Wpp Plc · LSE:WPP
Wpp — Q1 2022 Earnings Presentation
24 slides from Wpp's earnings presentation, Apr 27, 2022
Slide 1: First Quarter Trading Update 27 April 2022
2022 27 April 2022
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This document contains statements that are, or may be deemed to be, “forward-looking statements”. Forward-looking statements give the Company’s current expectations or forecasts of future events. An investor can identify these statements by t
Slide 3: Q1 Highlights, Financial Performance, Q&A
1. Q1 HIGHLIGHTS 2. FINANCIAL PERFORMANCE 3. Q&A 3
Slide 4: Strong Start to the Year
STRONG START TO THE YEAR Continued growth momentum Sustained investment in client offer • LFL1 revenue less pass-through costs • Further transformation of GroupM +9.5% • Launches of Everymile (D2C commerce) • Growth in all business segments: GIA and Metaverse Foundry +8.6% (GroupM +12.8%), PR +14.1%
Slide 5: Events in Ukraine and Russia
EVENTS IN UKRAINE AND RUSSIA • Provide practical and financial assistance for our 200 people in Ukraine • Partnered with the UNHCR to run an emergency fundraising appeal: - $150m raised to date, including over $1.3m from our employee match-funding programme • On 4 March 2022 we announced our decisio
Slide 6: Financial
FINANCIAL 6
Slide 7: Q1 LFL Growth Ahead of Expectations
Q1 LFL GROWTH AHEAD OF EXPECTATIONS Revenue less pass-through costs growth Q1 2020 Q1 2021 Q1 2022 Reported (4.3%) Reported (1.4%) Reported 10.3% FX (0.3%) FX (4.3%) FX 0.3% Acquisitions (0.7%) Acquisitions (0.2%) Acquisitions 0.5% LFL (3.3%) LFL 3.1% LFL 9.5% Q1 2022 TRADING UPDATE 7
Slide 8: Good Growth Across All Business Sectors
GOOD GROWTH ACROSS ALL BUSINESS SECTORS Q1 LFL REVENUE LESS PASS-THROUGH COSTS GROWTH 16% 14.1% • Continued strong performance at GroupM: 14% 12.8% 13.0% data, digital media, new business 12% 10% 9.5% 8.6% • Other GIAs all contributing to growth: 8% 5.6% − Demand for content driving Hogarth 6% 4% −
Slide 9: Major Markets Growing Well
MAJOR MARKETS GROWING WELL Q1 LFL REVENUE LESS PASS-THROUGH COSTS GROWTH 30% 28.5% • Global footprint increasingly relevant 25.1% for clients 25% • Largest markets growing close to or 20% above overall WPP growth rate 16.1% 15% 11.9% • Very strong growth in India and Brazil 10% 8.9% 8.1% 8.2% • Post
Slide 10: Main Movements in Net Debt (£m)
MAIN MOVEMENTS IN NET DEBT (£M) • Net debt at 31 March 2022 £2.6 billion, average net (0.9bn) debt £1.6 billion - Normal seasonal movement in working capital since year-end - Trade NWC improvement of c £180m YoY at Q1 • £405 million of share purchases in Q1 - £362 million share buyback (2.6bn) - £43
Slide 11: Updated 2022 Guidance
UPDATED 2022 GUIDANCE • Like-for-like revenue less pass-through costs of 5.5-6.5% (previously around 5%) • Headline operating margin improvement maintained targeted at around 50 bps, excluding the impacts of M&A and foreign exchange • Capex £350-400 million • Trade working capital expected to be fla
Slide 12: Outlook
OUTLOOK 12
Slide 13: Summary and Outlook
SUMMARY AND OUTLOOK • Strong start to the year; broad-based growth across the business • Ongoing investment in expanding our offer to drive long-term growth − Targeted acquisitions − Strategic partnerships − Continued investment in innovation, eg Choreograph, Finecast, Everymile • Demand from client
