2021 INTERIM RESULTS 5 August 2021 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This presentation contains statements that are, or may be deemed to be, “forward-looking statements”. Forward-looking statements give the Group’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. They use words such as ‘anticipate’, ‘estimate’, ‘expect’, ‘intend’, ‘will’, ‘project’, ‘plan’, ‘believe’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Other than in accordance with its legal or regulatory obligations (including under the Market Abuse Regulations, UK Listing Rules and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority), the Group undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Investors should, however, consult any additional disclosures that the Group may make in any documents which it publishes and/or files with the US Securities and Exchange Commission (SEC). All investors, wherever located, should take note of these disclosures. 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. Forward-looking statements are subject to assumptions, inherent risks and uncertainties, many of which relate to factors that are beyond the Group’s control or precise estimate. The Group cautions investors that a number of important factors, including those in this presentation, could cause actual results to differ materially from those expressed or implied in any forward-looking statement. Such factors include, but are not limited to, those discussed under Item 3.D ‘Risk factors’ in the Group’s Annual Report on Form 20-F for FY 2020 and any impacts of the COVID-19 pandemic. 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 presentation.
2021 INTERIM RESULTS 2 AGENDA
1. FIRST HALF HIGHLIGHTS 2. FINANCIAL PERFORMANCE 3. BUSINESS UPDATE 4. Q&A FIRST HALF: STRONG PERFORMANCE
• H1 LFL revenue less pass-through costs +11.0% (H1 20: -9.5%) Q1 +3.1% (Q1 20: -3.3%), Q2 +19.3% (Q2 20: -15.1%)
• Strong growth across the board in Q2: GIA +19.2% (Q2 20: -15.7%), PR +12.9% (Q2 20: -7.5%), Specialist Agencies +27.8% (Q2 20: -16.3%)
• Business mix shifting to faster-growth areas: - 26% Experience, Commerce and Technology vs 25% in 2019 - GroupM billings 43% digital, with 61% growth in commerce media
• $2.9 billion in net new business YTD: AstraZeneca, Bumble, JP Morgan Chase, Pernod Ricard; US Navy retention
• Leading in creativity: most creative company of the year at 2021 Cannes Lions
• Interim dividend +25% to 12.5p; £248m share buybacks in H1; further £350m in H2
• Guidance raised: LFL revenue less pass-through costs 9-10%; headline operating margin towards the upper end of 13.5-14.0% range
• Back to 2019 levels a year ahead of plan: H1 +0.5% on 2019, Q2 +1.3% on 2019; positive momentum 2021 INTERIM RESULTS 4 FINANCIAL PERFORMANCE UNAUDITED HEADLINE¹ IFRS INCOME STATEMENT
HALF YEAR TO 30 JUNE 2021 £M 2020 £M Δ REPORTED Δ LFL² Continuing operations • Disposals account for 0.2% Revenue 6,133 5,583 9.8% 16.1% reduction in revenue less Revenue less pass-through costs 4,899 4,668 5.0% 11.0% pass-through costs with currency 5.8% unfavourable Operating profit 590 382 54.4% Income from associates 29 - - • Associate income up by PBIT 619 382 62.0% £29m as we lap COVID related downsides Net finance costs (117) (106) (10.4%) Profit before tax 502 276 81.9% • Diluted EPS from continuing Tax at 24.1% (2020: 23.1%) (115) (64) (78.9%) operations up 86% Profit after tax 387 212 82.8% Non-controlling interests (34) (21) (64.0%)
