Wpp Plc · LSE:WPP
Wpp — Investor Day (December 2020)
48 slides from Wpp's investor day presentation, Dec 17, 2020
Slide 1: Accelerating Growth - Capital Markets Day
ACCELERATING GROWTH CAPITAL MARKETS DAY 17 December 2020 WPP 1
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: WPP Is a Creative Transformation Company
WPP IS A CREATIVE TRANSFORMATION COMPANY WPP 3
Slide 4: We Serve Many of the World's Most Successful Companies
WE SERVE MANY OF THE WORLD’S MOST SUCCESSFUL COMPANIES WPP’S TOP 20 CLIENTS CPG/PREMIUM TECHNOLOGY/MEDIA PHARMA AND HEALTHCARE AUTOMOTIVE WPP 4
Slide 5: We Have Many of Our Industry's Most Powerful and Respected Brands
WE HAVE MANY OF OUR INDUSTRY’S MOST POWERFUL AND RESPECTED BRANDS PR & PUBLIC SPECIALIST GLOBAL INTEGRATED AGENCIES AFFAIRS COMMUNICATIONS CREATIVE AGENCIES MEDIA AGENCIES WPP 5
Slide 6: Global Reach and Scale in Growth Markets
GLOBAL REACH AND SCALE IN GROWTH MARKETS NORTH AMERICA 37%1 WESTERN EUROPE 33%1 REST OF WORLD 30%1 10,000 7,000 19,000 2,000 2,000 6,500 2,000 4,000 8,000 1. % FY19 Revenue less pass-through costs Figures in chart are headcount at Q3 20 WPP 6
Slide 7: Significant Strengths in a Technology-Driven World
SIGNIFICANT STRENGTHS IN A TECHNOLOGY-DRIVEN WORLD 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.40% of media billings
Slide 8: 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 WPP 8
Slide 9: Accelerating Growth
PROGRESS SINCE DECEMBER 2018 ACCELERATING OUR GROWTH ACCELERATING • THE MARKET • WPP’S STRATEGY GROWTH • BUILDING OUR CULTURE • FINANCIAL PLAN Q&A
Slide 10: Progress Since December 2018
PROGRESS SINCE DECEMBER 2018
Slide 11: 2018: The Situation
2018: THE SITUATION 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 12: While Media and Digital Performed Well, Our Creative Agencies Struggled
WHILE MEDIA AND DIGITAL PERFORMED WELL, OUR CREATIVE AGENCIES STRUGGLED RELATIVE GROWTH OF MAJOR AGENCIES (CONSTANT CURRENCY NET SALES GROWTH, INCLUDING M&A) 5 yr CAGR to 2014 5 yr CAGR to 2019 MEDIA 25% 22.9% GroupM 20% DIGITAL VML 15% Wunderman 12.0% CREATIVE 10% 7.5% 7.5% JWT 6.8% 5.9% Ogilvy 5%
Slide 13: GroupM Has Delivered Both Growth and Margin
GROUPM HAS DELIVERED BOTH GROWTH AND MARGIN GROUPM MARGIN VS DIGITAL SHARE OF MEDIA MARKET 60% 52% DIGITAL SHARE OF MEDIA MARKET 50% 46% 40% OPERATING MARGIN 40% 35% 31% 30% 26% 22% 20% 17% 20% 10% 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 Share of digital in advertising market Group M operati
Slide 14: In December 2018, We Set Out Five Strategic Objectives
IN DECEMBER 2018, WE SET OUT FIVE STRATEGIC OBJECTIVES VISION AND DATA AND CREATIVITY OFFER VISION AND TECHNOLOGY DATA AND CREATIVITY OFFER TECHNOLOGY SIMPLER SIMPLER PEOPLE AND CULTURE STRUCTURE STRUCTURE CULTURE WPP 14
Slide 15: We Expanded Our Offer into Faster-Growth Areas
