 12 month2 People² $bn Revenue $bn ‘000 Asia Greater China3 3.2 40% 1 0.7 12.5 India 1.2 57% 1 0.3 8.4 Thailand 0.4 40% 1 0.1 1.2 LatAm Brazil4 1.1 25% 1 0.7 8.4 Mexico 0.7 23% 2 0.1 1.8 Argen
Slide 44: Revenue by Geography
Key Priorities, Objective and Strategy Revenue by Geography $15.4bn $13.4bn 3.6 Asia Pacific, LatAm, Africa & Middle East 1.5 Europe N America 4.8 6.8 $7.0bn $6.9bn 1.3 1.3 1.8 2.6 7.1 $2.3bn $2.3 bn 5.1 3.9 0.2 2.9 1.7 1.3 0.7 0.6 WPP¹ Omnicom IPG Publicis Havas Aegis 1 Source: WPP - sterling reven
Slide 45: Slowdown in Advertising Growth 2008-2009
Key Priorities, Objectives and Strategy Slowdown in Advertising Growth 2008-2009 15% North America Western Europe Latin America 10% Asia Pacific Worldwide 5% 0% 2006 2007 2008 2009 -5% -10% 1. Source: March 4 2009 GroupM unpublished media forecast growth projections, 2006 and 2007 are actual, 2008 a
Slide 46: Media Billings by Geography
Key Priorities, Objectives and Strategy Media Billings by Geography Worldwide ranking by Group as % of the Six Groups 40 35 WPP 30 Publicis Omnicom 25 IPG 20 Aegis Havas 15 10 5 0 Americas Europe Asia Pacific Worldwide 46 Source: RECMA August 2008 billings report, based on 2007 data.
Slide 47: Marketing Services to be Two Thirds of Total Group
Key Priorities, Objectives and Strategy Marketing Services to be Two Thirds of Total Group Today¹ Today including associates¹ Tomorrow 39% 33% 40% 60% 67% 61% Marketing Services Advertising & Media Investment Management ¹ Based on full year 2008 reported revenue adjusted to include a full year of TN
Slide 48: Revenue by Discipline
Key Priorities, Objective and Strategy Revenue by Discipline $15.4bn $13.4bn Marketing Services Advertising Media 9.5 7.6 $7.0bn $6.9bn 2.9 2.5 3.6 4.7 2.6 2.6 $2.3bn $2.3bn 0.8 0.9 2.3 1.8 1.0 1.1 1.4 1.4 0.5 WPP ¹ Omnicom IPG Publicis Havas Aegis Source: 1 WPP sterling revenue converted at $1.85=£
Slide 49: Quantitative Disciplines to be One Half of Total Group
Key Priorities, Objectives and Strategy Quantitative Disciplines to be One Half of Total Group Information, Insight & Consultancy to represent over $4 billion including TNS. Creates second largest Information, Insight & Consultancy group globally. Creates fourth largest business information group gl
Slide 50: Quantitative Disciplines to be One Half of Total Group
Key Priorities, Objectives and Strategy Quantitative Disciplines to be One Half of Total Group Today ¹ Today including associates ¹ Tomorrow 50% 38% 38% 62% 62% 50% Information, Insight & Consultancy and Direct, Internet & Interactive Advertising, Media Investment Management & Other Marketing Servic
Slide 51: WPP Position in Direct, Internet and Interactive
Key Priorities, Objectives and Strategy WPP¹ Position in Direct, Internet and Interactive $’m Digital, Internet and Interactive Networks 2,421 +14% vs 2007 (OgilvyOne, Wunderman, rmg:connect, G2 and WPP Digital) % of Group revenues 16% Specialist Digital, Internet and Interactive resources: - Inform
Slide 52: 2008 Digital Revenue
Key Priorities, Objective and Strategy 2008 Digital Revenue $billions 3.9 2.2 1.3 1.0 0.3 0.4 2 2 3 3 3 WPP¹ Omnicom IPG Publicis Havas Aegis Source: ¹ WPP is “wide” definition, adjusted to include a full year of TNS. ² Ad Age %s applied to FY08 US$ revenue. 3 Company Disclosure. 52
Slide 53: Top things you didn't know about WPP Digital
Key Priorities, Objectives and Strategy Top 11 things you didn’t know about WPP Digital WPP’s wide global digital revenue is almost 3x that of Publicis (Source: Ad Age). GroupM is the largest agency customer of Google, Yahoo!, MSN, and Baidu, with spend of nearly $900m on Google alone in 2008 (ca 6%
Slide 54: Top things you didn't know about WPP Digital
