Wpp Plc · LSE:WPP
Wpp — Q3 2005 Earnings Presentation
20 slides from Wpp's earnings presentation, Oct 28, 2005
Slide 1: Trading Statement for the Third Quarter 2005
WPP Trading Statement for the Third Quarter 2005 28 October 2005 1
Slide 2: Third Quarter 2005 Summary
Third Quarter 2005 Summary • Reported revenue growth up over 26%. On a constant currency basis, revenues up almost 23%, primarily reflecting strong organic growth and the inclusion of Grey Global Group (“Grey”). Reported growth was above the constant currency growth primarily due to the strength of
Slide 3: Revenue by Discipline: Third quarter
Third Quarter 2005 Revenue by Discipline: Third quarter Revenue 2005 2004 % Change £m £m Reported Constant Like-for- Currency¹ like² Advertising, Media Investment Management 648.3 479.9 35.1 30.8 3.6 Information, Insight & Consultancy 203.5 195.6 4.0 1.5 7.1 Public Relations & Public Affairs 134.1 1
Slide 4: Revenue by Discipline: Year to Date
Third Quarter 2005 Revenue by Discipline: Year to Date Revenue 2005 2004 % Change £m £m Reported Constant Like-for- Currency¹ like² Advertising, Media Investment Management 1,833.0 1,416.6 29.4 27.6 5.1 Information, Insight & Consultancy 591.0 532.0 11.1 10.0 6.8 Public Relations & Public Affairs 38
Slide 5: Advertising, Media Investment Management
Third Quarter 2005 Advertising, Media Investment Management • Constant currency revenue growth almost 31%, largely as a result of the acquisition of Grey Worldwide. Like-for-like growth almost 4%. • This sector performed well with strong organic growth in Media Investment Management. • UK, Asia Paci
Slide 6: Information, Insight and Consultancy
Third Quarter 2005 Information, Insight and Consultancy • Constant currency revenue growth up over 1%, largely impacted by the de-consolidation of AGB in 2005. Like-for- like growth up over 7%. • Strong organic growth from Millward Brown, Kantar Media Research, IMRB, Ziment, Lightspeed, Management V
Slide 7: Public Relations & Public Affairs
Third Quarter 2005 Public Relations & Public Affairs • Constant currency revenue growth over 16%, partly as a result of the acquisition of GCI. Like-for-like growth over 4%. • Strong performances at Burson-Marsteller in Latin America and Asia Pacific, Hill & Knowlton in Asia Pacific, Cohn & Wolfe, P
Slide 8: Branding & Identity, Healthcare and Specialist Communications
Third Quarter 2005 Branding & Identity, Healthcare and Specialist Communications • Constant currency revenue growth up almost 27%, largely driven by the acquisition of Grey Synchronized Partners. Like-for-like growth up almost 6%. • Strong organic growth in direct, internet and interactive at Ogilvy
Slide 9: Revenue by Region: Third Quarter
Third Quarter 2005 Revenue by Region: Third Quarter Revenue 2005 2004 % Change £m £m Reported Constant Like-for- Currency¹ like² North America 539.3 416.9 29.4 26.4 4.3 UK 204.5 186.5 9.7 9.7 3.0 Continental Europe 333.4 262.0 27.3 24.7 3.1 Asia Pacific, Latin America, Africa & Middle East 271.2 202
Slide 10: Revenue by Region: Year to Date
Third Quarter 2005 Revenue by Region: Year to Date Revenue 2005 2004 % Change £m £m Reported Constant Like-for- Currency¹ like² North America 1,512.7 1,226.8 23.3 24.2 5.3 UK 593.4 529.9 12.0 12.0 2.8 Continental Europe 995.8 786.3 26.6 23.9 3.7 Asia Pacific, Latin America, Africa & Middle East 714.
Slide 11: Growth by region
Third Quarter 2005 Growth by region • Double-digit growth, in constant currency, effectively across all geographies. • Strong organic growth in the USA, Asia Pacific and Latin America. 11
Slide 12: Revenue Growth by Country
Third Quarter results for 2005 Revenue Growth by Country Revenue Growth¹ Countries >20% Australia, Brazil, Canada, China, Denmark, Germany, Hong Kong, Mexico, Sweden, Taiwan, USA 15-20% India, Japan, Spain 10-15% France, Netherlands, Singapore, UK 5-10% Italy 0-5% Belgium ¹Constant currency 12
Slide 13: Revenue Growth by Category
Third Quarter results for 2005 Revenue Growth by Category Revenue Growth¹ Categories >20% Electrical, Financial Services, Personal Care & Drugs 15-20% Computer, Drinks 10-15% Food, Oil, Telecommunications 5-10% Automotive, Retail ¹Constant currency 13
Slide 14: Impact of currency
Third Quarter 2005 Impact of currency • Year to date revenues up 23% in reportable currencies and 22% in constant currencies, the difference being primarily due to the strength of the euro. • The average US dollar exchange rate for the first nine months of 2005 was $1.843/£1 compared to $1.822 for t
Slide 15: Major New Business Wins (1)
Third Quarter 2005 Major New Business Wins (1) Agency Account Office Billings ($m) MediaCom VW USA 500 Y&R Sears2 USA 350 mec Cingular USA 200 mec Novartis1 Global 200 MindShare Telefonica Europe 200 MediaCom IKEA Global 175 MediaCom Time Warner France 135 WINS GroupM Shell Global 120 Ogilvy Lenovo
Slide 16: Major New Business Wins (2)
Third Quarter 2005 Major New Business Wins (2) Agency Account Office Billings ($m) Ogilvy Revlon USA 40 GroupM China Telecom China 37 Ogilvy Healthworld/ OgilvyOne Wyeth USA 36 WINS Grey Worldwide BMW USA 35 Ogilvy Nectar UK 34 mec Netflix USA 30 MindShare Kellogg Canada 26 MediaCom Muller UK 26 Max
Slide 17: Major New Business Losses
Third Quarter 2005 Major New Business Losses Agency Account Office Billings ($m) Ogilvy Sears2 USA 350 Y&R Sony USA 125 1 MediaCom Novartis Global 100 Y&R Jaguar Global 100 MindShare/ mec Mattel USA 80 LOSSES Ogilvy AEFA USA 55 Ogilvy Motorola USA 50 Ogilvy Coca Cola USA 44 mec Cencosud Chile 40 mec
Slide 18: Uses of Cashflow
Third Quarter 2005 Uses of Cashflow • Average net debt in the first nine months up £20 million to £1,137 million, compared to £1,117 million in 2004, at 2005 exchange rates. This includes a £384 million gross payment for Grey. • Net debt at 30 September 2005 was £1,326 million, an increase of £206 m
Slide 19: Acquisitions
Third Quarter 2005 Acquisitions Advertising and Media Investment Public Relations & Public Management Affairs Malone Advertising (USA) Federalist Group (USA) Gallagher (USA) IPR (Hong Kong) TCG (Australia) Video international (Russia) Information, Insight & Consultancy M:Metrics (USA) 19
Slide 20: WPP
WPP Trading Statement for the Third Quarter 2005 28 October 2005 20