Wpp Plc · LSE:WPP

Wpp — H1 2013 Earnings Presentation

89 slides from Wpp's earnings presentation, August 2013

1. Slide 1: 2013 Interim Results

   2013 Interim Results London 1

2. Slide 2: Contents

   Contents 1 2013 Interim Results 2 Four Strategic Priorities 3 Key Objectives 4 Conclusions 5 27 Year History (Hard Copy Only) 6 Other Financial Information (Hard Copy only) 2

3. Slide 3: 2013 Interim Results

   1 2013 Interim Results WPP

4. Slide 4: 2013 Interim Results Highlights

   2013 Interim Results  Billings up 5% to £22.7bn and reportable revenues up 7.1% to over £5.3bn.  Like-for-like revenue up 2.4% with acquisitions adding 3.1% and foreign exchange 1.6%.  Gross margin up 2.4% like-for-like.  Headline PBIT up 11.8% to £637m from £570m.  Headline operating margin up

5. Slide 5: Summary Headline Results at a Glance

   2013 Interim Results Summary Headline¹ Results at a Glance Half Year to 30 June 2013 2012 Change % Revenue £m 5,327 4,972 7.1 Gross Margin £m 4,884 4,568 6.9 Operating Profit Margin: % of Revenue 12.0% 11.5% +0.5² % of Gross Margin 13.0% 12.5% +0.5² Diluted EPS 28.4p 25.8p 10.1 Dividend per share 10

6. Slide 6: Actual vs. Consensus

   2013 Interim Results Actual vs. Consensus Half Year to 30 June Actual Consensus1 Revenue Growth 7.1% 6.3% Organic Growth 2.4% 2.4% EBIT £637m £620m EBIT Growth 11.8% 8.7% EBIT Margin Growth 50 bps 40 bps EPS Growth 10.1% 6.7% Dividend Growth 20% 18.2% 1 Vuma Consensus Analysis 6

7. Slide 7: Unaudited Headline IFRS Income Statement

   2013 Interim Results Unaudited Headline¹ IFRS Income Statement % Change Half Year to 30 June 2013 2012 Constant £m £m Reported Currency Revenue 5,327 4,972 7.1 5.5 Operating profit 608 542 12.1 9.7 Income from associates 29 28 5.0 7.5 PBIT 637 570 11.8 9.6 Net finance costs (113) (103) -9.8 -9.2 Pro

8. Slide 8: Unaudited IFRS Income Statement

   2013 Interim Results Unaudited IFRS Income Statement Constant Half Year to 30 June 2013 2012 Change Currency £m £m % % Revenue 5,327 4,972 7.1 5.5 Operating profit pre-goodwill/intangibles 608 542 12.1 9.7 Goodwill/intangibles charges, net re-measurement gains (94) (87) -8.4 -8.0 Operating profit 51

9. Slide 9: % Growth Versus Prior Year

   2013 Interim Results % Growth Versus Prior Year Revenue Headline1 Headline1 PBIT EPS Like-for-like 2.4 n/a n/a Acquisitions2 3.1 n/a n/a Constant currency 5.5 9.6 6.7 Foreign exchange 1.6 2.2 3.4 Reportable sterling 7.1 11.8 10.1 Reportable US dollars3 4.7 8.5 6.9 Reportable euros4 3.4 7.1 5.0 1 Fig

10. Slide 10: Revenue by Sector

    2013 Interim Results Revenue by Sector % Change 2013 2012 Reported Constant Like-for- £m £m Currency like Advertising, Media Investment 2,193 2,044 7.2 5.7 4.3 Management Data Investment Management 1,238 1,191 3.9 2.3 0.9 1.72 Public Relations & Public Affairs 458 459 -0.2 -2.2 -3.6 Branding & Ident

11. Slide 11: Data Investment Management Revenue Growth by Region

    2013 Interim Results Data Investment Management - Solid in Faster Growing Markets, Improved in North America 9.3% EMERGING EUROPE (3.7%) WESTERN EUROPE 2.6% NORTH AMERICA (4.7%) DEVELOPED APAC 8.1% EMERGING APAC 5.0% LATAM 12.6% MEA 30 JUNE YEAR TO DATE LIKE-FOR-LIKE REVENUE GROWTH VERSUS 2012 Matur