Key Priorities, Objectives and Strategy Top 11 things you didn’t know about WPP Digital 24/7’s DecideDNA the #1 rated platform for managing global search campaigns according to Jupiter Research’s SEM Constellation Report. Since being acquired by WPP in May 2007, billings managed by 24/7’s DecideDNA
Slide 55: We continue to focus on our key objectives
Key Priorities, Objectives and Strategy We continue to focus on our key objectives Improving operating margins. Increasing flexibility in the cost base. Using free cash flow to enhance share owner value, and improve return on capital employed. Developing the role of the parent company. Emphasising r
Slide 56: Historic Headline PBIT and Margins
Key Priorities, Objectives and Strategy PBIT1 £’m Historic Headline PBIT¹ and Margins PBIT1 margin % 1200 Long-term IFRS target 19% 20% Revised Objectives: 1,118 2010 14.8% 1000 15.0% 15.0% 16% 2009 14.3% 14.1% 14.5% 14.0% 13.0% 928 800 12.3% 13.0% 859 2008 including 755 12% full year of TNS 14.3% 6
Slide 57: Increasing flexibility in the cost base
Key Priorities, Objectives and Strategy Increasing flexibility in the cost base Change in variable costs % 14 2002 12.8 2007 12 11.4 2008 10 9.2 8 7.4 6.6 6 5.3 4 2 0 Variable Staff costs as a % of Staff costs Variable Staff costs as a % of Revenue 57
Slide 58: Dividends and Share Repurchases
Key Priorities, Objectives and Strategy Using Free Cash Flow to Enhance Share Owner Value Dividends and Share Repurchases 2008 second interim dividend raised by 12.6% to 10.28p per share. Distributions to share owners: Share Repurchases Dividends Paid Amount % of Share Base 2000 £25.6m £94.1m 1.3% 2
Slide 59: Distributions to Share owners
Key Priorities, Objectives and Strategy Using Free Cashflow to Enhance Share Owner Value £ millions Distributions to Share owners¹ 600 6.6% Buybacks 500 Dividends paid 400 4.8% 415 300 4.7% 3.6% 258 112 200 2.7% 152 2.0% 1.6% 89 100 76 23 139 162 100 119 56 67 82 0 2002 2003 2004 2005 2006 2007 2008
Slide 60: Acquisitions
Key Priorities, Objectives and Strategy Using Free Cashflow to Enhance Share Owner Value Acquisitions Continue to focus on the faster growing geographical areas and marketing services, particularly direct, internet & interactive and information, insight & consultancy. During 2008 24 small and mid si
Slide 61: TNS Summary
Key Priorities, Objectives and Strategy TNS Summary Strong performance for full year and last two months. Full year organic revenue growth and two month organic growth both 5.5%. Worldpanel, Media and Europe Custom particularly strong in 2008. Synergy planning and execution progressing well – foreca
Slide 62: TNS Integration
Key Priorities, Objectives and Strategy TNS Integration Actions taken on public company cost and structure (Legal, IT, PR, Board etc). Integration planned and synergy targets broken down into individual workstreams. New structure and management team announced in February 2009. 62
Slide 63: TNS Consideration
Key Priorities, Objectives and Strategy TNS Consideration Use of Funds £m Source of Funds £m TNS equity 1,025 New shares (80.5m) 270 TNS debt¹ 559 New facilities 1,173 Other facilities 141 1,584 1,584 In 10 months to October 2008, TNS spent approximately £65m on acquisitions and £30m on advisory fee
Slide 64: Acquisitions
Key Priorities, Objectives and Strategy Acquisitions¹ Faster Growing Quantitative and Markets Digital Actis (Russia) Advertures (Czech) 10AM (Singapore) Agenda (Asia) DATA INTELLIGENCE (Denmark) Encompass (India) Evision (China) DesignKitchen (USA) Rikes (Hong Kong) NuConomy (Israel) HeathWallace (U
Slide 65: Acquisitions
Key Priorities, Objectives and Strategy Acquisitions¹ Advertising and Media Investment Management AdPeople (Denmark) LaComunidad (Netherlands) Public Relations and Public Affairs Axicom (UK) ¹ Excludes equity step ups 65
Slide 66: Investments
