Wpp Plc · LSE:WPP
Wpp — Investor Presentation (December 2021)
75 slides from Wpp's investor presentation, December 2021
Slide 1: Investor Briefing December 2021
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Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation contains statements that are, or may be deemed to be, “forward-looking statements”. Forward-looking statements give the Group’s current expectations or forecasts of future events. An investor can identify these statements by
Slide 3: - WHAT IS WPP? - MARKET DYNAMICS - STRATEGY AND PROGRESS
- WHAT IS WPP? - MARKET DYNAMICS - STRATEGY AND PROGRESS - WPP FINANCIAL PLAN - PROGRESS IN 2021
Slide 4: What is WPP?
WHAT IS | WIPIPS A
Slide 5: WPP is the Creative Transformation Company
WPP IS THE CREATIVE TRANSFORMATION COMPANY A global network of market-leading agencies with the unrivalled combination of a diverse blue-chip client base, geographic reach and a value-creating growth strategy: STRONG FUNDAMENTALS £9.8bn 12.9% Management team with a track record of delivering Revenue
Slide 6: Our Investment Proposition
OUR INVESTMENT PROPOSITION • Extended offer to high-growth areas of commerce, experience and technology Attractive and growing • Strong digital capabilities; 43% digital media billings in H1 21 addressable markets • Over half of revenue is from companies in the CPG, tech and healthcare & pharma sect
Slide 7: WPP has many of the industry's most powerful and respected brands
WPP HAS MANY OF THE INDUSTRY’S MOST POWERFUL AND RESPECTED BRANDS PR & PUBLIC SPECIALIST GLOBAL INTEGRATED AGENCIES AFFAIRS COMMUNICATIONS CREATIVE AGENCIES MEDIA AGENCIES WPP INVESTOR BRIEFING 7
Slide 8: World's largest advertising company with unparalleled scale
WE ARE THE WORLD’S LARGEST ADVERTISING COMPANY WITH UNPARALLELED SCALE GLOBALLY 14 4% 12 4% 3% Global revenue less pass- 18% 2% 10 10% 2% through costs $bn 2% 11% 6% 8 23% 4% 36% 27% 9% 6 17% 4 62% 58% 65% 38% 2 0 WPP Publicis Omnicom IPG North America Europe Asia Pacific Latin America Other Note: R
Slide 9: Home to the world's leading media investment company, GroupM
HOME TO THE WORLD’S LEADING MEDIA INVESTMENT COMPANY, GROUPM UK NORTH AMERICA #1 #3 EMEA #1 ASIA PACIFIC LATIN AMERICA #1 #1 >$60bn Client media spend 1. Ranked on the basis of 2020 media billings. 9 WPP INVESTOR BRIEFING Source: COMvergence 2020 Billings Rankings and Market Share reports
Slide 10: Global reach and scale in growth markets
GLOBAL REACH AND SCALE IN GROWTH MARKETS NORTH AMERICA WESTERN EUROPE REST OF WORLD 38%1 34%1 28%1 11,000 7,000 19,000 2,000 2,000 6,500 2,000 6,000 9,000 1. % FY20 Revenue less pass-through costs 10 WPP INVESTOR BRIEFING Figures in chart are headcount at Q3 21
Slide 11: With strong technology credentials