12. Slide 12: Revenue by Region

    2013 Interim Results Revenue by Region % Change 2013 2012 Reported Constant Like-for- £m £m Currency like North America 1,840 1,748 5.3 2.9 0.8 UK 669 591 13.1 13.1 4.6 6.0¹ Western Continental Europe 1,258 1,187 6.0 2.3 -1.0 Asia Pacific, Latin America, Africa & Middle East, Central & Eastern 1,560

13. Slide 13: Headline PBIT and Margin by Sector

    2013 Interim Results Headline¹ PBIT and Margin by Sector Headline PBIT Headline Margin 2013 2012 2013 2012 £m £m % % Advertising, Media Investment 315 283 14.4 13.9 Management Data Investment Management 93 84 7.5 7.0 Gross margin margins 10.4 9.7 Public Relations & Public Affairs 60 62 13.0 13.5 Bra

14. Slide 14: Headline PBIT and Margin by Region

    2013 Interim Results Headline¹ PBIT and Margin by Region Headline PBIT Headline Margin 2013 2012 2013 2012 £m £m % % North America 255 239 13.8 13.7 UK 85 73 12.7 12.3 Western Continental Europe 100 95 7.9 8.0 Asia Pacific, Latin America, Africa & 197 163 12.7 11.2 Middle East, Central & Eastern Eur

15. Slide 15: Revenue Growth by Country

    2013 Interim Results Revenue Growth by Country Revenue Growth1 Countries >20% Argentina 15% to 20% Thailand 10% to 15% Brazil, South Africa 5% to 10% Greater China², Mainland China³, India Average4 to 5% Germany, Netherlands, Russia, South Korea, UK Australia, Belgium, Canada, Denmark, France, Italy

16. Slide 16: Revenue Growth by Category

    2013 Interim Results Revenue Growth by Category Revenue Growth¹ Categories Above 10% Entertainment 5% to 10% Drinks, Government, Oil Average² to 5% Automotive, Electronics, Personal Care & Drugs Computers, Financial Services, Food, Retail, Below Average² Telecommunications, Travel & Airline 1 Like-f

17. Slide 17: Effects of Strength of Sterling

    2013 Interim Results Effects of Strength of Sterling  Currency movements accounted for a 1.6% increase in revenue, largely reflecting the weakness of the £ sterling against the euro and the US$, partly offset by strength against most faster growing market currencies.  Sterling weaker overall as fo

18. Slide 18: Trade Estimates of Major New Business Wins (1)

    2013 Interim Results Trade Estimates of Major New Business Wins (1) WPP Agency Incumbent Account Office Billings($m) Grey OMC Procter & Gamble (Gillette) Global 800 GroupM PUB Nestlé USA 750 MediaCom OMC Sony Global 500 Y&R PUB/IND JCPenney USA 440 Team Plus MEC Chanel Global 400 Mindshare IPG/Minds

19. Slide 19: Trade Estimates of Major New Business Wins (2)

    2013 Interim Results Trade Estimates of Major New Business Wins (2) WPP Agency Incumbent Account Office Billings($m) Grey Grey Kellogg’s Global 50 Grey IPG Mengniu Dairy China 50 MediaCom AGS Coca-Cola UK 48 JWT IND China Auto Rental China 40 JWT DEN China Unicom China 40 Maxus AGS Qantas Asia Pacif

20. Slide 20: Trade Estimates of Major New Business Losses

    2013 Interim Results Trade Estimates of Major New Business Losses WPP Agency Winning Agency Account Office Billings($m) Mindshare PUB AbbVie Global 365 Mindshare IPG Amazon Global 220 MEC Team Plus Chanel Global 200 Mindshare HAV LG Global 160 Mindshare PUB Motorola Global 150 Mindshare IPG Zurich G

21. Slide 21: Internal Estimates of Net New Business Wins

    2013 Interim Results Internal Estimates of Net New Business Wins ($m) Creative Media Total Advertising 1,436 2,195 3,631 Other Businesses 549 - 549 Total First Half 2013 1,985 2,195 4,180 Total First Half 2012 1,557 2,403 3,960 21

22. Slide 22: Major New Business Wins/Losses Since July

    2013 Interim Results Trade Estimates of Major New Business Wins/Losses Since 1 July WPP Agency Incumbent Account Office Billings($m) JWT IND Nokia Global 120 OgilvyOne PUB Weight Watchers USA 95 WINS MEC OMC/PUB GE Global ex USA 80 MediaCom PUB Siemens Global 46 MediaCom PUB Coca-Cola Vietnam 20 WPP

