WPP plc Q4 FY2025 Earnings Call

Good morning, everyone. Good morning, and warm welcome to our 2025 preliminary results and strategy update. By the way, that's our new brand refresh. I hope you like it, created by Landor AMP and Man versus Machine, WPP agencies, all powered by WPP Open. So look, I'm delighted to welcome you all here to One South Work Bridge to our campus here in London, which in many ways is symbolic of the future of WPP. It's modern, it's adaptive, it's a collaborative workspace for our talent, our clients, and our partners. So the plan this morning is I'm going to start with some opening remarks, and then I'm going to hand over to Joanne Wilson, our Chief Financial Officer, to share our 2025 preliminary results. Then I'll share our strategy update, and then we'll open up to Q&A. Before we start, I'd like to recommend that you take a moment to read this cautionary statement while I get out of your way. So Joanne and I will be joined on stage later by Brian Lesser, who's CEO of WPP Media. When we get to the media section of the presentation, most of my senior management team are here in the audience as well. Let me start by saying that WPP is an extraordinary company. We are built on agency brands with remarkable histories going all the way back to the 1800s. Some are still well-known today. Others have evolved into new parts of WPP. But together, they have roots in creating iconic work that moves people and shapes culture. We serve some of the biggest, most demanding clients in the world, and we steward and grow some of the most well-known brands on the planet, several of whom you'll hear from and see referenced throughout today's presentation. And our business model is actually very simple. We exist to make our clients successful. We help our clients build brands that matter, drive meaningful engagement with their consumers, and drive outcomes for their business. It drives growth for them and growth for us. However, it's really clear that what has made us successful in the past will not make us successful in the future. And as you can see from the numbers that we released this morning, our performance is not where it needs to be. Yes, of course, there are externalities we can point to like market volatility and economic headwinds. But really, the results point to the need for us to embrace a single unified growth strategy to execute with increased rigor and evolve as the needs of our clients evolve. After several years on the WPP Board of Directors, I took this role with a clear thesis in mind about what we need to do differently. We've spent the past six months as a team validating this thesis through rigorous analysis and by speaking directly to our clients and actively listening to their feedback. And the good news is we haven't been waiting for today's presentation to take action. We've already made several decisive changes, and you can see the positive results in our recent new business success. In the fourth quarter of 2025, WPP was number one in JPMorgan's net new business rankings for the first time since 2020, with a series of excellent client wins across media, creative, and our integrated offer. These include being appointed the U.K. government's lead media agency, Reckitt and Henkel Media in Europe, Kenvue and Haleon Creative globally, TruGreen Media in the U.S., Norwegian Cruise Line Global Media, Suncor Media, just to name a few. And I'm delighted to say we've maintained this strong momentum into 2026, winning Jaguar Land Rover, Global Media and Integrated Services. In fact, the impact from new business wins in 2026 already exceeds the impact of new business wins for all of 2025 combined, and it's only February. So while the turnaround of our business will take time, our momentum is undeniable, and these wins give me huge confidence that we are firmly on the right path. My team is united, committed, and hungry to win. Today's session is the culmination of months of detailed work by our team. We have a bold plan to make WPP a simpler, more integrated company, one that's fit for the future, relentlessly focused on growth and brilliant execution. Personally, I'm very excited to be here at a time of such revolutionary change, and I feel quite privileged to lead WPP as we play a defining role in shaping the future. So I'll come back shortly and talk about our view on the evolving landscape and our growth plan for the new WPMP, which we're calling Elevate28. But first, I'm going to hand over to Joanne to take you through our 2025 results. Joanne?

