Post on 22-Jan-2022
Q3 TRADING UPDATE
28 October 2021
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 the fact that they do not relate strictly to historical or current facts. They use words such as ‘anticipate’, ‘estimate’,‘expect’, ‘intend’, ‘will’, ‘project’, ‘plan’, ‘believe’, ‘target’ and other words and terms of similar meaning in connectionwith any discussion of future operating or financial performance.
Other than in accordance with its legal or regulatory obligations (including under the Market Abuse Regulations, UK Listing Rules and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority), the Group undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Investors should, however, consult any additional disclosures that the Group may make in any documents which it publishes and/or files with the US Securities and Exchange Commission (SEC). All investors, wherever located, should take note of these disclosures. Accordingly, no assurance can be given that any particular expectation will be met and investors are cautioned not to place undue reliance on the forward-looking statements. Forward-looking statements are subject to assumptions, inherent risks and uncertainties, many of which relate to factors that are beyond the Group’s control or precise estimate. The Group cautions investors that a number of important factors, including those in this presentation, could cause actual results to differ materially from those expressed or implied in any forward-looking statement. Such factors include, but are not limited to, those discussed under Item 3.D ‘Risk factors’ in the Group’s Annual Report on Form 20-F for FY 2020 and any impacts of the COVID-19 pandemic. Any forward-looking statements made by or on behalf of the Group speak only as of the date they are made and are based upon the knowledge and information available to the Directors on the date of this presentation.
2
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Q3 2021 TRADING UPDATE
1. Q3 HIGHLIGHTS2. FINANCIAL PERFORMANCE3. BUSINESS UPDATE4. Q&A
AGENDA
• 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 +16.9%, Germany +34.5%, Greater China +18.0%, Australia +2.4%, India +28.0%
• Strong performance in new business: $4.6 billion YTD, new wins include Beiersdorf, L’Oreal, Sainsbury’s and TD Bank; Unilever and Bayer retained/expanded
• Ongoing strategic progress: merger of Finsbury Glover Hering and SVC, acquisition of Satalia
• £448 million share buybacks year-to-date; at least £600 million in total by year-end
• Net debt £1.6 billion, down £1.0 billion year-on-year at 2021 exchange rates
• Full year guidance raised again: LFL1 revenue less pass-through costs 11.5-12.0%, headline operating margin slightly above 14%
4
VERY STRONG PERFORMANCE, BEYOND A CYCLICAL RECOVERY
Q3 2021 TRADING UPDATE1. Like-for-like. LFL comparisons are calculated as follows: current year, constant currency actual results (which include acquisitions
from the relevant date of completion) are compared with prior year, constant currency actual results, adjusted to reflect the results of acquisitions and disposals for the commensurate period in the prior year.
