WPP AUNZ has this morning announced its end of year results, with headline earnings down 8.7 per cent to $91.8 million.
The main results included:
• Total headline EPS of 7.4 cents, down 9.6 per cent. Continuing business headline EPS was six cents, down 9.6 per cent.
• Total net sales of $819.4 million, down 4.4 per cent. Continuing business net sales was $712.5 million, down 2.6 per cent.
• Strong cashflow conversion of 98 per cent over last 24 months.
• Significantly reduced net debt (post the Kantar AUNZ sale). Leverage reduced from 1.9x to 1.1xnet debt/Continuing1 Business Headline EBITDA.
Commenting on the results, WPPAUNZ CEO Jens Monsees (main photo) said: “Over the last five months, I have been impressed by the capability and talent within our business. We must now power up our creative capability and traditional skill-set with technology to capture growing areas of e-commerce, technology and experience. As technology advances, the way consumers connect and communicate with brands is also evolving rapidly and that is why today we have announced a new strategy to simplify and scale our business and capture the new growth areas of the advertising, media and communications market.
“It is a strategy that will significantly change our operating model.
“Our path to growth will be undertaken in three phases – transform, strengthen, and grow – over a three-year period to 2022.
“This year is the transformation phase of our strategy. Now two months into 2020, I can say we have already made meaningful progress in this phase by announcing a new leadership structure, a restructuring of our New Zealand business, added capabilities in technology through the acquisition of Dominion in New Zealand and announcing the establishment of our Centre of Excellence to consolidate the technology consulting operations of the Group.
“Our team is intent on being a true partner of choice for our clients, creating a shared services platform, and attracting and retaining the best talent in the market.
“Key to our success will be relentless execution and creating avenues for growth. We have new solutions technology and data capabilities, and campuses to drive better client service and a strengthened geographic footprint into South-East Asia.
“We are confident in our ability to change gear and create a future of opportunity and success. No-one in our market is yet leading the future of consumer communication and that is where we want to be. We believe we are strongly placed with our creativity and technology capabilities to become the leading creative transformation business in Australia, New Zealand and South-East Asia.”
In commenting on the outlook, Monsees, said: “Taking into consideration the considerable transformation that will be undertaken in the 2020 financial year, we expect to provide guidance on the 2020 outlook at the AGM in May 2020. It is too early to predict our full year result given the uncertain economic backdrop for our clients and the significance of our transformation strategy”.
Monsees also unveiled the business’ strategy for growth that will be executed across six key areas:
- Operating model
Restructure our operating model to bring fewer, stronger brands to our clients and make it easier for them to navigate our services. We are establishing a Centre of Excellence (to consolidate the technology consulting operations of the Group) to bolster our capabilities in data, marketing and advertising technology and consulting.
Improve the organisation of our capabilities across brands around client needs through dedicated client leads, sector practice areas, and a new incentive scheme.
Establish a new leadership model, roll out a new incentive scheme, and invest in specific talent to support our digital technology capabilities.
Support its strong brands and manage costs by implementing a shared services structure of HR, IT, Finance, legal, marketing, and communications.
Bolster its capabilities in e-commerce, experience, and technology through partnerships with platforms, scalable solutions and selective strategic M&A.
Leverage current presence in large and growing markets of South-East Asia by growing our capabilities in those locations to support our businesses in Australia and New Zealand. In Australia and New Zealand, we will expediate our campus approach with the goal of bringing brands together in one location in most of our major cities.
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