23. Slide 23: Cash Flow

    2013 Interim Results Cash Flow £m 2013 2012 Operating profit 514 455 Non-cash compensation 50 44 Depreciation & amortisation charges 117 112 Amortisation of acquired intangibles and impairment 94 82 Net interest paid & similar charges (121) (107) Tax paid (130) (143) Net cash generation 524 443 23

24. Slide 24: Uses of Cash Flow

    2013 Interim Results Uses of Cash Flow £m 2013 2012 Net cash generation 524 443 Capital expenditure (151) (116) Acquisition payments (98) (140) - Net initial payments¹ (91) (90) - Earnout payments/loan note redemptions (7) (50) Share repurchases (133) (66) Other 19 48 Net cash inflow before NWC chan

25. Slide 25: Average Net Debt – June 2013

    2013 Interim Results Average Net Debt – 30 June 2013 % £m 2013 2012 Variance 30 June (YTD) average net debt on reportable basis (3,128) (2,898) -8% 30 June (YTD) average net debt on constant currency (3,128) (2,923) -7% basis 31 July (YTD) average net debt on constant currency (3,114) (2,992) -4% ba

26. Slide 26: Reported Net Debt – Point-to-Point

    2013 Interim Results Reported Net Debt – Point-to-Point £m 2012 2011 % Variance Net Debt at Year-End (2,821) (2,465) -14% 2013 2012 Net Debt at 30 June (2,717) (2,861) +5% Net Debt at 31 July (2,955) (3,714) +20%  Month-end net debt is impacted by operating performance, NWC, currency and seasonalit

27. Slide 27: Historic Average Net Debt/Headline EBITDA

    2013 Interim Results Historic Average Net Debt/Headline EBITDA £m Average net debt/headline EBITDA 4,000 Average net debt 3.0 EBITDA Average net debt/headline EBITDA 3,500 2.5 3,000 2.0 2,500 2,000 1.5 1,500 1.0 1,000 0.5 500 0 0.0 2006 2007 2008 2009 2010 2011 2012 Jun-13 ¹ 1 Rolling annual average

28. Slide 28: Uses of Free Cash Flow

    2013 Interim Results Uses of Free Cash Flow H1 H1 Category Target FY 2012 2013 2012 Acquisitions¹ £300-£400m £91m² £90m² £500m² Share purchases 1%-2% 1.0% 0.6% 1.3% Dividend increase 20% 18% 16% Dividend pay-out ratio (2 years) 45% 37% 34% 39% Headroom: Undrawn facilities & £2.5bn £1.9bn £2.4bn surp

29. Slide 29: Earnings and EPS

    2013 Interim Results Earnings and EPS¹ Pence/ £m share 1,200 80p Earnings EPS 73.4p 8% 67.7p 70p 1,000 19% 56.7p 60p 55.5p 21% -20% 28% 800 45.8p 44.4p 50p 600 40p 10% 28.4p 25.8p 30p 400 20p 200 10p 0 0p 2007 2008 2009 2010 2011 2012 2012 H1 2013 H1 1 Diluted Headline Earnings and Diluted Headline

30. Slide 30: Ordinary Shares - Basic

    2013 Interim Results Ordinary Shares - Basic June June 2013 2012 No. of Shares (million) Actual Actual 1 January 1,265 1,266 Bond conversion 66 - Share buy-backs - (6) Option exercise 3 7 30 June 1,334 1,267 -5.3% Weighted Average 1,282 1,268 ESOP, Treasury & Other (22) (25) Average Basic 1,260 1,24

31. Slide 31: Ordinary Shares – Diluted

    2013 Interim Results Ordinary Shares – Diluted June June 2013 2012 No. of Shares (million) Actual Actual Average Basic 1,260 1,243 Share Option Dilution 7 5 Other Potentially Issuable Shares 28 22 Sub-Total 1,295 1,270 -2.0% Convertibles: £450m 5.75% bond 61 77 Fully Diluted Shares 1,356 1,347 -0.7%

