Wpp Annual Report 2006 Wpp Annual Report 2006
Total Page：16
File Type：pdf, Size：1020Kb
Annual Report & Accounts 2006 Annual Report & Accounts 2006 Advertising Media Investment Management Information, Insight & Consultancy Public Relations & Public Affairs Branding & Identity Healthcare Communications Direct, Digital, Promotion & Relationship Marketing Specialist Communications 27 Farm Street London W1J 5RJ Telephone +44 (0)20 7408 2204 Fax +44 (0)20 7493 6819 125 Park Avenue New York NY 10017-5529 Telephone +1 (212) 632 2200 Fax +1 (212) 632 2222 www.wpp.com 88310_AR06_(00)+spine_130507_JL.i1310_AR06_(00)+spine_130507_JL.i1 1 117/5/077/5/07 001:03:301:03:30 Contents What we think The Advertising & Marketing Services Industry: China and the internet by Sir Martin Sorrell 72 The fast read In Praise of Interior Decorators About WPP 2 (Or at Least Some of Them) A six-minute read 3 by Jeremy Bullmore 95 About the artists Manny Ling Feng Feng His skill in blending Calligrapher Artist traditional Chinese Who we are Who runs WPP Hong Kong-born The paintings in this historical reference with calligrapher who Report are the work of modern abstract painting Our companies and associates 10 Board of Directors 98 practises in both Feng Feng, a Beijing- creates a strong link Senior offi cers and advisors to the Board 101 eastern and western based artist and poet between past and present. traditions. with an established The more you look at reputation in China Feng Feng’s work, the and beyond. more you see. Why we exist Born in 1956, Feng Feng, WPP, a global company Why we exist 12 How we behave like so many artists, with a fruitful long-term Our mission 13 Directors’ report joined the army during the business relationship cultural revolution. In 1984 with China, takes great Review of the Company’s governance he graduated from Tianjin pleasure in embracing and the Nomination Committee 103 University with a degree Feng Feng’s work. Review of the Audit Committee 105 in architecture followed It would not have Review of the Compensation Committee 106 by several years working been possible without How we’re doing The Board of Directors 107 as a journalist. Throughout the endlessly helpful this period, he never cooperation of Financial summary 15 Committee meetings 107 abandoned painting. his representatives Letter to share owners 18 Share owner relations 108 at the ArtSceneChina Reports from our operating brands 27 Internal control 108 Feng Feng’s technique Gallery in Shanghai, Ogilvy & Mather Worldwide 28 Sarbanes-Oxley s404 109 combines acrylic paint to whom we express JWT 33 Going concern 109 with secret ingredients our gratitude. which he refuses to Young & Rubicam Brands 35 Responsibilities in respect of the preparation disclose. There are many Grey Global Group 42 of fi nancial statements 110 layers to his work – he The Voluntarily United Group of Creative Agencies 45 Substantial share ownership 110 may use up to a hundred BatesAsia 141 46 Election of directors 110 combinations of colour GroupM 47 Profi ts and dividends 110 before achieving his precise intention. The MediaCom 49 Parent company charitable donations 110 three-dimensional effect Mediaedge:cia 51 Group activities 111 of his work is achieved MindShare 52 Share capital 111 by employing a unique The Kantar Group 54 Authority for purchase of own shares 111 process involving the Public Relations & Public Affairs: overview 59 Supplier payment policy 111 use of ancient Chinese woodblock plates and Hill & Knowlton 60 Auditors 111 coins. These are pressed Burson-Marsteller 38 Corporate responsibility against the back of the Ogilvy Public Relations Worldwide 30 Business impact 112 canvas – and then heat is Cohn & Wolfe 61 Signifi cant issues 112 applied until the desired GCI Group 62 How we manage corporate responsibility risk texture develops. B to D Group 63 and opportunity 112 Enterprise IG 64 Corporate responsibility goals 112 Fitch 66 Progress in 2006 113 CommonHealth 67 The impact of our work 113 Sudler & Hennessey 40 Marketing ethics 113 Ogilvy Healthworld 31 WPP as an employer 114 Grey Healthcare 44 Environment 115 This Report uses paper manufactured from 100% recycled de-inked post Specialist Communications 69 WPP’s carbon footprint 116 consumer waste. All by-products from both the pulp and paper production Supply chain 116 are used for a variety of things including fertiliser, cement production and energy for heating the local community. Social investment 117 Pro bono work 117 WPP ANNUAL REPORT 2006 WPP ANNUAL REPORT 2006 88310_AR06_(00)+spine_130507_JL.i28310_AR06_(01)v10_160507_AT.inddC2310_AR06_(00)+spine_130507_JL.i2 2 C2 17/5/07 17:46:23 8310_AR06_(10)v4_160507_AT.indd 189 222/5/072/5/07 009:06:15 09:01:419:06:15 How we’re rewarded Our 2006 fi nancial statements Compensation Committee report Accounting policies 143 on behalf of the Board Consolidated income statement 149 Introduction 119 Consolidated cash fl ow statement 150 2006 highlights 119 Consolidated statement of recognised Remit of the Compensation Committee 119 income and expense 151 Composition of the