2018 Preliminary Results

1 Mar 2019

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

 

  • 2018 at upper end of guidance given in October, with like-for-like revenue less pass-through costs -0.4%
  • As previously stated, 2019 challenging, particularly in the first half, due to headwinds from client losses in 2018
  • Business performing strongly in Western Continental Europe, Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe, and addressing performance in the United States
  • Profit before tax reflects impact of restructuring and transformation costs and goodwill impairment
  • Dividends per share of 60.0p, flat with last year
  • Year end net debt position improved by £466 million on same date in 2017 (an improvement of £605 million at 2018 exchange rates)
  • Good initial progress on implementing strategy

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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 restated for the impact of the adoption of IFRS 15: Revenue from Contracts with Customers as described in note 2 of Appendix 1
  5. Headline earnings before interest, tax, depreciation and amortisation
  6. Headline profit before interest, tax and share of results of associates
  7. Headline operating profit as a percentage of revenue less pass-through costs
  8. Headline profit before interest and tax
  9. 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
  10. Diluted earnings per share based on headline earnings
  11. 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