2018 at upper end of guidance; 2019
challenging as previously indicated; good initial progress on
strategy
WPP (NYSE:WPP) today reported its 2018 Preliminary Results.
Mark Read, Chief Executive Officer, WPP:
“Since September, we have made good progress in implementing the
new strategy for WPP. We have set out our vision for a more
client-centric WPP, simplified our offer through the creation of
two new integrated networks, VMLY&R and Wunderman Thompson,
realigned our US healthcare agencies with major networks, formed
the Company’s first executive committee and begun the process of
seeking a financial and strategic partner for Kantar. Through 36
disposals since April 2018, we have strengthened our balance sheet
and streamlined our business, raising £849 million of cash proceeds
in 2018.
“We are showing early signs of success in attracting new
business and new talent to WPP. The newly formed VMLY&R,
for example, has enjoyed a strong start, with client wins totalling
$25 million in its first 90 days. The quality of our creative work
has been exceptional, with six WPP spots featuring at this year’s
Super Bowl and work such as Grey’s ‘The Best Men Can Be’ for
Gillette demonstrating once again the global impact of what we
do.
“Our results for 2018 are at the upper end of the guidance we
provided in October, with like-for-like revenue less pass-through
costs down 0.4%.
“As we have said previously, 2019 will be challenging –
particularly in the first half – due to headwinds from client
losses in 2018. However, we start the year with fewer clients under
review than we did in 2018, and investments in creativity and
technology will further improve the competitiveness of our
offer.
“Our business is performing strongly in Western Continental
Europe, Asia Pacific, Latin America, Africa & the Middle East
and Central & Eastern Europe, and we are addressing our
performance in the United States. Important wins such as Volkswagen
in North America reflect our creative strengths, and we are making
significant investments in talent in our largest market.
“We are at the beginning of a three-year turnaround plan, but
WPP’s new positioning as a creative transformation company with
stronger, more integrated, more tech-enabled agencies is already
proving effective, having driven several of our recent new business
successes. As we implement our strategy in 2019 we will continue to
put creativity, technology and great work for clients at the heart
of our own transformation.”
In this press release not all of the figures and ratios used are
readily available from the unaudited preliminary results included
in Appendix 1. These non-GAAP measures, including constant currency
and like-for-like growth, revenue less pass-through costs and
headline profit measures, management believes are both useful and
necessary to better understand the Group’s results. Where required,
details of how these have been arrived at are shown in the
Appendix.
Key figures
£ million
2018
∆ reported1
∆ constant2
∆ LFL3
20174
Billings 55,798 0.4%
3.3% 3.2%
55,585
Revenue 15,602 -1.3%
1.5% 0.8%
15,804
Revenue less pass-through costs 12,827
-2.6% 0.2%
-0.4%
13,170
Headline EBITDA5
2,311 -8.8% -6.4%
2,534
Headline operating
profit6
1,962 -8.9% -6.6%
2,154
Headline operating
margin7
15.3% -1.1* -1.1*
-1.1*
16.4%
Headline PBIT8
2,047 -9.7% -7.4%
2,267
Headline PBIT margin9
16.0% -1.2* -1.3*
-1.2*
17.2% Profit before
tax 1,463 -30.6%
-28.1%
2,109
Profit after tax 1,139
-40.4% -38.5%
1,912
Headline diluted EPS10
108.0p -10.3%
-8.1%
120.4p
Diluted EPS11
84.3p -40.8%
-38.9%
142.4p
Dividends per share 60.0p - -
60.0p
* Margin points
- 2018 at upper end of guidance given
in October, with like-for-like revenue less pass-through costs
-0.4%
- As previously stated, 2019
challenging, particularly in the first half, due to headwinds from
client losses in 2018
- Business performing strongly in
Western Continental Europe, Asia Pacific, Latin America, Africa
& the Middle East and Central & Eastern Europe, and
addressing performance in the United States
- Profit before tax reflects impact of
restructuring and transformation costs and goodwill
impairment
- Dividends per share of 60.0p, flat
with last year
- Year end net debt position improved
by £466 million on same date in 2017 (an improvement of £605
million at 2018 exchange rates)
- Good initial progress on
implementing strategy
Review of results
Reported billings at £55.798 billion, up 0.4%, up 3.3% in
constant currency and up 3.2% like-for-like.
