Third Quarter Trading Update

Resilient performance in a challenging environment: improvement on second quarter; strong new business momentum; tight cost control

£ million

Δ reported1

Δ LFL2

Third Quarter

Revenue

2,969

-9.8%

-5.5%

Revenue less pass-through costs

2,401

-11.9%

-7.6%

Year to date

Revenue

8,552

-11.5%

-9.5%

Revenue less pass-through costs

7,069

-10.8%

-8.9%

Note: all numbers relate to continuing operations unless otherwise stated

  • Q3 revenue -9.8%; LFL revenue -5.5%
  • Q3 LFL revenue less pass-through costs -7.6%
  • Top five markets Q3 LFL revenue less pass-through costs: US -5.5%; UK -6.5%; Germany -1.8%; Greater China -16.7%; India -16.3%
  • Continued good momentum in new business: $1.6 billion won in Q3, taking the year-to-date wins to $5.6 billion
  • Strong liquidity and balance sheet, supported by tight working capital management: year-to-date average net debt £2.5 billion, down £2.0 billion year-on-year
  • On track to be towards upper end of £700-800 million cost reduction target
  • Full year 2020 LFL revenue less pass-through costs growth and headline operating margin expected to be within the range of latest analysts’ expectations3

Mark Read, Chief Executive Officer of WPP, said:

“WPP continues to demonstrate its resilience in a challenging market. We have maintained our new business momentum as clients seek out our creativity and our skills in media, technology, data and ecommerce. This month, Uber joined a growing list of major assignment wins that includes Alibaba, Dell, HSBC, Intel, Unilever and Whirlpool, and we continue to lead the new business rankings. We have also renewed and expanded our relationship with Walgreens Boots Alliance to encompass its data- and technology-driven marketing strategy.

“Given the tightening of COVID restrictions around the world and uncertainty in the global economic outlook, we remain cautious about the pace of recovery. It is important that we maintain our strong financial position and we are on track to achieve cost savings towards the upper end of our £700-800 million target.

“Our people have done a superb job in serving our clients, largely working from home, but the events of 2020 have of course created new pressures for everyone. We have increased our investment in employee support services, with a particular focus on mental health and wellbeing, and this will be an ongoing priority for our leadership.”

WPP Third Quarter Trading Update 2020 press release PDF 274.0 KB

Percentage change in reported sterling.

Like-for-like. LFL comparisons are calculated as follows: current year, constant currency actual results (which include acquisitions from the relevant date of completion) are compared with prior year, constant currency actual results, adjusted to reflect the results of acquisitions and disposals for the commensurate period in the prior year.

Like-for-like growth in revenue less pass-through costs of -8.5% to -10.7% and headline operating margin of 11.4% to 12.5%. Equivalent ranges on 27 August 2020 were -10.0% to -11.5% and 10.4% to 12.5% respectively.

For further information:

Investors and analysts Peregrine Riviere +44 7909 907193 Fran Butera (US) +1 914 484 1198

Media Chris Wade +44 20 7282 4600

Richard Oldworth, +44 20 7466 5000 Buchanan Communications +44 7710 130634

wpp.com/investors