a1519e
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 6-K
____________________
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the Month of October 2022
Commission File Number: 001-38303
______________________
WPP plc
(Translation of registrant's name into English)
________________________
Sea Containers, 18 Upper Ground
London, United Kingdom SE1 9GL
(Address of principal executive offices)
_________________________
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form
20-F X Form 40-F
___
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): ___
Note: Regulation S-T Rule 101(b)(1) only permits the
submission in paper of a Form 6-K if submitted solely to provide an
attached annual report to security holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): ___
Note: Regulation S-T Rule 101(b)(7) only permits the
submission in paper of a Form 6-K if submitted to furnish a report
or other document that the registrant foreign private issuer must
furnish and make public under the laws of the jurisdiction in which
the registrant is incorporated, domiciled or legally organized (the
registrant’s “home country”), or under the rules
of the home country exchange on which the registrant’s
securities are traded, as long as the report or other document is
not a press release, is not required to be and has not been
distributed to the registrant’s security holders, and, if
discussing a material event, has already been the subject of a Form
6-K submission or other Commission filing on EDGAR.
Forward-Looking Statements
In
connection with the provisions of the U.S. Private Securities
Litigation Reform Act of 1995 (the ‘Reform Act’), the
Company may include forward-looking statements (as defined in the
Reform Act) in oral or written public statements issued by or on
behalf of the Company. 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 ‘anticipate’,
‘estimate’, ‘expect’, ‘intend’,
‘will’, ‘project’, ‘plan’,
‘believe’, ‘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 outbreaks, epidemics or pandemics, such as the Covid-19 pandemic
and ongoing challenges and uncertainties posed by the Covid-19
pandemic for businesses and governments around the world; 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; 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; 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,” which could also cause actual results
to differ from forward-looking information. In light of these and
other uncertainties, the forward-looking statements included in
this document should not be regarded as a representation by the
Company that the Company’s plans and objectives will be
achieved. 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. 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.
EXHIBIT INDEX
Exhibit
No.
|
Description
|
1
|
Third Quarter Trading Update dated 26 October 2022, prepared by WPP
plc.
|
26 October 2022
Third Quarter Trading Update
Strong Q3 performance; LFL revenue less pass-through costs +3.8%
year-on-year and acceleration of growth on 2019 at +10.9%; update
to full year guidance
|
£ million
|
+/(-)% reported[1]
|
|
Third Quarter
|
|
|
|
Revenue[3]
|
3,573
|
10.3
|
2.7
|
Revenue less pass-through costs
|
2,986
|
13.1
|
3.8
|
|
|
|
|
Year to date
|
|
|
|
Revenue
|
10,329
|
10.2
|
6.6
|
Revenue less pass-through costs
|
8,496
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12.7
|
7.1
|
■ Q3
revenue +10.3%; LFL revenue +2.7%
■ Q3
LFL revenue less pass-through costs +3.8%
o Acceleration
of growth on 2019 levels +10.9% (Q2 +9.7%, Q1
+9.2%)
o Top
five markets: USA +4.5%, UK +4.2%, Germany -8.7% (+3.3% excluding
the impact of Covid-related contract in prior year), China -9.0%,
India +10.7%
o Other
major growth markets: Brazil +19.7%, Canada
+7.7%
o By
business sector: Global Integrated Agencies +4.3% (GroupM +4.7%, ex
GroupM +4.0%), Public Relations +5.8%, Specialist Agencies -3.9%
(+8.6% excluding Covid-related contract above)
■ $1.7
billion net new business won in Q3 and $5.1 billion net
year-to-date
■ £692
million of share buybacks year-to-date, total of £800 million
to be completed in 2022
■ Full
year 2022 guidance updated: LFL revenue less pass-through costs
growth raised to 6.5-7.0% (previously 6.0-7.0%); headline operating
margin up 30 to 50 bps (previously up around 50
bps)
Mark Read, Chief Executive Officer of WPP, said:
"WPP continues to show strong momentum, reflecting broad-based
growth across our agencies, markets and industry sectors and the
investment by our clients in marketing, ecommerce and digital
transformation. Our performance on a three-year basis has continued
to improve each quarter during 2022.
