Financial summary charts

Revenue £m

Revenue £m

Reported revenue growth of almost 21% reflected organic growth, the strength of the euro and US dollar against sterling, as well as the impact of TNS. On a constant currency basis, revenues were up 9.0%.

Headline EBITDA1 £m

Headline EBITDA1 £m

Headline EBITDA (headline earnings before interest, taxation, depreciation and amortisation) rose over 20% to £1.3 billion ($2.3 billion).

Headline PBIT1 £m

Headline PBIT1 £m

Headline PBIT margin was flat at 15.0%, including TNS. Headline PBIT was up over 20% to £1,118 million, crossing £1 billion for the first time.

Headline diluted earnings per share1 p

Headline diluted earnings per share1 p

Diluted headline earnings per share were up over 21% to 55.5p. Dividends rose 15% to 15.47p.

After-tax return on average capital employed2 %

After-tax return on average capital employed2 %

After-tax return on average capital employed increased to 11.2%, with the weighted average cost of capital falling to 7.3%.

Relative TSR Rebased to 31 December 20033

Relative TSR Rebased to 31 December 20033

Despite under-performing the FTSE 100 index, WPP did well against its two US-based competitors.

1
The calculation of ‘headline’ measurements of performance (including headline EBITDA, headline PBIT and headline earnings) is shown in note 31 of the financial statements.
2
Calculated gross of goodwill and using profit after taxation before goodwill impairment and other goodwill write-downs, gains/losses arising from the revaluation of financial instruments, amortisation and impairment of acquired intangible assets, share of exceptional losses/gains of associates, costs incurred in 2008 in changing the corporate structure of the Group and investment gains/losses and write-downs, and adjusted to reflect taxes and net finance costs paid.
3
Measured on a common currency basis.

Average net debt4 £m and interest cover multiples

Average net debt4 £m and interest cover multiples

Net debt averaged £2.2 billion in 2008, up just over £600 million at 2008 exchange rates, principally reflecting the net acquisition cost of TNS and other acquisitions. Headline interest cover in 2008 was 7.5 times.

Debt maturity5 £m

Debt maturity5 £m

The Group continues to work to achieve continuity and flexibility of funding. Undrawn committed borrowing facilities are maintained in excess of peak net-borrowing levels and debt maturities are monitored closely.

2008 revenue1 by geography %

2008 revenue1 by geography %

Markets outside North America now account for over 65% of our revenues, up from 62% in 2007 and 58% five years ago. The influence of the faster-growing markets outside North America and Western Europe is increasing rapidly.

2008 headline PBIT1,2 by geography %

2008 headline PBIT1,2 by geography %

Asia Pacific, Latin America, Africa and the Middle East showed strong growth, with Central and Eastern Europe buoying Continental Europe’s overall growth.

2008 revenue1 by sector %

2008 revenue1 by sector %

Marketing services rose to almost 56% of revenues in 2008, up from 54% in 2007, due to strong growth in Public Relations & Public Affairs and the late-year impact of TNS on Information, Insight & Consultancy.

2008 headline PBIT1,2 by sector %

2008 headline PBIT1,2 by sector %

PBIT contributions were broadly in line with pro rata revenues, with Advertising and Media Investment Management more profitable and Information, Insight & Consultancy, Branding & Identity and Healthcare and Specialist Communications less so.

1
Percentages are calculated on a constant currency basis. See definition in the financial glossary.
2
The calculation of headline PBIT is set out in note 31 of the financial statements.
3
Interest in 2008, 2007, 2006 and 2005 excludes finance costs arising from the revaluation of financial instruments.
4
Average net debt includes amounts drawn down in each year on the Group’s working capital facility (the advance of cash financing against which certain trade debts have been assigned). This facility was repaid and cancelled on 31 August 2005.
5
Includes corporate bonds, convertible bonds and bank loans payable at par value, excluding any redemption premium due, by due date.