Section image

Cherries
oil on canvas
22 x 20 in
1981

Penny Machines
oil on canvas
23¾ x 29¾ in
1961

Stack of Books
oil on canvas
30 x 24 in
n.d.

Seven Suckers
oil on canvas
19 x 23 in
1970

Twin Jackpots
oil on canvas
30 x 46 in
1962

Ties
oil on canvas
20 x 26 in
1980

Cake Slices
oil on canvas
20 x 16 in
n.d.

Notes 1-5

For the year ended 31 December 2010

2. Segment information

The Group is a leading worldwide communications services organisation offering national and multinational clients a comprehensive range of communications services.

The Group is organised into four reportable segments – Advertising and Media Investment Management; Consumer Insight; Public Relations & Public Affairs; and Branding & Identity, Healthcare and Specialist Communications. This last reportable segment includes WPP Digital and direct, digital, promotional and relationship marketing.

IFRS 8 requires Operating Segments to be identified on the same basis as is used internally for the review of performance and allocation of resources by the Group chief executive. Provided certain quantitative and qualitative criteria are fulfilled, IFRS 8 permits the aggregation of these components into reportable segments for the purposes of disclosure in the Group’s financial statements. In assessing the Group’s reportable segments, the directors have had regard to the similar economic characteristics of certain operating segments, their shared client base, the similar nature of their products or services and their long-term margins, amongst other factors.

Operating sectors

Reported contributions were as follows:

  Revenue
2010
£m
1


Headline
PBIT
2010
£m
3


Headline
PBIT
margin
2010
%
  Revenue
2009
£m
1,2


Headline
PBIT
2009
£m
2,3


Headline
PBIT
margin
2009
%
2


Revenue
2008
£m
1,2


Headline
PBIT
2008
£m
2,3


Headline
PBIT
margin
2008
%
2


Advertising and Media Investment Management 3,733.3   573.0   15.3   3,420.5   472.8   13.8   3,380.2   581.3   17.2  
Consumer Insight 2,430.2   234.8   9.7   2,297.1   196.9   8.6   1,301.8   147.6   11.3  
Public Relations & Public Affairs 844.5   133.1   15.8   795.7   122.1   15.3   752.3   124.9   16.6  
Branding & Identity, Healthcare and Specialist Communications 2,323.0   287.8   12.4   2,171.0   225.4   10.4   2,042.6   264.4   12.9  
  9,331.0   1,228.7   13.2   8,684.3   1,017.2   11.7   7,476.9   1,118.2   15.0  
Notes
1
Intersegment sales have not been separately disclosed as they are not material.
2
2009 and 2008 comparatives have been restated to reflect the transfer of certain revenues of RMG from Branding & Identity, Healthcare and Specialist Communications to Advertising and Media Investment Management. Headline PBIT comparatives have not been restated as the impact was insignificant.
3
A reconciliation from reported profit before interest and taxation to headline PBIT is provided in note 31. Reported profit before interest and taxation is reconciled to reported profit before taxation in the consolidated income statement.