Profit attributable to 353 191 85.0% shareholders Diluted EPS 28.7p 15.4p 86.4% Operating profit margin³ 12.1% 8.2% 3.9pt EBITDA 699 480 45.8%
1 Figures before goodwill and intangibles charges, gains/losses on step-ups, gains/losses on disposals of subsidiaries 2 Like-for-like growth at constant currency exchange rates and excluding effect and investments, investment and other write-downs, share of exceptional gains/losses of associates, restructuring of acquisitions and disposals 6 and transformation costs, restructuring costs in relation to COVID-19, litigation settlement and revaluation of financial 3 Margin as % of revenue less pass-through costs 2021 INTERIM RESULTS instruments RECONCILIATION OF HEADLINE OPERATING PROFIT TO REPORTED OPERATING PROFIT
2021 2020¹ Δ HALF YEAR TO 30 JUNE £M £M £M Headline operating profit 590 382 208 Goodwill impairment - (2,813) 2,813 Amortisation and impairment of intangibles (30) (53) 23 Investment and other write-downs - (226) 226 Restructuring and transformation costs (34) (18) (16) Restructuring costs in relation to COVID-19 (19) (39) 20 (Loss)/gain on disposal of investments & (1) 16 (17) subsidiaries Litigation settlement (22) - (22) Non headline items (106) (3,133) 3,027 Reported operating profit/(loss) 484 (2,751) 3,235
2021 INTERIM RESULTS 7 1. 2020 figures have been restated as described in note 2 of Appendix 1 to the 2021 Interim Results press release GLOBAL INTEGRATED AGENCIES: GROUPM VERY STRONG, INTEGRATED AGENCIES RECOVERING
£M H1 2021 £M Δ REPORTED Δ VS 20 LFL Δ VS 19 LFL H1 PERFORMANCE Revenue less pass-through costs 4,069 4.4% 10.9% 0.4% • GroupM +17.0% in H1 (Q2: +28.6%) – Headline operating profit 483 71.1% strong global recovery in ad spend Headline operating margin 11.9% +4.7pt • Growth driven by leadership in programmatic and CTV LFL REVENUE LESS PASS-THROUGH COSTS GROWTH Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 • Encouraging two-year growth from 25.0% 19.2% GroupM and VMLY&R 20.0% 15.0% • Q2 double-digit LFL growth at 10.0% Hogarth, Wunderman Thompson 5.0% 2.8% and Ogilvy 0.0%
(5.0%) (2.6%) (10.0%) (6.7%) (6.3%) (15.0%) (20.0%) (15.7%)
Note: 2020 growth rates have not been restated for the reassignment of AKQA, Geometry, GTB and International Healthcare from Specialist Agencies to Global Integrated Agencies from Q1 2021 2021 INTERIM RESULTS 8 PUBLIC RELATIONS: INCREASING IMPORTANCE OF REPUTATION TO BRAND
£M H1 2021 £M Δ REPORTED Δ VS 20 LFL Δ VS 19 LFL H1 PERFORMANCE Revenue less pass-through costs 429 0.7% 7.4% 2.6% • Continued strong demand for Headline operating profit 63 (11.7%) strategic advice, increasing client Headline operating margin 14.8% (2.1pt) focus on purpose • Up 2.6% on 2019 LFL REVENUE LESS PASS-THROUGH COSTS GROWTH Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 • BCW and H+K both growing 15.0% 12.9% double-digits LFL in Q2
10.0% • Finsbury Glover Hering merger completed 5.0% 2.0% • Margin affected by relatively strong 0.0% prior year performance, investment (1.4%) (5.0%) (2.9%) (4.1%) in people and merger-related costs
(10.0%) (7.5%)
Note: 2020 growth rates have not been restated for the reassignment of AKQA, Geometry, GTB and International Healthcare from Specialist Agencies to Global Integrated Agencies from Q1 2021 2021 INTERIM RESULTS 9 SPECIALIST AGENCIES: RAPID RECOVERY IN BRAND CONSULTING