FINANCIAL PERFORMANCE
REVENUE LESS PASS-THROUGH COSTS BY QUARTER
CONTINUING OPERATIONS
£M Δ REPORTED Δ LFL Δ VS 19 LFL
Q1 2,334 (1.4%) 3.1% (0.3%)
Q2 2,565 11.5% 19.3% 1.3%
H1 4,899 5.0% 11.0% 0.5%
Q3 2,640 9.9% 15.7% 6.9%
YTD 7,539 6.7% 12.6% 2.6%
6Q3 2021 TRADING UPDATE
GLOBAL INTEGRATED AGENCIES: GROUPM VERY STRONG
Q3 PERFORMANCE
• +5.9% LFL on Q3 2019
• GroupM +19.0% LFL, +14.6% on Q3 2019
• Continued double-digit LFL growth at Hogarth, VMLY&R
• AKQA Group, Ogilvy and Wunderman Thompson all showing an improving two-year trend compared to Q2
Note: 2020 growth rates have not been restated for the reassignment of AKQA, Geometry, GTB and International Healthcare from Specialist Agencies to Global Integrated Agencies from Q1 2021
(2.6%)
(15.7%)
(6.7%) (6.3%)
2.8%
19.2%
13.5%
0.1% 0.5%
5.9%
(20.0%)
(15.0%)
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021
LFL REVENUE LESS PASS-THROUGH COSTS GROWTH
1-year 2-year
7Q3 2021 TRADING UPDATE
PUBLIC RELATIONS: HIGH DEMAND FOR STRATEGIC COMMS ADVICE
Q3 PERFORMANCE
• +12.6% LFL on Q3 2019
• Specialist PR continues to be the strongest performer
• Accelerating growth at BCW and H+K
• Finsbury Glover Hering/SVC merger
(1.4%)
(7.5%)
(2.9%)(4.1%)
2.0%
12.9%
16.0%
0.6%
4.4%
12.6%
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
15.0%
20.0%Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021
LFL REVENUE LESS PASS-THROUGH COSTS GROWTH
1-year 2-year
8Q3 2021 TRADING UPDATE
SPECIALIST AGENCIES: BEST-PERFORMING SECTOR
Q3 PERFORMANCE
• +21.8% LFL on Q3 2019
• Brand Consulting in strong demand
• CMI momentum continues
• Growth boosted by COVID-related contract in Germany
Note: 2020 growth rates have not been restated for the reassignment of AKQA, Geometry, GTB and International Healthcare from Specialist Agencies to Global Integrated Agencies from Q1 2021
(7.4%)
(16.3%)(13.9%)
(8.6%)
7.5%
27.8%
41.5%
(0.5%)
7.0%
21.8%
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021
LFL REVENUE LESS PASS-THROUGH COSTS GROWTH
1-year 2-year
9Q3 2021 TRADING UPDATE
MAJOR MARKETS PERFORMANCE1
1. Like-for-like revenue less pass-through costs growth vs prior year from continuing operations
2.Includes Hong Kong and Taiwan
(9.6%)(5.5%) (6.2%)
0.7%
12.6% 12.4%
(1.2%)
1.8% 6.2%
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021USA
(23.3%)
(6.5%) (7.4%)
3.9%
31.8%
16.9%
(0.5%)
1.1%9.3%
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021UK
(11.6%)
(1.8%) (0.8%)
2.5%
20.3%
34.5%
(1.9%)
6.3%
32.1%
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021GERMANY
(3.1%)
(16.7%)(12.1%)
18.4%
1.4%
18.0%
(6.8%)(1.7%) (1.7%)
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021GREATER CHINA2
(20.3%)(13.3%)
(9.4%) (7.6%)
8.4%2.4%
(12.2%) (13.6%) (11.2%)
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021AUSTRALIA
10Q3 2021 TRADING UPDATE
Key
1-year growth rate
2-year growth rate
OTHER MAJOR MARKETS PERFORMANCE1
1. Like-for-like revenue less pass-through costs growth vs prior year from continuing operations
(27.9%)
(13.1%) (12.7%)
(1.0%)
27.9%16.1%
(5.0%) (7.8%)
0.9%
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021FRANCE
(20.6%)
0.5% 3.6%
15.7%33.5%
8.7%14.4%