Reported revenue was down 1.3% at £15.602 billion. Revenue on a
constant currency basis was up 1.5% compared with last year, the
difference to the reportable number reflecting the strength of the
pound sterling against most currencies, particularly in the first
half of the year. On a like-for-like basis, which excludes the
impact of currency and acquisitions, revenue was up 0.8%.
Reported revenue less pass-through costs was down 2.6%, up 0.2%
in constant currency and down 0.4% like-for-like. In the fourth
quarter, like-for-like revenue was down 0.1%, a slight
deterioration from the third quarter of +0.2%, with all regions,
except North America, showing an improvement. On the same basis,
revenue less pass-through costs in the fourth quarter was down
0.7%, an improvement over the third quarter of -1.5%, with North
America and the United Kingdom slightly weaker, more than offset by
stronger growth in Western Continental Europe and Asia Pacific,
Latin America, Africa & the Middle East and Central &
Eastern Europe.
Operating profitability
Headline EBITDA was down 8.8% to £2.311 billion, from £2.534
billion the previous year and down 6.4% in constant currency. The
Group’s revenue is more weighted to the second half of the year
across all regions and sectors, and, particularly, in the faster
growing markets of Asia Pacific and Latin America. As a result,
profitability and margin continue to be skewed to the second half
of the year, with the Group earning approximately 40% of its
profits in the first half and 60% in the second half. Headline
profit before interest and tax for 2018 was down 9.7% to £2.047
billion, from £2.267 billion and down 7.4% in constant
currencies.
Headline operating margin12 was down 1.1 margin points to 15.3%,
and also down 1.1 margin points in both constant currency and
like-for-like, at the upper end of the full year revised operating
margin target. Headline PBIT margin13 was down 1.2 margin points to
16.0%, down 1.3 margin points in constant currency and down 1.2
margin points like-for-like. The Group’s operating margin of 15.3%
is after charging £37 million ($54 million) of severance costs,
compared with £40 million ($52 million) in 2017 and £326 million
($435 million) of incentive payments, which were 14.2% of operating
profit before incentives, a similar level to the £324 million ($421
million) or 13.1% in 2017. Achievement of target, at an individual
operating company level, generally generates 15% of operating
profit before bonus as an incentive pool and 20% at maximum.
On a reported basis, the Group’s operating margin, before all
incentives14 and income from associates, was 17.8%, down 1.0 margin
point, compared with 18.8% last year. The Group’s staff costs to
revenue less pass-through costs ratio, including severance and
incentives, increased by 0.5 margin points to 63.7% compared to
63.2% in 2017. In addition, there was an increase in the Group’s
general and administrative costs, principally in relation to an
increase in the provision for bad debts and higher IT costs.
On a like-for-like basis, the average number of people in the
Group, excluding associates, in 2018 was 133,903 compared to
135,521 in 2017, a decrease of 1.2%. On the same basis, the total
number of people, excluding associates, at 31 December 2018 was
134,281 compared to 135,187 at 31 December 2017, a decrease of 906
or 0.7%.
Exceptional gains and restructuring and transformation
costs
As outlined in the Investor Day on 11 December 2018, we have
undertaken a strategic review of our operations. As part of that
review, restructuring actions have been taken to right-size
underperforming businesses, address high cost severance markets and
simplify operational structures. This has included a number of
WPP’s operating companies having been merged, closed or sold. It
also includes transformation costs with respect to strategic
initiatives like co-locations in major cities, IT transformation
and shared services.
£234 million of restructuring and transformation costs were
recorded in the fourth quarter in relation to this plan. This
included £63 million of non-cash write-offs and £171 million of
actions that have a cash impact in 2018 and beyond. In 2018
the cash outflow was £50 million. The £171 million forms part of
the anticipated £300 million total cash cost of the restructuring
plan that we announced – with the balance to be incurred in 2019,
2020 and 2021.