£M H1 2021 £M Δ REPORTED Δ VS 20 LFL Δ VS 19 LFL H1 PERFORMANCE Revenue less pass-through costs 401 16.1% 17.1% 3.3% • Resurgence in demand for brand Headline operating profit 44 56.6% consultancy Headline operating margin 11.0% 2.9pt • Landor, Superunion and Design Bridge all performing very strongly LFL REVENUE LESS PASS-THROUGH COSTS GROWTH Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 • Significant growth at CMI, our 35.0% specialist healthcare media 30.0% 27.8% 25.0% business 20.0% 15.0% 10.0% 7.5% 5.0% 0.0% (5.0%) (10.0%) (7.4%) (8.6%) (15.0%) (13.9%) (20.0%) (16.3%)
Note: 2020 growth rates have not been restated for the reassignment of AKQA, Geometry, GTB 2021 INTERIM RESULTS 10 and International Healthcare from Specialist Agencies to Global Integrated Agencies from Q1 2021 MAJOR MARKETS PERFORMANCE1
USA UK GERMANY Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 31.8% 20.3% 12.6% 0.7% 3.9% 2.5%
(1.9%) (1.8%) (0.8%) (5.5%) (6.2%) (4.2%) (6.5%) (7.4%) (4.3%) (9.6%) (11.6%) (23.3%)
GREATER CHINA2 AUSTRALIA Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
18.4% 8.4% 1.4%
(3.1%) (5.0%) (9.4%) (7.6%) (12.1%) (13.3%) (16.7%) (21.3%) (20.3%)
1. Like-for-like revenue less pass-through costs growth vs prior year from continuing operations 2.Includes Hong Kong and Taiwan 2021 INTERIM RESULTS 11 OTHER MAJOR MARKETS PERFORMANCE1
INDIA FRANCE CANADA Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
33.5% 30.0% 27.9% 15.7% 6.1% 0.5% 3.6%
(0.5%) (4.0%) (1.0%) (1.1%) (8.9%) (13.1%) (12.7%) (16.3%) (20.6%) (25.1%) (27.9%)
ITALY SPAIN Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 52.7%
12.4% 15.8% 3.8%
(5.3%) (4.7%) (7.4%) (11.9%) (16.2%) (17.2%) (12.8%) (29.9%)
1. Like-for-like revenue less pass-through costs growth vs prior year from continuing operations 2021 INTERIM RESULTS 12 CHANGE IN HEADLINE¹ OPERATING MARGIN Continuing operations
2021 2020 Δ HALF YEAR TO 30 JUNE £M £M £M % • Reported revenue less pass-through costs up by £231m or 5.0% Revenue less pass-through costs 4,899 4,668 231 5.0% • Staff costs excluding incentives down by Staff costs pre incentives (3,229) (3,282) 53 1.6% 1.6% Establishment (265) (314) 49 15.8% • Establishment costs down by 15.8%, but IT IT (277) (274) (3) (1.1%) increases by 1.1% due to investments Personal (52) (88) 36 40.7% • Personal expenses down by 40.7% due to Other operating expenses (242) (280) 38 13.4% reduced travel etc Operating expenses (4,065) (4,238) 173 4.1% • Other operating expenses down by 13.4% Operating profit pre incentives 834 430 404 94.0% • Headline operating profit pre incentives Staff incentives (244) (48) (196) (411%) increases by £404m or 94.0%, with pre incentive margin of 17.0% up 7.8 margin Operating profit 590 382 208 54.4% points Operating profit Margin • Staff incentives of £244m up 411% Pre incentives 17.0% 9.2% 7.8pt • Headline operating profit increases by Post incentives 12.1% 8.2% 3.9pt £208m or 54.4%, with margin of 12.1% up 3.9 margin points
1. Figures before goodwill and intangibles charges, gains/losses on step-ups, gains/losses on disposals of subsidiaries and investments, investment and other write-downs, share of exceptional gains/losses of associates, restructuring and transformation costs, restructuring costs in relation to COVID-19 and litigation settlement 2021 INTERIM RESULTS 13 CHANGE IN OPERATING MARGIN YEAR ON YEAR
H2 margin considerations: 12.1% • Full effect of June 2021 salary review reduces operating leverage 8.2% • Re-opening to drive higher personal costs year-on-year • Continued impact from incentives but lower drag year-on-year than H1
