2019 Preliminary Results

27 Feb 2020

Good progress against three year plan: simpler business, stronger balance sheet, full year guidance delivered

Key figures – continuing operations

£ million 2019 Δ reported1 Δ constant2 Δ LFL3 20184
Billings 53,059 -0.3% -1.4% -1.0% 53,220
Revenue 13,234 1.4% 0.2% 0.0% 13,047
Revenue less pass-through costs 10,847 -0.3% -1.5% -1.6% 10,876
Headline EBITDA5 1,830 -5.3% -5.6% 1,933
Headline operating profit6 1,561 -5.5% -5.6% 1,651
Headline operating margin6 14.4% -0.8* -0.6* -1.2* 15.2%
Headline PBIT6 1,623 -5.8% -6.0% 1,723
Profit before tax
982 -21.9% -22.3%   1,258
Profit after tax 707 -29.4% -30.3% 1,002
Diluted EPS6 49.8p -33.0% -33.8% 74.3p
Headline diluted EPS6 78.1p -14.6% -14.9% 91.4p
Dividends per share 60.0p - 60.0p
* Margin points


Full year and Q4 financial highlights

  • Continuing operations reported revenue up 1.4%, constant currency revenue +0.2%, LFL revenue flat (Q4 +0.1%)
  • Including Kantar 7 LFL revenue less pass-through costs and headline operating margin delivered against guidance given at the Investor Day in December 2018 (revenue less pass-through costs -1.2% and operating margin -0.9 margin points)
  • FY LFL revenue less pass-through costs -1.6% (-1.2% including Kantar); Q4 -1.9% (-1.6% including Kantar) 
  • FY headline operating margin 14.4%, down 1.2 margin points LFL (down 0.9 margin points including Kantar), reflecting challenging performance in specialist agencies and investing for future growth 
  • Reported profit before tax -21.9% driven primarily by a significant H1 2018 exceptional gain that has not been repeated (£73 million impact) and a charge on the revaluation of financial instruments versus a credit in 2018 (£238 million impact) 
  • Year-end net debt £1.540 billion (2018: £4.017 billion). Average net debt £4.282 billion, down £743 million in constant currency year-on-year as a result of disposals and strong cash generation
  • Strong year over year improvement in net working capital of £350 million

Strategic highlights and 2020 guidance

  • Renewed commitment to creativity and collaboration
  • Simpler structure with fewer, stronger agency brands
  • Investments in technology, HR and client & new business teams
  • Stronger balance sheet and share buy-back programme commenced 
  • 2020 guidance: flat revenue less pass-through costs, flat headline operating profit margin
  • 2021 targets reiterated: organic growth in line with peers, headline operating profit margin at least 15%
  • 2020 guidance made prior to any impact from the coronavirus outbreak

Mark Read, Chief Executive Officer, WPP:

“2019 was the foundational year for the new WPP strategy, and thanks to the hard work of all our colleagues we have made substantial progress in a short period of time.

“We said that we would make progress in the journey to return WPP to growth, simplifying our business and reducing our debt, and we have delivered against each of these goals – having met our guidance for 2019, achieved our restructuring targets and completed the sale of a majority stake in Kantar. The second half of 2019 was stronger than the first, with performance improving globally and in the United States, our largest market.

“Our new offer of creativity powered by technology has resonated with clients, as we’ve seen in good retention rates and important wins. New creative assignments include Instagram and Mondelez, and AXA, eBay and Hasbro were among the media wins.

“Perhaps most importantly, our clients and our people tell us that WPP has a clear new sense of purpose and is successfully instilling a culture of creativity, collaboration and openness. As we enter the second year of our three-year turnaround plan, our ability to attract and retain the best people is key to long-term growth.

“I am optimistic about the future of our industry and WPP’s position within it, although there is still much more work to do. The marketing landscape has never been more dynamic and complex: clients need our help and expertise more than ever. With our market-leading scale and global footprint, allied to the creativity of our agencies and our technology leadership, we are confident of further progress against our 2021 targets.”

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  1. Percentage change in reported sterling
  2. Percentage change at constant currency exchange rates
  3. Like-for-like growth at constant currency exchange rates and excluding the effects of acquisitions and disposals
  4. Prior year figures have been re-presented in accordance with IFRS 5: Non-current Assets Held for Sale and Discontinued Operations, as described in note 2 of Appendix 1
  5. Headline EBITDA (including depreciation of right-of-use assets)
  6. Headline measures, diluted EPS and net working capital are defined in Appendix 1
  7. The basis of measures including Kantar is set out in Appendix 1

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