WE EXPANDED OUR OFFER INTO FASTER-GROWTH AREAS GLOBAL MARKETING EXPENDITURE 2019 $1,000 $873B Addressable $900 Not currently addressable $800 168 COMMUNICATIONS EXPERIENCE $700 $600 $508B $500 54 $400 705 $250+B $300 25 $200 454 $151B $100 ~200+ 63 88 COMMERCE TECHNOLOGY $- Communications Experience
Slide 16: We Renewed Our Commitment to Creativity
WE RENEWED OUR COMMITMENT TO CREATIVITY Holding Company of the Decade Pencils won by eight Laura Jordan Bombach Marcos Kotlhar Taras Wayner creative agencies Most Effective Holding Company 2012-2020 No.1 Media Holding Company 3 years running Keith Cartwright Debbie Vandeven Walter Geer 89 awards in
Slide 17: We Have Radically Simplified Our 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 mergers 60+ disposals
Slide 18: Our Client Satisfaction Has Systematically Improved
OUR CLIENT SATISFACTION HAS SYSTEMATICALLY IMPROVED WPP CLIENT SATISFACTION 8.2 8.1 8 7.8 7.8 7.7 7.7 7.6 7.4 7.4 7.3 7.2 7 6.8 2018 H1 2018 H2 2019 H1 2019 H2 2020 H1 COVID (April-Aug) SOURCE: WPP Vantage; 2.4K-59K+ client responses per period; scores out of 10 WPP 18
Slide 19: We Have Won and Retained Major Clients
WE HAVE WON AND RETAINED MAJOR CLIENTS Global / Oct 2020 RANK HOLDING ESTIMATED CREATIVE ESTIMATED MEDIA YTD ESTIMATED OVERALL YTD OCTOBER GROUP YTD REVENUE (USD $M) REVENUE (USD $M) REVENUE (USD $M) % AS OF 2019 REVENUE NO. OF WINS 1 WPP 286.9 269.6 556.6 3.3% 1,590 2 Publicis Groupe 109.1 148.6 25
Slide 20: Together, Improved Our Relative Performance
TOGETHER, IMPROVED OUR RELATIVE PERFORMANCE WPP VS. AVG ORGANIC GROWTH — USA WPP vs. AVG ORGANIC GROWTH — GLOBAL % BY QUARTER, 2016-2020 % BY QUARTER, 2016-2020 4% 4% 1.9% 2.1% 2.1% 1.7% 2% 2% 1.4% 0.8% 1.0% 0.3% 0.3% 0% 0% -0.1% -0.7% -0.6% -1.0% -1.0% -1.1% -2% -1.3%-1.2% -2% -1.3%-1.3% -1.4% -1.5
Slide 21: We Enter 2021 Having Made Significant Progress
• Improved organic growth performance WE ENTER 2021 o Growth ex-China pre-COVID HAVING MADE o Above peer group in last two quarters SIGNIFICANT o 3 out of 6 with the ambition to go further PROGRESS — • Stronger client performance o 15 of top 30 clients grew in Q3 MUCH OF IT o Business at risk at low
Slide 22: Accelerating Our Growth: The Market
ACCELERATING OUR GROWTH: THE MARKET
Slide 23: COVID Is Accelerating Existing Trends
COVID IS ACCELERATING EXISTING TRENDS 1 2 3 4 5 Growing Technology Collision of CMOs are becoming Marketing value importance of reshaping old communications, Chief Growth chain is evolving purpose and consumer models — content and Officers requiring with disruptive reputation mass media, bricks & co
Slide 24: Consumers Expect More from Companies
CONSUMERS EXPECT MORE FROM COMPANIES 2.5X 85% BRAND VALUE BELIEVE 62%PREFER 90% BELIEVE for brands perceived brands should be about to buy companies have an as having a high positive something more than from sustainable environmental and social impact on society1 profit2 Gen Z brands3 Gen Z responsi
Slide 25: Digital Is Now the Dominant Medium