2021 INTERIM RESULTS 14 PROGRESS ON TRANSFORMATION PROGRAMME
SAVINGS BY 2025… UPDATE ON PROGRESS
Enterprise IT: new leadership; extensive Shared services: migrating Finance and HR benchmarking, huge simplification services to global and regional hubs. £250M opportunities: • Transferred UK, UAE, China & • >2k entities recording IT costs Singapore. 2 further markets on the FUNCTIONAL • New global platform roadmap roadmap for H2 EFFECTIVENESS/ SHARED • Transformation to reduce the gap with • Appointed new Chief Global Business SERVICES industry benchmark MARGINServices IMPROVEMENT Officer to lead programme
Procurement: £2bn indirect spend; Property: delivering targeted savings; £200M hundreds of opportunities, e.g.: estate costs <6% of 2021 revenue less pass- EFFICIENCY • Car fleet: consolidating 100+ suppliers through costs (PROCUREMENT AND to 2. Additional net zero benefit • Further 10 campuses to be occupied by PROPERTY) • Pharmacy benefits: non-competitive the end of 2021 RFP, 20% cost saving • 85k people across 65 campuses by 2025 Business unit rationalisation: Travel savings: £150M • Creative agency operating units • Permanently reducing air travel by reduced 42% since 2019 c.1/3 vs. 2019 levels OPERATING MODEL • Reducing statutory entities
Savings 2021 INTERIM RESULTS 15 FREE CASH FLOW AND FREE CASH FLOW CONVERSION HALF YEAR TO 30 JUNE 2021 £M 2020¹ £M Operating profit 484 (2,740) - Continuing Operations 484 (2,750) - Discontinued Operations - 10 Depreciation & amortisation charges 250 306 - Depreciation & amortisation ex IFRS 16 111 151 - Depreciation of right-of-use assets 139 155 Impairments and investment write-downs 8 3,039 Lease payments (including interest) (202) (203) Non-cash compensation 44 31 Working capital, other receivables, payables and provisions (505) (751) - Working capital (464) (456) - Other receivables, payables and provisions (41) (295) Net interest paid & similar charges (65) (32) Tax paid (163) (201) Capital expenditure (138) (141) Earnout payments (14) (88) Other (44) (45) Free cash flow (345) (825)
2021 INTERIM RESULTS 16 1. 2020 figures have been restated as described in note 2 of Appendix 1 to the 2021 Interim Results press release USES OF CASH FLOW
HALF YEAR TO 30 JUNE 2021 £M 2020 £M Free cash flow (345) (825)
Net (acquisitions)/disposals ex earnout payments (209) 161
- Disposal proceeds 43 207
- Net initial payments1 (252) (46)
Net cash outflow before distributions (554) (664)
Distributions to shareholders (298) (286)
- Dividends - -
- Share purchases (298) (286)
Net cash flow (852) (950)
1. Net initial payments comprise purchases of other investments (including associates) and non–controlling interests less cash acquired 2021 INTERIM RESULTS 17 SIGNIFICANT IMPROVEMENT IN NET DEBT¹ SINCE JUNE 2020(£M)
(1,549)
(2,726)
1. Itemised movements in net debt represent management figures, which may vary from the presentation of the cash flow under IFRS 2. Acquisitions/disposals include earnout payments 2021 INTERIM RESULTS 18 3. Dividends to shareholders LEVERAGE METRICS Continuing operations
HALF YEAR TO 30 JUNE 2021 £M 2020 £M Δ £M Average net debt¹ on constant currency basis (1,465) (2,461) 996 Average net debt¹ on reportable basis (1,465) (2,496) 1,031 Rolling 12 month average net debt¹ on reportable basis (1,826) (3,341) 1,515 Net debt¹ at 30 June on constant currency basis (1,544) (2,611) 1,067 Net debt¹ at 30 June on reportable basis (1,544) (2,726) 1,182 Available liquidity at 30 June 5,157 4,714 443 Headline finance costs¹,² (71) (56)
