Slide 1: Q3 Trading Update
Q3 TRADING UPDATE 26 October 2023
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This document contains statements that are, or may be include but are not limited to: the impact of, epidemics or world’s advertising markets). They use words such as ‘aim’, deemed to be, “forward-looking statements”. Forward- pandemics inclu
Slide 3: Agenda
• Q3 highlights • Financial performance • Strategic progress • Q&A 3
Slide 4: Highlights
HIGHLIGHTS • Q3 2023 like-for-like revenue less pass-through costs -0.6%; YTD +1.2% • Continued to see reduced spend from technology clients in North America and other markets, with a greater impact on our media business, GroupM • LFL growth in UK, Western Continental Europe and Rest of World despit
Slide 5: Strengthened Offer
STRENGTHENED OFFER CREATING THE WORLD’S LARGEST CREATIVE SIMPLIFIED OPERATING MODEL IN AGENCY MEDIA + Further integration of GroupM with common products and single technology platform, streamlining of operations and back-office functions supporting client-facing agencies 30,000 people 64 countries -
Slide 6: Financial Performance
FINANCIAL PERFORMANCE
Slide 7: Revenue Less Pass-Through Costs Q3 2023
REVENUE LESS PASS-THROUGH COSTS Q3 2023 -5.0% -5.5pt +1.1pt -0.6% Reported growth FX contribution to M&A contribution to Like-for-like growth (+13.1% in Q3 ‘22) reported growth reported growth (+3.8% in Q3 ‘22) 7
Slide 8: Performance by Business
PERFORMANCE BY BUSINESS LFL REVENUE LESS PASS-THROUGH COSTS GROWTH (%) • GLOBAL INTEGRATED AGENCIES Q1 2023 Q2 2023 Q3 2023 • GroupM: softer growth from Tech clients impacted the US, UK and 6.1 6.1 Germany, alongside client losses in the US. Good growth in APAC 3.0 markets 1.5 1.6 2.2 2.0 1.9 0.1 0.
Slide 9: Performance by Region
PERFORMANCE BY REGION LFL REVENUE LESS PASS-THROUGH COSTS GROWTH (%) 9.0 Q1 2023 Q2 2023 Q3 2023 7.4 3.9 4.3 3.4 2.8 1.9 1.9 1.1 1.1 (4.1) (4.1) N. N. America America UK UK W. W.Continental ContinentalEurope Europe RoW RoW 39% OF NET SALES 14% OF NET SALES 20% OF NET SALES 27% OF NET SALES • USA: -4
Slide 10: Performance by Client Sectors
PERFORMANCE BY CLIENT SECTORS LFL REVENUE LESS PASS-THROUGH COSTS (Q3 2023)1 3% 3% 6% Telecom, media & 6% 27% CPG +14.5% (YTD +14.9%) entertainment +8.4% (YTD +1.7%) Financial services +3.9% (YTD +7.9% ) Tech & digital services -12.7% (YTD -7.6%) 7% Healthcare & pharma +1.5% (YTD Other -0.8% (YTD -0
Slide 11: 2023 Guidance
2023 GUIDANCE LFL revenue less pass-through costs growth of 0.5-1.0% (previously 1.5-3.0%) Headline operating margin of 14.8-15.0% ex FX (previously around 15.0%) – FX impact: current rates imply a c.1.0% headwind on revenues less pass-through costs and a c.0.25pt headwind on headline operating marg
Slide 12: Impact of VML and GroupM Strategic Initiatives
IMPACT OF VML AND GROUPM STRATEGIC INITIATIVES £100m < 1:1 >60% 82% Net annualised cost Restructuring WPP Net Sales and of WPP in top five savings in FY25 Costs:Savings Headcount from agencies1 (part-year benefit in two agencies FY24) UNLOCKING SCALE BENEFITS BACK-OFFICE OPTIMISATION • Simplified an
