a0038m
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 April 2024
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
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Indicate
by check mark if the registrant is submitting the Form 6-K in paper
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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 ‘aim’,
‘anticipate’, ‘believe’,
‘estimate’, ‘expect’,
‘forecast’, ‘guidance’,
‘intend’, 'may', ‘will’,
‘should’, ‘potential’,
‘possible’, ‘predict’,
‘project’, ‘plan’, ‘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, epidemics or pandemics including restrictions on
businesses, social activities and travel; 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; changes in client advertising, marketing and
corporate communications requirements; 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, slower growth, increasing interest rates and
high and sustained inflation; supply chain issues affecting the
distribution of our clients’ products; 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; effectively managing the risks, challenges
and efficiencies presented by utilising Artificial Intelligence
(AI) technologies and partnerships in our business; 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” in the company's 2022 Annual Report on
Form 20-F, 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
|
First Quarter Trading Update dated 25 April 2024, prepared by WPP
plc.
|
First Quarter Trading Update
Q1 performance in line with expectations. 2024 guidance reiterated.
Strong progress on strategic initiatives across Burson, GroupM and
VML
|
Key figures
First Quarter
|
£ million
|
+/(-) % reported1
|
+/(-) %
LFL2
|
Revenue
|
3,412
|
(1.4)
|
2.1
|
Revenue less pass-through costs
|
2,687
|
(5.0)
|
(1.6)
|
● Q1 revenue -1.4%;
LFL revenue +2.1%
● Q1 LFL revenue less
pass-through costs -1.6% (Q1 2023: +2.9%) with growth in the
UK and Western Continental Europe offset by declines in North
America and Asia Pacific, which saw strong growth in India offset
by a decline in China
● Global Integrated Agencies
revenue less pass-through costs declined 0.7%, with 2.4%
growth in GroupM offset by a 3.3% decline at integrated
creative agencies with the loss of assignments at a healthcare
client and reduced spend at technology companies
● New client assignment wins
from AstraZeneca, Canon, Molson Coors, Daiichi Sankyo, Nestlé,
Perfetti, Perrigo, Rightmove and Telefónica. Q1 net new
billings of $0.8bn (Q1 2023: $1.5bn)
● Strong progress on the
strategic initiatives laid out at our CMD in January. Burson,
GroupM and VML on track to deliver targeted in-year savings and
well-placed to benefit from a strong pipeline
● Continued strategic progress
on AI initiatives. WPP Open adopted by over 50,000 of our people
and at the heart of Nestlé Oceania, ASEAN and Nestlé
Health Science US wins. Collaboration with Google to integrate
Gemini 1.5 Pro in WPP Open announced in April. WPP named NVIDIA
Industry Innovation Partner of the Year in EMEA
● 2024 guidance reiterated: LFL
revenue less pass-through costs growth expected to be 0-1%;
with headline operating margin improvement
of 20-40bps (excluding the impact of FX)
Mark Read, Chief Executive Officer of WPP, said:
"The first quarter of 2024 was very much in line with our
expectations with performance reflecting the toughest comparator of
the year.
"Strategically, we have progressed well on the priorities set out
at our Capital Markets Day at the end of January. We've rolled out
multiple AI tools through our intelligent marketing operating
system WPP Open, including the latest foundation models from Bria,
Google and OpenAI, and at Google Cloud Next we launched
our Performance Brain to predict the best-performing
content ahead of campaigns going live. These products are being
deployed at scale, together with investment in training for our
people. WPP Open was also at the heart of our most recent new
business successes, including major media wins with
Nestlé.
"Structurally, VML is now well established and is on track to
deliver savings. GroupM is progressing well with its simplification
and Burson will be operational in July. I'm very pleased with
the progress we are making and we are already seeing the benefits
of a simpler and more agile structure for our clients.
"Our outlook for the full year is reiterated. We remain on track to
return to growth in the balance of the year, supported by an
encouraging new business pipeline and the strength of our business
creatively and in media, both powered by new AI capabilities, while
our simpler structure will drive organisational flexibility and
stronger cash conversion."
