Wpp Plc · LSE:WPP
Wpp — Q1 2023 Earnings Presentation
28 slides from Wpp's earnings presentation, Apr 27, 2023
Slide 1: Q1 Trading Update
Q1 TRADING UPDATE 27 April 2023
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This document contains statements that are, or may be limited to: the impact of, epidemics or pandemics including ‘estimate’, ‘expect’, ‘forecast’, ‘guidance’, ‘intend’, 'may', deemed to be, “forward-looking statements”. Forward- restrictions
Slide 3: • Q1 highlights • Financial performance • Q&A
• Q1 highlights • Financial performance • Q&A
Slide 4: Highlights
HIGHLIGHTS: • Q1 2023 like-for-like revenue less pass-through costs growth +2.9% • Growth in all segments: GIA +3.0%, PR +2.2%, Specialist Agencies +1.9% • Strong performance from GroupM +6.1% • Winning work: topped WARC 2023 rankings; $1.5 billion of net new business in Q1 • Continued investment in
Slide 5: Financial Performance
FINANCIAL PERFORMANCE
Slide 6: 2023 Has Started As Expected
2023 HAS STARTED AS EXPECTED Q1 2023 REVENUE LESS PASS-THROUGH COSTS GROWTH +9.9% +6.3pt +0.7pt +2.9% Reported growth FX contribution to M&A contribution to Like-for-like growth (+10.3% in Q1 ‘22) reported growth reported growth (+9.5% in Q1 ‘22) 6
Slide 7: Continued Growth Across Business Lines
CONTINUED GROWTH ACROSS BUSINESS LINES LFL REVENUE LESS PASS-THROUGH COSTS GROWTH IN Q1 2023 (%) • Global Integrated Agencies (GIA): • GroupM: continued strong performance 6.1 • Creative Agencies: strong growth at Ogilvy (new 3.0 business) offset by 2.2 1.9 Wunderman Thompson 0.7 (lower technology c
Slide 8: Major Markets
MAJOR MARKETS LFL REVENUE LESS PASS-THROUGH COSTS GROWTH IN Q1 2023 (%) • USA: growth in CPG, financial services and telecom, media & 7.4 entertainment; offset by lower technology and retail client spend 4.0 2.3 • UK: strong performance from CPG clients • Germany: good growth in travel & (1.4) leisu
Slide 9: Main Movements in Net Debt (£m)
MAIN MOVEMENTS IN NET DEBT (£M) DECEMBER 2022 TO MARCH 2023 • Net debt: at 31 March 2023 £3.9bn; Q1 average £3.2bn • Working capital: expected seasonal outflow since year-end. Continue to expect Trade NWC to be broadly flat in 2023 • Capex: driven by campus programme; Guangzhou and Manchester opened
Slide 10: Winning Work and Recognition
WINNING WORK AND RECOGNITION $1.5BN OF NEW BUSINESS WPP TOPPED ALL THREE WARC1 IN Q1 2023 CATEGORIES Media Production CRM, Creative, Commerce Americas Global North America Public Relations Media Media Switzerland US/UK India • Ogilvy: #1 creative • EssenceMediacom: • Wavemaker Mumbai: CRM Experience
Slide 11: Investing in Our Offer
INVESTING IN OUR OFFER ACQUISITIONS TO EXPAND OUR OFFER STRATEGIC TECHNOLOGY PARTNERSHIPS Goat: Global influencer agency, Personalised engagement through 150+ people first-party data Obviously: New York-based influencer Web3 digital content agency, c.100 people capabilities 3K Communication: Healthc
Slide 12: FGS Global Transaction
FGS GLOBAL TRANSACTION: KKR is investing in FGS Global, to create a “powerful strategic “ … we are confident that FGS, with whom we have enjoyed a long-term relationship, is well positioned to capitalize on significant growth opportunities ahead as a global category leader in the growing partnership
Slide 13: How We See the Opportunity in AI
HOW WE SEE THE OPPORTUNITY IN Al *WUNDERMAN THOMPSON IRAN DEMOCRACY COUNCIL ann ise
Slide 14: Summary
SUMMARY • A positive start to the year, in line with our expectations • Strong demand for our services from clients and progress against our own strategic plan • Continuing to invest both organically and through acquisitions in growth areas • KKR to invest in FGS Global, demonstrating its growth pot