Slide 13: Strategic Progress
STRATEGIC PROGRESS
Slide 14: Strategic Progress - Evolving Client Needs
STRATEGIC PROGRESS - EVOLVING CLIENT NEEDS CREATIVITY & TECHNOLOGY & SIMPLICITY & OFFER ARTIFICIAL PEOPLE EFFECTIVENESS SCALE INTELLIGENCE 14
Slide 15: New Business Wins
NEW BUSINESS WINS $3.4bn WINNING NEW BUSINESS1 of new business YTD (YTD 22: $5.1bn) Media Media Media Creative Creative Europe Aus & New Zealand China Global N. America Creative Creative Creative Public Relations Brand Strategy Global Brazil India Global Japan 1. New business announced in Q3 2023, e
Slide 16: Creativity & Effectiveness: Recognition
CREATIVITY & EFFECTIVENESS: RECOGNITION COMPANY CREATIVITY EFFECTIVENESS VMLY&R named Network of the Year and VMLY&R Commerce named Agency of the year 16
Slide 17: Creating the World's Largest Creative Agency
CREATING THE WORLD’S LARGEST CREATIVE AGENCY “ signals the integration of customer experience, brand experience and commerce services - not just under one logo - but as interconnected disciplines that form business solutions. Marketers are tired of managing multiple, duplicative specialists. They mu
Slide 18: Simplifying Our Offer: GroupM Evolution
SIMPLIFYING OUR OFFER: GROUPM EVOLUTION 2019 - 2020 April 2021 April 2022 August 2023 October 2023 New leadership team Merger of GroupM and Merger of Essence and Mediacom Finecast, Xasis and Sightline Client-facing agencies supported Wunderman Thompson Data media agencies brands retired by common pr
Slide 19: Summary
SUMMARY • Continuation of Q2 client spending trends • Performance in Q3 impacted by the cautious spending trends we saw in Q2, particularly across technology clients • Greater impact felt in GroupM than in H1 from these trends • Continued strategic progress: • Creation of VML as a powerhouse of crea
Slide 20: Q&A
Q&A
Slide 21: 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 INVESTOR WEBINARS ANTHONY HAMILTON A series of webinars designed to give investors and analysts Investor Relations Director deeper insight int
Slide 22: Appendix
APPENDIX
Slide 23: Exchange Rate Analysis
EXCHANGE RATE ANALYSIS STERLING 1 1 THIRD QUARTER 2023 2022 (WEAKER)/STRONGER 2022 Act Q1 23 Act Q2 23 Q3 23 Q4 23 Est 2023 FY Est US $ 1.27 1.18 8% 6.3% € 1.16 1.17 (1%) 5.9% Chinese Renminbi 9.17 8.06 14% Indian Rupee 104.7 94.0 11% Brazilian Real 6.18 6.18 0% (0.6%) (1.0%) Australian $ 1.93 1.72
Slide 24: Revenue Less Pass-Through Costs Growth
REVENUE LESS PASS-THROUGH COSTS GROWTH Central & Eastern Europe % Q1 23 Q2 23 Q3 23 11.0 10.3 3.3 UK % Q1 23 Q2 23 Q3 23 7.4 9.0 1.1 North America % Q1 23 Q2 23 Q3 23 Western Continental Europe % 1.9 (4.1) (4.1) Q1 23 Q2 23 Q3 23 3.4 3.9 1.1 Asia Pacific % Q1 23 Q2 23 Q3 23 (2.8) 1.3 (0.4) Africa &
Slide 25: Debt Maturity Profile at 30 Sept 2023
DEBT MATURITY PROFILE AT 30 SEPT 2023 (£M) £ TOTAL £ TOTAL CREDIT DRAWN EUR GBP USD 800 £ bonds £400m (2.875% Sep ’46) 400 400 US bond $220m (5.625% Nov ’43) 180 180 700 US bond $93m (5.125% Sep ’42) 76 76 600 £ bonds £250m (3.75% May ’32) 250 250 500 Eurobonds €600m (1.625% Mar ’30) 520 5
Slide 26: Thank You
THANK YOU d