2018 at upper end of guidance; 2019 challenging as previously indicated; good initial progress on strategy
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.”
Key figures
£ million | 2018 | Δ reported1 | Δ constant2 | Δ 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
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Percentage change in reported sterling Percentage change at constant currency exchange rates Like-for-like growth at constant currency exchange rates and excluding the effects of acquisitions and disposals 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 1 Headline earnings before interest, tax, depreciation and amortisation Headline profit before interest, tax and share of results of associates Headline operating profit as a percentage of revenue less pass-through costs Headline profit before interest and tax Headline profit before interest and tax as a percentage of revenue less pass-through costs, previously referred to as revenue less pass-through costs margin Diluted earnings per share based on headline earnings Diluted earnings per share based on reported earnings |
Further information Mark Read } Andrew Scott } Paul Richardson } Lisa Hau } +44 20 7282 4600 Chris Wade } Kevin McCormack } Fran Butera } +1 212 632 2235 Juliana Yeh } +852 2280 3790 Richard Oldworth, Buchanan Communications +44 20 7466 5000 +44 7710 130 634