Other information Share-based
payments
£m
Capital
additions
£m
1

Depreciation and
amortisation
£m
2

Goodwill
impairment &
write-downs
£m
Share of
results
of associates
£m
Interest in
associates
£m
2010                
Advertising and Media Investment Management 36.8 95.6   94.2   0.3 26.2 487.3
Consumer Insight 13.7 58.9   49.8   15.1 122.6
Public Relations & Public Affairs 3.3 12.9   14.1   2.0 4.1 58.7
Branding & Identity, Healthcare and Specialist Communications 16.6 50.1   52.2   7.7 9.8 123.5
  70.4 217.5   210.3   10.0 55.2 792.1
2009                
Advertising and Media Investment Management 23.1 166.5   99.7   33.3 30.7 445.9
Consumer Insight 11.5 51.6   53.5   16.9 114.5
Public Relations & Public Affairs 4.4 19.2   15.2   2.7 60.3
Branding & Identity, Healthcare and Specialist Communications 15.9 43.8   57.4   11.0 6.7 108.6
  54.9 281.1   225.8   44.3 57.0 729.3
2008                
Advertising and Media Investment Management 33.3 93.3   86.2   9.1 32.7 474.9
Consumer Insight 7.5 50.9   23.0   3.0 5.4 96.7
Public Relations & Public Affairs 4.3 13.3   13.6   4.1 59.6
Branding & Identity, Healthcare and Specialist Communications 17.2 63.1   50.2   73.5 3.8 83.1
  62.3 220.6   173.0   85.6 46.0 714.3
Notes
1
Capital additions include purchases of property, plant and equipment and other intangible assets (including capitalised computer software).
2
Depreciation of property, plant and equipment and amortisation of other intangible assets.


  Assets   Liabilities
Balance sheet Segment
assets
£m
Unallocated
corporate
assets
£m
1
Consolidated
total
assets
£m
  Segment
liabilities
£m
Unallocated
corporate
liabilities
£m
1
Consolidated
total
liabilities
£m
2010                  
Advertising and Media Investment Management 11,795.7         (9,553.6)
   
Consumer Insight 3,691.2         (1,143.9)      
Public Relations & Public Affairs 1,699.6         (388.4)      
Branding & Identity, Healthcare and Specialist Communications 5,031.4         (1,409.4)      
  22,217.9 2,127.2   24,345.1   (12,495.3) (5,201.9)   (17,697.2)
2009                  
Advertising and Media Investment Management 10,539.1         (8,036.9)      
Consumer Insight 3,714.6         (1,002.4)      
Public Relations & Public Affairs 1,579.7         (324.9)      
Branding & Identity, Healthcare and Specialist Communications 4,710.9         (1,237.8)      
  20,544.3 1,807.2   22,351.5   (10,602.0) (5,673.8)   (16,275.8)
Note
1
Included in unallocated corporate assets and liabilities are corporate income tax, deferred tax and net interest-bearing debt.


Contributions by geographical area were as follows:

    2010
£m
  2009
£m
  2008
£m
Revenue1            
North America5   3,299.8   3,010.0   2,603.2
UK   1,087.6   1,029.0   954.2
Western Continental Europe4   2,325.3   2,327.8   1,879.1
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe   2,618.3   2,317.5   2,040.4
    9,331.0   8,684.3   7,476.9
             
  Margin   Margin   Margin  
Headline PBIT2            
North America5 14.7% 484.6 13.2% 397.9 16.8% 438.3
UK 13.6% 147.9 12.8% 131.5 13.0% 124.1
Western Continental Europe4 9.5% 221.6 8.3% 193.4 13.1% 247.0
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 14.3% 374.6 12.7% 294.4 15.1% 308.8
  13.2% 1,228.7 11.7% 1,017.2 15.0% 1,118.2
             
Non-current assets3            
North America5   4,742.7   4,420.1    
UK   1,693.3   1,688.3    
Western Continental Europe4   3,728.6   4,012.6    
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe   2,649.2   2,379.6    
    12,813.8   12,500.6    
Notes
1
Intersegment sales have not been separately disclosed as they are not material.
2
Headline PBIT is defined in note 31.
3
Non-current assets excluding financial instruments and deferred tax.
4
Western Continental Europe includes Ireland with revenue of £37.4 million (2009: £43.4 million, 2008: £41.3 million), headline PBIT of £2.0 million (2009: £3.9 million, 2008: £8.0 million) and non-current assets of £65.0 million (2009: £61.6 million).
5
North America includes the US with revenues of £3,097.9 million (2009: £2,835.8 million, 2008: £2,444.7 million), headline PBIT of £448.7 million (2009: £370.9 million, 2008: £411.0 million) and non-current assets of £4,209.7 million (2009: £4,010.9 million).