32. Slide 32: Four Strategic Priorities

    2 Four Strategic Priorities 32

33. Slide 33: Market Environment

    Market Environment New Markets, New Media, Data Investment Management and “Horizontality” Macro Micro  In spite of first signs of stabilization,  Client comments not indicating lower Eurozone debt depressing growth spend. across Southern Europe and adding to uncertainty.  New investments and redi

34. Slide 34: Pre- and Post-POG World: Initial Reactions

    Pre- and Post-POG World Initial Reactions  Strategic 180 degree turn for both companies; heavier North American and traditional advertising emphasis.  Structurally clunky.  Client and people conflicts.  Regulatory issues.  Limited articulation of client benefits. 34

35. Slide 35: Pre- and Post-POG World: Possible Implications

    Pre- and Post-POG World Possible Implications  Potential economies of scale in media buying, but diseconomies of scale elsewhere.  Consolidation and concentration.  WPP strategic response – same strategy, more intense.  New markets, new media, data investment management and “Horizontality”.  Ta

36. Slide 36: Pre- and Post-POG World: Market Reaction

    Pre- and Post-POG World Market Reaction 106 104 102 Share Price (rebased to 100) 0.3% 100 (0.2%) 98 (1.9%) (3.1%) 96 94 (6.7%) (7.3%) 92 26-Jul 02-Aug 09-Aug 16-Aug 23-Aug WPP Publicis Omnicom FTSE 100 CAC 40 S&P 500 Source: Bloomberg as at 28 August 2013. Announcement on 29 July 2013. Price taken f

37. Slide 37: Four Strategic Priorities

    Four Strategic Priorities New Markets, New Media, Data Investment Management and “Horizontality”  Faster growing markets to be 40%-45% of total Group revenues.  New media to be 40%-45% of total Group revenues.  Data investment management and quantitative disciplines to be one half with focus on t

38. Slide 38: New Markets, New Media and Data Investment Management: Today

    New Markets, New Media and Data Investment Management Today 1: New Markets 2: New Media 3: Quantitative Today 30% Today 34% Today 51% UK & Western Continental Europe Traditional Media North America UK & Western Continental Europe Traditional Media Qualitative Asia Pacific, Latin America, Africa & Mi

39. Slide 39: New Markets, New Media and Data Investment Management: Tomorrow

    New Markets, New Media and Data Investment Management Tomorrow 1: New Markets 2: New Media 3: Quantitative Target 40-45% Target 40-45% Target 50% UK & Western Continental Europe Traditional Media North America UK & Western Continental Europe Traditional Media Qualitative Asia Pacific, Latin America,

40. Slide 40: New Markets: Revenues in Faster Growing Markets 2004-2012

    New Markets Revenues in Faster Growing Markets 2004-2012 5.0 4.5 4.0 3.5 3.0 Revenue ($'bn) 2.5 2.0 1.5 1.0 0.5 0.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 WPP POG OMC PUB IPG 1. WPP reportable US$’s per WPP results and peer $ revenues as shown in annual results presentations 2. Peer data sourc

41. Slide 41: New Markets: Leadership in Faster Growing Markets

    New Markets WPP continues Leadership Position in Faster Growing Markets Both in Size and Proportion Full Year 2012 $bn % WPP PUB OMC POG % North America 34% 5.6 4.1 7.6 11.61 51% UK & Europe 36% 5.9 2.4 4.0 6.42 28% Faster Growing Markets 30% 5.0 2.0 2.7 4.7 21% Total 100% 16.5 8.5 14.2 22.7 100% As

42. Slide 42: New Markets: Performance Strong in BRIC Markets

    New Markets WPP’s Performance Strong in BRIC Markets Revenue $'m 1,300 12 year CAGR 17% 1,200 1,100 1,000 Associates @ 100% First half 2012 (including Associates) 900 800 12 year CAGR 13% 700 600 500 12 year CAGR 13% 400 300 12 year CAGR 50% 200 100 0 2000 2012 2013 H1 2000 2012 2013 H1 2000 2012 20

43. Slide 43: New Markets: Media Billings by Geography

    New Markets Media Billings by Geography Worldwide Ranking by Group as % of the Six Groups % WPP POG Publicis Omnicom Dentsu/Aegis IPG Havas 50 45 40 35 30 25 20 15 10 5 0 Worldwide Americas Europe Asia Pacific Source: RECMA July 2013 billings report, based on 2012 data 43