So thank you, Cindy, and good morning, everybody. And can I add my warm welcome to you here today. So let me start by taking you through the main financial headlines for 2025. Our like-for-like revenue less pass-through costs fell 5.4% for the full year due to client assignment losses and spending cuts. Now this is slightly better than our most recent guidance for a decline of 5.5% to 6%, and it reflects a Q4 like-for-like decline of 6.9%, and that's a deterioration from the third quarter decline of 5.9%. In the context of the weaker top line, we delivered a headline operating margin of 13%, in line with our expectations and down 180 basis points year-on-year on a like-for-like basis. Our fully diluted EPS was 63.2p, a decrease of 28.4% year-on-year, with the impact of reduced headline operating margin and a higher headline effective tax rate, partially offset by lower net finance costs and non-controlling interests. Turning to cash flow, our adjusted operating cash flow before working capital was GBP 1.2 billion, down from GBP 1.3 billion in 2024 and at the top of our most recent guidance range and includes GBP 82 million of cash restructuring charges. On my next slide, I provided some color on our net sales performance, both for the fourth quarter and across the full year. And please note that we have included more detail in the appendix to this deck. Now you have some of the detail here on trends by business, by region and by client sector, but I thought it would be more useful to unpack some of those trends by theme to help give a sense of what is WPP specific and what is more market driven. And when we consider what is WPP specific, the major negative impact to call out both for the full year and for the fourth quarter is the impact of gross client losses, which deteriorated through the year. Now this was driven by the impact of incremental losses in the year in 2025. And by segment, this particularly weighed on media, by geography on the U.S. and the U.K., and by client sector on CPG and TME. Now against this, we had the positive impact of new business wins in 2024 and '25, which indeed contributed progressively through the year. The aggregate level of in-year wins, however, was lower than we initially expected and significantly below what we have experienced over the past number of years. This was in part because of a lower win rate, but in EMEA, it was because of a lower level of aggregate new business activity. Industry estimates are that global pitch activity was down double digits in the year. While we saw an encouraging new business performance in the fourth quarter with the wins of Reckitt, Henkel, the U.K. government, Pizza Hut, NCL, and JLR, the impact on our like-for-like performance is expected to take time to ramp up, and we expect the overall net new business headwind to sustain into the first half of 2026. The final theme to call out is spend by existing clients. We characterize the year as one of more cautious spending from clients with a higher degree of volatility than we would typically expect to see. Now the impact was seen most strongly across the CPG, auto, and the tech and digital services sectors. And while many of our businesses were impacted, it weighed most heavily on Ogilvy. The waterfall chart on this next slide bridges our headline operating margin from 15% in 2024 to 13% in 2025, a 1.8 percentage point deterioration on a like-for-like basis. There are a number of moving parts, starting with staff costs, including our severance and incentives on the left. Now these reduced by GBP 576 million on the back of lower permanent headcount, which ended the year down 8.7% and reduced use of freelancers, which was down 14% year-on-year. However, due to that lower revenue, this resulted in a 180 basis points drag on our margin. This was amplified by the impact of increased severance and other associated costs, which was up GBP 89 million in the year, taking a further 100 basis points off margin. And we did increase investment levels in WPP Open in AI and data, and this was more than funded by a reduction in back-office costs, leading to a net reduction in tech spend and other costs of GBP 128 million. Again, with the impact from those lower revenues, this translated into a 60 basis point drag on margin. These drags on margin were offset by a 50% reduction in staff incentive payments to GBP 182 million, providing a margin cushion of 140 basis points, which is equivalent to 120 basis points like-for-like if we exclude FGS. And taken together, this resulted in that net margin move of 200 basis points on a reported basis and 180 basis points on a like-for-like basis, which includes 20% of the impact from the disposal of FGS and from FX. Now moving to my next slide, we show our headline income statement. Overall reported revenue less pass-through costs was GBP 10.2 billion, a decrease of 10.4% year-on-year on a reported basis. Our headline operating profit was GBP 1.3 billion, which was down 22.6% year-on-year on a reported basis and is consistent with that 13% operating profit margin. Our net finance costs of GBP 274 million were slightly down year-on-year on lower average net debt and lower interest rates. And our effective tax rate increased to 32% given that lower profit base and the impact of non-deductible fixed elements. By contrast, non-controlling interest of GBP 43 million was down year-on-year, partially driven by disposals. Our headline diluted EPS, as I said, was 63.2p and down 28.4% on a reported basis. The Board has recommended a final dividend of 7.5p, giving a total dividend of 15p for 2025. Now while this is a reduction year-on-year, it represents a stable dividend from the first half, and it underlines our commitment to maintaining shareholder returns. We included a full reconciliation between our headline and our reported financials in the appendix. And the main items I would call out are the impact of restructuring programs as well as further goodwill impairments of GBP 641 million, primarily relating to our integrated creative agencies and property impairments of GBP 114 million, both of which are non-cash in nature. Now this next slide bridges the year-on-year movement in net debt, which ended 2025 at GBP 2.2 billion versus GBP 1.7 billion in 2024. Our adjusted operating cash flow before working capital was GBP 1.2 billion and reflects a lower level of cash profit, partially offset by a lower level of CapEx and a year-on-year decrease in cash restructuring costs, which came in at GBP 82 million. Our working capital saw an outflow of GBP 334 million, primarily driven by the temporary impact of reduced staff incentives, adverse FX movements, and business mix. Within this, our trade working capital, excluding the impact from FX was broadly flat year-on-year. We remain disciplined on our working capital management and saw an improvement in underlying operating metrics year-on-year, including reduced overdues. We saw an outflow of GBP 17 million from earnouts of GBP 65 million, and the net impact of dividends to minorities and from associates and earn-outs have decreased year-on-year and are expected to continue to progressively fall in 2026. Our net interest and tax contributed to a total adjusted free cash flow of GBP 202 million, and note that the tax payment includes GBP 43 million of one-off taxes related to the disposal of FGS Global. And turning to the uses of cash, M&A spend was GBP 147 million and largely related to the acquisition of Infrum, while cash dividends amounted to GBP 343 million. Adding in the impact of buybacks at GBP 97 million to offset the dilution from incentives and other factors, including FX, our spot net debt was GBP 2.2 billion, up GBP 500 million year-on-year. Now my next slide provides more detail on our overall net debt and our leverage profile. As we've already said, we think it's more prudent to look at average adjusted net debt through the year rather than the year-end level, which typically benefits from a favorable working capital position. Now our average adjusted net debt was slightly down year-on-year at GBP 3.4 billion compared to GBP 3.5 billion in 2024. However, given that lower headline EBITDA, the average adjusted net debt to headline EBITDA ratio for 2025 was 2.2x, which was up from 1.8x in 2024. While our average leverage ratio has increased, our maturity profile stands at 5.8 years, and the average coupon on our net debt is 3.5%. We, of course, also completed a successful GBP 1 billion bond issue in December 2025, which more than covers our GBP 650 million bond maturity in September 2026. We have no covenants. And as of December 2025, we had GBP 4.4 billion of liquidity, including an undrawn committed RCF of $2.5 billion, which does not mature until 2031. Furthermore, I'm very pleased to share that today, Fitch Ratings has assigned WPP a BBB rating with a stable outlook, reinforcing our investment-grade balance sheet. And on my final slide for now, I have shared guidance for 2026 across key financial metrics. Now we will talk about the impact of our strategy update later this morning. But for 2026, we're setting the following parameters in terms of our headline guidance. Our like-for-like net revenue growth is the most important metric for judging our business, but it is a lagging indicator, with account losses continuing to drag for around 12 months after they first start to impact. Meanwhile, new account wins take time to bed in and move toward a steady state. For the year as a whole, we estimate that gross client losses will represent a 500 to 600 basis point drag, an increase from the 300 to 400 basis points in 2025. At the same time, the positive impact on like-for-like from gross client wins in 2026 already exceeds that for the full year 2025. While it is still early in the year to indicate the impact of new business in the full year, we do expect it to be a more significant drag in the first half in 2025. We are encouraged by the new business performance in the fourth quarter and the performance year-to-date and the nature of the pipeline. As a result, we anticipate a progressively improving impact from net new business through the course of the year. Now reflecting all of this, we are guiding to like-for-like revenue less pass-through costs down mid- to high single digits in the first half of 2026, with an improving trajectory in the second half. We also anticipate that the first quarter will see the weakest like-for-like for the year. On profit, there are a number of moving parts that will impact our headline operating margin. On the positive side, we will benefit from the annualized impact of cost actions, which were taken in 2025, alongside a part year benefit from the cost initiatives we are implementing as part of our new strategy. We also expect a lower impact from headline severance costs. Against this, we will continue to invest in WPP Open in AI and in data as well as our growth drivers and also expect to rebuild our incentive pools. Cindy and I will share greater detail on both the growth drivers and the cost initiatives as part of our strategy update. Taking all of that into account, we anticipate headline operating profit margin in the range of 12% to 13%. And turning to cash flow, we continue to focus on adjusted operating cash flow before working capital as the most important metric, reflecting the potential for volatility in the year-end working capital position, including both the anticipated costs associated with historical plans as well as the restructuring costs linked to the Elevate28 plan, we anticipate adjusted operating cash flow before working capital of GBP 800 million to GBP 900 million. This includes total anticipated cash restructuring charges of around GBP 250 million, of which around GBP 190 million are associated with the Elevate28 plan. Excluding these charges, we would anticipate adjusted operating cash flow before working capital of GBP 1 billion to GBP 1.1 billion. And finally, in terms of leverage, given the expectation of a further moderation in headline EBITDA, we would anticipate our average leverage metrics to move up further in 2026. We do, however, expect average net debt to remain broadly stable, and we note that any proceeds from asset disposals during the year will be used to strengthen our balance sheet, providing a greater degree of financial flexibility. Now you will find more detail on other modeling assumptions for 2026 in our preliminary results press release. And that is it for me for now, and I will hand back to Cindy, who I know is very keen to share our strategic update.

