Wpp Plc · LSE:WPP

Wpp — Q3 2012 Earnings Presentation

29 slides from Wpp's earnings presentation, October 2012

  1. Slide 1: Trading Statement for the Third Quarter 2012

    Trading Statement for the Third Quarter 2012 October 2012 1

  2. Slide 2: Third Quarter 2012 Summary

    Third Quarter 2012 Summary  Reported revenue up 1.6% at £2.496bn with constant currency revenue up 4.8%. Like-for-like revenue up 1.9%.  Operating profits and operating margins in first nine months in line with budget and ahead of last year.  Average net debt of £3.105bn up £329m compared with sa

  3. Slide 3: Summary – Revenue Growth

    Third Quarter 2012 Summary – Revenue Growth Third % change Quarter YTD Like-for-like 1.9 3.0 Acquisitions 2.9 3.1 Constant currency 4.8 6.1 Foreign exchange -3.2 -1.9 Reportable sterling 1.6¹ 4.2 Reportable US dollars² -0.1 1.9 Reportable euros² 12.5 11.9 ¹ Average Q3 2012 exchange rate for US$/£ wa

  4. Slide 4: Revenue by Discipline: Third Quarter

    Third Quarter 2012 Revenue by Discipline: Third Quarter % Change 2012 2011 Reported Constant Like-for- £m £m Currency like Advertising, Media Investment 999 1,010 -1.1 2.2 2.9 Management Consumer Insight 591 593 -0.4 3.5 0.8 Public Relations & Public Affairs 227 223 2.3 3.3 -1.7 Branding & Identity,

  5. Slide 5: Revenue by Discipline: Year to Date

    Third Quarter 2012 Revenue by Discipline: Year to Date % Change 2012 2011 Reported Constant Like-for- £m £m Currency like Advertising, Media Investment 3,043 2,937 3.6 5.7 5.0 Management Consumer Insight 1,783 1,771 0.7 3.3 0.9 Public Relations & Public Affairs 686 652 5.3 5.3 0.1 Branding & Identit

  6. Slide 6: Advertising, Media Investment Management

    Third Quarter 2012 Advertising, Media Investment Management  Strongest performing sector as in 2011 and first half of 2012. Advertising improved in third quarter, with media investment management slower than quarter two albeit at a higher absolute rate than advertising.  Advertising stronger in No

  7. Slide 7: Consumer Insight

    Third Quarter 2012 Consumer Insight  Like-for-like growth in third quarter the same as quarter two, with relative improvement in North America and strong growth in the United Kingdom.  Double digit growth in Latin America, Africa and the Middle East. Custom research continues to be under pressure

  8. Slide 8: Public Relations & Public Affairs

    Third Quarter 2012 Public Relations & Public Affairs  Difficult third quarter, particularly in September, with like-for-like revenues down 1.7% and North America down across all Group brands.  Geographically, strong growth in the United Kingdom, with double digit like-for-like growth in Latin Amer

  9. Slide 9: Branding & Identity, Healthcare and Specialist Communications

    Third Quarter 2012 Branding & Identity, Healthcare and Specialist Communications  Like-for-like growth of 2.7% in third quarter, stronger than the second quarter driven by direct, digital and interactive growth partly offset by softness in branding & identity and healthcare communications.  Geogra

  10. Slide 10: Direct, Digital and Interactive

    Third Quarter 2012 Direct, Digital and Interactive  In the first nine months almost 32% of Group revenues came from direct, digital and interactive, up over 200 basis points from the previous year. Direct, digital and interactive revenues up well over 7% in the first nine months.  Acquisition of A

  11. Slide 11: Revenue by Region: Third Quarter

    Third Quarter 2012 Revenue by Region: Third Quarter % Change 2012 2011 Reported Constant Like-for- £m £m Currency like North America 885 837 5.6 4.0 -0.4 UK 311 286 8.9 8.9 4.7 Western Continental Europe 537 588 -8.6 0.5 -2.1 Asia Pacific, Latin America, Africa & Middle East, Central & Eastern 763 7

  12. Slide 12: Revenue by Region: Year to Date

    Third Quarter 2012 Revenue by Region: Year to Date % Change 2012 2011 Reported Constant Like-for- £m £m Currency like North America 2,633 2,483 6.0 3.9 0.1 UK 902 846 6.7 6.7 3.6 Western Continental Europe 1,724 1,763 -2.2 4.6 0.4 Asia Pacific, Latin America, Africa & Middle East, Central & Eastern

  13. Slide 13: Growth by Region

    Third Quarter 2012 Growth by Region  Faster growing markets of Asia Pacific, Latin America, Africa & the Middle East continued the strong growth seen in the first half with like-for-like growth of 6.8%. The United Kingdom also grew strongly in the third quarter with like-for-like growth of 4.7%. 