44. Slide 44: New Markets: WPP Clear No. 1 in Brazil

    New Markets WPP Clear No. 1 in Brazil¹  RECMA does not cover Brazil, IBOPE measures media spend with the “IBOPE Rate Card Monitor”. Agency R$’bn Rank R$’bn Rank Y&R 6.9 1 WPP 13.5 1 Ogilvy/Grey141 4.3 2 POG 7.3 2= Almap/BBDO 3.3 3 IPG 7.3 2= W/McCann 2.8 4 Africa 2.0 4 JWT 2.3 5 Total Top 10 30.1 B

45. Slide 45: New Media: Media Time Spent vs. Ad Spend

    New Media Media time spent vs. ad spend not aligned Internet/Mobile (upside…) vs. Print (downside...) % of Time Spent in Media vs. % of Advertising Spending, USA 2012 50% Time Spent Ad Spend 45% 40% 35% 30% ~$20bn+ Opportunity in USA 25% 20% 42% 43% 15% 26% 23% 22% 10% 14% 5% 12% 10% 6% 3% 0% Print

46. Slide 46: New Media: Digital Revenues

    New Media WPP Digital Revenues – Higher Percentage, Similar Total Full Year 2012 $bn % WPP PUB OMC POG % Digital 32% 5.4 2.8 2.6 5.4 24% Advertising 19% 3.11 2.6 4.9 7.5 33% Media 15% 2.41 1.5 1.83 3.3 15% Other Marketing Services 34% 5.61 1.6 4.92 6.5 28% Total 100% 16.5 8.5 14.2 22.7 100% 1 Exclud

47. Slide 47: New Media: Revenue Share Continues to Increase

    New Media Revenue Share Continues to Increase 40%- WPP Share of Digital Revenue 45% 34% 33%¹ 30% 21% 12% 2000 2006 2011 2012 2013 H1 Target in 5 years 1 Including AKQA Pro-Forma 47

48. Slide 48: New Media: WPP's Digital Strategy

    New Media WPP’s Digital Strategy 1. Digital • Invest in digital in all of our businesses through training, Everywhere recruitment, acquisitions, etc. 2. Specialist • Develop new services beyond traditional advertising, e.g, Digital web development, DSPs, mobile, social, eCommerce and Expertise eShop

49. Slide 49: Xaxis - The World's Largest Audience Buying Company

    New Media Xaxis - The World’s Largest Audience Buying Company GLOBAL ANNUAL CLIENTS GROWTH BILLING Y‐O‐Y 300+ employees $400M+ 1,800+ 50%+ in 26 markets North America EMEA Latin America • 34% billings growth • 60% billings growth • Launched in Q2 2013 • Canada seeing 7X growth • 6 new offices • 5 ne

50. Slide 50: Xaxis Versus Agency Trading Desks

    New Media Xaxis Versus Agency Trading Desks BILLINGS BILLINGS BILLINGS BILLINGS $200M $100M ~$100M $400M+ REGIONS REGIONS REGIONS NA, EMEA, APAC, LatAm US, Europe, APAC REGIONS US, EMEA, APAC MARKETS MARKETS 10 US, Canada, EMEA, MARKETS 16 CHANNELS APAC, LatAm 16 CHANNELS 4 CHANNELS 4 EMPLOYEES 200

51. Slide 51: Data Investment Management and Quantitative Disciplines

    Data Investment Management and Quantitative Disciplines WPP Advantage  Marketing becoming more data driven.  Clients need simplified better utilisation of existing data and help in managing explosion of new data.  Digital campaigns driven by data analytics and feedback to shape new activity.  Ab

52. Slide 52: Horizontality

    “Horizontality” 170,000 people1 in 3,000 offices in 110 countries with access to $23bn1 of annual revenues 1 Including associates and investments 52

53. Slide 53: Horizontality: Client Account Teams

    “Horizontality” 30+ Account Teams – Over 35,000 WPP employees work on these clients WHITEHALL SW1 City of Westminster 53

54. Slide 54: Horizontality: Country and Regional Managers

    Horizontality 13 Current Country and Regional Managers – People, Clients, Acquisitions Europe Italy Portugal South Korea Greater China Mexico ME & N Africa India Vietnam Indonesia Andina Australia New Zealand

55. Slide 55: Horizontality

    “Horizontality”  People, clients, acquisitions.  Ensure our people work across our businesses and geographies to deliver best resources to clients.  Deliver specialist skills (e.g. digital, shopper, analytics, sustainability, retailing, internal communications and “media and entertainment”) to cl