Thank you, Joanne. I want to start by acknowledging that recent years have been disappointing for our shareholders. I recognize that our performance on key metrics such as net sales margin and free cash flow has not met expectations. I am determined to change this. As mentioned earlier, I took this role with a clear vision of what needed to change. Over the past six months, our team has validated this vision through thorough analysis and client feedback. While there are reasons to be optimistic, I want to first share some consistent feedback from clients, which not only supports my vision but also provides a roadmap for our future direction. Clients have pointed out that our complexity has hindered our focus on their needs. We have been siloed and difficult to navigate. We haven't been proactive enough in evolving our integrated services to meet changing client demands. Our data offerings have taken too long to develop, negatively impacting our media business. The good news is that these issues are fixable. We have already begun addressing them. Although our performance has not been where we want it to be, WPP has significant potential and all the necessary elements to succeed. We have talented and dedicated individuals with extensive expertise who deliver exceptional results for some of the most demanding clients every day. Our capabilities span the entire marketing spectrum, from media to commerce, creative, PR, production, digital experiences, software engineering, data, AI, and beyond. We have made strategic investments in technology that have enabled us to develop WPP Open into a competitive, future-oriented marketing platform. Our global presence in over 100 countries allows us to serve complex multinational brands effectively. We have a strong media offering and partnerships with key players in the industry. Most importantly, we have a motivated, high-energy team eager to embrace change and succeed. Despite the challenges we face, I am optimistic about our position at this critical point in WPP's journey. We are not merely adapting to change; we are actively shaping the future. We are creating a WPP that is more agile, connected, and powerful than ever, focused on client success, which in turn drives better returns for our shareholders. Our new mission is to be the trusted partner for leading brands in the age of AI, recognized for our combination of advanced media intelligence, reliable data solutions, world-class creativity, next-generation production, and transformative enterprise solutions. This will help our clients navigate change, capture growth, and seize opportunities. We have four key objectives in our strategy, which we will explore in detail. To summarize, these objectives are to foster superior growth for our clients, simplify and integrate our company, leverage our WPP Open platform for competitive advantage, and establish solid financial foundations for the future. Although this will take time, we have already made a solid start. To support our growth strategy, we have devised a detailed execution plan that unfolds in three distinct phases. Our immediate focus is to stabilize the business, implement necessary structural changes, and improve execution to win and retain clients, thereby maintaining our current market momentum. The next phase will involve building on these foundations and aiming for growth by 2027. The final phase will focus on accelerating growth to capture market share from 2028 onward. Regarding outcomes from this plan, you can expect performance stabilization in the near term, a return to growth by 2027, gross cost savings of GBP 500 million over three years, a reallocation of investments toward key growth areas, a more focused portfolio, an investment-grade balance sheet, and increased financial flexibility. That outlines the basic framework, timeline, and expected outcomes of our growth strategy. We will delve into the specifics shortly, but first, I would like to set the scene regarding the evolving landscape, our clients' needs, and the potential of AI. For some time, our industry has been experiencing significant transformation. With the rapid rise of AI, we are witnessing a fundamental change in the commercial ecosystem, including shifts in consumer behavior. Brands are now being discovered through AI-driven conversational searches, and traditional barriers protecting established brands have been diminished. Creators and influencers are reshaping consumer preferences and can launch brands instantly. Media has become omnipresent; it’s no longer episodic but continuous and integrated. Furthermore, every interaction is increasingly shoppable, leading us toward a model where AI agents facilitate our purchases. Trust has become a scarce resource that must be earned consistently in a world filled with synthetic content and deep fakes. Brands must find a balance between hyper-personalization and personal privacy. As the market floods with AI-generated content, the demand for genuine human creativity, craftsmanship, empathy, and taste has become critical differentiators. These dynamics are not mere trends; the acceleration of AI is unavoidable and is reshaping the commercial landscape. This is the complexity our clients navigate daily, making growth paths harder to identify. It has never been more crucial to build enduring and trusted brands that create competitive advantages and long-term value. In this noisy environment, brands must adopt new strategies rooted in deep data insights, real-time signals, and AI that can react instantaneously. Clients do not require more traditional marketing agencies but need a fresh playbook for growth and a reliable partner to help create and implement it. They need an intelligent orchestration layer that combines creativity, media, commerce, data, and technology, merging technical expertise with innovative thinking in modern brand building. At WPP, we collaborate with some of the most impactful brands globally, like Coca-Cola, Unilever, and Ford. We understand how to navigate disruption and help clients forge new paths to growth. For many, this new growth strategy involves transformations at all levels. Having spent the last decade implementing large-scale technology transformations for enterprise clients, I can affirm that it is a challenging process. Clients must establish AI-ready data foundations, utilize agentic tools, and have robust governance in place. They also need skilled personnel, and should rethink their processes. There are no shortcuts to AI transformation; every client is going through this and requires our assistance. To capitalize on this opportunity, WPP must evolve from being a collection of traditional marketing agencies to becoming a trusted growth and transformation partner, helping clients develop modern marketing capabilities and confidently progress into the future. A notable example of such a partnership is with the Coca-Cola Company. Let's hear from Manolo. Commerce and retail media are at 23%, and high-velocity content production is at 38%. The changes we are implementing at WPP to integrate our client proposition will allow us to cross-sell more effectively and increase our market share in these rapidly growing sectors. This reflects my view on how the world is evolving, its implications for our clients, and the potential of AI. Now, I want to elaborate on our growth strategy. As I previously mentioned, we have four strategic objectives: to provide superior growth for our clients by focusing on an integrated approach that encompasses media, creative, production, and enterprise solutions, all powered by WPP Open. I want to outline the organizational changes that will make us a simpler and more integrated company, as these are essential for our strategy. We have already begun evolving how we engage with clients, and we know that when we present ourselves as the new WPP, we achieve success. To build on our current momentum and ensure sustainability, we must radically simplify our organization to enhance client centricity. Therefore, WPP will transition from being a holding company. We will stop being a collection of hundreds of standalone businesses and instead adopt a single company model with four operating units across four regions, with incentives closely aligned to WPP's overall performance. Having a unified company structure and common incentives is crucial to our strategy. As part of these structural adjustments, we will also streamline corporate functions, especially in finance and HR, with the goal of reducing duplication, increasing shared services, and redesigning our processes by leveraging AI and Agenta capabilities. In addition to these structural changes, we are committed to significantly enhancing our execution, both in client service delivery and in acquiring new business. Our global client leaders, the GCLs, are pivotal to our relationships with our largest clients and are already skilled in creating value. However, our current operational model, incentives, and internal processes have sometimes limited their agility in delivering client-focused services that drive growth. We are transforming our approach to empower our GCLs with the authority and resources necessary to lead their client portfolios effectively, making strategic decisions rather than just coordinating various tasks. This will give them greater control over client P&Ls and the ability to make optimal strategic choices, supported by streamlined processes designed to minimize friction and ensure access to resources at the right moments. We are also forming a new team of client solution architects who will leverage deep industry expertise to create successful growth strategies for clients and design tailored solutions to implement those strategies, integrating technology, media data, and all our marketing capabilities to ensure effective execution. Additionally, we are enhancing our growth operations to establish a stronger network of growth talent across WPP that shares a collective drive to succeed. These changes will allow us to build on our current achievements as we enhance our new business capabilities and foster a winning mindset. Speaking of a winning mindset, our next main focus, perhaps the most significant, is to cultivate a high-performance culture that attracts and retains top talent. This culture will be rooted in collaboration, a strong client focus, humility, accountability, and a desire to succeed. I know from experience that culture can be the most substantial differentiator and competitive advantage. Talented individuals prefer to work for companies with robust cultures where they can flourish and express their true selves. I also understand that changing culture requires time and effort, focusing on both winning hearts and minds. Winning hearts involves inspiring people with a fresh, relevant, and clear mission. It also means creating a safe and inclusive environment where creativity and intelligent risk-taking are encouraged, where failures are viewed as learning opportunities, and where continuous improvement is recognized. Winning minds entails getting the fundamentals right with clear communication and active listening, along with investments in learning and development to help our employees build new capabilities, especially around AI, so they can effectively meet client needs. It involves common incentives that enable collaboration and seamless resource sharing, alongside performance management and feedback mechanisms to foster accountability and enhance talent mobility and career progression opportunities. Ultimately, I want everyone to have a world-class employee experience, feeling proud to be part of a winning team and part of WPP. The final aspect of our Elevate28 execution plan is aimed at establishing a solid financial foundation for the future, which includes creating the capacity for growth investment and ensuring WPP is fully optimized to serve our clients. Now, I will turn it over to Joanne to discuss the financial elements of our plan.