Key Priorities, Objectives and Strategy Investments¹ Quantitative & Digital HDT (China) IGA (China) immi (USA) Jump Tap (USA) Media Rights Capital (USA) Proclivity (USA) Realtime World (USA) Yield Software (USA) 66 ¹ Interests of less than 20%
Slide 67: Acquisitions since 1 January 2009
Key Priorities, Objectives and Strategy Acquisitions¹ since 1 January 2009 Faster Growing Quantitative and Markets Digital Danone CRM (France) H-art (Italy) Jupiter Drawing Room (S. Africa) Omniture² (USA) Smart Media (Vietnam) Red Dot Square (UK, USA) Video Egg Series E² (USA) Healthcare Lob Consei
Slide 68: Conclusions
WPP 3 Conclusions 68
Slide 69: Conclusions: Outlook
Conclusions Outlook The unprecedented financial crisis has triggered recession across the globe. Our revised budgets show low single digit like-for-like revenue decline. 2009 will be a very difficult year, particularly in the first half and we will take the necessary steps to deal with any revenue d
Slide 70: Conclusions
Conclusions The Group continues to be well placed by region and discipline to benefit from key industry trends. The TNS acquisition represents a major competitive advantage for our Information, Insight & Consultancy business and the Group, as well as a source of margin improvement. In the long term
Slide 71: Structure and Competitive Position (Hard Copy Only)
WPP 4 Structure and Competitive Position (Hard Copy Only) 71
Slide 72: WPP Today
WPP Today WPP is the world’s largest communication services group with over 135,000 people (including associates) in over 2,400 offices in 107 countries worldwide. 345 of the Fortune Global 500, 29 of the Dow Jones 30, 50 of the Nasdaq 100 and 33 of the Fortune e-50 as clients. 443 clients in all fo
Slide 73: WPP has many of the best known brands in the industry
WPP Today WPP has many of the best known brands in the industry Ranked 1 or 2 in all sectors in which it competes TNS Ogilvy & Mather Worldwide Millward Brown JWT BrandAsset Valuator and BRANDZ Y&R Advertising United / red cell Grey OgilvyOne Mindshare Wunderman Mediaedge:cia rmg:connect MediaCom 14
Slide 74: WPP Today
WPP Today Revenue £7.5bn¹ WPP PBIT £1,118m Branding & Identity, Media Information, Public Relations Healthcare and Advertising Investment Insight & & WPP Digital Management Specialist Consultancy Public Affairs Communications Revenue £3.3bn Revenue £1.3bn¹ Revenue £752m Revenue £2.1bn Revenue Broade
Slide 75: Global Strength in Advertising
WPP Today Global Strength in Advertising Market Position (Gross Income) WPP (1) OMC IPG Publicis USA 1 4 2 3 EMEA 1 2 4 3 Asia Pacific (2) 1 2 4 3 Japan 3 5 4 7 Latin America 1 4 2 3 Source: Advertising Age, 22 April 2002. Based on gross income for agency brands (1) Includes Cordiant acquired on 1 A
Slide 76: Worldwide Advertising Rank by Market
WPP Today Worldwide Advertising Rank by Market WPP (1) OMC IPG Publicis Australia 1 2 4 3 Belgium 1 3 2 5 Brazil 1 4 2 3 France 4 1 5 3 Germany 1 2 3 4 Greater China (3) 1 6 3 2 India 1 3 2 4 Italy 1 5 3 2 Japan 3 5 4 7 Mexico 1 3 2 4 Netherlands 2 1 4 3 Russia 2 1 4 3 Singapore 1 3 4 2 Spain 1 3 2
Slide 77: Advertising
WPP Today Advertising Ogilvy & Y&R Mather JWT Grey United Advertising Worldwide (Global) (Global) (Global) (Global) (Global) CEO: Chairman and CEO: Chairman & CEO: Chairman & CEO: CEO: Miles Young Bob Jeffrey Hamish McLennan Jim Heekin Ewen Cameron DY&R Asatsu - DK Chime Joint Venture (Japan) (UK) R
Slide 78: Advertising - Competitive Worldwide Ranking
WPP Today Advertising - Competitive Worldwide Ranking Worldwide JWT 3 Ogilvy & Mather 8 Grey 9 Y&R Advertising 13 Source: Advertising Age, April 2002. 78
Slide 79: Media Investment Management
WPP Today Media Investment Management: CEO: Irwin Gotlieb GroupM KR Media Mindshare Mediaedge:cia MediaCom MAXUS (49.9%) CEO: Dominic Proctor Chairman: Charles Courtier CEO: Stephen Allan CEO: Kelly Clark Joint CEO: Bruno Kemoun CEO: Dominic Grainger Joint CEO: Eryck Rebbouh Kinetic 79