WITH STRONG TECHNOLOGY CREDENTIALS 1.6B >20k Working on c.$30B ecommerce with 76 100 OUT OF TOP Audience pool updated Accreditations Annual GMV over WPP-installed for planning and in 2020 across commerce platforms activation daily technology partners1 clients c.43% 25% $10B Top 3 of media billings O
Slide 12: Partner to the world's leading brands
PARTNER TO THE WORLD’S LEADING BRANDS WPP’S TOP Travel & leisure Luxury & premium 2% 20 CLIENTS 6% Financial services 4% CPG CPG/PREMIUM Other 26% 5% Retail 5% Telecom, media & entertainment 7% Automotive Healthcare & pharma 14% 13% PHARMA AND HEALTHCARE AUTOMOTIVE Tech 18% Note: all figures relate
Slide 13: Our purpose is to use the power of creativity to build a better future
OUR PURPOSE IS TO USE THE POWER OF CREATIVITY TO BUILD A BETTER FUTURE FOR OUR… PEOPLE PLANET CLIENTS COMMUNITIES Become the Maximise Support our Build healthy and employer of our positive clients to vibrant choice for all impact on deliver their communities the planet purpose WPP INVESTOR BRIEFING
Slide 14: Market
MARKET 14
Slide 15: Post-COVID structural growth drivers
POST-COVID STRUCTURAL GROWTH DRIVERS AD SPEND: 2021-24 CAGR 6.9% DIGITAL MEDIA: 2021-24 CAGR 9.7% 1,000 800 Jun-20 Dec-20 Jun-21 Jun-20 Dec-20 Jun-21 600 500 400 200 0 0 2018 2019 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 ECOMMERCE: PENETRATION STILL LOW 40% 2018 2020 2024 30% 20% 10% 0% Chi
Slide 16: Streaming services and social video are exploding
STREAMING SERVICES AND SOCIAL VIDEO ARE EXPLODING GLOBAL SUBSCRIBERS HOURS OF VIDEO WATCHED SVOD SUBS1 TO DISNEY+ ON YOUTUBE DAILY 1.2BN >230M 1BN By 2025 By 2024 TIKTOK UNIQUE CREATORS MONTHLY AD-SUPPORTED APP DOWNLOADS STREAMING ON TWITCH VIEWERS ON HULU >2BN 6M+ >92M Worldwide Monthly 1. Digital
Slide 17: Client spend is holding up but it is shifting
CLIENT SPEND IS HOLDING UP — BUT IT IS SHIFTING Q: What percentage of your company’s total revenue is allocated to its total marketing expense budget? 14 12.1% 68% 12 11.4% 11.3% of CMOs expecting martech 11.2% 11.0% 10.5% budget increase 10 Spend on marketing technology 8 now exceeding traditional
Slide 18: Addressable market opportunities in experience, commerce and technology
ADDRESSABLE MARKET OPPORTUNITIES IN EXPERIENCE, COMMERCE AND TECHNOLOGY ARE SIGNIFICANT AND GROWING CAGR CAGR CAGR Forecast spend by WPP capability (19-21) (19-25F) (21-25F) 450 412 2.8% 4.8% 5.8% 400 87 1.0% 5.4% 7.7% 350 329 311 300 38 2.0% 7.6% 10.5% 65 64 SPEND $B 250 26 85 0.8% 7.8% 11.4% 25 20
Slide 19: Purpose a strong business driver
PURPOSE A STRONG BUSINESS DRIVER 9 of our top 10 clients working with us on purpose-related activities 2.5X BRAND VALUE 85% BELIEVE 72% BUY 90% BELIEVE for brands perceived brands should be more environmentally companies have as having a high positive about something more friendly products an enviro
Slide 20: Strategy and Progress
AND
Slide 21: 2018: Legacy issues