Thank you, Cindy. And okay, let me share the financial framework underlying our Elevate28 plan, including our approach to capital allocation. Elevate28 is first and foremost about getting WPP back to growth, and our financial priorities underpin that. In the near term, our focus will be on stabilizing the business, and that means improving our net new business performance and our client retention. As I mentioned earlier, net sales like-for-like is a lagging indicator, and that will take time to recover as we cycle through historic client losses. Now as we progress through the three years of our plan and we deliver strongly against the core growth building blocks, which I will talk to in a later slide, we anticipate a return to taking our fair share of the market. And in some areas, and over time, we will seek to outperform the market. To support this, we will unlock GBP 500 million of gross annual cost savings between now and 2028, enabling a reallocation of investment towards our growth drivers. And this will, in turn, support a rebuild of margins. Finally, we are setting out to make WPP a simpler and more focused business, reducing the perimeter of the group, but still strengthening the balance sheet and providing a greater degree of financial flexibility. As you've heard today, we are already implementing many parts of our plan. However, it will take time to deliver and realize the full benefits in our operational and financial outcomes. As Cindy indicated, we see delivery across three phases. In 2026, we will stabilize the operational performance of the business, leveraging the improved competitiveness of our media and our data proposition and our production consolidation. We will action our cost-saving plans, and we will prioritize investment into the parts of our business that represent the largest growth opportunities. In parallel, we will take a more proactive approach to our portfolio, unlocking embedded value and operating with a tighter and more focused perimeter. This will require focused execution and a rigorous reallocation of resources to support our growth plans. Now as a lagging indicator, we expect organic growth to remain subdued in 2026, and we also anticipate margins to stay below historic levels as we reinvest savings to support growth. Alongside this, we expect an elevated average leverage ratio. From 2027, we expect to start to see a progressive ramp-up of the benefits from both our operating model changes and the investments we are making to enhance our new go-to-market integrated proposition and from scaling capabilities, including our full-service enterprise solutions and production. It's our ambition for the group to return to growth during 2027 for margins to start to rebuild and for our leverage to start to come down. And from 2028, our plan assumes significantly improved operational performance characterized by accelerating growth, improving margin, and strong cash conversion. While we are not providing specific medium-term guidance today, rest assured, we are relentlessly focused on immediate stabilization and disciplined execution of the building blocks to return WPP to growth.