"Our new business success reflects the quality of our creative
work, our strength in media and our ability to deliver integrated
solutions to clients. During the quarter we achieved $1.7 billion
of net new business, including assignments with Nestlé,
Samsung and SC Johnson. Our leading scale and differentiated offer
were exemplified by GroupM which led COMvergence's new business and
retention global rankings in the first half of 2022.
"Our growth over the year has been strong with full year
like-for-like revenue less pass-through costs now upgraded to
6.5-7.0%. We have continued to invest in our people and in data and
technology to support this growth, resulting in headline operating
margin now expected to be up 30 to 50 bps. We are on track with the
£300m transformation savings and will continue to manage our
costs with discipline.
"We enter the last quarter of the year with confidence, based on
the leading competitive position of our businesses, our client
momentum and the knowledge that the actions we have taken to
strengthen WPP leave us well placed to support our clients in
navigating the economic uncertainties ahead."
For further information:
Investors and analysts
Anthony Hamilton
+44 7464 532903
Caitlin Holt
+44 7392 280178
Media
Chris
Wade
+44
20 7282 4600
Richard Oldworth,
+44 20 7466
5000
Buchanan Communications
+44 7710 130 634
wpp.com/investors
Overview
The business has performed well in the third quarter, continuing
the positive momentum built up through the first half of the year.
Revenue in the third quarter was up 10.3% at £3.6 billion. On
a constant currency basis, revenue was up 1.4% year-on-year.
Like-for-like growth, excluding the impact of currency,
acquisitions and disposals, was 2.7%.
Revenue less pass-through costs in the third quarter was up 13.1%
year-on-year to £3.0 billion, and up 4.0% on a constant
currency basis. Excluding the positive net impact from acquisitions
and disposals, like-for-like growth was 3.8%.
Operational and strategic progress
Clients and partners
Client demand remained healthy across all services as our clients
continue to invest in their marketing, ecommerce and digital
transformation.
We have won $5.1 billion of net new business in the first nine
months of the year, up on the $4.6 billion in the same period in
2021. Significant wins and retentions include Nestlé Germany
media, Samsung European CRM, Discover media, H&R Block creative
and the consolidation of SC Johnson's global creative and shopper
marketing account. Coca-Cola continues to be onboarded at pace;
most recently, Coca-Cola-owned Costa Coffee appointed OpenX from
WPP to lead its global brand strategy.
Industry recognition and awards
We are proud that our creative excellence and depth of capabilities
have been recognised in the latest Q3 Forrester Waves. VMLY&R
was named a leader in Marketing Creative and Content Services and
WPP was named a leader among Global Marketing Services providers,
in recognition of the strength of our offering, strategy and market
presence.
On the media front, GroupM led COMvergence's new business and
retention global Group rankings in the first half of 2022,
reflecting the company's leading scale and differentiated offering.
Within media agencies, Mindshare and Wavemaker ranked first and
second respectively.
Investment for
growth
We continue to invest in the long-term growth of our business
across commerce, data, technology and media.
We acquired four businesses including Newcraft, a data-first
European ecommerce consultancy based in Netherlands; Corebiz, a
Latin American ecommerce agency specialising in VTEX
implementation; JeffreyGroup, a leading corporate communications,
public affairs, and marketing consulting firm in Latin America; and
Passport Brand Design, a leading brand design agency based in the
United States.
Transformation programme
We continue with our actions to deliver efficiency savings to
invest in our people, accelerate growth and improve margins. In
property, we opened our new Dusseldorf campus during the quarter.
By the end of the year, we aim to open three further campuses,
taking the total to 38 campuses that can accommodate around half
our people. We have made progress in our shared services and IT
transformation, with finance shared services now live in twelve
markets. Our procurement team continue to leverage our global scale
to consolidate our spend with suppliers; during the quarter this
included working with our HR teams to consolidate spend with
freelance and contractor agencies. We remain on track to deliver
£300 million of efficiency savings by the end of
2022.