Slide 80: Media Investment Management - Competitive Worldwide Ranking
WPP Today Media Investment Management - Competitive Worldwide Ranking Americas EMEA Asia Pacific Worldwide Mindshare 3 6 1 3 Mediaedge:cia 5 5 7 6 MediaCom 6 3 6 5 GroupM 2 1 1 1 Source: RECMA Billings & Rankings 2007 Actual, published August 2008. 80
Slide 81: Kantar
WPP Today Chairman & CEO: Kantar Eric Salama Kantar Media Millward Brown BPRI Added Value Cheskin Added Value Kantar Japan IMRB AMRB, TAM 50% Kantar Retail The Futures Yankelovich/ Company Henley Centre, HeadlightVision Kantar Healthcare TNS/ Research International Kantar Worldpanel Center Partners
Slide 82: Kantar Media, Retail and Healthcare
WPP Today Kantar Media Kantar Retail TNS Media KMR Retail Cannondale Red Dot Square Glendinning MVI Forward Media Intelligence, Ibope 43% iTRAM, Compete, Cymfony Kantar Healthcare Mattson TNS Ziment Jack 82
Slide 83: Information, Insight & Consultancy – Worldwide Competitive Ranking
WPP Today Information, Insight & Consultancy – Worldwide Competitive Ranking 1. The Nielsen Company 2. Kantar/ TNS 3. IMS 4. GfK 5. Ipsos 6. Synovate 7. IRI 83 Source: ESOMAR 2007, published Sept 2008.
Slide 84: Public Relations & Public Affairs
WPP Today Public Relations Executive Vice President, & Public Relations/Public Affairs: Howard Paster Public Affairs Ogilvy Public Hill & Burson- Cohn & Relations Knowlton Marsteller Wolfe Worldwide Chairman & CEO: Chairman & CEO: Founding Chairman: CEO: Donna Imperato Paul Taaffe Marcia Silverman H
Slide 85: Public Relations & Public Affairs - Competitive Worldwide Ranking
WPP Today Public Relations & Public Affairs - Competitive Worldwide Ranking Worldwide Hill & Knowlton 3 Burson-Marsteller 4 GCI 9 Ogilvy Public Relations Worldwide 10 Source: Advertising Age, April 2002. 85
Slide 86: Branding & Identity
WPP Today Branding & Identity BtoD Group CEO: Craig Branigan Landor The Brand Union Fitch The Partners Addison CEO: Charlie Wrench CEO: Simon Bolton Lambie-Nairn CEO: Rodney Fitch VBAT 86
Slide 87: Healthcare
WPP Today Healthcare CommonHealth Ogilvy Healthworld Grey Healthcare Group Sudler & Hennessey President & CEO: Chairman & CEO: CEO: Chairman & CEO: Matt Geigerich Tro Piliguian Lynn O’Connor Vos Jed Beitler 87
Slide 88: Direct, Internet and Interactive
WPP Today Direct, Internet and Interactive JWT Specialised rmg:connect Wunderman G2 OgilvyOne¹ 141 Communications President & CEO: Chairman & CEO: Chairman & CEO: Chairman & CEO: Chairman & CEO: CEO: Tim Gibbon Philip Greenfield Daniel Morel Joe Celia Brian Rick Roth Fetherstonhaugh ¹ Includes Neo@O
Slide 89: Specialist Communications
WPP Today Specialist Communications Relationship Media, Technology Sports Demographic Industry Sector Marketing and & Production Marketing Marketing Marketing Promotion Services 89
Slide 90: Specialist Communications
WPP Today Specialist Communications Relationship Demographic Marketing & Promotion Marketing The Geppetto Group Uniworld Group¹ EWA Forward Group Mando Brand Assurance Brierley & Partners¹ Grass Roots¹ 90 ¹ Associate companies
Slide 91: Specialist Communications
WPP Today Specialist Communications Media, Technology & Industry Sector Sports Marketing Production Services Marketing Global Sportnet Metro Broadcast Imagina¹ Spafax The Food Group The Farm Pace MJM Creative Services ¹ Investment 91
Slide 92: New Technology
WPP Today New Technology New Technology Ogilvy WPP Digital Wunderman OgilvyOne Interactive G2 rmg CEO: Mark Read Interactive Blast Radius Neo@Ogilvy 24/7 Real Media Blue Schematic Syzygy¹ Quasar Loyalty & Web Content Portal Search Software Information Data Mining Sports Rel. Mktg Dev’t ² Associate c
Slide 93: WPP
WPP Results for 2008 London March 2009 93