56. Slide 56: Digital and Faster Growing Markets

    Digital and Faster Growing Markets Two Key Long-Term Growth Drivers  Overall 55% of 2012 FY Actual Revenues Faster growing markets Digital 30% 33%1 of revenue of revenue Digital in faster growing markets 8% of revenue 1 Including AKQA Pro-Forma 56

57. Slide 57: Key Objectives

    f CANNES LIONS 2011/12/13 HOLDING COMPANY OF THE YEAR y EFFIE INDEX 2012/13 ‘ r x 3 Key Objectives WPP 57

58. Slide 58: We Continue to Focus on Our Key Objectives

    Key Objectives We Continue to Focus on Our Key Objectives  Improving operating margins.  Increasing flexibility in the cost base.  Using free cash flow to enhance share owner value and improve return on capital employed.  Developing the role of the parent company.  Emphasising revenue growth mo

59. Slide 59: Improving Operating Margins

    Key Objectives PBIT1 Improving Operating Margins PBIT1 margin £’m % 1,800 20% Revised Objectives: 1,600 19% Long-term 18.3%* 1,531 18% 2014 15.8% 1,400 1,429 2013 15.3% 17% 1,200 1,229 * Includes 1.0% margin 1,118 16% improvement from 1,000 operational efficiency 15.0% 15.0% 1,017 programmes 14.8% 1

60. Slide 60: Operational Effectiveness Programmes

    Key Objectives Improving Operating Margins Operational Effectiveness Programmes  Shared Service Centres to generate scale and improve process efficiency.  Offshoring of certain tasks from high cost markets with outsourcing where appropriate to take advantage of scale and skills of major providers.

61. Slide 61: Increasing Flexibility in The Cost Base

    Key Objectives Increasing Flexibility in The Cost Base Change in Variable Costs % 8 7.2 6.9 6.9 7 6.4 6 4.9 5 4 3 2 1 0 2009 H1 2010 H1 2011 H1 2012 H1 2013 H1 Variable Staff Costs as % of Revenue 61

62. Slide 62: Using Free Cash Flow to Enhance Share Owner Value

    Key Objectives Using Free Cash Flow to Enhance Share Owner Value Distributions to Share Owners¹ £’m 600 6.6% Buy-backs Dividends declared 500 Dividends paid 4.3% 4.5% 2.9% 400 134 415 182 133 300 4.7% 2.8% 3.0% 66 112 3.4% 46 200 9 307 258 100 201 218 213 190 162 139 0 2007 2008 2009 2010 2011 2012

63. Slide 63: Using Free Cash Flow to Enhance Dividend Pay-Out Ratio

    Key Objectives Using Free Cash Flow to Enhance Dividend Pay-Out Ratio 80p 50% 45% 70p 40% 60p 35% 50p 30% 40p 25% 20% 30p 15% 20p 10% 10p 5% 0p 0% 2008 2009 2010 2011 2012 2012 H1 2013 H1 Headline Diluted EPS Dividend Declared/ Share Dividend Pay-Out Ratio 63

64. Slide 64: Using Free Cash Flow for Acquisitions

    Key Objectives Using Free Cash Flow for Acquisitions  Significant pipeline of reasonably priced small and medium-sized potential acquisitions.  Continue to focus on the faster growing geographical and functional services, particularly direct, digital & interactive and data investment management. 

65. Slide 65: Acquisitions and Investments – First Half

    Key Objectives Acquisitions and Investments – First Half Faster Growing Quantitative & Markets CBC II (CHINA)¹ ², Digital C-Section (Turkey) Globant (Argentina)³ HEUREKA GROUP (POLAND)³ eCommera (UK)¹,² BPG PR (MENA)² Kantar Myanmar FULLSCREEN (USA)² BURSON MARSTELLER (CHINA)¹ LEADING SMART (CHINA)¹

66. Slide 66: Acquisitions and Investments – Since July

    Key Objectives Acquisitions and Investments – Since 1 July Faster Growing Quantitative & Markets Digital BrandAnalytics (Brazil) Brandigital (Latin America) Benenson (USA) Scangroup (Africa)¹ Designercity (Hong Kong) The Group (UK) TNS Korea¹ H1 (Czech Republic) Mutual Mobile (USA)² Post Visual (Sou