6.0% 9.2%
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021CANADA
(17.2%) (11.9%) (12.8%)(4.7%)
15.8% 12.7%
(8.3%)(4.1%) (0.7%)
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021
SPAIN
(29.9%)
(5.3%) (7.4%)
12.4%
52.7%
14.3%
(5.8%)
7.0% 8.2%
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021
ITALY
11Q3 2021 TRADING UPDATE
(25.1%)(16.3%)
(8.9%)(0.5%)
30.0% 28.0%
5.6%
(2.6%)
7.1%
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021INDIA
Key
1-year growth rate
2-year growth rate
SIGNIFICANT IMPROVEMENT IN NET DEBT YEAR-ON-YEAR (£M)
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- Itemised movements in net debt represent management figures, which may vary from the
presentation of the cash flow under IFRS- Acquisitions/disposals include earn-out payments
12Q3 2021 TRADING UPDATE
-696
-1,629
-1,540
-2,318
• 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 preliminary results
GUIDANCE AND BUYBACK
13Q3 2021 TRADING UPDATE 13Q3 2021 TRADING UPDATE
BUSINESS UPDATE
ONGOING STRATEGIC PROGRESS
• AI-driven solutions in resource optimisation
• Clients include Unilever, Tesco and DFS
• >80 people across Europe
• Acting as a hub of AI expertise across WPP
SATALIA
• Merger with SVC• Creates the world’s
leading strategic communications firm
• Board-level engagement• Reputation and purpose
increasingly important to our clients
FINSBURY GLOVER HERING/SVC
• Kantar significantly strengthens US presence
• Numerator: digital panel of >1 million US consumers
• Advanced analytics for faster insights
• Strong underlying progress at Kantar
NUMERATOR
15Q3 2021 TRADING UPDATE
OUR WORK
Sky GlassAKQA
16Q3 2021 TRADING UPDATE
Blue Paradox/SCJOgilvy
OUR WORK
17Q3 2021 TRADING UPDATE
Mondelez DiwaliOgilvy
OUR WORK
18Q3 2021 TRADING UPDATE
1. H1 20 figure2. YTD Sep-20
INDUSTRY-LEADING PARTNERSHIPS
Launched Snapchat ‘AR Lab’ partnership
>5,750 GMP certified consultants
Google Marketing Platform Global Partner
First-of-its-kind global agency partnership with
TikTok
Sitecore’s Global Excellence in Solution Delivery award 2021
Global Salesforce Partner Innovation in Media award
2021 (Emark)
Global-first collaboration to access Amazon Advertising’s Overlapping Audiences API
X
19Q3 2021 TRADING UPDATE
ACCOUNT M/C REGION WPP AGENCY
M NA 2 2
M Global
C NA
M 6 markets
STRONG NEW BUSINESS PERFORMANCE
ACCOUNT M/C1 REGION WPP AGENCY
M Global
M Global
M Global
M Europe and APAC
C NA
M APAC
C Europe
C NA
M NA
M APAC
M Europe
M APAC
M Global
C Europe
M APAC
M 6 markets
Selected wins/retentions since August Selected losses since August
1. Media/Creative2. Haworth is a 49% owned subsidiary
20Q3 2021 TRADING UPDATE
YEAR-TO-DATE MEDIA NEW BUSINESS
21Q3 2021 TRADING UPDATESource: COMvergence. Provisional data
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- Leveraging technology partnerships for skills and growth- Some markets/sectors still impacted by COVID
22Q3 2021 TRADING UPDATE
Q&A
OTHER FINANCIAL INFORMATION
REVENUE LESS PASS-THROUGH COSTS GROWTH VS PRIOR YEAR
Q3
15.7%
(0.4%)
(5.4%)
9.9%
LFL
Acquisitions/ disposals
FX
Reported
Q2
19.3%
(0.3%)
(7.5%)
11.5%
Acquisitions/ disposals
FX
Reported
LFL
Q1
3.1%
(0.2%)
(4.3%)