Interest cover¹ on headline operating profit 8.3x 6.8x
Headline EBITDA¹ 699 480 Rolling 12 month headline EBITDA¹ 1,700 1,579 Rolling average net debt/headline EBITDA¹ 1.1x 2.1x
1. Net debt, headline finance costs, interest cover, headline EBITDA, exclude impact of IFRS 16 2021 INTERIM RESULTS 19 2. Headline finance costs of £71m (2020: £56m) excludes £46m (2020: £50m) IFRS 16 impact of all leases IMPACT OF FX ON REVENUE LESS PASS-THROUGH COSTS¹
20/FY Act 21/Q1 Act 21/Q2 Act 21/Q3 Est 21/Q4 Est 21/FY Est 0% YTD currency (1.2%) • (1%) headwind (5.8%)
(3.8%) (2%) (4.3%) • 2020 full year (4.9%) (5.0%) headwind (1.2%) (3%)
(7.5%) (4%) • 2021 full year currency headwind (5.0%) at (5%) latest exchange rates²
(6%)
(7%)
(8%)
1. Continuing operations 2021 INTERIM RESULTS 20 2. Q2-Q4 uses 18 June 2021 exchange rates, including £:$1.38, £:€1.16 DIVIDEND, SHARE BUYBACKS AND GUIDANCE
• Interim dividend of 12.5p declared – up 25% YoY • £248m of share buybacks completed in H1, additional £350m planned for H2 • 2021 guidance:
− LFL revenue less pass-through costs growth 9-10% (was mid-single- digits %) − Headline operating towards the upper end of 13.5-14.0% range − Capex £450-500m and net working capital outflow £200-300m
• Some short-term uncertainties remain – COVID variants, travel restrictions, economic outlook • Medium-term guidance unchanged
2021 INTERIM RESULTS 21 BUSINESS UPDATE POST-COVID STRUCTURAL GROWTH DRIVERS
AD SPEND: 2021-24 CAGR 6.9% DIGITAL MEDIA: 2021-24 CAGR 9.7% 1,000 800 Jun-20 Dec-20 Jun-21 Jun-20 Dec-20 Jun-21 800 600 600 400 400 200 200 0 0 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024
ECOMMERCE: PENETRATION STILL LOW ATTRACTIVE SECTOR EXPOSURE
40.0% 2018 2020 2024 SALES MIX 2 YEAR LFL 30.0%
20.0% CPG 24% 7.2% 10.0% Tech 18% 12.7% 0.0% Healthcare 12% 10.8%
2021 INTERIM RESULTS 23 LEADING POSITIONS GLOBAL INTEGRATED AGENCIES MEDIA INTEGRATED CREATIVE AGENCIES • 3.7% 2-year growth • Four distinctive global networks • 43% digital mix • Leading in creativity: 2021 Cannes winners • Commerce media +61% in H1 • Strong positions in ecommerce, • Finecast H1 +113% marketing technology • Xaxis H1 +56% • VMLY&R 11.7% 2-year growth in H1 • Creation of Choreograph PR AND PUBLIC AFFAIRS SPECIALIST COMMS • 2.6% 2-year growth • High demand for branding and • Three leading networks in BCW, H+K innovation driving strong growth at and Finsbury Glover Hering Landor & Fitch, Superunion, Design Bridge • Increasingly part of integrated services • Strength in specialist healthcare media • Corporate investment in reputation, through CMI employees and purpose
2021 INTERIM RESULTS 24 SOLID NEW BUSINESS PERFORMANCE Wins/retentions Losses ACCOUNT M/C/P REGION WPP AGENCY ACCOUNT M/C/P REGION WPP AGENCY (Flumist) C NA C Global
(Vaccines) P Global M Europe
M Global (Digital) M NA
(Commercial vehicles) C Germany (US Shopper) C NA
C Dubai M NA
M Global
(India and ANZ) M APAC
(Social Brand Agency) C NA
C NA
(Absolut) C Global
C NA
C NA
M Global
C Global
2021 INTERIM RESULTS 25 CREATIVITY: BUILDING THE MOST CREATIVE COMPANY IN THE WORLD
8 other WPP agencies
81 42 27 19 21 Lions Lions Lions Lions Lions