67. Slide 67: Majority Stakes Acquired 2009-2012

    Key Objectives Using Free Cash Flow for Acquisitions Majority stake acquired in 94 companies1 ‐ 2009 ‐ 2012 Faster Growing Quantitative & Markets Digital Client/Creative 17 32 30 15 Total revenue in 2013F: $1,362m2 Total consideration paid: $1,417m. 1 Includes majority acquisitions and step-ups to m

68. Slide 68: Acquisitions: Strong Financial Performance and Return

    Key Objectives Using Free Cash Flow for Acquisitions Strong Financial Performance and Return Organic revenue growth (2013F) Operating margin contribution (2013F) Return on Capital Employed 19% 21% 20% 16% 17% 17% 17% 16% 15% 12% 11% 13% 10% 10% ‐3% Faster Growing Markets - 49 acquisitions Quantitati

69. Slide 69: Improving the Creative Capabilities and Reputation

    Key Objectives Improving the Creative Capabilities and Reputation of all Our Businesses  By placing greater emphasis on recruitment.  By recognising creative success tangibly and intangibly.  By acquiring highly regarded creative businesses.  By placing greater emphasis on awards.  1st as a Gro

70. Slide 70: Improving the Creative Reputation of all our Businesses

    Key Objectives Improving the Creative Reputation of all our Businesses Network Points1 1 Ogilvy & Mather 1,024 2 BBDO 592 Ogilvy & Mather Cannes Network of the Year 3 DDB 587 2012 and 2013 4 Y&R 482 Ogilvy & Mather Brazil 5 McCann 412 Cannes Agency of the Year 2013 6 Leo Burnett 334 7 Publicis 280 8

71. Slide 71: Conclusions

    f CANNES LIONS 2011/12/13 Dp HOLDING COMPANY OF THE YEAR EFFIE INDEX 2012/13 o MOST EFFECTIVE HOLDING COMPANY 4 Conclusions WPP 71

72. Slide 72: 2013 H1 Summary

    Conclusions 2013 H1 Summary  Solid like-for-like revenue growth of 2.4% with Q2 growth accelerating in a difficult environment.  Over two thirds of absolute growth from Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe underlines importance of Group’s strategic focus.

73. Slide 73: Outlook

    Conclusions Outlook  Forecasts indicate over 3% revenue growth for 2013 with continued strong growth in faster growing markets and slower growth in mature markets and functionally faster growth in media investment management and digital.  July 2013 like-for-like growth of 5% supporting our quarter

74. Slide 74: Conclusions

    Conclusions  2013 H1 results demonstrate the Group is well placed to benefit from geographic and functional trends.  Strong existing position in New Markets and New Media enable us to raise our strategic goals on share of revenue to 40%-45% - achieving this should drive above industry average grow

75. Slide 75: Survey through Lightspeed Panel

    Survey through Lightspeed Panel Europe, Middle East, Africa Austria Norway Proprietary panels in 40 countries with over 4 million members built from scratch and from acquisition and Belgium Poland partner network of over 20 million Czech Portugal Republic The Americas Asia Pacific New Zealand Denmar

76. Slide 76: Q&A Lightspeed Survey Results

    Q&A Lightspeed Survey Results Dashboard link:http://tinyurl.com/klhqjyx 76

77. Slide 77: 27 Year History (Hard Copy Only)

    5 27 Year History (Hard Copy Only) 77

78. Slide 78: 27 Year History: WPP Reported Revenue

    27 Year History WPP Reported Revenue £’m 11,000 10,373 10,022 10,000 9,331 9,000 8,684 8,000 7,477 27 year CAGR 34% 7,000 6,185 5,908 6,000 5,374 5,000 4,300 4,022 3,908 4,106 4,000 2,981 3,000 2,173 1,918 2,000 1,747 1,431 1,427 1,555 1,691 1,264 1,204 1,273 1,005 1,000 547 284 4 24 0 78

79. Slide 79: 27 Year History: WPP Organic Growth

    27 Year History WPP Organic Growth % 20 18.6 15.0 15 13.9 14.1 11.8 Average: 5.6% 10 8.0 8.3 8.4 8.0 8.0 6.3 5.7 5.2 5.5 5.4 5.0 5.3 5.3 5 4.0 4.0 2.7 2.9 0.7 N/A 0 -3.0 -5 -4.7 -5.9 -8.1 -10 Note: Estimates for 1985-1990 79

