Wpp Plc · LSE:WPP

Wpp — Q1 2018 Earnings Presentation

27 slides from Wpp's earnings presentation, Apr 30, 2018

  1. Slide 1: First Quarter 2018 Trading Update

    First Quarter 2018 Trading Update London 30 APRIL 2018 WPP plc 1

  2. Slide 2: Safe Harbour Statement

    FIRST QUARTER 2018 TRADING UPDATE Safe Harbour Statement The following cautionary statement is included for safe harbour purposes in connection with the Private Securities Litigation Reform Act of 1995 introduced in the United States of America. This presentation may contain forward-looking statemen

  3. Slide 3: Highlights

    FIRST QUARTER 2018 TRADING UPDATE Highlights  Reported revenue down 4.0% at £3.555 billion, currency headwinds of 6.0%, constant currency up 2.0%.  Reported revenue less pass-through costs¹ down 5.1% at £2.948 billion, currency headwinds of 6.1%, constant currency up 1.0%.  Like-for-like revenue

  4. Slide 4: Implementation of IFRS 15 From 1 January 2018

    FIRST QUARTER 2018 TRADING UPDATE Implementation of IFRS 15 From 1 January 2018 REVENUE REVENUE LESS PASS-THROUGH COSTS £M Q1 2018 Q1 2017 Q1 2018 Q1 2017 Pre IFRS 15 n/a 3,597 n/a 3,100 Impact of IFRS 15 n/a 107 n/a 7 Post IFRS 15 3,555 3,704 2,948 3,107 Implementation of IFRS 15 Revenue from Contr

  5. Slide 5: Summary – Revenue and Revenue Less Pass-Through Costs Growth

    FIRST QUARTER 2018 TRADING UPDATE Summary – Revenue and Revenue Less Pass-Through Costs Growth REVENUE LESS % GROWTH REVENUE PASS-THROUGH COSTS Like-for-like 0.8 -0.1 Acquisitions 1.2 1.1 Constant currency 2.0 1.0 Foreign exchange -6.0 -6.1 Reportable sterling -4.0 -5.1 WPP plc 5

  6. Slide 6: Impact of Foreign Exchange

    FIRST QUARTER 2018 TRADING UPDATE Impact of Foreign Exchange 2017 FY ACT 2018 Q1 ACT 2018 Q2 EST 2018 Q3 EST 2018 Q4 EST 2018 FY EST  Q1 headwind -6% revenue 6% and revenue less pass- Revenue Revenue less pass-through costs through costs. 4%  Full year headwind -5% revenue and revenue less 2% pass

  7. Slide 7: Revenue Less Pass-Through Costs by Region

    FIRST QUARTER 2018 TRADING UPDATE Revenue Less Pass-Through Costs by Region REVENUE LESS PASS-THROUGH COSTS % CHANGE CONSTANT % GROUP 2018 £M 2017¹ £M REPORTED CURRENCY LIKE-FOR-LIKE North America 35.9 1,055 1,203 -12.3 -1.7 -2.4 UK 13.7 405 396 2.1 2.1 1.6 Western Continental Europe 21.2 626 600 4.

  8. Slide 8: Revenue Less Pass-Through Costs Growth by Region

    FIRST QUARTER 2018 TRADING UPDATE Revenue Less Pass-Through Costs Growth¹ by Region 5.6% Central & Eastern Europe 1.6% UK -2.4% North America -0.2% Western Continental Europe Q1 18 FY 17 0.7% Mature Markets -1.0% -0.9% 9.1% Asia Pacific “Faster Growing” Markets 2.3% -0.8% LATAM -3.1% Africa & Middle

  9. Slide 9: Top 6 Markets

    FIRST QUARTER 2018 TRADING UPDATE Top 6 Markets REVENUE LESS PASS-THROUGH COSTS GROWTH¹ 2018 Q1 -2.2% 1.6% -5.7% 2.1% n/a³ 0.7% 2017 FY -3.2% 4.8% -1.3% -3.2% -0.9% 0.4% USA UK Germany Greater China² ANZ France 1 Like-for-like growth vs. prior year 2 Includes Hong Kong and Taiwan 3 WPP AUNZ listed c

  10. Slide 10: BRICs Markets

    FIRST QUARTER 2018 TRADING UPDATE BRICs Markets REVENUE LESS PASS-THROUGH COSTS GROWTH¹ 2018 Q1 3.6% 2.1% 6.0% 0.3% 0.6% 2017 FY -1.8% -3.2% 1.6% 1.1% -15.4% Mainland China Greater China² Brazil India Russia 1 Like-for-like growth vs. prior year 2 Includes Hong Kong and Taiwan WPP plc 10

  11. Slide 11: Revenue Less Pass-Through Costs by Sector

    FIRST QUARTER 2018 TRADING UPDATE Revenue Less Pass-Through Costs by Sector REVENUE LESS PASS-THROUGH COSTS % CHANGE CONSTANT % GROUP 2018 £M 2017¹ £M REPORTED CURRENCY LIKE-FOR-LIKE² Advertising, Media Investment 42.7 1,257 1,373 -8.4 -2.8 -0.9 Management Data Investment Management 15.4 455 484 -6.