The total of restructuring and transformation costs in 2018 was
£302 million. The remaining £68 million relates to severance
restructuring costs recorded in the first half, together with costs
in relation to the continuing global IT transformation program.
These exceptional costs of £302 million and £41 million of
associate company exceptional losses have been partly offset by
exceptional gains of £235 million, primarily relating to the gain
on the sale of the Group’s investment in Globant S.A.
This gives a net exceptional loss of £108 million and compares
with a net exceptional loss in 2017 of £24 million.
Interest and taxes
Net finance costs (excluding the revaluation of financial
instruments) were £184.5 million, compared with £174.6 million in
2017, an increase of £9.9 million. This is due to higher dollar
interest rates.
The headline tax rate was 22.5% (2017 22.0%) and on reported
profit before tax was 22.1% (2017 9.3%), the difference in the
rates in 2017 was principally due to an exceptional tax credit,
primarily relating to the re-measurement of deferred tax
liabilities. Given the Group’s geographic mix of profits and the
changing international tax environment, the tax rate is expected to
increase slightly over the next few years.
Earnings and dividend
Headline profit before tax was down 11.0% to £1.863 billion from
£2.093 billion, and down 8.5% in constant currencies.
Reported profit before tax fell by 30.6% to £1.463 billion from
£2.109 billion, the difference between the headline and reported
figures reflecting principally the £302 million of restructuring
and transformation costs and £184 million of goodwill impairment
charges. In constant currencies, reported profit before tax fell by
28.1%.
Reported profit after tax fell by 40.4% to £1.139 billion from
£1.912 billion. In constant currencies, profits after tax fell
38.5%.
Profits attributable to share owners fell 41.5% to £1.063
billion from £1.817 billion, again reflecting principally the £302
million of restructuring and transformation costs and £184 million
of goodwill impairment. In constant currencies, profits
attributable to share owners fell by 39.6%.
Headline diluted earnings per share fell by 10.3% to 108.0p from
120.4p. In constant currencies, earnings per share on the same
basis fell by 8.1%. Reported diluted earnings per share fell by
40.8% to 84.3p from 142.4p and decreased 38.9% in constant
currencies.
As outlined in our Investor Day presentation, despite the
reduction in diluted earnings per share, your Board proposes to
maintain the final dividend of 37.3p per share, which, together
with the interim dividend of 22.7p per share, makes a total of
60.0p per share for 2018, the same as the prior year. This
represents a dividend pay-out ratio of 56%, compared with 50% last
year. The record date for the final dividend is 14 June 2019,
payable on 8 July 2019.
Further details of WPP’s financial performance are provided in
Appendix 1.
Regional review
The pattern of revenue and revenue less pass-through costs
growth differed regionally. The tables below give details of
revenue and revenue less pass-through costs, revenue and revenue
less pass-through costs growth by region for 2018, as well as the
proportion of Group revenue and revenue less pass-through costs and
operating profit and operating margin by region:
Revenue analysis
£ million
2018 ∆ reported
∆ constant15
∆ LFL16
% group
2017 %
group N. America 5,371 -5.1%
-1.9% -3.0% 34.4%
5,659 35.8% United Kingdom 2,189
2.6% 2.6% 1.5%
14.0% 2,133 13.5% W Cont. Europe
3,335 3.2% 3.5%
1.7% 21.4% 3,231 20.4%
AP, LA, AME, CEE17
4,707
-1.6%
3.8%
4.4%
30.2%
4,781
30.3%
Total Group 15,602
-1.3% 1.5% 0.8%
100.0% 15,804
100.0%
Revenue less pass-through costs analysis
£ million
2018 ∆ reported ∆ constant
∆ LFL % group
2017
% group N. America 4,474
-6.7% -3.5% -4.2% 34.9%
4,794 36.4% United Kingdom
1,691 0.2% 0.2%
-0.5% 13.2% 1,688 12.8% W
Cont. Europe 2,736 4.0%
4.1% 2.0% 21.3% 2,631
20.0% AP, LA, AME, CEE
3,926
-3.2%
2.0%
2.5%
30.6%
4,057
30.8%
Total Group 12,827
-2.6% 0.2% -0.4%
