The world’s biggest media company, WPP, has unveiled an impressive set of numbers in its end-of-years with revenue growth up 6.9 per cent and profit up a staggering 22 per cent.
On the back of the numbers, it expects to pay £424 million ($A748 million) in staff bonuses.
Annual pre-tax profits were up 22 per cent to £1.16 billion ($A2 billion) and the dividends were up 31 per cent.
In another sign of expansion, headcount increased by almost 5000 in the previous 12 months. The business now boasts some 115,000 staffers worldwide.
Highlights of the numbers included:
◼ FY reported revenue +12.7%, LFL revenue +6.7%
◼ FY LFL revenue less pass-through costs +6.9%; with good performance in Q4 +6.4%
◼ Q4 LFL revenue less pass-through costs by major market: US +3.5%, UK +12.0%, Germany +4.9%, China -8.4%, India +8.5%
◼ Three-year FY LFL revenue less pass-through costs +10.0%; Q4 +10.2%
◼ FY headline operating margin 14.8%, up 0.4 points LFL with strong top-line growth and efficiency savings supporting investment and margin expansion
◼ Reported diluted EPS 61.2 pence; headline diluted EPS up 25.5% to 98.5 pence ◼ Adjusted net debt at 31 December 2022 £2.5 billion (2021: £0.9 billion) after investments and over £1.1 billion of cash returned to shareholders. Average adjusted net debt to EBITDA ratio of 1.46x, slightly below the 1.5-1.75 target range
◼ Trade working capital adverse movement of £226 million4 at year-end driven by mix and timing factors. Average trade working capital across 2022 was flat year-on-year ◼ Final dividend of 24.4 pence proposed, up 30.5%, for a proposed total dividend for 2022 of 39.4 pence, in line with our policy of approximately 40% of headline diluted EPS
WPP supremo Mark Read (lead image) commented: “WPP delivered strong growth in 2022, despite the macro challenges, reflecting the priority placed by our clients on investing in communications, customer experience, commerce, data and technology.
“The competitiveness of our offer drove net new business of $5.9 billion in 2022, including new assignments with Audible, SC Johnson, and Verizon among many others and the quality of our work was recognised at the Cannes Lions Festival of Creativity where WPP was named Creative Company of the Year.
“Our transformation is now delivering measurable results. Over the past three years, WPP has grown like-for-like net sales at a compound average rate of 3.2%, including 3.3% in North America, while improving our headline operating profit margin by 40 basis points. Our adjusted net debt has declined from over £4 billion at the end of 2018 to £2.5 billion, while over £3.4 billion has been returned to shareholders via share buybacks and dividends.
“We enter 2023 in a strong financial position with good momentum from new business and the many opportunities ahead of us. While there will no doubt be challenges, the continued need for major companies to build brands, sell products, reinvent and transform their business, understand their data, invest in technology and exploit the potential of AI remains, as does their need for modern partners who can help them navigate this new world.”