  12. Slide 12: Trade Estimates of Major New Business Wins

    FIRST QUARTER 2018 TRADING UPDATE Trade Estimates of Major New Business Wins WPP AGENCY INCUMBENT ACCOUNT OFFICE BILLINGS $M MediaCom IND Hotels.com N America 175 MediaCom DEN Sky Europe 169 Wavemaker DEN Danone N America 118 Wavemaker/Y&R IND Altice USA 110 Team Amplify IPG Bose Global 80 MediaCom/

  13. Slide 13: Trade Estimates of Major New Business Losses

    FIRST QUARTER 2018 TRADING UPDATE Trade Estimates of Major New Business Losses WPP AGENCY WINNING AGENCY ACCOUNT OFFICE BILLINGS $M Wavemaker PUB Campbell Soup Co. USA, ANZ, Indonesia 189 Wavemaker PUB Marriott Global 140 JWT IPG Edgewell Global 50 Underlined are losses since 1 April WPP plc 13

  14. Slide 14: Uses of Free Cash Flow

    FIRST QUARTER 2018 TRADING UPDATE Uses of Free Cash Flow CATEGORY FY TARGET MARCH YTD 2018 MARCH YTD 2017 FY 2017 Acquisitions (excluding earnouts)¹: Gross £300-£400m £80m £129m £326m Less proceeds - £(44m) £(3m) £(296m) Net acquisitions - £36m £126m £30m Share buy-backs: - £145m £180m £504m % of is

  15. Slide 15: Outlook

    FIRST QUARTER 2018 TRADING UPDATE Outlook  Financial guidance remains unchanged for 2018.  Our quarter one preliminary revised forecasts are in line with budget, with a slightly stronger second half, at revenue less pass-through costs level and show: – Flat like-for-like revenue and revenue less p

  16. Slide 16: Last Two Weeks

    FIRST QUARTER 2018 TRADING UPDATE Last Two Weeks  Established and communicated clear roles: – Mark: clients, companies and people. – Andrew: commercial management, portfolio optimisation.  Spoken to our key clients – very reassured by their response, but not complacent: – Personally to CEO/CMO of

  17. Slide 17: WPP has Tremendous Talent, Resources and Capabilities

    FIRST QUARTER 2018 TRADING UPDATE WPP has Tremendous Talent, Resources and Capabilities  Strong company and client team leaders; primary holders of relationships with clients.  Powerhouse of talent; most creative group at Cannes for last seven years; people with unparalleled knowledge and expertis

  18. Slide 18: How We See the World

    FIRST QUARTER 2018 TRADING UPDATE How We See the World  Continued growth in demand from clients for marketing and communication services, as clients need to: – Drive their top-line growth. – Build and manage direct customer relationships. – Transform their customer experiences. – Sell in a multi-ch

  19. Slide 19: Path to Growth for WPP

    FIRST QUARTER 2018 TRADING UPDATE Path to Growth for WPP  Focus on our clients – provide faster, more agile, more effectively integrated solutions.  Look at our offering and focus our investments in the faster-growing parts of our business.  Continue to simplify our organisation to make it: – eas

  20. Slide 20: Financial Management, Operations and Portfolio

    FIRST QUARTER 2018 TRADING UPDATE Financial Management, Operations and Portfolio  Align how we run the business commercially to support our growth strategy.  Address under-performing parts of the Group more proactively to focus on growth and free up resources for investment.  Accelerate strategie

  21. Slide 21: Other Financial Information

    HARD COPY ONLY Other Financial Information WPP plc 21

  22. Slide 22: Revenue Less Pass-Through Costs Growth by Country

    FIRST QUARTER 2018 TRADING UPDATE Revenue Less Pass-Through Costs Growth by Country REVENUE LESS PASS-THROUGH COSTS GROWTH¹ TOP COUNTRIES² More than 10% Argentina, Mexico, Poland 5% to 10% Brazil, Japan, Norway, South Korea, Sweden Greater China³, Mainland China, Denmark, France, 0% to 5% Netherland

  23. Slide 23: Revenue Less Pass-Through Costs Growth by Category

    FIRST QUARTER 2018 TRADING UPDATE Revenue Less Pass-Through Costs Growth by Category REVENUE LESS PASS-THROUGH COSTS GROWTH¹ CATEGORIES More than 10% Retail More than 5% Automotive, Electronics 0% to 5% Oil, Travel & Airline Computers, Drinks, Financial Services, Food, Government, Less than 0% Media

  24. Slide 24: Effects of Currency

    FIRST QUARTER 2018 TRADING UPDATE Effects of Currency STERLING  Currency movements Q1 2018 Q1 2017 STRONGER/(WEAKER) accounted for 6.0% US$ 1.39 1.24 12% decrease reported revenue and 6.1% € 1.13 1.16 -3% decrease revenue less ¥ 151 141 7% pass-through costs. Chinese Renminbi 8.9 8.5 5%  Reflects

  25. Slide 25: Debt Maturity Profile £m at 31 Mar 2018

    FIRST QUARTER 2018 TRADING UPDATE Debt Maturity Profile £m at 31 Mar 2018 £ TOTAL £ TOTAL CREDIT DRAWN 700 £ bonds £400m (2.875% Sep ’46) 400 400 US bond $500m (5.625% Nov ’43) 356 356 600 US bond $300m (5.125% Sep ’42) 214 214 Eurobonds €600m (1.625% Mar ’30) 527 527 500 Eurobonds €750m (2.25% Sep

  26. Slide 26: Acquisitions Since 1 January

    FIRST QUARTER 2018 TRADING UPDATE Acquisitions Since 1 January BAR – Portugal (Ogilvy) BAR is a leading independent creative agency in Portugal. BAR will merge operations with Ogilvy & Mather Portugal, with the combined business trading as BAR Ogilvy. It will be managed by the founders of BAR: Jose

  27. Slide 27: First Quarter 2018 Trading Update

    First Quarter 2018 Trading Update London 30 APRIL 2018 WPP plc 27

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