2018: LEGACY ISSUES SLOWING GROWTH • Negative growth for 4 quarters • No growth in USA since Q4 2016 • 5 or 6 out of 6 peers in relative growth CLIENT ISSUES • Largest client under review • $4 billion of client business being pitched ORGANISATIONAL • No common WPP vision, culture or purpose COMPLEXI
Slide 22: A strategy for growth
VISION AND OFFER CREATIVITY In December 2018, we set out: DATA AND TECHNOLOGY A STRATEGY FOR GROWTH SIMPLER STRUCTURE PEOPLE AND CULTURE WPP INVESTOR BRIEFING 22
Slide 23: We expanded our offer into faster-growth areas
VISION AND OFFER WE EXPANDED OUR OFFER INTO FASTER-GROWTH AREAS GLOBAL MARKETING EXPENDITURE 2019 $1,000 $873B Addressable $900 Not currently addressable $800 COMMUNICATIONS EXPERIENCE 168 $700 $508B $600 54 $500 $400 $250+B 705 $300 25 $151B $200 454 63 $100 ~200+ 88 COMMERCE TECHNOLOGY $- Communic
Slide 24: Our client satisfaction has improved
VISION AND OFFER OUR CLIENT SATISFACTION HAS IMPROVED LIKELIHOOD TO RECOMMEND 8.2 8 8 8 7.8 7.8 7.6 7.5 7.5 7.4 7.4 7.3 7.2 7 6.8 2018 H1 2018 H2 2019 H1 2019 H2 2020 H1 2020 H2 2021 H1 NET PROMOTER SCORE 0 4 6 7 18 25 26 SOURCE: WPP Vantage; 2.4K-59K+ client responses per period; scores out of 10 W
Slide 25: We have won and retained major clients
VISION AND OFFER WE HAVE WON AND RETAINED MAJOR CLIENTS 2020 Source: COMvergence YEAR-TO-DATE SEP-21 Source: COMvergence. Provisional data WPP INVESTOR BRIEFING 25
Slide 26: We have reclaimed the top holding company at Cannes
CREATIVITY WE HAVE RECLAIMED THE TOP HOLDING COMPANY AT CANNES Holding Company HOLDING COMPANY of the Decade OF THE YEAR Pencils won by eight creative agencies Most Effective Holding Company 2012-2020 Other WPP agencies No.1 Media Holding Company 3 years running 89 awards in 2019; top honours to Ogi
Slide 27: We have deep specialisations in marketing technology
TECHNOLOGY WE HAVE DEEP SPECIALISATIONS IN MARKETING TECHNOLOGY DIGITAL AGENCIES CX ADOBE Gartner Magic Quadrant for IDC Worldwide CX Forrester Adobe Global Digital Agencies, Feb 2020 Improvement Services, 2020 Implementation Services Wave Leaders, Q2 2020 - 4/10 Leaders - WPP/AKQA clear leader WPP
Slide 28: We have radically simplified our structure
SIMPLER STRUCTURE WE HAVE RADICALLY SIMPLIFIED OUR STRUCTURE FROM TO 25 networks 10 networks 65+ speciality businesses <40 speciality businesses 500+ brands 220 brands 10,000 people in campuses 38,000 people working from 20 campuses ACTIONS 100+ local office >£3.5bn raised from 80+ business unit mer
Slide 29: Improving relative performance vs peers
DRIVING AN IMPROVING RELATIVE PERFORMANCE VS PEERS WPP vs. AVG. ORGANIC GROWTH — USA WPP vs. AVG. ORGANIC GROWTH — GLOBAL AVG. TRAILING 4 QUARTERS, 2016-Q321 AVG. TRAILING 4 QUARTERS, 2016-Q321 2% 2% 1.5% 1.6% 1.1% 0.9% 1% 0.9% 1% 0.4% 0.3% 0.4% 0% 0% 0.0% -0.1% -0.4% -0.4% -0.4% -1% -0.7% -0.7% -0.