2021 INTERIM RESULTS 26 PURPOSE A STRONG BUSINESS DRIVER 9 of our top 10 clients working with us on purpose-related activities 2.5X 85% 72% 90% BRAND VALUE BELIEVE BUY BELIEVE for brands perceived brands should be more environmentally companies have as having a high positive about something more friendly products an environmental and impact on society1 than profit2 than 5 years ago3 social responsibility4
1. Kantar Purpose 2020 Report 2. Generation Z: Building a Better Normal, Wunderman Thompson Intelligence, Dec-20 3. Accenture, 2019 2021 INTERIM RESULTS 27 4. Bank of America Gen Z Primer SUMMARY
• Recovered to 2019 levels a year ahead of plan. Good momentum going into H2 and 2022: − Strong client demand across a range of services − Some markets still COVID-affected • Structural growth from changing consumer behaviour, client sectors and geographical exposure • Encouraging progress on creativity, purpose, new services and transformation programme
2021 INTERIM RESULTS 28 Q&A OTHER FINANCIAL INFORMATION UNAUDITED IFRS INCOME STATEMENT Δ CONSTANT YEAR TO 30 JUNE 2021 £M 2020 £M¹ Δ REPORTED CURRENCY Continuing operations Revenue 6,133 5,583 9.8% 15.8% • Share of associate Gross profit 936 778 20.4% 27.7% exceptional profit of Operating profit pre exceptional & goodwill/intangibles² 590 382 54.4% 66.5% £11m primarily comprises Net exceptional loss (76) (267) - - gain on disposal of Goodwill/intangible charges (30) (2,866) - - certain Kantar businesses Operating profit/(loss) 484 (2,751) - - partially offset by Income from associates 29 - - - amortisation and impairment of acquired Share of associate exceptional profit/(loss) 11 (51) - - intangible assets with PBIT 524 (2,802) - - Kantar Net finance costs (130) (375) (65.5%) (64.7%) Profit/(loss) before tax 394 (3,177) - - • Net finance costs Tax (107) (11) - - includes £12m loss (2020: Profit/(loss) after tax 287 (3,188) - - £269m loss) from revaluation and Non-controlling interests (34) (21) (64.0%) (71.7%) retranslation of financial Profit/(loss) attributable to shareholders: Continuing ops 253 (3,209) - - instruments Discontinued ops - (7) - - Total 253 (3,216) - - Total reported diluted EPS 20.6p (262.5p) - -
1. 2020 figures have been restated as described in note 2 of Appendix 1 to the 2021 Interim Results press release 2. Figures before goodwill and intangibles charges, gains/losses on step-ups, gains/losses on disposals of subsidiaries and investments, investment and other write-downs, share of exceptional gains/losses of associates, restructuring and transformation costs, restructuring costs in relation to COVID-19, litigation 2021 INTERIM RESULTS 31 settlement and revaluation of financial instruments REVENUE LESS PASS-THROUGH COSTS GROWTH VS PRIOR YEAR
Q1 Q2 H1 Continuing Operations:
Reported (1.4%) Reported 11.5% Reported 5.0%
FX (4.3%) FX (7.5%) FX (5.8%)
Acquisitions/ (0.2%) Acquisitions/ (0.3%) Acquisitions/ (0.2%) disposals disposals disposals
LFL 3.1% LFL 19.3% LFL 11.0%
2021 INTERIM RESULTS 32 REVENUE LESS PASS-THROUGH COSTS BY SECTOR1
HALF YEAR TO 30 JUNE 2021 £M 2020 £M2 Δ REPORTED Δ LFL
Global Integrated Agencies 4,069 3,897 4.4% 10.9%
Public Relations 429 426 0.7% 7.4%
Specialist Agencies 401 345 16.1% 17.1%
Total Continuing Operations 4,899 4,668 5.0% 11.0%
1. Continuing operations 2. During 2020, we announced the intention to combine Grey and AKQA into the AKQA Group, and to bring Geometry and GTB into VMLY&R, and International Healthcare into VMLY&R and Ogilvy. As a result AKQA, Geometry, GTB and International Healthcare are now reported within Global Integrated Agencies, 2021 INTERIM RESULTS 33 having previously been reported within Specialist Agencies. 2020 comparable figures have been adjusted by a total of £225m to reflect this change REVENUE LESS PASS-THROUGH COSTS BY REGION¹