80. Slide 80: 27 Year History: WPP PBIT and Margins

    27 Year History WPP PBIT and Margins PBIT PBIT margin £’m % 1,600 16% 15.0% 15.0% 14.5% 14.0% 14.1% 14.3% 1,400 14.8% 13.4% 14.5% 14% 13.0% 14.3% 12.8% 14.0% 12.3% 1,200 13.0% 13.2% 27 Year CAGR: 37% 11.8% 12% 10.8% 11.7% 1,000 10.5% 10.1% 9.7% 9.6% 10% 800 8.4% 1531 1429 7.5% 8% 7.0% 7.0% 1229 600

81. Slide 81: History: WPP Headline Diluted EPS

    History WPP Headline Diluted EPS Post 1992 Rights Issue pence 80 73.4 70 67.7 60 20 Year CAGR: 15% 55.5 56.7 50 45.8 44.4 42.0 40 36.0 32.3 30.3 30.9 29.0 27.9 30 22.7 23.8 18.8 20 15.7 13.5 9.4 10 6.5 5.0 0 UK GAAP IFRS Note: 1993 adjusted to reflect 1992 rights issue. Headline Diluted EPS 81

82. Slide 82: Other Financial Information (Hard Copy only)

    6 Other Financial Information (Hard Copy only) 82

83. Slide 83: Net Finance Costs

    2013 Interim Results Net Finance Costs £m 2013 2012 B/(W) Interest on net debt 103 93 (10) IAS 19 (Pensions) 6 6 - IAS 32 (Convertibles) 4 4 - Sub-total 10 10 - Headline finance costs 113 103 (10) IAS 39 (Financial Instruments) 1 22 21 Net finance costs 114 125 11 83

84. Slide 84: Debt Maturity Profile

    2013 Interim Results Debt Maturity Profile £m Total Total As at 30 June 2013 2013 2014 2015 2016 2017 2018+ Credit Drawn US bond $300m (5.125% ’42) 198 198 198 US bond $500m (3.625% ’22) 329 329 329 US bond $812m (4.75% ’21) 535 535 535 £ bonds £200m (6.375% ’20) 200 200 200 £ bonds £400m (6% ’17) 4

85. Slide 85: 2012 Revenue by Geography

    Key Priorities, Objectives and Strategy 2012 Revenue by Geography $22.7bn 4.7 Asia Pacific, Latin America, Africa & Middle East, CEE $16.5bn Western Europe 6.4 $14.2bn N America 5.0 2.7 4.0 $8.5bn 5.9 2.0 $7.0bn $6.1bn 11.6 1.6 2.4 1.4 7.5 4.4 5.6 $2.3bn 4.1 3.9 0.4 1.0 1.1 0.7 0.8 PUB/OMC WPP Omnic

86. Slide 86: 2012 Revenue by Sector

    Key Priorities, Objectives and Strategy 2012 Revenue by Sector $16.5bn Data Investment Management 3.9 $14.2bn Marketing Services Advertising Media 7.54 5.8 $8.5bn $7.0bn $6.1bn 4.4 0.4 2.9 3.7 4.9 2.5 2.6 5.7 $2.3bn 0.7 3.1 1.8 0.9 1.5 1.4 0.7 WPP Omnicom Publicis IPG Aegis/Dentsu Havas Source: 1 WP

87. Slide 87: Digital In All Our Businesses

    Digital In All Our Businesses Global Scale and Quality Digital Revenues ($billion – 2012 Full Year) 5.4 5.4 2.8 2.6 1.0 0.6 WPP POG Publicis Omnicom IPG Havas 1 Peer digital revenue according to Sanford Bernstein %’s applied to FY US$ revenue. 87

88. Slide 88: WPP Position in Direct, Digital and Interactive

    Key Priorities, Objectives & Strategy WPP Position in Direct, Digital and Interactive First Half 2013 c$’m Direct, Digital and Interactive Networks 1,464 (OgilvyOne, Wunderman, Geometry, VML, WPP Digital & AKQA) % of Group Revenues 17.8% Specialist Direct, Digital and Interactive Resources: - Data I

89. Slide 89: London

    2013 Interim Results London 89

WPP — H1 2013 Earnings Presentation on 6ix