Thank you, Joanne. We're in the final stretch here. Before we wrap up and take your questions, I want to briefly discuss how my team and I will hold ourselves accountable and gauge our success. As Joanne pointed out, our main goal is to return our business to growth. Organic growth is our key performance indicator, and achieving consistent organic growth is our guiding principle as a management team. However, as you know, organic growth is a lagging indicator, and it will take time to achieve. Alongside these lagging indicators, you can see on the slide behind me some leading indicators and success metrics that my team and I are tracking as part of our scorecard. These will provide concrete evidence that the actions we are taking are effective. While I won't go through them all, you can see indicators like new business wins, client retention, cost savings, and asset disposals. We will be actively managing these leading indicators and are confident they will lead to the desired outcomes over time: consistent organic growth backed by a strong financial foundation. I want to assure you that we aren't going to disappear and only report KPIs in a year's time. We want you to witness the implementation of our strategy in real time. In the upcoming months, we’ll host a series of in-depth webinars to explore our key growth areas, particularly in media, next-gen production, and enterprise solutions. We've shared a lot of information today, and I appreciate your attention. Our mission is clear: to be the trusted growth partner for the world's leading brands in the era of AI. Elevate28 is an ambitious plan for a simpler, more integrated WPP. We will stabilize the business, return to organic growth, create capacity for investment, and deliver strong returns for our shareholders. We will accomplish this by fostering growth for our clients through a more unified organization, leveraging our agentic marketing platform, WPP Open, for a competitive edge and establishing firm financial foundations for the future. I am confident that WPP has a promising future ahead. This is WPP that is prepared for the future and ready to succeed. Now, we will conclude this strategy update and invite questions from the audience for me, Joanne, Brian, or any members of the senior leadership team. Thank you very much.

Thank you very much, Cindy. My name is Tom Singlehurst, and I lead Investor Relations for WPP. We will now take questions. Before we begin, I have a couple of quick announcements. For those in the room, we will provide a microphone, so please be patient. When you speak, kindly state your name and the firm you represent. To ensure we have enough time for everyone, we would greatly appreciate it if you could limit yourself to two questions and a follow-up. Let's start with questions in the room. Laura, would you like to begin?

Laura Metayer from Morgan Stanley. Three questions today, please. First question on differentiation and competitive advantage. I'm curious, what do you think is the single differentiation of WPP? Obviously, we've heard from peers need to have an integrated offering, a focus on data, driving leading with AI. So I'm just wondering what do you think is the single differentiating factor of WPP? Second question is when you talked about the JLR win, you said you pitched it as an outcome-based revenue model. Do you mind providing a bit more details here, like any KPIs, and if you can also tell us a bit more generally, like how you think the revenue model will evolve and what sort of KPIs will be used to measure performance? And then lastly, on the Enterprise Solutions business, could you give us an example of a typical project of WPP here and how it differs from leading IT services consultants, because obviously, it's part of an agency?

Thank you for your questions, Laura. They're great. I'll address the first one and then invite Johnny Horny to discuss JLR, as he led the pitch, and perhaps Jeff Geheb can provide an example of an enterprise solution engagement, if that's alright. Brian articulated this well. I aimed to highlight WPP Open as a uniquely integrated offering. It transforms the entire marketing workflow end-to-end and is powered by Open Intelligence, our foundational data layer. We've integrated InfoSum's capabilities for distributed data collaboration, making it designed for the future of marketing. This gives us a significant competitive edge. We have all the necessary components to succeed, and our focus has been on integrating them into a cohesive proposition, powered by our exceptional platform. When clients witness this, they recognize its potential to drive growth while maintaining data ownership. We excel in direct competition. Brian, do you have anything you'd like to add?

I think one of the things I said was that every client is different. And there is no one approach to driving business results for clients. We've built a platform in WPP Open that is flexible, that includes our proprietary technology, but also partners effectively with other companies. So we're always ready for what's next. We built a data model that similarly doesn't rely on a static data asset like a legacy CRM solution. Instead, it relies on the ability to connect any and all data sources so that we can be more intelligent and more dynamic in understanding consumer behavior and driving those business results for our clients. So it's different for every client. But as Cindy said, it's really an integrated approach across all parts of our business grounded in that data and technology strategy.

I would just add, we are still contracting with JLR. So there's a limit to what we can share. But Johnny, why don't you say a few words?

Yes, sure. Yes. Thanks for mentioning that. We haven't officially been appointed by JLR. We pitched throughout last year, went into a period of exclusivity with them through January, and we're now contracting and hoping that by March, we'll be live. But at the core of our pitch to your question, I guess, what's our secret sauce? I think our secret sauce is where you put everything you've seen this morning together. So starting with Open Intelligence to be able to build cohorts and understand audiences in a way that doesn't require us to do simply old-fashioned ID matching, to keep the data where it is, keep it safe and secure and then put that into a team that we're going to build with JLR, where we and they are all together on the open platform end-to-end. It's the end-to-end integrated nature of this offer that I think then allows us to make what I think are becoming genuinely competitive offers when it comes to outcomes. Those outcomes aren't do you like the agency you work with; those outcomes are are we selling more product? And will we get paid on being able to sell more product by being able to build their brands and measurably show that there's greater levels of desire for their products and the crown jewels of brands that they've got. We haven't finished contracting, but those are the defining factors, and that pitch was against all the major holding companies. I think those will be the integrated propositions that will see us win JLR and hopefully many more JLRs pulling these ingredients together.

Thank you, Johnny.

Can I just build on that because Laura, I think stepping back a little bit, your question is around what happens with a time and materials model with AI. The story is really moving on. Hopefully, you picked it up today. Our clients are using us and it's for the industry really. They need brand safety. They need to know that they have cultural nuances. They have the best creative and strategy talent, working with them on their brands to really differentiate. Also, they have access to the best talent. Navigating through what is an incredibly and ever more complex ecosystem is incredibly challenging for CMOs. It's getting tougher and tougher. And that's what they're paying us for. It's no longer about creating 5 ads. In fact, we can create 1,000 ads, but it's how do you get those ads into the right audiences. And that's really what they're paying for, which is really enabling this output-based pricing, it's outcome-based pricing, and it's also shifting more to tech fees and licensing fees as well. So this will be an evolution, but we're making lots of progress in this area.

To answer your question about enterprise solution scaling. So let's just stay with automotive. This could be JLR. It's certainly true with Ford. So when you begin to solve a marketing problem around content transformation or a customer experience challenge for marketing and you start with the CMO, you quickly evolve that conversation and realize that's an enterprise problem you're solving. Content doesn't live in marketing; it lives as an asset of the entire company. Customer experience exists as an asset of service, brand product development. So the nature of our work usually begins with the marketer, and then it expands further and further and further. Soon, we're in rooms with IT leaders, procurement leaders, service leaders. Instead of using their silos to define how we work, we're pulling them together. With AI, that's collapsing at an even more increased rate of change. AI platforms right now are collapsing the buying patterns where IT buyers used to buy a platform, implement it for years, and then draw the business in. Nowadays, there's really a fast iteration cycle. So we're finding ourselves in rooms starting with marketing but really extends to all the stakeholder groups.