People
WPP is focussed on attracting, retaining and promoting exceptional,
diverse talent. In July we launched the Making Space initiative,
giving our people a company-wide break along with a series of
events across our campuses and offices to inspire and reconnect. We
have partnered with The One Club for Creativity to launch ONE
School UK, a free 16-week online programme designed to open doors
to a career in advertising for talented UK-based Black creatives.
In addition, we launched the second year of the VisibleStart
course, a programme providing career options and training for women
over 45.
During the quarter we announced the internal promotions of Karen
Blackett to President of WPP in the UK and Devika Bulchandani to
Global Chief Executive Officer of Ogilvy. We are also pleased to
announce the appointment of Juan Pedro Moreno as President of WPP's
business in Spain, aligning with WPP's country leadership structure
in other major markets. We also appointed Laura
Maness as the new Global Chief Executive Officer of Grey and Wendy
Lund as Chief Client Officer for Health and
Wellness.
Environment
WPP is committed to achieving net zero carbon emissions across our
supply chain - including our $60 billion of media investments - by
2030. Supporting this, GroupM released its media
decarbonisation report in July, which provides a framework to
measure and reduce ad-based carbon emissions; an important first
step to standardise and accelerate carbon reduction across
different media channels.
Regional review
Revenue less pass-through costs analysis
£
million
|
Q3 2022
|
Q3
2021
|
+/(-) %
reported
|
+/(-) % LFL
|
N. America
|
1,222
|
975
|
25.5
|
4.7
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United Kingdom
|
381
|
362
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5.1
|
4.2
|
W. Cont Europe
|
547
|
562
|
(2.7)
|
(2.1)
|
AP, LA, AME, CEE
|
836
|
741
|
12.8
|
6.9
|
Total Group
|
2,986
|
2,640
|
13.1
|
3.8
|
North America saw
like-for-like revenue less pass-through costs up 4.7%, with strong
growth in the US and Canada where both markets are up double digits
on 2019 levels. Growth in the US was up 4.5% or 11.0% on 2019
levels, mainly driven by strength in GroupM and Hogarth, our media
and production businesses.
In the United
Kingdom, like-for-like
revenue less pass-through costs was up 4.2% and saw a strong
acceleration in its three-year LFL growth rate, from 7.3% in Q2 to
13.9% in Q3. Ogilvy, GroupM and H+K saw the highest growth in the
quarter.
Western Continental Europe like-for-like
revenue less pass-through costs fell by 2.1% in the quarter
although achieved an acceleration in its three-year LFL growth rate
from 10.0% in Q2 to 12.4% in Q3. Performance in Germany was down
8.7% year-on-year in Q3 due to the prior year boost from a
Covid-related contract. Excluding this, Germany grew 3.3% and
Western Continental Europe grew 2.5%. While France remains below
2019 levels, the other main markets showed
growth.
Asia Pacific, Latin America, Africa & the Middle East and
Central & Eastern Europe like-for-like
revenue less pass-through costs was up 6.9%. The highest growth
region was Latin America, led by Brazil which grew 19.7%, the sixth
consecutive quarter of double-digit growth. Asia Pacific grew more
slowly with strong growth in India, up 10.7% offset by a
significant slowdown in China. China was down 9.0% in the third
quarter, a deceleration from the second quarter, as Covid-related
lockdowns have restricted activity.
Business sector review
Revenue less pass-through costs analysis
£
million
|
Q3 2022
|
Q3
2021
|
+/(-) %
reported
|
+/(-) % LFL
|
Global
Integrated Agencies
|
2,458
|
2,190
|
12.3
|
4.3
|
Public
Relations
|
296
|
231
|
28.0
|
5.8
|
Specialist
Agencies
|
232
|
219
|
6.1
|
(3.9)
|
Total Group
|
2,986
|
2,640
|
13.1
|
3.8
|
Prior year figures have been restated to reflect the reallocation
of a number of businesses between Global Integrated Agencies and
Specialist Agencies. This increases Global Integrated Agencies' Q3
2021 revenue less pass-through costs by £5 million and reduces
Specialist Agencies' by the same amount.