  14. Slide 14: Revenue Growth by Country

    Third Quarter 2012 Revenue Growth by Country Revenue Growth1 Countries >20% Argentina 15% to 20% South Africa 10% to 15% Brazil, Mexico, Thailand 5% to 10% Greater China², India, Mainland China³, Singapore Australia, Belgium, Canada, Denmark, France, Germany, <5% Italy, Japan, Netherlands, Poland, R

  15. Slide 15: Revenue Growth by Category

    Third Quarter 2012 Revenue Growth by Category Revenue Growth1 Categories >15% Government, Retail 10% to 15% Drinks, Oil 5% to 10% Automotive, Travel & Airline Computers, Electronics, Entertainment, Financial Services, <5% Food, Personal Care & Drugs, Telecommunications ¹ Like-for-like growth 15

  16. Slide 16: Effects of Currency

    Third Quarter 2012 Effects of Currency  Currency movements accounted for a 3.2% decrease in revenue, largely reflecting the strength of the £ sterling against the euro and faster growing market currencies, partly offset by weakness against the US$.  Sterling stronger overall as follows: Q3 2012 Q3

  17. Slide 17: Trade Estimates of Major New Business Wins (1)

    Third Quarter 2012 Trade Estimates of Major New Business Wins (1) WPP Agency Incumbent Account Office Billings($m) Team BofA OMC Bank of America Global 2,000 Equipe L’Oreal PUB L’Oreal Germany 727 MediaCom PUB Procter & Gamble Germany 225 Grey Ind RadioShack USA 200 Mindshare AGS SFR France 200 Medi

  18. Slide 18: Trade Estimates of Major New Business Wins (2)

    Third Quarter 2012 Trade Estimates of Major New Business Wins (2) WPP Agency Incumbent Account Office Billings($m) MEC HAV/AGS/Ind Lavazza Europe 66 Grey None FDA USA 65 Maxus/MEC/KR Media AGS Fiat France 60 Ogilvy HAV Vodafone Australia 52 Ogilvy Ind Nascar USA 50 MediaCom PUB P&G Korea 50 Team New

  19. Slide 19: Trade Estimates of Major New Business Losses

    Third Quarter 2012 Trade Estimates of Major New Business Losses WPP Agency Winning Agency Account Office Billings($m) Mindshare PUB Sprint Global 1,000 Mindshare OMC Farmer’s USA 160 Grey OMC Aquafresh/GSK Global 158 MEC OMC Specsavers UK 63 Ogilvy OMC Cisco Global 60 Ogilvy PUB Toblerone/Kraft USA

  20. Slide 20: Internal Estimates of Net New Business Wins – Year to Date

    Third Quarter 2012 Internal Estimates of Net New Business Wins – Year to Date ($m) Creative Media Total Advertising 1,239 3,328 4,567 Other Businesses 808 - 808 Third Quarter YTD 2012 2,047 3,328 5,375 Third Quarter YTD 2011 2,020 2,191 4,211 20

  21. Slide 21: Trade Estimates of Major New Business Wins/Losses Since October

    Third Quarter 2012 Trade Estimates of Major New Business Wins/Losses Since 1 October WPP Agency Incumbent Account Office Billings($m) VML PUB Wendy’s USA 273 WINS Grey OMC/Y&R Allianz Global 100 MEC IPG LegalZoom USA 50 WPP Agency Winning Agency Account Office Billings($m) LOSSES MEC AGS Macy’s USA

  22. Slide 22: Cash Flow and Net Debt

    Third Quarter 2012 Cash Flow and Net Debt  Average net debt in the first nine months up £329 million to £3.105 billion, compared to £2.776 billion in 2011, at 2012 exchange rates.  Acquisitions (including earnouts) and share buy-backs totalled £558 million in nine months to 30 September 2012.  Ne

  23. Slide 23: Acquisitions and Investments – Year to Date

    Third Quarter 2012 Acquisitions and Investments – Year to Date Ace Metrix (USA)¹,² Faster Growing Quantitative & Markets AFFECTIVA (USA)¹,² Digital 41?29! Media (Turkey) ACTIVEARK OY (FINLAND) ACCELERATION (S AFRICA, UK, USA) AKQA (WORLDWIDE) ALCHEMEDIA (S KOREA) Corda (USA)² Barrows (S Africa) CORE

  24. Slide 24: Other Acquisitions – Year to Date

    Third Quarter 2012 Other Acquisitions – Year to Date Advertising Colmar Brunton (New Zealand)¹ Siboney (USA) Ubachs Wisbrun (Netherlands)¹ Public Relations & Public Affairs ABC (DENMARK) ¹ ASCENTUM (CANADA) CrowdVerb (USA) First Movies (UK) I&E (FRANCE) Ogilvy Impact (Australia)¹ Pohjoisranta (Finla

  25. Slide 25: Uses of Free Cash Flow

    Third Quarter 2012 Uses of Free Cash Flow Category Target Sept YTD 2012 Sept YTD 2011 FY 2011 New acquisitions¹ £300m+ £487m² £291m² £381m² Share purchases Minimum 1% 0.7% 1.8% 2.1% EPS growth + 500 basis Dividend increase 18%³ 25%³ 38% points ¹ Includes investments and step-ups in subsidiaries equi

  26. Slide 26: Summary

    Third Quarter 2012 Summary  Marked slowdown in September reduced Q3 like-for-like growth to 1.9% with North America and to a greater extent Continental Europe impacted.  UK still strong as is Asia Pacific, Latin America and Middle East & Africa.  Advertising and media investment management strong

  27. Slide 27: Outlook

    Third Quarter 2012 Outlook  Faster growing markets and UK projected to remain stronger in line with Q3.  More uncertainty over North America and Continental Europe.  Full year like-for-like outlook for the Group in 2.5% to 3.0% range.  Operating profits and profit margins in first nine months in

  28. Slide 28: Conclusion

    Third Quarter 2012 Conclusion  The Group is well placed as we begin preparations for 2013: – variable costs in the 6% to 7% range – headcount held at around December 2011 level through the year – good new business momentum – strong cash flow, debt maturity profile and balance sheet ratios  Global

  29. Slide 29: Trading Statement for the Third Quarter 2012

    Trading Statement for the Third Quarter 2012 October 2012 29

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