Nicolas Langlet from BNP Paribas. I've got 3 questions. The first one on the existing business with clients, which was definitely a weak part in the 2025 performance. Can you tell us a bit more about what happened? Is it related to scope reduction, pricing pressure? Or can you give us more detail about that? And what are the concrete actions you have already implemented to stabilize the business with the existing clients? The second question on WPP Open Pro. Can you give us an update regarding the rollout, the first feedback, and what sort of opportunity you see in the mid- to long term? And finally, of the GBP 500 million gross cost reduction, have you included any benefit from generative AI tools in that GBP 500 million? And if you can share that? And of the GBP 500 million, how much do you plan to reinvest in the business?

Okay. So look, Nico, it's absolutely the right question. If you look at our performance in 2025, we talked about a drag from net new business of about 150 basis points. So that points to just under 400 basis points from the underlying business. The majority of the cuts came from the creative part of our business. As I said in my prepared remarks, it was really an overview, and we did see significant spending cuts, particularly from the start of Q2. Look, we can point to different reasons for it, but there was an awful lot of uncertainty and we saw heightened volatility across clients. We've talked about the polarization. Many clients, we saw very strong growth during the year, but others cut significantly and at very short notice as well. Effectively, we tend to have more project-based spend in our business. And of course, that's often the first place that gets cut when we see that volatility. And I would also just add that as you've heard from Brian today, Brian and the team have been incredibly busy in the last 18 months really setting up our competitive proposition for the future, redesigning how we deliver for clients. That undoubtedly has had some disruption in the business and the underlying business. And we've been very deliberate in Elevate28 that Brian and the team have done a lot of the heavy lifting, and their focus is now on execution. So it brings you on to the second part, what are we doing about it. Think about that for media. And then with the creative part of the business, we are building an incredible powerhouse within WPP Creative. We did get in our own way a lot of the time in the past with our silos. WPP Creative will enable scaled capabilities across all of our agencies. WPP Open as well will enable our creative teams to work in a standardized way, and that's everything from big large clients to smaller clients. So it will improve what we're delivering, and that will help both with our larger clients and that tail of clients where we've seen more reductions in spend. I think that's really important with creative. Sometimes we get very focused on the headline cost-saving, but it is about creating a more agile organization with fewer silos. And just on the GBP 500 million of growth savings and how much we're going to reinvest. I talked about the in-year savings in '26 being GBP 100 million, annualized savings will be GBP 250 million. All of that we're going to reinvest in 2026. I talked about this priority to stabilize and invest in the growth drivers, we will do that. Look, it's too early to say how much of the remainder we will invest, but I would assume that we will invest as much as we need of that to support our growth ambitions.

I'm happy to say a few words about WPP Open Pro. It's early days, right? We only launched a few months ago. But what we did was basically productize or SaaS-ify certain capabilities from within the WPP Open platform. We did it to target the mid-market SMB kind of end of the client segment. The clients that would largely look to self-service that kind of capability. I'm very encouraged, actually. We've got a number of deals with clients. We've got a very healthy pipeline against this, albeit it's small in absolute terms. I think the interesting learning from my perspective is our top 100 clients, say, are looking at WPP Open Pro as a way to software enable the long tail of markets that they service. Rather than having full teams on the ground, you can start to see a world where they can software enable their long tail. And that's kind of interesting.

Perfect. Maybe we can go to Adrien.

Cindy, this is Adrien from Bank of America. I have two questions, one for Brian and one for you, Cindy. John, I know we'll talk this afternoon, so I'll address the financial questions later. Brian, you mentioned the business wins in Q4 and Q1, which is great. Can you explain what contributed to those wins and the role that pricing played? Also, we have discussed this before, but you emphasize data in your strategy. How do you address the absence of a proprietary identity graph compared to your competitors? Now, for Cindy, while we heard a lot about opportunities today, I want to revisit the risks. What revenue decline do you expect in the creative industry due to AI deflation affecting the revenue per head? How much do you anticipate for the next couple of years?

Adrien, in terms of the new business wins, everything that I showed in terms of our proposition contributed to those wins. Without going client by client, what I said about every client being different applies to how we pitch business and then how we ultimately service business. So whether that was winning JLR or NCL or the various other wins, each one of those solutions was different. The great thing about our platform is it allows that and enables us to go in and do things differently for clients. So selling cars is different than selling cruises is different than various other clients that we have. So I think that contributed to it. The way that we're structured also helps quite a bit. So we're not going into these pitches as Mindshare or Wavemaker or one of our other agencies; we're going into these pitches as WPP media. Increasingly, we're going into these pitches as WPP. So we get a lot of help from our colleagues at VML and Ogilvy and AKQA and from WPP production. The clients see that, and they know that while we're pitching one thing, we're going to offer a full breadth of services over time. All these pitches are competitive, so price is always a factor, but that wasn't a defining factor in any of these pitches. We have a proprietary identity asset. One of the things that you have to understand is that identity is pretty ubiquitous in the market. So there are lots of companies that provide identity solutions. It’s really an old-fashioned notion of what we need to do to join up disparate data points. We also have an identity asset called MerLink. We see every adult in the United States, and we use that. We also use other partners like Experian when we want to augment that. Because we have a solution that allows us to access any identity asset, it's really not a problem for us having identity. What we have is InfoSum, which allows us to connect to hundreds of other data sources. Instead of those being household addresses or e-mail addresses, these are what are people consuming on TikTok? How are they interacting with creators on YouTube? Those signals are much more important than having a traditional identity asset, which again, is a legacy system and fairly ubiquitous and accessible in the market.

Yes, I would just like to add to what Brian said. I've never encountered a client who doesn't want more value at a lower cost. This is not a new situation. We operate in a highly competitive market where price pressure is always present. However, we do tend to experience some downward pricing pressure due to AI productivity. What we are doing is building an organization that can cross-sell more effectively to tap into the opportunities within our existing client base and enhance our success in acquiring new business. For instance, among our top 25 clients, we likely capture only about one-third of the total potential spending. By unlocking collaboration and cross-selling opportunities at WPP, we see a significant chance to grow and compensate for challenges in those areas.