Slide 14: Q&A
Q&A 14
Slide 15: Contacts and Further Resources
CONTACTS AND FURTHER RESOURCES PEREGRINE RIVIERE INVESTOR WEBSITE Group Investor Relations Director www.wpp.com/investors peregrine.riviere@wpp.com Tel: +44 (0) 7909 907 193 WPP IQ ANTHONY HAMILTON WPP’s industry intelligence platform Investor Relations Director www.wpp.com/wpp-iq anthony.hamilton@w
Slide 16: Other
OTHER
Slide 17: Revenue Less Pass-Through Costs by Sector
REVENUE LESS PASS-THROUGH COSTS BY SECTOR FIRST QUARTER 2022 £M 2021 £M1 Δ REPORTED Δ LFL Global Integrated Agencies 2,106 1,947 8.2% 8.6% Public Relations 262 206 27.4% 14.1% Specialist Agencies 206 181 14.0% 13.0% Total Continuing Operations 2,574 2,334 10.3% 9.5% 1. Prior year figures have been r
Slide 18: Revenue Less Pass-Through Costs by Region
REVENUE LESS PASS-THROUGH COSTS BY REGION FIRST QUARTER 2022 £M 2021 £M Δ REPORTED Δ LFL North America 1,015 886 14.6% 8.7% UK 352 321 9.8% 8.1% Western Continental Europe 507 492 3.2% 8.9% Asia Pacific, Latin America, Africa & Middle East and Central & Eastern 700 635 10.1% 11.9% Europe Total Conti
Slide 19: Revenue Less Pass-Through Costs Growth by Region Like-for-Like %
REVENUE LESS PASS-THROUGH COSTS GROWTH BY REGION LIKE-FOR-LIKE % C. & E. Europe % FY 21 Q1 22 12.3% 4.9% UK % FY 21 Q1 22 15.0% 8.1% North America % FY 21 Q1 22 W. Cont. Europe % 9.7% 8.7% FY 21 Q1 22 14.5% 8.9% Asia Pacific % FY 21 Q1 22 9.5% 10.4% Africa & M. East % FY 21 Q1 22 11.0% 9.4% Latin Am
Slide 20: Top Markets Performance
TOP MARKETS PERFORMANCE1 USA UK GERMANY Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 34.5% 31.8% 20.3% 16.9% 16.1% 12.6% 12.4% 11.7% 8.9% 9.9% 8.1% 3.9% 2.5% 3.4% 0.7% CHINA INDIA Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q1 20
Slide 21: Top Markets Performance
TOP MARKETS PERFORMANCE1 AUSTRALIA CANADA FRANCE Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 33.5% 27.9% 15.7% 16.1% 8.4% 8.7% 7.8% 5.8% 6.1% 2.4% 3.5% 0.4% (2.2%) (1.0%) (7.6%) BRAZIL SPAIN Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q
Slide 22: Impact of FX on Revenue Less Pass-Through Costs
IMPACT OF FX ON REVENUE LESS PASS-THROUGH COSTS 21/FY Act 22/Q1 Act 22/Q2 Est¹ 22/Q3 Est¹ 22/Q4 Est¹ 22/FY Est¹ 4% • YTD currency tailwind 3% 0.3% 2% 3.6% 3.3% • 2021 full year 1% 2.3% 2.4% 0.3% headwind (5.0%) 0% • 2022 full year currency -1% tailwind 2.4% at recent -2% exchange rates1 (5.0%) -3% -
Slide 23: Debt Maturity Profile £m at Mar 31, 2022
DEBT MATURITY PROFILE £M AT MAR 31, 2022 £ TOTAL £ TOTAL 700 CREDIT DRAWN ◼ £ bonds £400m (2.875% Sep ’46) 400 400 600 ◼ US bond $220m (5.625% Nov ’43) 167 167 ◼ US bond $93m (5.125% Sep ’42) 71 71 500 ◼ £ bonds £250m (3.75% May ’32) 250 250 ◼ Eurobonds €600m (1.625% Mar ’30) 506 506 400 ◼ Eurobonds
Slide 24: Effects of Currency
EFFECTS OF CURRENCY STERLING FIRST QUARTER 2022 2021 (WEAKER)/STRONGER US$ 1.34 1.38 (3%) € 1.20 1.15 4% • Currency movements accounted for 0.3% Chinese Renminbi 8.5 8.9 (5%) increase in revenue less Brazilian Real 7.00 7.56 (7%) pass-through costs Australian $ 1.85 1.78 4% • £ sterling weakening ag