For further information:
Investors and analysts
Tom Waldron
|
+44 7788 695864
|
Anthony Hamilton
|
+44 7464 532903
|
Caitlin Holt
|
+44 7392 280178
|
irteam@wpp.com
|
|
Media
|
|
Chris Wade
|
+44 20 7282 4600
|
Richard Oldworth
|
+44 7710 130 634
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Buchanan Communications
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+44 20 7466 5000
|
press@wpp.com
wpp.com/investors
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 from continuing operations, adjusted to
include the results of acquisitions and disposals for the
commensurate period in the prior year. Throughout the commentary in
this release growth rates are LFL unless stated
otherwise.
Overview
Revenue in the first quarter was £3.4bn, down 1.4% from
£3.5bn in Q1 2023, and up 2.1% like-for-like. Revenue
less pass-through costs was £2.7bn, down 5.0% from
£2.8bn in Q1 2023, and down 1.6%
like-for-like.
£ million
|
Q1 2024
|
%
reported
|
%
FX
|
%
M&A
|
%
LFL
|
Revenue
|
3,412
|
(1.4)
|
(4.2)
|
0.7
|
2.1
|
Revenue less pass-through costs
|
2,687
|
(5.0)
|
(3.9)
|
0.5
|
(1.6)
|
Business segment
review3 -
revenue less pass-through costs
£ million
|
Q1 2024
|
Q1 2023
|
+/(-) % reported
|
+/(-) % LFL
|
Global Integrated Agencies
|
2,202
|
2,305
|
(4.5)
|
(0.7)
|
Public Relations
|
276
|
292
|
(5.5)
|
(3.3)
|
Specialist Agencies
|
209
|
232
|
(9.9)
|
(7.6)
|
Total Group
|
2,687
|
2,829
|
(5.0)
|
(1.6)
|
Global Integrated Agencies: GroupM,
our media planning and buying business, saw growth in revenue less
pass-through costs of 2.4% in Q1 (Q1 2023: +6.1%), with
continued growth in client investment in media, partially
offset by the impact of US client assignment losses from prior
years and lower spending by technology clients.
Other Global Integrated Agencies declined 3.3% (Q1 2023:
+0.7%), also impacted by lower year-on-year spending by
technology clients and the first full quarter impact of the loss of
Pfizer creative assignments. Against that backdrop, VML and AKQA
declined in the quarter, with continued growth at Hogarth and
Ogilvy, supported by recent client wins.
Public Relations: BCW
and Hill & Knowlton, which together will merge to form Burson
in July, saw a combined decline due to the loss of Pfizer
assignments and the impact of macroeconomic uncertainty on client
spending. FGS Global grew against a tough
comparison.
Specialist Agencies: Landor,
Design Bridge and Partners, and a number of our smaller specialist
agencies continued to be affected by delays in project-based
spending. CMI Media Group, our specialist healthcare media planning
and buying agency, continued to grow well, building on strong prior
year performance.
3. Prior
year figures have been re-presented to reflect the reallocation of
a number of businesses between Global Integrated Agencies and
Specialist Agencies.
Regional review - revenue less pass-through costs
£ million
|
Q1 2024
|
Q1 2023
|
+/(-) % reported
|
+/(-) % LFL
|
N. America
|
1,055
|
1,150
|
(8.3)
|
(5.2)
|
United Kingdom
|
383
|
377
|
1.6
|
0.3
|
W Cont. Europe
|
556
|
558
|
(0.4)
|
3.3
|
AP, LA, AME, CEE
|
693
|
744
|
(6.9)
|
(0.6)
|
Total Group
|
2,687
|
2,829
|
(5.0)
|
(1.6)
|
North America had
a challenging quarter as expected, declining 5.2% due to a
year-on-year reduction in spend from technology clients, the loss
of Pfizer at our creative agencies, and client assignment
losses at GroupM. We continue to expect our strategic actions
to drive improved performance in the region across the balance of
2024.
The United
Kingdom grew 0.3%
against a tough comparison (Q1 2023: +7.4%) with growth in CPG
offsetting declines in technology client
spend. Western Continental
Europe saw strength in
France and Spain offset by a decline in
Germany.