(1.4%)
LFL
Acquisitions/disposals
FX
Reported
Continuing Operations:
YTD
12.6%
(0.3%)
(5.6%)
6.7%
LFL
Acquisitions/ disposals
FX
Reported
25Q3 2021 TRADING UPDATE
REVENUE LESS PASS-THROUGH COSTS BY SECTOR1
THIRD QUARTER 2021 £M 2020 £M Δ REPORTED Δ LFL
Global Integrated Agencies 2,185 2,016 8.3% 13.5%
Public Relations 231 210 10.4% 16.0%
Specialist Agencies 224 175 27.9% 41.5%
Total Continuing Operations 2,640 2,401 9.9% 15.7%
1. Continuing operations
During 2020, we announced the intention to combine Grey and AKQA into the AKQA Group, and to bring Geometry and GTB into VMLY&R, and International Healthcare into VMLY&R and Ogilvy. As a result AKQA, Geometry, GTB and International Healthcare are now reported within Global Integrated Agencies, having previously been reported within Specialist Agencies. 2020 comparable figures have been adjusted by a total of £211m to reflect this change
26Q3 2021 TRADING UPDATE
REVENUE LESS PASS-THROUGH COSTS BY REGION1
THIRD QUARTER 2021 £M 2020 £M Δ REPORTED Δ LFL
North America 975 922 5.6% 12.2%
UK 362 311 16.4% 16.9%
Western Continental Europe 562 493 14.0% 21.5%
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 741 675 9.9% 15.6%
Total Continuing Operations 2,640 2,401 9.9% 15.7%
1. Continuing operations 27Q3 2021 TRADING UPDATE
REVENUE LESS PASS-THROUGH COSTS BY SECTOR
NINE MONTHS YEAR-TO-DATE 2021 £M 2020 £M Δ REPORTED Δ LFL
Global Integrated Agencies 6,254 5,913 5.8% 11.8%
Public Relations 660 636 3.9% 10.3%
Specialist Agencies 625 520 20.1% 24.9%
Total Continuing Operations 7,539 7,069 6.7% 12.6%
1. Continuing operations
During 2020, we announced the intention to combine Grey and AKQA into the AKQA Group, and to bring Geometry and GTB into VMLY&R, and International Healthcare into VMLY&R and Ogilvy. As a result AKQA, Geometry, GTB and International Healthcare are now reported within Global Integrated Agencies, having previously been reported within Specialist Agencies. 2020 comparable figures have been adjusted by a total of £646m to reflect this change
28Q3 2021 TRADING UPDATE
REVENUE LESS PASS-THROUGH COSTS BY REGION
NINE MONTHS YEAR-TO-DATE 2021 £M 2020 £M Δ REPORTED Δ LFL
North America 2,792 2,779 0.5% 9.1%
UK 1,042 897 16.2% 16.9%
Western Continental Europe 1,612 1,412 14.1% 17.2%
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 2,093 1,981 5.7% 12.3%
Total Continuing Operations 7,539 7,069 6.7% 12.6%
1. Continuing operations 29Q3 2021 TRADING UPDATE
REVENUE LESS PASS-THROUGH COSTS GROWTH¹ BY REGION LIKE-FOR-LIKE %
% Q1 Q2 Q3 YTD
Mature Markets 2.6 20.5 15.7 12.8
Faster Growing Markets 4.7 16.1 15.6 12.4
Total 3.1 19.3 15.7 12.6
North America %Q1 Q2 Q3 YTD1.6 13.7 12.2 9.1
UK %Q1 Q2 Q3 YTD3.9 31.8 16.9 16.9
W. Cont. Europe %Q1 Q2 Q3 YTD3.7 27.1 21.5 17.2
Africa & M. East %
Q1 Q2 Q3 YTD(5.9) 19.2 15.0 9.0
C. & E. Europe %Q1 Q2 Q3 YTD9.5 20.6 11.9 14.0
Asia Pacific %Q1 Q2 Q3 YTD4.7 11.7 12.6 9.8
Latin America %Q1 Q2 Q3 YTD
10.2 30.5 30.8 24.0
30Q3 2021 TRADING UPDATE1. Continuing operations
3.5%
(16.1%)(9.1%)
25.1%
(0.4%)
19.0%
(4.2%)
3.1%
(0.2%)
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021
CHINA
BRIC MARKETS PERFORMANCE1