100.0% 13,170
100.0%
Operating profit analysis (Headline PBIT)
£ million
2018 % margin*
2017 % margin* N. America 804
18.0% 937 19.6% United
Kingdom 245 14.5% 280
16.6% W Cont. Europe 372
13.6% 376 14.3% AP, LA, AME, CEE
626 15.9% 674
16.6%
Total Group 2,047 16.0% 2,267
17.2%
* Headline PBIT as a percentage of revenue less pass-through
costs
North America constant currency revenue less pass-through
costs was down 4.5% in the final quarter, the same as the third
quarter, and down 5.7% like-for-like, a slight deterioration on the
third quarter of -5.3%. This reflects continuing challenges in our
advertising businesses, with data investment management and
healthcare also slower, partly offset by a significant improvement
in public relations and public affairs. On a full year basis,
constant currency revenue less pass-through costs was down 3.5%,
with like-for-like down 4.2%.
United Kingdom constant currency revenue less
pass-through costs was down 2.4% in the final quarter and down 2.7%
like-for-like, slightly weaker than the -2.0% shown in quarter
three. Media investment management and the specialist
communications businesses were particularly strong with data
investment management improving. Our public relations and public
affairs and direct, interactive and eCommerce businesses were
slower. On a full year basis, constant currency revenue less
pass-through costs was up 0.2%, with like-for-like down 0.5%.
Western Continental Europe constant currency revenue less
pass-through costs was up 4.1% in the final quarter, a significant
improvement on the growth in quarter three of 1.3%. On a
like-for-like basis revenue less pass-through costs was also up
4.1%, the strongest quarter of the year, and compared to -0.4% in
quarter three. Twelve of the Group’s top 14 markets showed
significant growth in quarter four, particularly Austria, Belgium,
Denmark, Finland, Germany, Italy, Netherlands, Portugal, Sweden and
Turkey. For the year, Western Continental Europe constant currency
revenue less pass-through costs grew 4.1% with like-for-like up
2.0%, the second strongest performing region.
In Asia Pacific, Latin America, Africa & the Middle East
and Central & Eastern Europe, on a constant currency basis,
revenue less pass-through costs was up 0.4% in the fourth quarter
and up 2.6% like-for-like, slightly above the third quarter growth
of 2.4%. In the fourth quarter, Latin America, grew over 7%,
stronger than the third quarter, with Central & Eastern
Europe showing double digit growth in the fourth quarter
compared with almost 5% in quarter three. Asia Pacific and
Africa & the Middle East were slightly weaker. On a full
year basis, constant currency revenue less pass-through costs
growth in the region was 2.0% with like-for-like growth 2.5%, the
strongest performing region.
Business sector review
The pattern of revenue and revenue less pass-through costs
growth also varied by sector and operating brand. The tables below
give details of revenue and revenue less pass-through costs,
revenue and revenue less pass-through costs growth by sector, as
well as the proportion of Group revenue and revenue less
pass-through costs for 2018 and operating profit and operating
margin by sector:
Revenue analysis
£ million
2018 ∆ reported
∆ constant18
∆ LFL19
% group
2017 %
group
AMIM20
7,132 -3.2% -0.4%
1.0% 45.6% 7,369
46.6% Data Inv. Mgt. 2,582 -4.5%
-1.8% -2.0% 16.6%
2,703 17.1%
PR & PA21
1,211 0.6% 3.4%
3.1% 7.8% 1,204
7.6%
BC, HW & SC22
4,677 3.3% 6.3%
1.5% 30.0% 4,528
28.7%
Total Group 15,602
-1.3% 1.5% 0.8%
100.0% 15,804
100.0%
Revenue less pass-through costs analysis
£ million
2018 ∆ reported ∆ constant
∆ LFL % group
2017
% group AMIM 5,530 -6.1%
-3.3% -1.2% 43.1%
5,889 44.7% Data Inv. Mgt. 1,966
-4.2% -1.3% -1.8%
15.3% 2,052 15.6% PR & PA
1,136 -0.4% 2.5%
2.6% 8.9% 1,141
8.7% BC, HW & SC 4,195 2.6%
5.6% 0.6% 32.7%
4,088 31.0%
Total Group
12,827 -2.6% 0.2%
-0.4% 100.0%
13,170 100.0%
Operating profit analysis (Headline PBIT)
£ million
2018 % margin*
2017 % margin* AMIM 972
17.6% 1,109 18.8% Data Inv. Mgt.