Slide 30: WPP has a clear leadership position in ESG
PEOPLE AND CULTURE WPP HAS A CLEAR LEADERSHIP POSITION IN ESG SUSTAINALYTICS ESG RISK SCORE SUSTAINALYTICS ESG RISK SCORE vs agency peers vs global leaders 28.9 25.2 23.6 20.7 18.5 14.6 Low risk 15.5 12.5 12.8 Low risk 14.4 12.5 WPP Competitor 1 Competitor 2 Competitor 3 Competitor 4 WPP Global Reta
Slide 31: We set out industry-leading ESG targets
PEOPLE AND CULTURE WE SET OUT INDUSTRY-LEADING ESG TARGETS • WPP commits to reduce absolute Scope 1 and 2 emissions by at least 84% by 2025 from a 2019 base year • WPP also commits to reduce absolute Scope 3 emissions by at least 50% by 2030 from a 2019 base year • Residual emissions will be offset
Slide 32: We will reduce emissions across our business
PEOPLE AND CULTURE WE WILL REDUCE EMISSIONS NET ZERO ACROSS OUR BUSINESS CAMPUSES, POWERED BY RENEWABLE Scopes 1 & 2 ELECTRICITY 100,000 90,000 NATURAL 8% 80,000 Tonnes CO2 equivalent (tCO2e) GAS 70,000 7,000 tCO2e used 60,000 to heat offices 50,000 COMPANY 21% 40,000 CARS 30,000 18,000 tCO2e 20,000
Slide 33: Reducing absolute Scope 3 emissions by 50% by 2030
PEOPLE AND CULTURE REDUCING ABSOLUTE SCOPE 3 EMISSIONS BY 50% BY 2030 Four priority emissions hotspots: • Media spend (55%) • Production (14%) • Technology (6%) Media (55%) • Business travel (3%) Production (14%) 1 Other Procurement (14%) 1 Minority Investments (6%) To reduce emissions from these so
Slide 34: We have significantly strengthened our governance structure
PEOPLE AND CULTURE WE HAVE SIGNIFICANTLY STRENGTHENED OUR GOVERNANCE STRUCTURE Setup today Board of Directors Group Chief Nomination and Sustainability Compensation Audit Committee Governance Executive Officer Committee Committee Committee WPP Executive Risk Committee KEY Committee Board committee W
Slide 35: Enhanced the Board of Directors
PEOPLE AND CULTURE ENHANCED THE BOARD OF DIRECTORS Broad, deep and relevant expertise AS AT DECEMBER 2017 AS AT DECEMBER 2020 BOARD GENDER GEOGRAPHICAL EXPERIENCE BOARD GENDER Exceeding BOARD GENDER Parker Review 13 12 diversity 11 46% 27% target 9 8 5 54% 73% Africa and APAC Europe International La
Slide 36: Aligned management incentives with shareholders
PEOPLE AND CULTURE ALIGNED MANAGEMENT INCENTIVES WITH SHAREHOLDERS • 1,600 key executives awarded WPP Stock Plan. Awards vest three years after grant RETAINING KEY PEOPLE, • 42,000+ employees eligible for WPP share option plans (2019: 38,000+) DRIVING COLLABORATION • Agency leads now partly remunera
Slide 37: Made good progress in driving gender equality
PEOPLE AND CULTURE MADE GOOD PROGRESS IN DRIVING GENDER EQUALITY BOARD AND EXECUTIVE 40% 60% 2020 37% 63% 2019 10 th SENIOR MANAGERS ranking in Hampton- 51% 49% Alexander’s FTSE 100 2020 review of Women on Boards in 2020 50% 50% 2019 ALL OTHER EMPLOYEES 57% 43% 2020 57% 43% 2019 43% TOTAL EMPLOYEES
Slide 38: And continue to focus on diversity