Rest of World declined 0.6% primarily
due to a decline in Asia Pacific of 3.2%. Growth in India
of 6.6%, reflecting last year's strong new business momentum,
was offset by a 15.4% decline in China, due to a
challenging macro and client environment.
There was continued growth in Latin America (+2.3%) and Middle East
& Africa (+7.8%). Central & Eastern Europe was flat
(-0.1%).
Top five markets - revenue less pass-through costs
% LFL +/(-)
|
USA
|
UK
|
Germany
|
China
|
India
|
Q1 2024
|
(5.4)
|
0.3
|
(1.9)
|
(15.4)
|
6.6
|
Client sector review
Client sector - revenue less pass-through costs
Q1 2024
|
% share, revenue less pass-through costs4
|
% LFL +/(-)
|
CPG
|
28.0
|
9.5
|
Tech & Digital Services
|
17.1
|
(9.0)
|
Healthcare & Pharma
|
11.6
|
(8.2)
|
Automotive
|
10.6
|
(0.7)
|
Retail
|
8.9
|
(9.1)
|
Telecom, Media & Entertainment
|
6.8
|
6.8
|
Financial Services
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6.2
|
(0.9)
|
Other
|
4.7
|
(14.8)
|
Travel & Leisure
|
3.7
|
4.0
|
Government, Public Sector & Non-profit
|
2.4
|
(6.6)
|
4. Proportion
of WPP revenue less pass-through costs in Q1 2024; table made up of
clients representing 77% of WPP total revenue
less pass-through costs.
Operating and strategic progress
Lead through AI, data and technology
At the Capital Markets Day in January, WPP set out its strategy to
leverage its first-mover advantage in applying AI to marketing.
During the quarter we continued to invest in WPP Open, our
intelligent marketing operating system powered by AI, as part of
our annual investment of £250m in AI, data and tech. WPP Open
is already used by more than 50,000 of our people and
adopted by key clients, including The
Coca-Cola Company and L'Oréal. Most recently, WPP
Open was leveraged in a bespoke agency model, OpenMind, to win
media assignments at Nestlé Oceania, ASEAN and Nestlé
Health Science US.
In April, WPP announced a collaboration with Google Cloud to
integrate Google's Gemini 1.5 Pro models with WPP Open, with a
range of Gemini powered applications demoed during the keynote
session of the annual Google Cloud Next conference, including WPP
Open Creative Studio and an upgraded AI Performance
BrainTM.
WPP was proud to be recognised by the NVIDIA Partner Network as the
Industry Innovation Partner of the Year in EMEA.
Accelerate growth through the power of creative
transformation
Creativity is what sets WPP apart, and when combined with AI,
technology, data and the largest global media platform, we have an
unparalleled offer to clients.
During the quarter, WPP topped the WARC Media 100 for the seventh
year running and topped the WARC Creative 100 for the second
consecutive year. All three of WARC's top creative directors work
at WPP agencies. WPP also topped The Drum's World Creative Rankings
2024 for the third year in a row.
Ogilvy was named the 2024 Global Agency Network of the Year by Ad
Age and also topped both the WARC Effective 100 and Creative 100
rankings. VML was third in the WARC Creative 100. Mindshare New
York was named the number one media agency in the WARC Effective
100 rankings.
VML's 'Waiting to Live' campaign with NHS Blood and Transplant won
two Gold Clio awards.
At this year's Super Bowl, WPP integrated creative agencies were
responsible for 12 of the 57 advertising spots shown during
coverage of the game. GroupM secured the media for
19 spots.
Build world-class, market-leading brands
Good progress has been made on each of our strategic initiatives
with integration and cost actions relating to VML expected to be
broadly complete in early Q2. The GroupM simplification and Burson
merger also remain on track.
Across all three agencies, we have a strong pipeline of new
business and we are encouraged by conversion in Q1. VML won a
global assignment for Perrigo and a US assignment from Daiichi
Sankyo and AstraZeneca for their medicine Enhertu in breast cancer. GroupM won Nestlé
Oceania, ASEAN and Health Sciences in the US and Burson won
Kellanova.
