WPP has just hosted a virtual presentation from its London HQ for investors and analysts to provide an update on its strategy for growth, set out opportunities for efficiency and reinvestment, outline its plans for capital allocation and provide new medium-term financial targets.
Company CEO Mark Read (man photo) commented: “It has been two years since we set out our strategy to return WPP to growth. Since then, we have made significant progress, with stronger agency brands, new leadership, a simpler structure and a strong balance sheet. We can see the results in our industry-leading new business performance, with $US5.6 billion won in the first nine months including Alibaba, HSBC, Intel, Uber and Unilever.
“The events of 2020 have only accelerated the structural changes in our industry, from the expansion of digital channels to growing demand for ecommerce solutions. The actions that we have taken have positioned us well, and we are already working with 76 of our top 100 clients on ecommerce. There are significant new growth opportunities for WPP as clients demand simple, integrated solutions that combine creativity with technology and data expertise. Clients need trusted partners more than ever to help them transform and succeed.
“In partnership with our agency brands we are deepening and accelerating the change already happening within WPP. We aim to return our Communications business to sustainable growth and invest further in the high-growth areas of Commerce, Experience and Technology. We are converting our size into scale, making us more effective and efficient as we share expertise across a simpler company of stronger agency brands. £400 million of the targeted £600 million savings will be used to fund investment in the capabilities and technology that will drive future growth for our people, our clients, our business and our shareholders.”
- Return core Communications business to sustainable growth
- Expand further into high-growth areas of Commerce, Experience and Technology – from 25% of our business today to 40% by 2025
- Fund growth and improve profitability through gross annual cost savings of £600 million by 2025, with approximately two-thirds reinvested in talent, incentives and technology to drive growth
- Supplement growth through targeted, scalable M&A of £200-400 million annually
- Invest capital expenditure of £450-500 million per annum in 2021 and 2022 and £300-350 million per annum thereafter, in our campus programme, ERP systems and shared services to deliver gross cost savings and improved business insight and talent management
- Recovery to 2019 revenue less pass-through costs levels by 2022
- 3-4% annual growth in revenue less pass-through costs from 2023, including M&A benefit of 0.5-1.0% annually
- 15.5-16.0% headline operating margin in 2023
- Double-digit headline EPS growth over next three years
- New dividend policy: intention to grow annually with a pay-out ratio around 40% of headline EPS
- Average net debt/EBITDA maintained in the range 1.5-1.75x
2020 and 2021 guidance
- LFL revenue less pass-through costs growth of -6.7% in the two months to November
- 2020 LFL revenue less pass-through costs growth expected to be in line with year to date performance of -8.4%
- 2020 headline operating margin expected to be 12.5-13.0%
- 2020 year-end net debt expected to be around £1.6 billion
- 2020 dividend in line with new policy
- 2021 LFL revenue less pass-through costs growth of mid-single-digits %, with headline operating margin of 13.5-14.0%
- Kantar share buyback programme to resume in 2021
More than 450 million people use Pinterest around the world each month to find tomorrow’s ideas. It’s a place to look forward and plan and these days, it’s a place to find ideas to stay inspired while staying at home. Pinterest insights have always been a strategic way for brands to tap into what Pinners are searching for […]
A column from controversial UK media commentator Piers Morgan on the Daily Mail has been stripped of advertising, after Google detected racist content in the comments. Earlier this week, Morgan penned a column titled ‘Sorry Simone Biles, but there’s nothing heroic or brave about quitting because you’re not having ‘fun’ – you let down your team-mates, […]
Acoustic, an open and independent marketing cloud and analytics provider, has announced the expansion of offices in Sydney and Melbourne as well as the launch of an Australian, cloud-based data centre. The move is part of its commitment to prioritise tens of millions of dollars over the next two years to accelerate its growth strategy […]
This month Vevo is celebrating 40 years of music videos – a medium that has become a cultural touchstone for anyone with ears and eyes. MTV premiered exactly forty years ago this month and changed music forever, offering a visual music medium and music lovers and advertisers have never looked back. To celebrate such a […]
Nova’s Live & Unrestricted, hosted by Tim Blackwell and Kate Ritchie, will aim to provide listeners with an escape from restrictions, dropping every Saturday morning in August on the Nova Network. Following the overwhelming response to Nova’s Kate, Tim & Joel Live in Lockdown, a one-off special to keep up the spirits of listeners locked down in […]
TripleLift has today announced an expansion in their Asia Pacific (APAC) operations, with Henry Shelley [featured image] appointed as Managing Director, based in Singapore. Fueling TripleLift‘s expansion in APAC is its success in Australia, where the company works with 70 per cent of the top 50 comScore publishers. “As the home to several of the worlds’ […]
Rob Highett-Smith joins Fiftyfive5 in the newly created role of head of performance measurement. Performance measurement represents one of the three core offer areas at Fiftyfive5 with tracking programs running across 40 countries; representing our fastest growing capability pillar. Rob joins to lead this capability, which encompasses brand and comms tracking, multi market monitoring, CX and customer satisfaction, as well as other longitudinal programmatic work.
Podium has continued its international expansion today announcing its launch in Australia. Podium serves more than 90,000 local businesses in the United States, Canada and Australia, and has seen its customer base in Australia almost quadruple to over 3,000 local businesses since the start of the pandemic. Through its SMS-based platform, Podium helps local businesses receive […]