PEOPLE AND CULTURE AND CONTINUE TO FOCUS ON DIVERSITY UNITED STATES 2018, 2019 AND 2020 DATA1,2 Black or African Hispanic or Level Year American Asian Latino White 2020 3.9% 6.9% 6.4% 80.9% Senior/Executive 2019 2.9% 6.6% 6.4% 82.3% Level Managers 2018 2.2% 5.7% 5.8% 85.0% 2020 4.4% 10.6% 9.4% 73.3%
Slide 39: WPP Financial Plan
_ WPP ANCIAL PEA A
Slide 40: WPP's Financial Plan
WPP’S FINANCIAL PLAN 1 2 3 4 ACCELERATED GROWTH FUNDED CLEAR CAPITAL ATTRACTIVE GROWTH THROUGH AND MARGINS ALLOCATION FINANCIAL INVESTMENT IMPROVED THROUGH FRAMEWORK OUTCOMES GROUP-WIDE TRANSFORMATION PROGRAMME WPP INVESTOR BRIEFING 40
Slide 41: Accelerated growth through investment
ACCELERATED GROWTH THROUGH INVESTMENT 1 M&A OF £200-400M ANNUALLY TO ADD P&L INVESTMENT 0.5-1.0% GROWTH RISING TO £400M ANNUALLY BY 2025 TO DRIVE INCREMENTAL 1.5% GROWTH “CORE” GROWTH 1-2% Core Growth P&L Investment M&A MEDIUM-TERM GROWTH POTENTIAL GUIDANCE CORRECT AS OF DEC-20 WPP INVESTOR BRIEFING
Slide 42: Targeting 40% of our business in higher growth areas by 2025
TARGETING 40% OF OUR BUSINESS IN HIGHER 1 GROWTH AREAS BY 2025 SALES MIX ACROSS OFFER PILLARS 12% 20% 8% 5% 8% Technology 17% Commerce Experience Communications 75% 55% WPP 2019 sales mix Market sales mix SOURCE: Market sales mix all IDC, apart from Communications (GroupM/WPP) WPP INVESTOR BRIEFING
Slide 43: Targeting sector opportunities
TARGETING SECTOR OPPORTUNITIES 1 RENEWED GROWTH WITH CONTINUE TO GROW COMPLETE RECOVERY FOCUS EFFORTS IN CPG SECTOR WITH TECH SECTOR IN PHARMA/HEALTHCARE UNDERWEIGHT SECTORS 27% E.G., FINANCIAL SERVICES 26% 18% 13% 12% 12% 6% 4% 2016 9M 2020 2016 9M 2020 2016 9M 2020 2016 9M 2020 PROPORTION OF REVEN
Slide 44: Innovative engines of growth in media
INNOVATIVE ENGINES OF GROWTH IN MEDIA 1 • Programmatic is 80-90% of digital display in US and • 63% YoY growth in US internet-connected devices UK usage, Q2 2020 • Xaxis expected to capture double-digits market • Roku (AVOD) nearly 50% of total US internet-based growth viewing minutes in Q2 • New ma
Slide 45: Investing in higher-growth markets
INVESTING IN HIGHER-GROWTH MARKETS 1 BRAZIL: 2.4% OF WPP CHINA: 6.7% OF WPP INDIA: 2.5% OF WPP 18 Total CAGR: 9.3% 18 Total CAGR: 12.6% 200 Total CAGR: 16.7% 16 Digital CAGR: 9.8% Digital CAGR: 10.4% 16 Digital CAGR: 21.1% 14 14 150 12 12 10 10 100 8 8 6 6 4 50 4 2 2 - - - 2020 2021 2022 2023 2024 2
Slide 46: Summary investment plan
SUMMARY INVESTMENT PLAN 1 Goal to grow in Communications, and to increase the share of our business in Experience, Commerce and Technology to 40% by 2025 £ MILLIONS ANNUAL REINVESTMENT COMMENTS BY 2025 INCENTIVE POOL c.100 Rebuild incentive pool to historical levels: target 3-4% of revenue less pass
Slide 47: Scalable M&A in growth areas
SCALABLE M&A IN GROWTH AREAS 1 COMMUNICATIONS EXPERIENCE MEDIA CREATIVE SCALED CUSTOMER EXPERIENCE BUSINESSES • Enhance planning and • Exceptional creative • End to end digital customer journey design and implementation strategy offer agencies to underpin • Expand experience consulting and delivery