Slide 15: Q&A
Q&A
Slide 16: Contacts and Further Resources
CONTACTS AND FURTHER RESOURCES TOM WALDRON INVESTOR WEBSITE Group Investor Relations Director wpp.com/investors tom.waldron@wpp.com Tel: +44 (0) 7788 695 864 INVESTOR WEBINARS ANTHONY HAMILTON A series of webinars designed to give investors and analysts Investor Relations Director deeper insight int
Slide 17: Appendix
APPENDIX
Slide 18: Outlook
OUTLOOK 2023 Guidance: unchanged Like-for-like revenue less pass-through costs growth of 3-5%; further margin improvement reflecting continued operating leverage to deliver a headline margin of around 15% (excluding the impact of FX) • M&A contribution will add 0.5-1.0% to revenue less pass- Medium-
Slide 19: Diverse Client Sector Mix
DIVERSE CLIENT SECTOR MIX 3% 3% 5% Telecom, media & 6% 25% CPG +14.8% entertainment +1.1% Financial services +15.0% 6% Tech & digital services -0.6% Other +4.0% Healthcare & pharma +3.4% Travel & leisure +8.7% 10% Automotive -0.2% Government, public 19% Retail -5.8% sector & non-profit +0.8% 11% 12%
Slide 20: Examples of Our Offer
EXAMPLES OF OUR OFFER Wunderman Thompson and Mindshare are calling upon all Americans to COMMUNICATIONS #StandUpToJewishHate: The Foundation to Combat Antisemitism Ogilvy and David continue the Dove Self-Esteem Project, with a campaign EXPERIENCE fighting against digitally distorted images on social
Slide 21: Revenue Less Pass-Through Costs
REVENUE LESS PASS-THROUGH COSTS FIRST QUARTER 2023 £M 2022 £M Δ REPORTED Δ LFL Global Integrated Agencies 2,307 2,106 9.6% 3.0% Public Relations 292 262 11.5% 2.2% Specialist Agencies 230 206 11.3% 1.9% Total 2,829 2,574 9.9% 2.9% 21
Slide 22: Revenue Less Pass-Through Costs
REVENUE LESS PASS-THROUGH COSTS FIRST QUARTER 2023 £M 2022 £M Δ REPORTED Δ LFL North America 1,150 1,015 13.3% 1.9% UK 377 352 7.0% 7.4% Western Continental Europe 558 507 10.0% 3.4% Asia Pacific, Latin America, Africa & Middle 744 700 6.4% 1.9% East and Central & Eastern Europe Total 2,829 2,574 9.
Slide 23: Revenue Less Pass-Through Costs Growth
REVENUE LESS PASS-THROUGH COSTS GROWTH Central Eastern Europe % FY 22 Q1 23 8.0% 11.0% UK % FY 22 Q1 23 7.6% 7.4% North America % FY 22 Q1 23 Western Continental Europe % 6.6% 1.9% FY 22 Q1 23 5.5% 3.4% Asia Pacific % FY 22 Q1 23 5.6% (2.8)% Africa & Middle East % Latin America % FY 22 Q1 23 FY 22 Q
Slide 24: Like-for-Like Revenue Less Pass-Through Costs Growth
LIKE-FOR-LIKE REVENUE LESS PASS-THROUGH COSTS GROWTH USA UK GERMANY Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 40% 40% 40% 30% 30% 30% 20% 16.1% 11.5% 20% 20% 10% 4.9% 4.0% 12.0% - 10.4% 10% 8.9% 10% 8.1% 7.4% 6.2% 4.5% 3.5
Slide 25: Like-for-Like Revenue Less Pass-Through Costs Growth
LIKE-FOR-LIKE REVENUE LESS PASS-THROUGH COSTS GROWTH AUSTRALIA CANADA FRANCE Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 40% 40% 40% 30% 30% 30% 20% 20% 20% 10% 10% 8.0% 7.7% 0.4% 5.8% - 2.3% 10% (1.3%) - 3.5% 4.0% (10%) (6.
Slide 26: Tailwind to Revenue Less Pass-Through Costs
TAILWIND TO REVENUE LESS PASS-THROUGH COSTS STERLING 1 1 1 1 2022 Act Q1 23 Act Q2 23 Est Q3 23 Est Q4 23 Est 2023 FY Est FIRST QUARTER 2023 2022 (WEAKER)/STRONGER US $ 1.22 1.34 (9%) € 1.13 1.20 (6%) 6.3% 5.9% Chinese Renminbi 8.32 8.52 (2%) Indian Rupee 100 101 (1%) Australian $ 1.78 1.85 (4%) 0.4
Slide 27: Debt Maturity Profile
DEBT MATURITY PROFILE £ TOTAL £ TOTAL 800 CREDIT DRAWN £ bonds £400m (2.875% Sep ’46) 400 400 700 US bond $220m (5.625% Nov ’43) 178 178 600 US bond $93m (5.125% Sep ’42) 75 75 500 £ bonds £250m (3.75% May ’32) 250 250 Eurobonds €600m (1.625% Mar ’30) 528 528 400 Eurobonds €750m (2.375%
Slide 28: Thank You
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