Innovating to Lead
WPP (NYSE: WPP) is today announcing the next phase of its
strategy to capture the opportunities offered by AI, maximise the
potential of creative transformation and deliver faster growth,
higher margins and improved cash generation.
Four strategic pillars support these goals:
1. Lead through AI, data and technology
- Capitalise on WPP’s lead in artificial intelligence built on:
the acquisition of Satalia in 2021; organic investment in AI,
client technology and data; and deep partnerships with Adobe,
Google, IBM, Microsoft, Nvidia and OpenAI
- Drive improved returns to clients through a set of AI-enabled
services and tools, delivered by WPP Open, our common technology
platform, and powered by proprietary AI models
- Fuel AI services with WPP’s proprietary data sets together with
client, platform and market-level data to improve marketing
performance for clients
- Ensure appropriate safeguards for client information, brand
safety, copyright and ethics
- Expand the reach of our AI services through WPP Open, with more
than 28,000 current users across WPP and adoption by key clients
including L’Oréal and Nestlé
2. Unlock the full potential of creative transformation to
drive growth
- Expand our client relationships by further leveraging WPP’s
global scale, integrated offer in creative, media, production and
PR, and capabilities in growth areas such as commerce, influencer
marketing and retail media to capture share in a growing
market
3. Build world-class, market-leading brands
- Lead the industry through six powerful agency networks – AKQA,
Ogilvy, VML, Hogarth, GroupM and Burson – which now represent close
to 90% of WPP’s revenue less pass-through costs
- Realise the opportunities from VML as the world’s largest
integrated creative agency and leverage GroupM’s simplified
operating model and scale as the world’s largest media agency
- Establish Burson as a leading global strategic communications
agency bringing together BCW and Hill & Knowlton
4. Execute efficiently to drive strong financial
returns
- Deliver growth and structural cost savings as a result of the
creation of VML and Burson and simplification of GroupM, unlocking
scale advantages and further efficiency savings. Structural savings
to deliver annualised net cost savings of c.£125m in 2025, with
40-50% of that saving expected to be achieved in 2024. Associated
restructuring cost of c.£125m in 2024
- Target c.£175m gross savings from efficiency opportunities
across both back office and commercial delivery which will be used
to invest in growth and support delivery of our medium-term margin
target
This strategy will be underpinned by a disciplined approach to
capital allocation with continued organic investment, a progressive
dividend policy and a disciplined approach to M&A supported by
a strong balance sheet and an investment grade credit rating.
Updated medium-term targets
- 3%+ LFL growth in revenue less pass-through costs
- 16-17% headline operating profit margin
- Adjusted operating cash flow conversion of 85%+1
Previous medium-term targets, outlined at WPP’s Capital Markets
Day in December 2020, were for 3-4% growth in revenue less
pass-through costs including an M&A benefit of 0.5-1.0%
annually; with a headline operating profit margin of
15.5-16.0%.
2023 expected out-turn and 2024 outlook
WPP will report 2023 results on February 22nd. We expect to
report results in line with our guidance ranges with:
- 2023 LFL revenue less pass-through costs expected to be 0.9%
consistent with guidance given at Q3 2023 of 0.5-1.0%
- 2023 headline operating profit margin expected to be 14.8%,
equivalent to 15.0% on a constant currency basis, which is at the
top end of guidance of 14.8-15.0% (excluding the impact of FX)
Looking ahead,
- 2024 LFL revenue less pass-through costs growth of 0-1%
- 2024 headline operating profit margin improvement of 20-40bps
(excluding the impact of FX)
- Our plans include annual cash investment of around £250m in
proprietary technology to support our AI and data strategy
Mark Read, CEO of WPP, said:
“The past three years have demonstrated the power of brands,
creativity and investment in marketing to drive growth for clients
and to build significant value. Research demonstrates that those
companies with the strongest brands deliver the highest returns to
shareholders.
“AI is transforming our industry and we see it as an opportunity
not a threat. We firmly believe that AI will enhance, not replace,
human creativity. We are already empowering our people with
AI-based tools to augment their skills, produce work more
efficiently and improve media performance, all of which will
increase the effectiveness of our work. We also see opportunities
to sell new AI-driven products and services to our clients and to
capture more growth in areas like production.
“Our long-standing investments in AI, including our AI-powered
platform, WPP Open, and our acquisition in 2021 of Satalia, a
leading UK AI company, are at the heart of our competitive offer.
An ongoing annual investment of £250m in data and technology to
support our AI strategy is included in our 2024 financial
plans.
“While we had to navigate a more challenging environment in
2023, we see strong future demand for our services and are
confident we can accelerate our growth over the medium-term.