Slide 48: Growth funded and margins improved through group-wide transformation programme
GROWTH FUNDED AND MARGINS 2 IMPROVED THROUGH GROUP-WIDE TRANSFORMATION PROGRAMME BY 2025… 250 200 FUNCTIONAL EFFECTIVENESS/ MARGIN IMPROVEMENT SHARED SERVICES 200 EFFICIENCY (PROCUREMENT AND PROPERTY) 400 REINVESTMENT 150 OPERATING MODEL Savings Outcomes GUIDANCE CORRECT AS OF DEC-20 WPP INVESTOR BR
Slide 49: Functional effectiveness and shared services: £250 million opportunity
FUNCTIONAL EFFECTIVENESS AND SHARED 2 SERVICES: £250 MILLION OPPORTUNITY MODEL TODAY FUTURE MODEL CURRENT COST • Dispersed, siloed and unbalanced • Single, federated approach to global OF FINANCE functions in Finance, HR, IT and legal business functions c. 4% OF REVENUE LESS • c. 8,000 Finance emplo
Slide 50: Efficiency: £200 million opportunity
EFFICIENCY: 2 £200 MILLION OPPORTUNITY REAL ESTATE MODEL TODAY FUTURE MODEL CURRENT • Campus strategy in place since 2018 • Post COVID opportunity to utilise space more ESTABLISHMENT COSTS intensively within existing and future campuses • Already a third of people in 20 campuses • Increase levels of
Slide 51: Operating model: £150 million opportunity
OPERATING MODEL: 2 £150 MILLION OPPORTUNITY MODEL TODAY FUTURE MODEL • 10+ different, opaque country • 3 clearly-defined country operating models models • Long tail of small agencies in • Significant consolidation of local unprofitable countries agency operations • Too many management layers • Simpl
Slide 52: Savings unlocked by significant capital investment
SAVINGS UNLOCKED BY SIGNIFICANT CAPITAL 2 INVESTMENT 600 • Capex forecast at £450-500 million in 500 2021 and 2022 • Partially relates to 400 delayed 2020 capex 300 • Investments in campuses, ERP and 200 shared service centres driving the majority of 100 efficiency savings 0 2021 2022 2023 2024 2025
Slide 53: Approximate phasing of the gross savings target
APPROXIMATE PHASING OF THE GROSS SAVINGS 2 TARGET 700 600 600 525 500 450 400 300 300 200 200 100 0 2021 2022 2023 2024 2025 Operating model Efficiency Functional/shared services GUIDANCE CORRECT AS OF DEC-20 WPP INVESTOR BRIEFING 53
Slide 54: Clear capital allocation framework
CLEAR CAPITAL ALLOCATION FRAMEWORK 3 • Invest in growth, with a goal to increase revenue less pass-through costs from Experience, Commerce and Technology to Capex A sustainable, investment progressive 40% by 2025 in our estate, dividend, set at around 40% of technology and headline EPS • Provide sha
Slide 55: Strong financial outcomes
STRONG FINANCIAL OUTCOMES 4 ACCELERATED IMPROVED MEDIUM-TERM GROWTH PROFITABILITY Targeting revenue less pass- Targeting headline operating through costs growth of 3–4% margin of 15.5–16.0% in 2023 annually from 2023 GUIDANCE CORRECT AS OF DEC-20 WPP INVESTOR BRIEFING 55
Slide 56: Recap: accelerating our growth