Compensation Committee 120 Consolidated balance sheet 152 Advisors to Compensation Committee 120 Notes to the consolidated fi nancial statements 153 Principles of remuneration 120 Company balance sheet 173 Performance 121 Notes to the Company balance sheet 174 Alignment to share owner interests 121 Reconciliation to US Accounting Principles 175 WPP Share Incentive Scheme dilution 121 Notes to the Reconciliation to US Accounting Key elements of short- and long-term remuneration 122 Principles 176 Policy on directors’ service contracts, Independent auditors’ report 179 notice periods and termination payments 123 Five-year summary 181 Performance graph 123 Financial glossary 182 Elements of remuneration 123 Retirement benefi ts 125 Directors’ remuneration 126 Directors’ interests 127 About share ownership Information for share owners Share owners’ register 185 Analysis of shareholdings at 31 December 2006 185 Operating & fi nancial review Dividends 186 Competitive performance 131 American Depositary Receipts (ADRs) 186 Geographic performance 132 Financial calendar 187 Sector performance 133 Share price 187 Review of operations 135 Access numbers/Ticker symbols 187 Group fi nancial performance 135 Online information 187 Operating margins 136 Registrar and transfer offi ce 187 Like-for-like performance 136 American Depositary Receipts (ADRs) offi ce 187 Headcount 136 WPP registered offi ce 187 Acquisitions and start-ups 136 Tax information 187 Parent company initiatives 137 Treasury activities 137 Cash fl ow and balance sheet 138 Pensions funding 139 Future prospects 139 Where to fi nd us Contact points 188 WPP offi ces 188 Investor relations 188 Media relations 188 Group information 188 Current and historical fi nancial information, including trading statements, news releases and presentations are available online at www.wpp.com You can sign up to receive WPP news by e-mail at www.wpp.com/ewire WPP ANNUAL REPORT 2006 Contents . Who we are The fast read WPP is one of the world’s most For a quick, pre-digested, comprehensive marketing highly-compressed version communications groups. of this Annual Report: It comprises leading companies read the next fi ve pages. in all these disciplines: The full story starts on page 8. • Advertising Please read that, too. • Media Investment Management • Information, Insight & Consultancy • Public Relations & Public Affairs • Branding & Identity • Healthcare Communications •Direct, Digital, Promotion & Relationship Marketing • Specialist Communications There are more than 100 companies within the Group – and each is a distinctive brand in its own right. Each has its own identity, commands its own loyalty, and is committed to its own, specialist expertise. That is their individual strength. Clients seek their talent and their experience on a brand-by-brand basis. Between them, our companies work with over 340 of the Fortune Global 500, over one- half of the NASDAQ 100 and over 30 of the Fortune e-50. It is also of increasing value to clients that WPP companies can work together, as increasingly they do: providing a tailor-made range of communications services, centrally integrated. Over 400 clients are now served in three distinct disciplines. More than 280 clients are served in four disciplines and these clients account for over 57% of Group revenues. Group companies now work with nearly 230 clients across six or more countries. Collectively, 100,000* people work for WPP companies; out of 2,000 offi ces in 106 countries. Our companies and their websites are listed on pages 10 and 11. * Including associates. The fast read WPP ANNUAL REPORT 2006 Why we exist What we think Our mission The Advertising & Marketing Services Industry: China and the internet by Sir Martin Sorrell To develop and manage talent; 2006 was WPP’s best year ever, measured by all metrics. to apply that talent, This year will be even stronger as the platform for 2008 – a blockbuster 12 months that will see the US presidential throughout the world, elections, the Beijing Olympics and the European Football for the benefi t of clients; Championships. In the longer term, our industry will be bolstered to do so in partnership; by globalisation and the continued growth of China and to do so with profi t. India in particular, along with other parts of Asia Pacifi c, Latin America, Africa, the Middle East, and Central and Eastern Europe. Within the WPP Group, our clients have access to Manufacturing overcapacity will demand more companies with all the necessary marketing and innovation, stronger brands and greater differentiation – communications skills; companies with strong and all areas in which we excel. The digital technologies will distinctive cultures of their own; famous names, also provide big opportunities as the media landscape many of them. fragments and consumers’ habits evolve. Equally, the WPP, the parent company, complements demand for internal alignment in big companies and thus these companies in three distinct ways. the need for internal communications – combined with First, it relieves them of much administrative work.