301 15.3% 350
17.1% PR & PA 184 16.2%
183 16.1% BC, HW & SC
590 14.1% 625 15.3%
Total Group 2,047 16.0% 2,267
17.2%
* Headline PBIT as a percentage of revenue less pass-through
costs
Advertising and Media Investment Management
In constant currencies, advertising and media investment
management revenue less pass-through costs was down 1.6% in the
fourth quarter, a significant improvement on the -6.5% in the third
quarter and the strongest quarter of the year. On a like-for-like
basis revenue less pass-through costs was up 0.4% in the fourth
quarter, the first quarter of positive growth, with both our
advertising and media investment businesses showing considerable
improvement over the third quarter. However, despite this
improvement, our advertising businesses remain under pressure.
The strong revenue less pass-through costs growth across most of
the Group’s media investment management businesses, offset by
slower growth in our advertising businesses in most regions,
resulted in the combined reported operating margin of this sector
being down 1.2 margin points at 17.6% and down 1.4 margin points in
constant currency.
Data Investment Management
In constant currencies, data investment management revenue less
pass-through costs was down 2.8% in the fourth quarter, and down
2.8% like-for-like. On a full year basis, constant currency revenue
less pass-through costs was down 1.3%, down 1.8% like-for-like.
Geographically, revenue less pass-through costs was up strongly in
Asia Pacific and Latin America, but North America was weaker.
Kantar Worldpanel and Kantar Media showed strong like-for-like
revenue less pass-through costs growth, with Kantar Insights,
Kantar Health, Kantar Public and Lightspeed less robust. Reported
operating margins were down 1.8 margin points to 15.3% and down 1.8
margin points in constant currency.
Public Relations and Public Affairs
In the fourth quarter, in constant currencies and like-for-like,
our public relations and public affairs businesses were the
strongest performing sector, as they were in the first half and
third quarter, with growth of 3.3% and 1.2% respectively. On a full
year basis, constant currency revenue less pass-through costs grew
2.5% with like-for-like growth 2.6%. Geographically, all regions
showed strong growth, with the United Kingdom and Africa & the
Middle East particularly strong. Cohn & Wolfe, H+K Strategies
and the specialist public relations and public affairs businesses
Finsbury, Hering Schuppener and Buchanan, performed particularly
well. Overall operating margins improved 0.1 margin points to 16.2%
and by 0.1 margin points in constant currency.
Brand Consulting, Health & Wellness and Specialist
Communications
Our brand consulting, health & wellness and specialist
communications businesses (including direct, interactive and
eCommerce), performed less well in the fourth quarter with constant
currency revenue less pass-through costs up 0.2%, compared with
6.5% in the third quarter, with like-for-like down 1.6%, as our
healthcare businesses in North America and some direct, interactive
and eCommerce businesses came under pressure. On a full year basis,
revenue less pass-through costs was up 5.6% in constant currency
and up 0.6% like-for-like. In brand consulting, Landor and FITCH
performed strongly, and in the direct, interactive and eCommerce
businesses, Wunderman, Hogarth, AKQA, Blue State Digital, F.biz and
Deeplocal performed well. Operating margins, for the sector as a
whole, were down by 1.2 margin points to 14.1% and down 1.3 margin
points in constant currency, with operating margins negatively
affected as parts of our direct, interactive and eCommerce, brand
consulting and healthcare businesses in North America slowed.