HALF YEAR TO 30 JUNE 2021 £M 2020 £M Δ REPORTED Δ LFL
North America 1,817 1,856 (2.1%) 7.5%
UK 680 586 16.1% 16.9%
Western Continental Europe 1,050 920 14.2% 15.0%
Asia Pacific, Latin America, Africa & Middle East and 1,352 1,306 3.5% 10.5% Central & Eastern Europe
Total Continuing Operations 4,899 4,668 5.0% 11.0%
1. Continuing operations 2021 INTERIM RESULTS 34 REVENUE LESS PASS-THROUGH COSTS GROWTH¹ BY REGION LIKE-FOR-LIKE %
C. & E. Europe % Q1 Q2 H1 9.5 20.6 15.1
UK % North America % Q1 Q2 H1 3.9 31.8 16.9 Q1 Q2 H1 1.6 13.7 7.5 W. Cont. Europe % Q1 Q2 H1 3.7 27.1 15.0
Asia Pacific % Q1 Q2 H1 4.7 11.7 8.3
Africa & M. East % Q1 Q2 H1 (5.9) 19.2 6.0 Latin America % Q1 Q2 H1 10.2 30.5 20.3
% Q1 Q2 H1 Mature Markets 2.6 20.5 11.2 Faster Growing Markets 4.7 16.1 9.0 Total 3.1 19.3 11.0 1. Continuing operations 2021 INTERIM RESULTS 35 BRIC MARKETS PERFORMANCE1
CHINA GREATER CHINA² BRAZIL Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 29.8% 25.1% 18.4% 8.5% 3.5% 1.4%
(0.4%) (3.1%) (1.3%) (9.1%) (10.5%) (12.1%) (14.1%) (16.1%) (16.7%) (18.7%) (23.4%) (21.3%)
INDIA RUSSIA
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 30.0% 21.3% 24.4% 11.5% 6.1% 5.3%
(0.5%) (0.1%) (8.9%) (6.2%) (16.3%) (25.1%)
1. Like-for-like growth vs prior year from continuing operations 2. Includes Hong Kong and Taiwan 2021 INTERIM RESULTS 36 CLIENT SECTOR ANALYSIS
H1 REVENUE LESS PASS- Govt, Public THROUGH COSTS Travel & Sector & Non- GROWTH BY CLIENT Leisure Profit SECTOR Other (12.3)%+4.7% +6.5% Financial 3% 3% Services 5% CPG +11.3% +0.1% 24% 6% Telecom, Media & Entertainment (3.5)% 6%
Retail 11% +9.8% Tech & 18% Digital Services 12% +14.5%
Healthcare & 12% Pharma Automotive +13.4% +10.9%
% of total designated clients attributable to each industry for continuing operations in the first half, and includes an allocation of GroupM trading revenue less pass-through costs. These clients comprise 77% of WPP total revenue less 2021 INTERIM RESULTS 37 pass-through costs HEADLINE¹ OPERATING PROFIT AND MARGIN BY SECTOR²
OPERATING PROFIT £M OPERATING MARGIN³
HALF YEAR TO 30 JUNE 2021 2020⁴ 2021 2020⁴
Global Integrated Agencies 483 282 11.9% 7.2%
Public Relations 63 72 14.8% 16.9%
Specialist Agencies 44 28 11.0% 8.1%
Total Continuing Operations 590 382 12.1% 8.2%
1 Continuing operations 3 Margin as % of revenue less pass-through costs 2 Figures before goodwill and intangibles charges, gains/losses on step-ups, gains/losses on disposals of 4 During 2020, we announced the intention to combine Grey and AKQA into the AKQA Group, and to subsidiaries and investments, investment and other write-downs, share of exceptional gains/losses of bring Geometry and GTB into VMLY&R, and International Healthcare into VMLY&R and Ogilvy. As a associates, restructuring and transformation costs, restructuring costs in relation to COVID-19 and result AKQA, Geometry, GTB and International Healthcare are now reported within Global 2021 INTERIM RESULTS 38 litigation settlement Integrated Agencies, having previously been reported within Specialist Agencies HEADLINE¹ OPERATING PROFIT AND MARGIN BY REGION²
OPERATING PROFIT £M OPERATING MARGIN³
HALF YEAR TO 30 JUNE 2021 2020 2021 2020
North America 271 215 14.9% 11.6%
UK 83 35 12.3% 6.0%