DIGITAL IS NOW THE DOMINANT MEDIUM MEDIA SPEND BY MEDIUM ($M) US CHINA UK BRAZIL INDIA 63% 300,000 DIGITAL 250,000 90% 200,000 DIGITAL 150,000 100,000 72% 50,000 DIGITAL 53% 37% DIGITAL DIGITAL - 2012 2020 2024 2012 2020 2024 2012 2020 2024 2012 2020 2024 2012 2020 2024 Digital TV Other SOURCE: Grou
Slide 26: Ecommerce Has Accelerated Dramatically
ECOMMERCE HAS ACCELERATED DRAMATICALLY ECOMMERCE AS % OF RETAIL SALES 35% 31% 30% 27% 25% 20% 20% 18% 16% 16% 15% 14% 15% 12% 11% 10% 10% 9% 5% 2017 2018 2019 Q1 20 Q2 20 Q3 20 UK US PAGE 26 SOURCE: US Consensus (Nov-20) and ONS Internet retail sales (UK). Q3 20 represents preliminary estimates. WPP
Slide 27: 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 28: 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% 11.2% of CMOs expecting martech 10.2% 11.0% 10.5% budget increase 10 Spend on marketing technology 8 now exceeding tradit
Slide 29: Our Growth Opportunity Is in Digital Communications and Experience, Commerce, Technology
OUR GROWTH OPPORTUNITY IS IN DIGITAL COMMUNICATIONS AND IN EXPERIENCE, COMMERCE AND TECHNOLOGY CAGR (21-24F) $400 $368B 5.6% $350 $310B 84 9.8% $300 $281B 63 33 9.8% SPEND $BN $250 52 25 21 75 $200 54 10.9% 45 $150 $100 163 168 175 1.3% $50 ~48% digital ~59% digital $0 2017 2019 2024F Communications
Slide 30: Coffee Break
COFFEE BREAK EXTRAORDINARY AWARDS 5 MINS WPP 30
Slide 31: Accelerating Our Growth: WPP's Strategy
ACCELERATING OUR GROWTH: WPP’S STRATEGY
Slide 32: WPP's Growth Strategy
WPP’S GROWTH STRATEGY ACCELERATING OUR GROWTH COMPANIES CLIENTS COUNTRIES Strong, growing Partner to the world’s Scale in the markets brands leading companies of the future SCALED GROUP-WIDE CULTURE CAPABILITIES TRANSFORMATION To deliver scale in To be the To provide an efficient and production, dat
Slide 33: Companies: Our Growth Platforms
COMPANIES: OUR GROWTH PLATFORMS GROWTH PLATFORMS CREATIVE • Digital communications • Healthcare 12% • Ecommerce and experience Specialist Comms • Marketing technology 8% • Production PR • Digital media: Search, social 45% MEDIA and programmatic Creative • New business models: Xaxis and Finecast • Da
Slide 34: VMLY&R Demonstrates Benefits of Integration
VMLY&R DEMONSTRATES BENEFITS OF INTEGRATION VMLY&R QUARTERLY LFL NET SALES GROWTH 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% VML Y&R VMLY&R BASIS OF PREP: All agencies excluding GTB and Hogarth. WPP 34
Slide 35: Creative Agencies: Excellence in Digital Communications
5 CREATIVE AGENCIES: EXCELLENCE IN DIGITAL COMMUNICATIONS Boots.com page views Social impressions Return on ad spend +95% YoY +687% YoY 223% over benchmark WPP 35
Slide 36: Creative Agencies: Expansion into Ecommerce
CREATIVE AGENCIES: EXPANSION INTO ECOMMERCE One of the world’s largest New category entrants across three global brands roll-outs of Adobe’s B2C commerce platform 10 commerce sites launched so far / Germany / United Kingdom / Italy / Columbia / Poland / United Kingdom WPP 36