RECAP: ACCELERATING OUR GROWTH 1 2 3 4 ACCELERATED GROWTH GROWTH FUNDED AND MARGINS CLEAR CAPITAL ALLOCATION ATTRACTIVE THROUGH INVESTMENT IMPROVED THROUGH GROUP-WIDE FRAMEWORK FINANCIAL OUTCOMES TRANSFORMATION PROGRAMME • Accelerating through growth in • Plans in place to target £600 million of • C
Slide 57: Progress in 2021
IN 2021 57
Slide 58: Q3 21: Very strong performance, beyond a cyclical recovery
Q3 21: VERY STRONG PERFORMANCE, BEYOND A CYCLICAL RECOVERY • Q3 LFL1 revenue less pass-through costs +15.7% (Q1 +3.1%, Q2 +19.3%) - GIA +13.5%, PR +16.0%, Specialist Agencies +41.5% - +6.9% LFL over 2019 (Q1: -0.3%, Q2 +1.3%) • Q3 LFL1 revenue less pass-through costs by major market: US +12.4%, UK +
Slide 59: Global Integrated Agencies: VMLY&R and GroupM very strong
GLOBAL INTEGRATED AGENCIES: VMLY&R AND GROUPM VERY STRONG SUMMARY REPRESENTS • Industry-leading media business, 75% £7.3BN 13.2% HEADLINE GroupM • Four distinctive global integrated REVENUE LESS PASS- OF WPP GROUP1 THROUGH COSTS2 OPERATING PROFIT creative networks: VMLY&R, MARGIN COSTS2 Wunderman Th
Slide 60: Specialist Agencies: encouraging trajectory
SPECIALIST AGENCIES: ENCOURAGING TRAJECTORY SUMMARY REPRESENTS • High demand for branding and 16% £1.6BN 9.5% HEADLINE innovation driving strong growth at Landor & Fitch, Superunion, Design OF WPP GROUP1 REVENUE LESS PASS- OPERATING PROFIT Bridge THROUGH COSTS2 MARGIN2 • Strength in specialist healt
Slide 61: Public Relations: strong sector throughout 2021
PUBLIC RELATIONS: STRONG SECTOR THROUGHOUT 2021 SUMMARY REPRESENTS • Three leading networks in BCW, Hill + 9% £0.9BN 16.5% HEADLINE Knowlton and Finsbury Glover Hering • Finsbury Glover Hering merged with REVENUE LESS PASS- OF WPP GROUP1 THROUGH COSTS2 OPERATING PROFIT Sard Verbinnen to create the w
Slide 62: Leveraging our strength with industry-leading partnerships
LEVERAGING OUR STRENGTH WITH INDUSTRY-LEADING PARTNERSHIPS >5,750 GMP certified consultants Google Marketing Platform Global Partner Launched Snapchat First-of-its-kind global ‘AR Lab’ partnership agency partnership with TikTok X Global-first collaboration to Global Salesforce Partner Sitecore’s Glo
Slide 63: Ongoing strategic progress
ONGOING STRATEGIC PROGRESS SATALIA FINSBURY GLOVER HERING/SVC NUMERATOR • Acquired in Aug-21 • Merger with SVC in Oct- • Acquired in Jul-21 • AI-driven solutions in 21 • Kantar significantly resource optimisation • Creates the world’s strengthens US presence • Clients include leading strategic • Num
Slide 64: Major markets performance
MAJOR MARKETS PERFORMANCE 1 USA: FY20 LFL1 (5.8%) UK: FY20 LFL (10.5%) GERMANY: FY20 LFL (4.4%) Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 31.8% 34.5% 32.1% 20.3% 16.9% 12.6% 12.4% 9.3% 6.2% 3.9% 2.5
Slide 65: Other major markets performance
OTHER MAJOR MARKETS PERFORMANCE 1 INDIA: FY20 LFL (11.5%) FRANCE: FY20 LFL (14.7%) CANADA: FY20 LFL (4.4%) Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 30.0% 33.5% 28.0% 27.9% 16.1% 15.7% 7.1% 14.4% 9.
