Wpp Plc · LSE:WPP
Wpp — Q1 2012 Earnings Presentation
28 slides from Wpp's earnings presentation, April 2012
Slide 1: Trading Statement for the First Quarter 2012
Trading Statement for the First Quarter 2012 April 2012 1
Slide 2: First Quarter 2012 Highlights
First Quarter 2012 Highlights Q1 organic growth of 4%, Q1RF revenue growth slightly better, with a slightly stronger second half. Q1 profits and operating margin above budget, ahead of last year and in line with Group’s targeted margin improvement of 0.5 margin points. Strong growth rates in A
Slide 3: Summary
First Quarter 2012 Summary Reported revenue up 7.6% with constant currency revenue up 7.4%. Like-for-like revenue up 4.0% with gross margin also up 4.0%. First quarter profits and margins ahead of budget and ahead of last year in line with full year margin target of 0.5 margin points improveme
Slide 4: Summary
First Quarter 2012 Summary USA 1.4% like-for-like growth but improvement vs Q4 2011 and a strong Q1 2011. Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe continues to be fastest growth region with like-for-like growth of 9.5%. Western Continental Europe stabl
Slide 5: Summary – Revenue Growth
First Quarter 2012 Summary – Revenue Growth % Like-for-like 4.0 Acquisitions 3.4 Constant currency 7.4 Foreign exchange 0.2 Reportable sterling 7.6 Reportable US dollars¹ 5.5 Reportable euros² 10.1 1 Translated into US$, using among other currencies, average exchange rates of US$/£ for Q1 2012 of $1
Slide 6: Revenue by Discipline
First Quarter 2012 Revenue by Discipline % Change 2012 2011 Reported Constant Like-for- £m £m Currency like Advertising, Media Investment 973 899 8.3 8.4 6.2 Management Consumer Insight 569 553 3.0 3.3 1.3 0.6¹ Public Relations & Public Affairs 225 208 8.1 6.8 1.9 Branding & Identity, Healthcare and
Slide 7: Advertising, Media Investment Management
First Quarter 2012 Advertising, Media Investment Management Strongest performing sector with like-for-like growth of 6.2% in first quarter. Strong growth in Ogilvy & Mather Advertising and Grey in the first quarter, particularly in the United States and Latin America following several major new
Slide 8: Consumer Insight
First Quarter 2012 Consumer Insight Consumer insight improved performance with like-for-like revenue growth of 1.3%. TNS Custom had its best revenue growth quarter since 2008. Like-for-like revenue growth in Asia Pacific, Latin America, the Middle East and Africa well above the average, but th
Slide 9: Public Relations & Public Affairs
First Quarter 2012 Public Relations & Public Affairs Constant currency revenue growth 6.8% with like-for-like growth 1.9%. Burson-Marsteller and Cohn & Wolfe showed particularly strong growth in the first quarter. Geographically, strong growth in Asia Pacific, Latin America, the United Kingdom a
Slide 10: Branding & Identity, Healthcare and Specialist Communications
First Quarter 2012 Branding & Identity, Healthcare and Specialist Communications Continuing good performance with constant currency revenues up 10.0% and like-for-like revenue growth of 3.8% in first quarter. The Group’s Specialist Communications businesses showed the strongest growth of this se
Slide 11: Direct, Digital and Interactive
First Quarter 2012 Direct, Digital and Interactive At 31 March 2012, direct, digital and interactive revenues were $1.2bn or 31% of total revenues (2011: $1.0bn and 29% respectively) and up 8% like-for-like. The number of people working in the Group in this practice is almost 28,900 or 25% of he
Slide 12: Revenue by Region
First Quarter 2012 Revenue by Region % Change 2012 2011 Reported Constant Like-for- £m £m Currency like North America 864 808 6.9 4.9 1.4 UK 284 271 5.0 5.0 2.5 3.0¹ Western Continental Europe 563 532 5.8 8.2 2.5 Asia Pacific, Latin America, Africa & Middle East, Central & Eastern 681 612 11.2 11.1
Slide 13: Growth by Region
First Quarter 2012 Growth by Region Asia Pacific and Latin America delivered double digit like-for-like growth in first quarter, with the BRIC countries up over 16% and Next 11 up almost 10%. In Asia Pacific, Greater China continued the strong growth seen in 2011, with like-for-like growth of ov
Slide 14: Revenue Growth by Country