Cash flow highlights
In 2018, operating profit was £1.431 billion, depreciation,
amortisation and goodwill impairment £728 million, non-cash
share-based incentive charges £85 million, working capital and
provisions inflow £166 million, net interest paid £162 million, tax
paid £384 million, capital expenditure £375 million, earnout
payments £120 million and other net cash outflows £266 million,
principally £235 million gains on disposal of investments and
subsidiaries. Free cash flow available for debt repayment,
acquisitions (excluding earnouts), share buy-backs and dividends
was, therefore, £1.103 billion.
This free cash flow was enhanced by £849 million of proceeds
from the disposal of associates and investments, offset by £289
million in cash acquisition costs (investments and new acquisition
payments), £207 million in share buy-backs and £747 million in
dividends, a net outflow of £394 million. This resulted in a net
cash inflow of £709 million.
Free cash flow conversion23 in 2018 was 81%.
A summary of the Group’s unaudited cash flow statement and notes
as at 31 December 2018 are provided in Appendix 1.
Balance sheet highlights
Average net debt in 2018 was £4.966 billion, compared to £5.125
billion in 2017, at 2018 exchange rates. On 31 December 2018 net
debt was £4.017 billion, against £4.483 billion on 31 December
2017, a decrease of £466 million (a decrease of £605 million at
2018 exchange rates). The reduced period end debt figure reflects
the benefit of £849 million proceeds in relation to disposal of our
interests in certain associates and investments, the principal of
which were Globant S.A., Imagina, AppNexus and Bruin. This trend
has continued in the first seven weeks of 2019, with average net
debt of £3.954 billion, compared with £4.519 billion in the same
period in 2018, a decrease of £565 million (a decrease of £691
million at 2019 exchange rates).
The net debt figure of £4.017 billion at 31 December, compares
with a current market capitalisation of approximately £10.420
billion ($13.821 billion), giving an enterprise value of £14.437
billion ($19.149 billion). The average net debt to EBITDA ratio at
2.1x, is above the revised target range of 1.5-1.75x to be achieved
by the end of 2021.
A summary of the Group’s unaudited balance sheet and notes as at
31 December 2018 are provided in Appendix 1.
Return of funds to shareholders
Dividends paid in respect of 2018 will total approximately £753
million for the year. Funds returned to shareholders in 2018
totalled £955 million, including share buy-backs.
In 2018, 16.6 million shares, or 1.3% of the issued share
capital, were purchased at a cost of £207 million.
Progress on growth strategy
In the last six months we have made significant progress in
simplifying our operations to make them more client-centric and
improving WPP’s financial position.
Milestones include the launch of a new vision, offer and brand
identity for WPP, the creation of two new integrated networks
(VMLY&R and Wunderman Thompson), the realignment of the US
healthcare agencies with major networks, the formation of WPP’s
first executive committee and the initiation of the process to find
a financial and strategic partner for Kantar.
As part of the restructuring plan we outlined in the Investor
Day presentation, 70 of the 100 planned office mergers have been
completed, 57 of the 80 offices have been closed and approximately
2,650 of the 3,500 planned redundancies have been actioned. The
anticipated gross savings remain in line with the £160 million
estimate in December. As we outlined in the Investor Day a
proportion of these gross savings will be reinvested in talent and
technology development.
In addition, 30 disposals were completed in 2018 realising
proceeds of £849 million, helping to strengthen the Group’s balance
sheet and improve leverage. The disposal programme will continue in
2019 and a further 6 disposals have been completed
year-to-date.
