WPP has smashed its own staff bonus targets and will pay out £592 million ($A1.1 billion) – more than double pre-pandemic levels – to more than 50,000 staff after what CEO, Mark Read, described as an “outstanding” year for the world’s biggest media company that saw revenues grow 12.1 per cent.
It’s understood that 54,000 of WPP’s global workforce of 109,400 are now in line for a hefty bonus judging by the allocated kitty.
However, it’s debatable how many bonuses will be paid to Australian staffers after the local operations here reported a 2.2 per cent revenue decline for the last quarter of 2021.
WPP’s 12.1 per cent growth in organic revenue less pass-through costs puts it near the top of the holding companies, after Publicis reported 10 per cent growth, Omnicom 10.2 per cent, IPG 11.9 per cent and Dentsu 13 per cent (although growth was only 9.7 per cent outside its home market of Japan).
Highlights of the numbers released over night included:
• FY continuing operations reported revenue +6.7 per cent, LFL revenue +13.3 per cent
• FY LFL revenue less pass-through costs +12.1 per cent; Q4 +10.8 per cent
• Two-year FY LFL revenue less pass-through costs +2.9 per cent; Q4 +3.6 per cent
• Q4 LFL revenue less pass-through costs by major market: US +11.7 per cent, UK +9.9 per cent, Germany +3.4 per cent, Greater China +13.6 per cent, Australia -2.2 per cent
• FY headline operating margin 14.4 per cent, up 1.7pt LFL on prior year with strong top-line growth and efficiency savings supporting significant reinvestment in incentives
• Reported diluted EPS 52.5 pence; headline diluted EPS up 30.6 per cent to 78.5 pence
• Free cash flow of £1.3 billion
• Adjusted net debt at 31 December 2021 £0.9 billion, after significant growth investments and shareholder returns, reflecting very strong cash generation
Commenting on the numbers, Mark Read (main photo), WPP’s chief executive officer, said: “It has been an outstanding year for WPP. Our top-line growth, driven by strong demand for our services in digital marketing, media, ecommerce and technology, has resulted in our fastest organic growth for over 20 years. As a result, we are two years ahead of our plan, hitting our 2023 revenue target in 2021.
“As clients seek to accelerate their growth and transform how they reach customers, the depth, breadth and global scale of our offer – which combines creativity with technology and data, through Choreograph, and the largest global media platform in GroupM – is proving its value for existing and new clients. The talent, dynamism and commitment of our people have also shone through. Our extensive partnership with The Coca-Cola Company, the expansion of our work with Google and the continuation of our longstanding relationship with Unilever demonstrate the value that three of the world’s leading marketing organisations place in WPP.
“We have made substantial strategic progress, creating the world’s leading board-level communications firm through the merger of Finsbury Glover Hering and Sard Verbinnen, and acquiring capabilities in AI, commerce and technology services to leverage across all of WPP for future growth. Cash generation continues to be very strong, underpinned by efficiencies achieved in our transformation programme, allowing us to make significant investments in our offer and reward our people for their huge contribution, while returning over £1 billion in cash to shareholders through dividends and share buybacks.
“We look forward to 2022 with confidence. We are guiding to strong top-line growth, improving profitability and continued investment in our people and services.”