Slide 37: Creative Agencies: Building New Experiences
CREATIVE AGENCIES: BUILDING NEW EXPERIENCES 45 MINS BRONCO SOLD OUT 1ST ONLINE RESERVATION 8 DAYS FIRST EDITION MACH-E PLATFORM SOLD OUT 500K VISITORS IN FIRST 24 95% OF ALL MACH-E HOURS AFTER LAUNCH RESERVATIONS MADE ONLINE 23 MILLION CUSTOMERS HAVE VISITED BRONCO PAGES
Slide 38: In Media, We Can Build on Significant Momentum
IN MEDIA, WE CAN BUILD ON SIGNIFICANT MOMENTUM 2020 KEY MEDIA NEW BUSINESS WINS SOURCE: COMvergence, Q1-Q3 2020 WPP 38
Slide 39: Xaxis Continues to Grow and Innovate
XAXIS CONTINUES TO GROW AND INNOVATE CHALLENGE FROM VOLVO • More customers and lower cost per conversion through relevant and tailored digital communications APPROACH • Combined WPP team across Xaxis, Mindshare and Grey • First-party Google analytics data to define Volvo’s target audience • Leveragi
Slide 40: Connected TV Represents a Similar Opportunity
0 AND CONNECTED TV REPRESENTS A SIMILAR OPPORTUNITY DEEP UK CONNECTIVITY ACROSS BROADCASTERS AND PLATFORMS 50% ALSO LIVE TODAY Monthly reach (UK households) Australia Germany Canada Indonesia USA +40,000,000 NEW MARKETS BY END OF 2021 TV devices Netherlands Italy India Taiwan Thailand WPP 40
Slide 41: In Public Relations, We Help Maximise Effectiveness of Clients' Campaigns
1 IN PUBLIC RELATIONS, WE HELP TO MAXIMISE THE EFFECTIVENESS OF OUR CLIENTS’ CAMPAIGNS 99.99% OfIncrease households counted in Conversion Rate WPP 41
Slide 42: Clients: Expanding Our Offer
CLIENTS: EXPANDING OUR OFFER Brand Expression EXPERIENCE Innovation & Sonic Branding Dedicated COMMERCE Amazon team Single Customer TECHNOLOGY View CRM Platform Build AND GROWING WITH THE CLIENT NEW PRODUCTS ACQUISITIONS EXPANSIONS 42
Slide 43: Countries: Capture the Opportunity in Higher Growth Markets
COUNTRIES: CAPTURE THE OPPORTUNITY IN HIGHER GROWTH MARKETS BRAZIL CHINA INDIA INDIA WPP 43
Slide 44: Our Growth Is Supported by a Common Approach to Production, Technology and Data
SCALED GLOBAL DATA-DRIVEN PARTNERSHIPS PRODUCTION OUR GROWTH IS SUPPORTED BY A COMMON APPROACH TO PRODUCTION, TECHNOLOGY AND DATA OPEN DEEP APPROACH SPECIALISATION WPP 44
Slide 45: Data and Technology-Driven Production: Hogarth
DATA AND TECHNOLOGY-DRIVEN PRODUCTION: HOGARTH
Slide 46: Technology: Scaled Global Partnerships
TECHNOLOGY: SCALED GLOBAL PARTNERSHIPS MARKETING TECHNOLOGY DIGITAL MEDIA+ CLOUD & AI CREATIVE & PRODUCTION $400M SERVICE 170+ CLIENTS 3,200+ EXPERTS REVENUE ASSIGNMENTS WPP 46
Slide 47: Technology: Deep Specialisation
TECHNOLOGY: DEEP SPECIALISATION 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 47
Slide 48: Open Data Approach: Delivering Mass Personalisation
OPEN DATA APPROACH: DELIVERING MASS PERSONALISATION • Integrated WPP team across creative, media, data, technology and public relations • WBA-owned identity graph to activate WBA’s first party data in all channels • Third party platforms, fully integrated with partners WPP 48