GroupM agency Wavemaker was named the number one global media
agency network in the COMvergence Final 2023 Global New Business
Barometer with a total new business value of $2.4bn including
retentions.
Execute efficiently to drive financial returns through margin and
cash
As well as the initiatives above we are making good progress
against our enterprise IT roadmap and workforce optimisation across
finance and IT.
In the UK, Workday HCM access was rolled out across more than
10,000 employees. In the US, VML and GroupM ERP deployment
plans are tracking in line with our plans. Several smaller markets
in EMEA are preparing for the rollout of Maconomy in the second
quarter.
Our cloud migration continues at pace with over 50% of legacy
on-premise workloads migrated to the cloud by the end of Q1, with
three more data centres closed in Germany, North America and Brazil
during the period.
No new campuses were opened in the quarter, but several new campus
openings are planned for the second half of 2024.
Purpose and ESG
WPP's purpose is to use the power of creativity to build better
futures for our people, planet, clients and communities. Read more
on the ways WPP is working to deliver against its purpose in
our 2023 Sustainability Report.
Balance sheet highlights
Average adjusted net debt in the first three months of 2024
was £3.5bn, compared to £3.4bn reported in the
first quarter of 2023, with no material impact from
FX.
Adjusted net debt at 31 March 2024 was £4.0bn,
against £3.9bn as at 31 March 2023.
In March, WPP issued two bonds as part of a planned refinancing of
two upcoming debt maturities, issuing a €600m 3.625% bond due
2029 and a €650m 4.0% bond due 2033.
Outlook
We are reaffirming our guidance for 2024 as follows:
Like-for-like
revenue less pass-through costs growth of 0-1%.
Headline operating margin improvement of 20-40bps (excluding the impact of
FX)
|
Other 2024 financial indications:
●
Mergers and acquisitions will add 0.5-1.0% to revenue
less pass-through costs growth
●
FX impact: current rates (at 19 April 2024) imply a c.1.1% drag on
FY 2024 revenue less pass-through costs, with no meaningful impact
expected on FY 2024 headline operating margin
●
Headline income from associates and non-controlling interests at
similar levels to 2023
●
Net finance costs of around £295m
●
Effective tax rate (measured as headline tax as a % of headline
profit before tax) of around 28%
●
Capex of around £260m
●
Cash restructuring costs of around £285m
●
Working capital expected to be broadly flat
year-on-year
Medium-term targets
In January 2024, we presented an updated medium-term financial
framework including the following three targets:
● 3%+ LFL
growth in revenue less pass-through costs
● 16-17% headline
operating profit margin
● Adjusted operating
cash flow conversion of 85%+5
5. Adjusted
operating cash flow divided by headline operating
profit.
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
'aim', 'anticipate', 'believe', 'estimate', 'expect', 'forecast',
'guidance', 'intend', 'may', 'will', 'should', 'potential',
'possible', 'predict', 'project', 'plan', '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 epidemics or pandemics including restrictions on businesses,
social activities and travel; 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; changes in client advertising, marketing and corporate
communications requirements; 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 conflicts in Ukraine and Gaza; the risk of global
economic downturn; slower growth, increasing interest rates and
high and sustained inflation; supply chain issues affecting the
distribution of our clients' products; 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; effectively managing the risks, challenges
and efficiencies presented by using Artificial Intelligence (AI)
and Generative AI technologies and partnerships in our business;
risks related to our environmental, social and governance goals and
initiatives, including impacts from regulators and other
stakeholders, and the impact of factors outside of our control on
such goals and initiatives; 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). They
use words such as 'aim', 'anticipate', 'believe', 'estimate',
'expect', 'forecast', 'guidance', 'intend', 'may', 'will',
'should', 'potential', 'possible', 'predict', 'project', 'plan',
'target', and other words and similar references to future periods
but are not the exclusive means of identifying such statements.
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.
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:
25 April 2024
|
By:
______________________
|
|
Balbir
Kelly-Bisla
|
|
Company
Secretary
|