Western Continental Europe 104 44 9.9% 4.8%
Asia Pacific, Latin America, Africa & Middle 132 88 9.7% 6.7% East and Central & Eastern Europe
Total Continuing Operations 590 382 12.1% 8.2%
1 Continuing operations 2 Figures before goodwill and intangibles charges, gains/losses on step-ups, gains/losses on disposals of subsidiaries and investments, investment and other write-downs, share of exceptional gains/losses of associates, restructuring and transformation costs, restructuring costs in relation to COVID-19 2021 INTERIM RESULTS 39 and litigation settlement 3 Margin as % of revenue less pass-through costs DEBT MATURITY PROFILE £M AT 30 JUNE 2021
£ TOTAL £ TOTAL CREDIT DRAWN 700 ◼ £ bonds £400m (2.875% Sep ’46) 400 400 ◼ US bond $220m (5.625% Nov ’43) 159 159 600 ◼ US bond $93m (5.125% Sep ’42) 67 67 ◼ £ bonds £250m (3.75% May ’32) 250 250 500 ◼ Eurobonds €600m (1.625% Mar ’30) 515 515 400 ◼ Eurobonds €750m (2.375% May ‘27) 644 644 Eurobonds €750m (2.25% Sep '26) 644 644 ◼ 300 ◼ Eurobond €500m (1.375% Mar ‘25)/£444m Swap1 444 444 ◼ US bond $750m (3.75% Sep '24) 542 542 200 Eurobonds €750m (3.0% Nov ’23)2 651 651 100 ◼ Eurobond €250m (3m EURIBOR + 0.45% Mar ’22) 215 215 ◼ US bond $500m (3.625% Jul ’21)3 362 362 0 Debt Facilities 4,893 4,893
Other facilities 1,808 -
Net cash, overdrafts & other adjustments – (3,349) Weighted Average Coupon 2.9% Total Borrowing Capacity / Net Debt 6,701 1,544 Weighted Average Maturity 6.9 years Available Liquidity £5,157M
Exchange Rates £/$ 1.3831 £/€ 1.1648 1. Swapped to £444m at 2.61% 2. €500m swapped to $604m at 4.03% 2021 INTERIM RESULTS 40 3. Make-Whole July 2021 USES OF FREE CASH FLOW FY JUNE YTD JUNE YTD FY TARGET 2021 2020 2020 (Disposals)/acquisitions (excluding earnouts): Acquisitions¹ c. £200M £252M £46M £144M Less disposals² c. £(200M) (£43M) £(207M) £(284M) Net (disposals)/acquisitions NEUTRAL £209M £(161M) £(140M) Share purchases: - £298M £286M £285M % of issued share capital - 2.1% 2.6% 2.6% Balance Sheet Headroom: Undrawn facilities & surplus cash - £5.2B £4.7B £6.4B Average net debt at 2021 exchange rates - £1.5B £2.5B £2.3B 30 June net debt at 2021 exchange rates £1.5B £2.6B £0.7B³
1. Acquisitions comprises initial cash payments net of cash acquired £37m (H1 2020 £6m, FY 2020 £33m), purchase of other investments £97m including £93m invested in Kantar to fund it’s share of the acquisition by Kantar of Numerator which completed in July 2021 (H1 2020 £2m, FY 2020 £30m) and cash paid for non-controlling interests £118m (H1 2020 £38m, FY 2020 £81m) 2. Disposals comprises proceeds on disposal of investments and subsidiaries £3m (H1 2020 £228m, FY 2020 £321m), cash consideration received from non–controlling interests £39m, less cash and cash equivalents disposed £2m (H1 2020 £24m, FY 2020 £48m) and proceeds on disposal of property, plant & equipment £3m (H1 2020 £3m, FY 2020 £11m) 2021 INTERIM RESULTS 41 3. FY 2020 net debt stated at 2020 actual exchange rates EFFECTS OF CURRENCY
£ STRONGER FIRST HALF 2021 2020 /(WEAKER) US$ 1.39 1.26 10% • Currency movements accounted for 5.8% € 1.15 1.14 1% decrease¹ in revenue less pass-through costs Chinese Renminbi 8.98 8.86 1% • £ stronger against most Brazilian Real 7.47 6.17 21% currencies, particularly the US$ Australian $ 1.80 1.92 (6%)
Canadian $ 1.73 1.72 1%
Indian Rupee 102 93 9%
Singapore $ 1.85 1.76 5%
South African Rand 20.2 20.9 (3%)
1. Effects of currency on continuing operations 2021 INTERIM RESULTS 42