1. Like-for-like growth vs prior year from continuing operations
2.Includes Hong Kong and Taiwan
(3.1%)
(16.7%)(12.1%)
18.4%
1.4%
18.0%
(6.8%)(1.7%) (1.7%)
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021GREATER CHINA²
(0.1%)(6.2%)
5.3%
21.3% 24.4%18.9%
35.2%
24.3%
11.5%
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021
RUSSIA
(25.1%)(16.3%)
(8.9%)(0.5%)
30.0% 28.0%
5.6%
(2.6%)
7.1%
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021
INDIA
(18.7%)(14.1%)
(10.5%)
8.5%
29.8% 29.6%
7.1% 5.5%11.3%
Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021BRAZIL
31Q3 2021 TRADING UPDATE
Key
1-year growth rate
2-year growth rate
CLIENT SECTOR ANALYSIS
Note: % of total designated clients attributable to each industry for continuing operations in the third quarter, and includes an allocation of GroupM trading revenue less pass-through costs. These clients comprise 77% of WPP total revenue less pass-through costs
Third quarter revenue less pass-through costs growth by client sector
23%
19%
11%11%
10%
7%
6%
6%
4% 3%
+18.4%
+7.0%
+18.9%
+17.1%
+2.3%+6.4%
+4.8%
+18.9%
+56.2% +29.6%
CPG
Tech & Digital
Services
Healthcare & Pharma
Automotive
Retail
Telecom, Media & Entertainment
Financial Services
Other
Travel & Leisure
Govt, Public Sector &
Non-Profit
32Q3 2021 TRADING UPDATE
DEBT MATURITY PROFILE £M AT SEPT 30, 2021
Exchange Rates £/$ 1.3474 £/€ 1.1634 1. Swapped to £444m at 2.61%2.€500m swapped to $604m at 4.03%
Weighted Average Coupon 2.8%
Weighted Average Maturity 7.2 years
Available Liquidity £4,793m
0
100
200
300
400
500
600
700
33Q3 2021 TRADING UPDATE
£ TOTALCREDIT
£ TOTALDRAWN
£ bonds £400m (2.875% Sep ’46) 400 400
US bond $220m (5.625% Nov ’43) 163 163
US bond $93m (5.125% Sep ’42) 69 69
£ bonds £250m (3.75% May ’32) 250 250
Eurobonds €600m (1.625% Mar ’30) 516 516
Eurobonds €750m (2.375% May ‘27) 645 645
Eurobonds €750m (2.25% Sep '26) 645 645
Eurobond €500m (1.375% Mar ‘25)/£444m Swap1 444 444
US bond $750m (3.75% Sep '24) 557 557
Eurobonds €750m (3.0% Nov ’23)2 663 663
Eurobond €250m (3m EURIBOR + 0.45% Mar ’22) 215 215
Debt Facilities 4,567 4,567
Other facilities 1,855 -
Net cash, overdrafts & other adjustments – (2,938)
Total Borrowing Capacity / Net Debt 6,422 1,629
EFFECTS OF CURRENCY
1. Effects of currency on continuing operations
THIRD QUARTER 2021 2020£ STRONGER/(WEAKER)
US$ 1.38 1.29 7%
€ 1.17 1.11 6%
Chinese Renminbi 8.92 8.94 -
Brazilian Real 7.21 6.95 4%
Australian $ 1.88 1.81 4%
Canadian $ 1.74 1.72 1%
Indian Rupee 102 96 6%
Singapore $ 1.86 1.78 5%
South African Rand 20.2 21.9 (8%)
• Currency movements accounted for 5.4% decrease¹ in revenue less pass-through costs
• £ stronger against most currencies, particularly the US$ and Euro€
34Q3 2021 TRADING UPDATE
IMPACT OF FX ON REVENUE LESS PASS-THROUGH COSTS¹
1. Continuing operations
2. Q4 uses 18 October 2021 exchange rates, including £:$1.38, £:€1.19
• YTD currency headwind (5.6%)
• 2020 full year headwind (1.2%)
• 2021 full year currency headwind (5.2%) at latest exchange rates²
(1.2%)
(4.3%)
(7.5%)
(5.4%)
(4.2%)
(5.2%)
(8%)
(7%)
(6%)
(5%)
(4%)
(3%)
(2%)
(1%)
0%20/FY Act 21/Q1 Act 21/Q2 Act 21/Q3 Act 21/Q4 Est² 21/FY Est
35Q3 2021 TRADING UPDATE