Outlook
Financial guidance
Our 2019 targets are:
- Like-for-like revenue less pass-through
costs down 1.5% to 2.0%, with stronger headwinds in the first half,
due to client losses in 2018
- Headline operating margin to revenue
less pass-through costs down around 1.0 margin point on a constant
currency basis (excluding the impact of IFRS 16: Leases)
In 2019, our primary focus will remain on addressing our issues
in North America. We will achieve this through investment in
leadership, creative talent and technology and delivering on the
potential of the newly merged businesses of VMLY&R and
Wunderman Thompson. In addition, ensuring the gross benefits from
the restructuring actions taken in 2018 and continuing to be taken
in 2019 are realised. To help drive top-line growth, the incentive
plans for 2019 will include up to half of the incentive pools being
funded based on improving growth in revenue less pass-through
costs, with the remaining proportion based on growth in operating
profit and margin.
Medium-term financial targets
At our Investor Day in December, we set out our new medium-term
financial targets that will allow us to invest in talent and
technology, improve our competitive position and deliver
sustainable long-term growth rates. Our targets, to be achieved by
the end of 2021, are:
- Organic growth (defined as
like-for-like revenue less pass-through costs growth) in line with
peers
- Headline operating margin (excluding
the impact of IFRS 16: Leases) of at least 15%
- Free cash flow conversion of
80%-90%
Uses of funds
As per the Investor Day in December, over the next three years
we will prioritise the dividend over share buy-backs and will
balance targeted M&A with divestments.
To access WPP's 2018 preliminary results financial tables,
please visit www.wpp.com/investors
This announcement has been filed at the Company Announcements
Office of the London Stock Exchange and is being distributed to all
owners of Ordinary shares and American Depository Receipts. Copies
are available to the public at the Company’s registered office.
The following cautionary statement is included for safe harbour
purposes in connection with the Private Securities Litigation
Reform Act of 1995 introduced in the United States of America. This
announcement may contain forward-looking statements within the
meaning of the US federal securities laws. These statements are
subject to risks and uncertainties that could cause actual results
to differ materially including adjustments arising from the annual
audit by management and the Company’s independent auditors. For
further information on factors which could impact the Company and
the statements contained herein, please refer to public filings by
the Company with the Securities and Exchange Commission. The
statements in this announcement should be considered in light of
these risks and uncertainties.
1 Percentage change in reported sterling2 Percentage change at
constant currency exchange rates3 Like-for-like growth at constant
currency exchange rates and excluding the effects of acquisitions
and disposals4 Prior year figures have been restated for the impact
of the adoption of IFRS 15: Revenue from Contracts with Customers
as described in note 2 of Appendix 15 Headline earnings before
interest, tax, depreciation and amortisation6 Headline profit
before interest, tax and share of results of associates7 Headline
operating profit as a percentage of revenue less pass-through
costs8 Headline profit before interest and tax9 Headline profit
before interest and tax as a percentage of revenue less
pass-through costs, previously referred to as revenue less
pass-through costs margin10 Diluted earnings per share based on
headline earnings11 Diluted earnings per share based on reported
earnings12 Headline operating profit (excluding income from
associates) as a percentage of revenue less pass-through costs13
Headline PBIT as a percentage of revenue less pass-through costs14
Short and long-term incentives and the cost of share-based
incentives15 Percentage change at constant currency exchange
rates16 Like-for-like growth at constant currency exchange rates
and excluding the effects of acquisitions and disposals17 Asia
Pacific, Latin America, Africa & Middle East and Central &
Eastern Europe18 Percentage change at constant currency exchange
rates19 Like-for-like growth at constant currency exchange rates
and excluding the effects of acquisitions and disposals20
Advertising, Media Investment Management21 Public Relations &
Public Affairs22 Brand Consulting, Health & Wellness and
Specialist Communications (including direct, interactive and
eCommerce)23 Free cash flow conversion is the ratio of free cash
flow to headline earnings. Free cash flow is after earnouts and
changes in working capital and before new acquisition spend,
disposals and shareholder distributions
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190301005159/en/
Mark ReadAndrew ScottPaul RichardsonLisa HauChris Wade+44 20
7282 4600Kevin McCormackFran Butera+1 212 632 2235Juliana Yeh+852
2280 3790Richard Oldworth,Buchanan Communications+44 20 7466 5000
+44 7710 130 634wpp.com/investors
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