Why don't you pass it on to Steve, given he's right next to you.

Just on the numbers, sorry. You said 5% to 6% gross hit from losses. Can you quantify the '25 and '26 to date wins to kind of give us some idea of a net number to work off as we stand today? That's the first question. Second, Brian, in the new setup and the new kind of pitch that you're doing to clients, where you haven't won, why was that? I know things are different, but it would just be useful to hear some insights there. And you also said you had some more work to do as well in your comments. I just wonder from my perspective, how much is the pitch that you're going with the clients now absolutely the right pitch? And what more is there that you do have to do?

It's a very dynamic business. So it's very rare that the right pitch today is the right pitch a week from now or a month from now. So when I say we have more work to do, it's that we're on a constant quest to meet the needs of our clients in a rapidly evolving world, and that's never going to change. Structurally, we're set up to win, and we have been winning. From a data and technology standpoint, I feel great about where we are. We have the building blocks in place to evolve, not just win today, but evolve as the market evolves. I feel great about that. In terms of why we didn't win, I say all the time to the team, you can be the best in a pitch, you can be the best on the day, and you can still lose a pitch. There are lots of factors that go into it. Sometimes it's price. Sometimes we don't feel comfortable with where a prospect is taking us in terms of commercial negotiations. Sometimes it's an affinity for one of our competitors between a CMO that knows a certain team. So there are lots of different factors that go into it. We're not going to win every pitch, but we need to go into every pitch with the right solution for clients. I feel great about getting our fair share and actually exceeding our fair share and starting to win back the market share that we've lost. Thanks for the question, Steve. I'm always hesitant at this time of the year to give a net new business because there's a whole year to play for, there's a pipeline, etc. But let me share some of the data that we've already shared, and you'll be able to kind of broadly figure it out. Then I'll just give you some context around the pipeline. Last year, we said that our gross wins were 300 to 400 basis points of drag, and then we ended up at the top end of that. We said that the net new business impact was about 150 basis points for 2025. Really encouraging, the gross win impact for 2026 exceeds and that gross win impact in 2025, and that reflects in recent months the new business, the better business performance that we've seen, and that's really encouraging. 2025 was a much lower activity year for new business. What we have seen in recent months is the pipeline activity building up again, which is also encouraging. Also, often get asked, what's defensive and what's offensive? It's very interesting when you look at the pipeline and the opportunities; it's less black and white than that. Oftentimes, you're defending some scope, but you also have an opportunity to win more. So it's getting much more nuanced. As I said, I'm encouraged by the activity, the pickup in the pipeline and of course, the momentum that we've seen in recent months.

Perfect. I'm just going to do a couple of questions from the webcast, and then I will get back to the room. The first one is on the broader strategic shift at WPP to become a more holistic partner to solve challenges for clients. Does this increasingly take WPP into competition with different competitors? How well do you think you are positioned to win against them?

Yes, that's for me, right? Look, I think we have all the ingredients we need to win. As I said, we have amazing talent, incredible capabilities, fantastic technology, and technology partnerships. We have scale. We have the trust of our clients, which is super important. What we need to do now is pull it all together into an integrated proposition and lead with our agentic marketing platform. When we do that, I think what you're seeing is we're pretty hard to beat for clients that are ready for that. All of our clients are on a journey. Some are really at the very beginning, some are way down the line, and most are somewhere in between. But when you see the power of that turn up in your office and the growth that we can deliver, again, without compromising on data ownership, it's a very strong proposition. So I feel very confident that we're going to be in a great position to deliver this on a repeatable, sustained basis.

Okay. What we've clearly shared today in our capital allocation framework is our commitment to an investment-grade balance sheet. And that feels more relevant as we progress through the Elevate28 plan and feels more relevant than the historic range that we had, and we are very committed to that investment-grade balance sheet. As I said in my remarks, and that's reinforced with the Fitch rating. I want to spend a bit of time on leverage. Leverage is really driven by obviously EBITDA and net debt. Our average adjusted net debt through '25 has actually come down slightly. Our elevated leverage is a result of that lower EBITDA, and hopefully, as you've heard today, we presented a plan that is going to get us back to growth. With that will follow improved margin, profitability, improved cash generation, and we'll help that out. We also talked about the importance of reducing our gross debt.

Julien Roch with Barclays. Looking at Page 41, you have a production CAGR over '24, '28 of minus 1% for the industry. I thought it was a growing part of agency services. So why the decline for the industry? And what can WP production can grow at? That's my first question. Then on organic, accelerate organic growth in 2028, the previous CEO had a 3% plus organic guidance. So if everything goes according to plan, what's your cruising altitude? What is your ambition? Then lastly, moving from holding company to a single company, does that mean one P&L per country? Or will you still have separate P&L for the new 4 entities? Or will you still have separate P&L per agency?

I might need to repeat your second question, but let me answer the first and the third first, and we can come back to that. Yes, look, on production, I shared this in my prepared remarks that there's subdued growth in production overall. That's not the way to look at what production can mean for our business and how that can contribute to our growth. Hundreds of millions of dollars that our clients spend and their production today goes outside of WPP. It goes to a variety of third-party providers. Hopefully, as you saw today, production is being completely revolutionized and transformed by AI. We talked about particular parts of production, high-velocity production, which is growing at 38%. That's a very small part of the production market today, but it is a huge opportunity. As the largest agency globally, with the investment that we're making in content studios, and with our team, we're incredibly well-placed to take advantage of that. With the WPP production consolidation, we are much fit for purpose to really internalize a lot of that client spend. So it's a win-win, and our clients are getting the very best of production capability in the market and that AI investment as well. In terms of the P&Ls, to how we will operate, maybe I'll start with WPP Creative and then look at it overall. So WPP Creative will run on P&Ls. The regional and market models will mirror media. In certain markets as well, actually, those media and creative and production operations and teams will be even more integrated. We will have one P&L for WPP Creative for the markets. For the agencies, we will still measure them on their revenues and their contributions, but that will not be the lead P&L. Across the other four areas, of course, they will each have their P&Ls that will roll up to WPP overall.

