Wpp Plc · LSE:WPP
Wpp — Q1 2024 Earnings Presentation
25 slides from Wpp's earnings presentation, Apr 25, 2024
Slide 1: Q1 Trading Update
Q1 TRADING UPDATE 25 April 2024
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This document contains statements that are, or may be personnel; delays or reductions in client advertising budgets; conditions and government regulations in the world’s deemed to be, “forward-looking statements”. Forward- shifts in industry
Slide 3: Agenda
• Q1 highlights • Financial performance • Strategic progress • Q&A 3
Slide 4: Summary
SUMMARY Strategy Momentum will outlined at the improve CMD landed well Q1 performance Reiterating 2024 through the with clients and as expected guidance balance of the across the Q1 likely to be year business the most challenging of the year Confident the actions we are taking will accelerate WPP’s
Slide 5: Q1 Highlights
Q1 HIGHLIGHTS • Q1 2024 like-for-like revenue less pass-through costs: -1.6% (Q1 ‘23 +2.9%), in line with expectations • New client wins: AstraZeneca, Canon, Molson Coors, Daiichi Sankyo, Nestlé, Perfetti, Perrigo, Rightmove and Telefónica • Awards: topped WARC’s creative and media rankings, and The
Slide 6: Financial Performance
FINANCIAL PERFORMANCE
Slide 7: Revenue Less Pass-Through Costs
REVENUE LESS PASS-THROUGH COSTS Q1 2024 -5.0% -3.9% +0.5% -1.6% Reported growth FX contribution to M&A contribution to Like-for-like growth (+9.9% in Q1 ‘23) reported growth reported growth (+2.9% in Q1 ‘23) 7
Slide 8: Performance by Business
PERFORMANCE BY BUSINESS LFL REVENUE LESS PASS-THROUGH COSTS GROWTH (%) • GLOBAL INTEGRATED AGENCIES • GroupM: continued growth in client Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 investment in media, offset by the 6.1 6.1 impact of US client assignment 5.7 losses in 2023 3.0 1.5 1.6 2.4 2.2 2.0 2.4 1.
Slide 9: Performance by Region
PERFORMANCE BY REGION LFL REVENUE LESS PASS-THROUGH COSTS GROWTH (%) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 9.0 7.4 5.1 5.3 3.9 4.3 3.4 3.3 2.8 1.9 1.1 1.1 1.9 0.3 (0.8) (0.6) (4.1) (4.1) (4.1) (5.2) N. America UK W. Continental Europe RoW 38% OF NET SALES1 14% OF NET SALES 20% OF NET SALES 28% OF
Slide 10: Client Sector Mix
CLIENT SECTOR MIX1 LFL REVENUE LESS PASS-THROUGH COSTS Q1 ‘24 4% 2% 4% Telecoms, media & 6% 28% CPG +9.5% entertainment +6.8% Financial services -0.9% 7% Tech & digital services -9.0% Other -14.8% Healthcare & pharma -8.2% Travel & leisure +4.0% 9% Automotive -0.7% Government, public Retail -9.1% se
Slide 11: Movement in Net Debt
MOVEMENT IN NET DEBT • Usual seasonal working capital £m MAR ‘23 DEC ‘23 MAR ‘24 outflow since year-end • Successful refinancing of two Adjusted net debt1,2 (3,928) (2,504) (4,000) upcoming bond maturities, issuing a €600m 3.625% bond due 2029 and a Average adjusted net debt/headline €650m 4.0% bond
Slide 12: 2024 Guidance Unchanged
2024 GUIDANCE UNCHANGED LFL revenue less pass-through costs growth of 0-1% Headline operating margin improvement of 20-40bps at constant currency Other FY 2024 financial indications: – Mergers and acquisitions will add 0.5-1.0% to revenue less pass-through costs growth – FX impact: current rates (at