“Today, the team and I look forward to demonstrating our
commitment to leadership through innovation and sharing our plans
for improved and sustained returns for our people, our clients, our
communities and our shareholders.”
The Capital Markets Day for analysts and investors will take
place at our offices at Sea Containers House in London with
presentations beginning from 1pm (UK time) today. Investors and
analysts who wish to attend in person are required to pre-register
by emailing irteam@wpp.com. The event will feature demonstrations
of our AI capabilities along with presentations from creative,
production and media agencies, and contributions from key clients
and partners. A live stream of the event will be available from 1pm
(UK time) today at www.wpp.com/investors and will subsequently be
made available for replay.
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 the fact that they do
not relate strictly to historical or current facts.
These forward-looking statements may include, among other
things, plans, objectives, beliefs, intentions, strategies,
projections and anticipated future economic performance based on
assumptions and the like that are subject to risks and
uncertainties. These statements can be identified by the fact that
they do not relate strictly to historical or current facts. They
use words such as ‘aim’, ‘anticipate’, ‘believe’, ‘estimate’,
‘expect’, ‘forecast’, ‘guidance’, ‘intend’, 'may', ‘will’,
‘should’, ‘potential’, ‘possible’, ‘predict’, ‘project’, ‘plan’,
‘target’, and other words and similar references to future periods
but are not the exclusive means of identifying such statements. As
such, all forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances that are
beyond the control of the Company. Actual results or outcomes may
differ materially from those discussed or implied in the
forward-looking statements. Therefore, you should not rely on such
forward-looking statements, which speak only as of the date they
are made, as a prediction of actual results or otherwise. Important
factors which may cause actual results to differ include but are
not limited to: the impact of, epidemics or pandemics including
restrictions on businesses, social activities and travel; the
unanticipated loss of a material client or key personnel; delays or
reductions in client advertising budgets; shifts in industry rates
of compensation; regulatory compliance costs or litigation; changes
in competitive factors in the industries in which we operate and
demand for our products and services; changes in client
advertising, marketing and corporate communications requirements;
our inability to realise the future anticipated benefits of
acquisitions; failure to realise our assumptions regarding goodwill
and indefinite lived intangible assets; natural disasters or acts
of terrorism; the Company’s ability to attract new clients; the
economic and geopolitical impact of the Russian invasion of
Ukraine; the risk of global economic downturn, slower growth,
increasing interest rates and high and sustained inflation; supply
chain issues affecting the distribution of our clients’ products;
technological changes and risks to the security of IT and
operational infrastructure, systems, data and information resulting
from increased threat of cyber and other attacks; the Company’s
exposure to changes in the values of other major currencies
(because a substantial portion of its revenues are derived and
costs incurred outside of the UK); and the overall level of
economic activity in the Company’s major markets (which varies
depending on, among other things, regional, national and
international political and economic conditions and government
regulations in the world’s advertising markets). In addition, you
should consider the risks described in Item 3D, captioned “Risk
Factors” in the Group’s Annual Report on Form-20F for 2022, which
could also cause actual results to differ from forward-looking
information.
Neither the Company, nor any of its directors, officers or
employees, provides any representation, assurance or guarantee that
the occurrence of any events anticipated, expressed or implied in
any forward-looking statements will actually occur. Accordingly, no
assurance can be given that any particular expectation will be met
and investors are cautioned not to place undue reliance on the
forward-looking statements.
Other than in accordance with its legal or regulatory
obligations (including under the Market Abuse Regulation, the UK
Listing Rules and the Disclosure and Transparency Rules of the
Financial Conduct Authority), The Company undertakes no obligation
to update or revise any such forward-looking statements, whether as
a result of new information, future events or otherwise.
Any forward-looking statements made by or on behalf of the Group
speak only as of the date they are made and are based upon the
knowledge and information available to the Directors at the
time.
______________________________
1 Adjusted operating cash flow conversion
is calculated as headline EBITDA plus non-cash compensation, less
repayment of lease liabilities and related interest, cash
restructuring costs, capex and working capital.
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version on businesswire.com: https://www.businesswire.com/news/home/20240129527680/en/
Investors and analysts Tom Waldron +44 7788 695864
Anthony Hamilton +44 7464 532903 Caitlin Holt +44 7392 280178
irteam@wpp.com Media Chris Wade +44 20 7282 4600
Richard Oldworth, +44 7710 130 634 Buchanan Communications +44
20 7466 5000 press@wpp.com wpp.com/investors
Grafico Azioni WPP (NYSE:WPP)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni WPP (NYSE:WPP)
Storico
Da Gen 2024 a Gen 2025