Just to build on that because I'm trying to understand your question. Please don't underestimate the significance of the change we're implementing. We're transitioning from hundreds of independent operating companies to four operating units across four regions. This unified incentive tied to WPP's overall performance will dramatically alter behaviors. It will eliminate friction within the organization, make us more client-focused, and allow us to allocate the right resources to the right clients at the right time. So I want to emphasize that we should not underestimate the complexities involved in making these proposed changes.

Julien, I think your second question was around our ambition on organic growth, if that's right. I said we weren't going to give specific medium-term targets, and that was quite intentional. We talked about the three phases. The job that we have to do as a management team in '26 is to stabilize the business, continue to build on that new business momentum, and improve our client retention. That will get us back to growth at some point during 2027, and then we will accelerate from there. I'm intentionally not putting a number on it, but that will give you a sense of what we're expecting in terms of the trajectory.

I understand that you prefer not to provide specific numbers, but I think it's more of a question for Cindy. What is your growth ambition for the next 5 to 10 years? What would you consider a success for WPP in relation to achieving the previous target of 3%, or do you have higher aspirations than that?

I'd like to reach the end of Elevate28 by capturing our fair share of the market and then going beyond that. In the short term, I am focused on delivering growth for clients, building on our market momentum, and stabilizing our performance. This will remain our priority in the short term.

Annick Maas from Bernstein asked about how a company with 100,000 employees can remain agile in a rapidly changing world and what challenges this presents. She also inquired about the impact of AI on staffing efficiencies in terms of workforce numbers and the cost of staff, considering the current industry landscape with fewer competitors. Additionally, she mentioned the rationalization of the portfolio and questioned who the potential buyers might be.

Staying agile is an ongoing effort. We consistently invest in skill development and building new capabilities for our employees. We offer creative technology apprenticeships and various formal AI coaching and training programs. Additionally, it’s important for us to maintain close relationships with our partners. We have what we refer to as forward deployed engineers. We integrate resources from our technology partners into our organization, provide them with training on our platform, and then deploy them to work with clients to co-create new solutions.

Yes. And exactly through the questions, I think Nico, I think it was you asked me about AI efficiencies, and I didn't answer. Look, as we look at the business going forward, undoubtedly, if nothing else changed, we can do more with less. So we can do a lot more with a lot fewer people, but it's never just as simple as that. What we're able to do now for our clients is before we might have created 5 ads and we were managing that. Now it might be 1,000 ads, and they’re very different in how they need to be adapted to target audiences and drive returns. That's requiring different skills and different talent in the organization. Now some of that, we are upskilling our people, some of that we're bringing new talent into the organization. If you think about the plan that we shared today, we'll be reallocating talent around the business. Yes, we will be delivering cost savings. In a business where most of our cost savings are people, that will mean a reduction of certain heads, but we will be reinvesting back into talent, different types of talent, commerce talent, influencer talent, much more analytics talent. We already have that at scale today, but really, those are the areas that we will be investing in, and with that will come a different profile. In terms of how we measure it, the most important metric will be revenue per head, and that will reflect also our ambition to grow and do more with people, decoupling our revenue model from our FTEs. That's really all around our client delivery. In the back office, there's an opportunity, and we're already doing it in pockets. How do we leverage open, how do we leverage AI to drive productivity savings in our back office. The plans over Elevate28 will do much more of that at scale and on a standardized level. Just in terms of the question, is there AI productivity you asked built into the GBP 500 million? There is on the back office side. On the front office, the way we think about it is we’re creating productivity efficiencies in how we do things, but we're reinvesting that back into delivering even more value, even more outcomes for our clients. That’s built into our plans.

The buyers. Well, look, as we shared, particularly in the people business, it's incredibly sensitive, and we're not at a point where we're ready to share externally. What is important is that we've seen an opportunity where we have embedded value of great assets that we have, that will give us greater financial flexibility and enable us to target our capital allocation more. For some of these assets, there are many buyers, some of them are attractive assets.

This was an exercise in determining the areas we want to prioritize investment in, being rigorously disciplined in our allocation of capital.

And finally, for me, a brief note on how our reporting is going to evolve to reflect this new structure. The current structure is shown here, and our ultimate objective is for our financial reporting to map directly onto our new organizational model. For segmental reporting purposes, the 4 operating units, which are the engines of our business, will be included in an enlarged global integrated agencies reportable segment, which will now include public relations and our design agencies. For regional reporting, results will be broken down by North America, EMEA, Latin America, and APAC. Over time, we want to give you better visibility into the engines of our business. Therefore, within global integrated agencies, we will provide specific disclosures on net revenue and organic growth for our key capabilities, media, production, creative, and enterprise solutions. That’s all for me, and I will hand you back to Cindy to wrap up. Amazing. Thank you, Joanne. Home stretch folks. So before we conclude and open up to questions, I want to spend a minute on how my team and I will hold ourselves accountable and measure success. As Joanne mentioned, our primary focus is to return our business to growth. Organic growth is our most important success metric, and getting back to consistent organic growth is our North Star as a management team. But as you know, organic growth is a lag indicator and will take us some time to deliver. Beyond the lag indicators, we've also included on the left a few leading indicators and success metrics that we have as part of our own scorecard that will provide tangible evidence along the way that the actions we're taking are working. I won't read them to you, but these include new business wins, client retention, cost savings, and asset disposals. These are types of lead indicators we'll be rigorously managing, and we're confident they will drive the outcomes that matter most over time. Consistent organic growth supported by a solid financial foundation. I also reassure you that we're not going to just simply disappear and report back on KPIs in a year's time. We want to see the execution of the strategy in real-time. We want to invite more frequent engagement with our investor community. In the coming months, we'll be hosting a series of deep dive webinars to take you further under the hood of our key growth engines, specifically in the areas of media, next-gen production, and enterprise solutions. Thanks for listening. Our mission has never been clearer to be the trusted growth partner to the world's leading brands in the era of AI. Elevate28 is a bold plan for a simpler, more integrated WPP. We will stabilize the business, return to organic growth, create capacity to invest, and deliver attractive returns for our shareholders. I'm confident that WPP has a bright future ahead. This is a WPP that is fit for the future and built to win. Now we're going to draw this strategy update to a close. We're going to invite questions from the audience for me, Joanne, Brian, or any members of the senior leadership team. Thank you.