Slide 13: Strategic Progress
STRATEGIC > PROGRESS
Slide 14: Innovating to Lead, Today and Tomorrow
INNOVATING TO LEAD, TODAY AND TOMORROW 1 LEAD THROUGH AI, DATA & TECHNOLOGY 2 ACCELERATE GROWTH THROUGH THE POWER OF CREATIVE TRANSFORMATION 3 BUILD WORLD-CLASS, MARKET-LEADING BRANDS 4 EXECUTE EFFICIENTLY TO DRIVE FINANCIAL RETURNS THROUGH MARGIN AND CASH 14
Slide 15: Medium-Term Financial Framework
MEDIUM-TERM FINANCIAL FRAMEWORK 3%+ 16%-17% 85%+ 1.5-1.75x Organic growth Headline Adjusted Operating Cash Average Net Debt / Revenue less pass- Operating Margin Flow Conversion Headline EBITDA1 through costs DISCIPLINED CAPITAL ALLOCATION Potential for M&A to accelerate growth by up to 1% p.a. 1. A
Slide 16: Summary
SUMMARY Strategy Momentum will outlined at the improve CMD landed well Q1 performance Reiterating 2024 through the with clients and as expected guidance balance of the across the Q1 likely to be year business the most challenging of the year Confident the actions we are taking will accelerate WPP’s
Slide 17: Q&A
Q&A
Slide 18: Contacts and Further Resources
CONTACTS AND FURTHER RESOURCES TOM WALDRON INVESTOR WEBSITE Group Investor Relations Director wpp.com/investors tom.waldron@wpp.com Tel: +44 (0) 7788 695 864 CAPITAL MARKETS DAY 2024 Materials linked here ANTHONY HAMILTON Investor Relations Director INVESTOR WEBINARS anthony.hamilton@wpp.com A serie
Slide 19: Appendix
APPENDIX
Slide 20: Revenue Less Pass-Through Costs Growth by Region
REVENUE LESS PASS-THROUGH COSTS GROWTH BY REGION LIKE-FOR-LIKE % Central & Eastern Europe % Q1 ‘23 FY ’23 Q1 ’24 11.0 6.9 (0.1) UK % Q1 ’23 FY ’23 Q1 ’24 7.4 5.6 0.3 North America % Q1 ‘23 FY ’23 Q1 ’24 1.9 (2.7) (5.2) Western Continental Europe % Q1 ’23 FY ’23 Q1 ‘24 3.4 1.8 3.3 Asia Pacific % Q1 ‘
Slide 21: Like-for-Like Growth Top Markets
LIKE-FOR-LIKE REVENUE LESS PASS-THROUGH COSTS GROWTH TOP MARKETS USA UK GERMANY Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 30% 30% 20% 20% 20% 10% 6.6% 9.0% 4.0% 10% 10% 7.4% 5.1% 2.3% 1.1% - 0.3% - - (1.9%) (3.8%) (5.3%) (
Slide 22: Like-for-Like Growth Top Markets
LIKE-FOR-LIKE REVENUE LESS PASS-THROUGH COSTS GROWTH TOP MARKETS AUSTRALIA CANADA FRANCE Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 20% 20% 20% 10% 10% 10% 4.5% 4.9% 2.5% 0.5% 0.9% 1.4% - - - (0.8%) (3.4%) (2.2%) (3.1%) (3.
Slide 23: Exchange Rate Analysis
EXCHANGE RATE ANALYSIS FX CONTRIBUTION TO REPORTED REVENUE LESS PASS- THROUGH GROWTH STERLING QUARTER TO 31 MARCH 2024 2023 (WEAKER)/STRONGER 2023 FY Q1 23 Act Q2 23 Act Q3 23 Act Q4 23 Act Act Q1 24 Act US $ 1.27 1.22 4.1% € 1.17 1.13 3.5% 6.3% Chinese Renminbi 9.12 8.32 9.6% Indian Rupee 105.3 100
Slide 24: Debt Maturity Profile at March 31, 2024
DEBT MATURITY PROFILE AT MARCH 31, 2024 (£M) £ TOTAL £ TOTAL EUR GBP USD Bonds (currency of issuance) Bonds post swaps: CREDIT DRAWN 700 ◼ £ bonds £400m (2.875% Sep ’46) 400 400 ◼ US bond $220m (5.625% Nov ’43) 174 174 600 New ◼ US bond $93m (5.125% Sep ’42) 74 74 New 500 ◼ Eurobonds €650m (4.0% Sep
Slide 25: Thank You
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