Global Integrated Agencies like-for-like
revenue less pass-through costs was up 4.3%. GroupM, which was
approximately 37% of WPP revenue less pass-through costs in the
third quarter, grew 4.7% in Q3 and showed an improving three-year
trend from 15.9% in Q2 to 20.0% in Q3. Excluding GroupM, Global
Integrated Agencies was up 4.0%. Hogarth was the standout performer
in the quarter, while Ogilvy and AKQA also saw strong
growth.
Public Relations like-for-like
revenue less pass-through costs was up 5.8% and up 19.1% over 2019.
BCW, H+K and FGS Global continued to perform well, reflecting the
strong demand from clients for strategic advice in a heightened
political environment.
Specialist Agencies like-for-like
revenue less pass-through costs was down 3.9%, and up 17.1% over
2019. Excluding the impact of the Covid-related contract in
Germany, growth was 8.6% year-over-year, fuelled by CMI, our
healthcare media business, which grew
double-digits.
Balance sheet highlights
Average adjusted net debt[4] in
the first nine months of 2022 was £2.8 billion, compared to
£1.5 billion in 2021, at 2022 exchange rates, an increase of
£1.3 billion. Adjusted net debt at 30 September 2022 was
£3.5 billion, compared to £1.6 billion on 30 September
2021, or £1.7 billion at 2022 exchange rates, an increase of
£1.8 billion.
Share purchases of £735 million were made in the first nine
months of the year, of which £692 million related to share
buybacks and £43 million were purchases into the employee
benefit trust.
Outlook
We are confident in the resilience of our business, our strategy
and our long-term growth potential. Our updated guidance takes into
account the strong third quarter performance, ongoing investment in
our people, inflationary pressures and the impact of the current
outlook for the global economy.
We therefore raise revenue guidance and adjust expectations for
headline operating profit margin progress for the full year. Our
guidance for 2022 is:
■ Like-for-like
revenue less pass-through costs growth of 6.5-7.0% (previously
6.0-7.0%)
■ Foreign
exchange rate benefit of around 7.0% to reported revenue less
pass-through costs from the movement in sterling
year-on-year
■ Mergers
and acquisitions benefit of around 0.3% to revenue less
pass-through costs
■ Headline
operating margin improvement targeted at 30 to 50 bps (previously
around 50 bps)
■ Capex
£350-400 million
■ Trade
working capital expected to be flat year-on-year;
£300-£400 million outflow expected on non-trade working
capital, largely driven by the high 2021 bonus paid out in
2022
■ Around
£800 million of share buybacks in 2022, of which £692
million was completed in the year-to-date
■ Average
adjusted net debt / headline EBITDA slightly below the guidance
range of 1.5x - 1.75x
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
'anticipate', 'estimate', 'expect', 'intend', 'will', 'project',
'plan', 'believe', '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 outbreaks,
epidemics or pandemics, such as the Covid-19 pandemic and ongoing
challenges and uncertainties posed by the Covid-19 pandemic for
businesses and governments around the world; 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; 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; 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 under Item 3D 'Risk Factors' in
the Group's Annual Report on Form 20-F for 2021, 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 on the date of
this document.
[1] Percentage
change in reported sterling.
[2] Like-for-like.
LFL comparisons are calculated as follows: current year, constant
currency actual results (which include acquisitions from the
relevant date of completion) are compared with prior year, constant
currency actual results, adjusted to include the results of
acquisitions and disposals for the commensurate period in the prior
year.
[3] Certain
businesses have been reclassified to associates as the Group no
longer controls them. In addition, certain media billings
recognised as revenue earlier were
re-assessed under IFRS 15: "Revenue from Contracts with Customers"
and have been excluded from revenue, but have no impact on revenue
less pass-through costs. There are no adjustments to previously
reported revenue in the first three quarters of 2021. The
adjustments were recorded for the first time for full-year 2021
reporting.
[4] Adjusted
net debt excludes lease liabilities.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
WPP
PLC
|
|
(Registrant)
|
Date:
26 October 2022
|
By:
______________________
|
|
Balbir
Kelly-Bisla
|
|
Company
Secretary
|