First Quarter 2012 Revenue Growth by Country Revenue Growth1 Countries >20% Argentina, Belgium 15% to 20% Brazil, Greater China², Mainland China³, Russia, South Korea 10% to 15% India, Singapore 5% to 10% Italy, Mexico, Norway, Poland Australia, Canada, Denmark, France, Germany, Japan, <5% Netherlan
Slide 15: Revenue Growth by Category
First Quarter 2012 Revenue Growth by Category Revenue Growth1 Categories >15% Automotive, Government, Travel & Airline 5% to 10% Personal Care & Drugs, Electronics Computers, Drinks, Entertainment, Financial Services, <5% Food, Oil, Retail, Telecommunications 1 Like-for-like growth 15
Slide 16: Effects of Weakness of Sterling
First Quarter 2012 Effects of Weakness of Sterling Currency movements accounted for a 0.2% increase in revenue, largely reflecting the weakness of the £ sterling against the US$ and most other currencies, offset by strength against the euro. Sterling weaker on average as follows: 2012 2011 Sterl
Slide 17: Trade Estimates of Major New Business Wins – First Quarter
First Quarter 2012 Trade Estimates of Major New Business Wins – First Quarter WPP Agency Incumbent Account Office Billings($m) Equipe L’Oreal PUB L’Oreal Germany 727 MediaCom OMC Etihad Global 160 Wunderman None Levis Global 100 MEC OMC/Others UK Government UK 100 JWT/MEC/MediaCom PUB MOD UK 80 MEC
Slide 18: Trade Estimates of Major New Business Losses – First Quarter
First Quarter 2012 Trade Estimates of Major New Business Losses – First Quarter WPP Agency Winning Agency Account Office Billings($m) Mindshare PUB Sprint Global 1,000 Grey OMC GSK Global 158 Ogilvy PUB Kraft USA 60 18
Slide 19: Internal Estimates of Net New Business Wins – Year to Date
First Quarter 2012 Internal Estimates of Net New Business Wins – Year to Date ($m) Creative Media Total Advertising 455 1,006 1,461 Other Businesses 394 - 394 Total 849 1,006 1,855 19
Slide 20: Trade Estimates of Major New Business Wins/Losses Since April
First Quarter 2012 Trade Estimates of Major New Business Wins/ Losses Since 1 April WPP Agency Incumbent Account Office Billings($m) MediaCom PUB Procter & Gamble Germany 225 Grey Ind RadioShack USA 200 WINS MediaCom PUB Procter & Gamble China 100 Ogilvy G2 Aetna USA 30 WPP Agency Winning Agency Acc
Slide 21: Cash Flow and Net Debt
First Quarter 2012 Cash Flow and Net Debt Average net debt in the first three months up £416 million to £2.644 billion, compared to £2.228 billion in 2011, at 2012 exchange rates. Net debt at 31 March up £291 million to £2.816 billion, compared to £2.525 billion last year, at 2012 exchange rates
Slide 22: Average debt continues to reduce
First Quarter 2012 Average debt continues to reduce (1,500) Mar‐10 Jun‐10 Sep‐10 Mar‐11 Jun‐11 Sep‐11 Mar‐12 Dec‐09 Dec‐10 Dec‐11 (2,000) £ ‘million (2,500) £2,811 (3,000) £3,056 net debt annual average (3,500) 22
Slide 23: Q1 2012 below Q1 2010
First Quarter 2012 Q1 2012 below Q1 2010 (1,500) Mar‐10 Jun‐10 Sep‐10 Mar‐11 Jun‐11 Sep‐11 Mar‐12 Dec‐09 Dec‐10 Dec‐11 (2,000) £ ‘million (2,500) (3,000) (3,500) 23
Slide 24: Acquisitions and Investments – Year to Date
First Quarter 2012 Acquisitions and Investments – Year to Date Faster Growing Quantitative & Markets Digital 41?29! Media (Turkey) BARROWS (S AFRICA) CIC Data (China) CARNATION (HUNGARY) DTDigital (Australia) IDEA (Jordan) CONVERGE (PAKISTAN) EFFECTIVEUI (USA) PBN (Russia)¹ Oasis Insights (Pakistan)
Slide 25: Uses of Free Cash Flow
First Quarter 2012 Uses of Free Cash Flow Category March YTD 2012 March YTD 2011 FY 2011 New acquisitions¹ £27m² £18m² £381m² Share purchases/ cancellations: £21m £64m £182m % of issued share capital 0.2%³ 0.6% 2.1% Dividend increase n/a n/a 38.3% ¹ Includes investments and step-ups in subsidiaries
Slide 26: Summary
First Quarter 2012 Summary The year has started well with like-for-like revenues up 4.0%, in line with budget, with all geographies and sectors growing revenues. Better revenue performance from consumer insight. First quarter profits and margins ahead of budget and last year in line with the f
Slide 27: Outlook
First Quarter 2012 Outlook Trading in the first quarter consistent with budget which showed organic revenue growth of 4% and targeted improvement in margin of 0.5 margin points. Preliminary quarter one revised forecasts show like-for-like revenue growth slightly better than budget, with targeted
Slide 28: Trading Statement for the First Quarter 2012
Trading Statement for the First Quarter 2012 April 2012 28