Slide 66: Significant improvement in net debt year-on-year
SIGNIFICANT IMPROVEMENT IN NET DEBT YEAR-ON-YEAR (£M) -696 -1,540 -1,629 -2,318 Notes: - Net debt at 30 September 2020 was £2.6 billion at 2021 exchange rates, leading to a year-on-year reduction in net debt to September 2021 of £1.0 billion 66 WPP INVESTOR BRIEFING - Itemised movements in net debt
Slide 67: Guidance and buyback
GUIDANCE AND BUYBACK • Full year 2021 LFL revenue less pass-through costs growth now expected to be 11.5-12.0%, up from 9-10% • Headline operating margin slightly above 14% • £448 million share buybacks year-to-date - £600 million by year-end - Plan to continue at a similar rate up to 2021 prelimina
Slide 68: Summary and outlook
SUMMARY AND OUTLOOK • Very strong quarter; raising guidance for the full year again • Ongoing execution of strategy: - Targeted acquisitions in growth areas - Creating global leaders in the WPP portfolio • Good momentum into 2022: - Strong new business performance, retaining key accounts - Leveragin
Slide 69: Modelling considerations for FY22 and FY23
MODELLING CONSIDERATIONS FOR FY22 AND FY23 Correct as of Nov-21 FY22 FY23 Organic growth No guidance 2.5-3.0% Acquisitions No guidance 0.5%-1.0% Headline operating profit margin No guidance 15.5%-16.0% Benchmark tax rate Pre-associates tax rate c.24.0% in FY21, rising c.0.5% annually Capex £450-500m
Slide 70: Appendix
APPENDIX
Slide 71: Debt maturity profile at Sept 30, 2021
DEBT MATURITY PROFILE £M AT SEPT 30, 2021 £ TOTAL £ TOTAL CREDIT DRAWN ◼ £ bonds £400m (2.875% Sep ’46) 400 400 700 ◼ US bond $220m (5.625% Nov ’43) 163 163 600 ◼ US bond $93m (5.125% Sep ’42) 69 69 ◼ £ bonds £250m (3.75% May ’32) 250 250 500 ◼ Eurobonds €600m (1.625% Mar ’30) 516 516 400 ◼ Eurobond
Slide 72: Revenue less pass-through costs growth by region like-for-like
REVENUE LESS PASS-THROUGH COSTS GROWTH¹ BY REGION LIKE-FOR-LIKE % C. & E. Europe % Q1 Q2 Q3 YTD 9.5 20.6 11.9 14.0 UK % North America % Q1 Q2 Q3 YTD 3.9 31.8 16.9 16.9 Q1 Q2 Q3 YTD 1.6 13.7 12.2 9.1 W. Cont. Europe % Q1 Q2 Q3 YTD 3.7 27.1 21.5 17.2 Asia Pacific % Q1 Q2 Q3 YTD 4.7 11.7 12.6 9.8 Afric
Slide 73: Revenue less pass-through costs by region: North America vs International
REVENUE LESS PASS-THROUGH COSTS BY REGION: NORTH AMERICA VS INTERNATIONAL (2020, %) 100 90 35 38 80 43 70 62 74 60 50 % 40 65 62 30 58 20 38 26 10 0 IPG PUB OMC WPP Dentsu North America International IPG North America figure is US only WPP INVESTOR BRIEFING 73
Slide 74: Revenue less pass-through costs by client industry (2020)
REVENUE LESS PASS-THROUGH COSTS BY CLIENT INDUSTRY (2020, %) 100 9 12 13 90 22 10 5 30 8 80 4 13 7 15 14 70 4 8 8 60 9 16 10 13 5 50 % 4 26 16 12 14 40 25 30 13 15 16 20 34 24 26 10 22 18 0 IPG PUB OMC WPP Dentsu CPG + Food/Beverage TMT Healthcare Automotive Financials Retail Other WPP INVESTOR BRIE
Slide 75: Investor Contacts
INVESTOR CONTACTS PEREGRINE RIVIERE FRAN BUTERA CAITLIN HOLT Group Investor Relations Director Director, Investor Relations Investor Relations Senior Manager [email protected] [email protected] [email protected] Tel: +44 (0) 7909 907 193 Tel: +1 914 484 1198 Tel: +44 (0) 7392 280 178 MA