WPP plc 6-K, filed Oct 28, 2021
WPP plc (WPP)
6-K
2021-10-28
For: 2021-10-28
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Added on
July 04, 2026
About this 6-K
WPP plc filed this 6-K on October 28, 2021.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 6-K
____________________
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the Month of October 2021
Commission File Number: 001-38303
______________________
WPP plc
(Translation of registrant's name into English)
________________________
Sea Containers, 18 Upper Ground
London, United Kingdom SE1 9GL
(Address of principal executive offices)
_________________________
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form
20-F X Form 40-F
___
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): ___
Note: Regulation S-T Rule 101(b)(1) only permits the
submission in paper of a Form 6-K if submitted solely to provide an
attached annual report to security holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): ___
Note: Regulation S-T Rule 101(b)(7) only permits the
submission in paper of a Form 6-K if submitted to furnish a report
or other document that the registrant foreign private issuer must
furnish and make public under the laws of the jurisdiction in which
the registrant is incorporated, domiciled or legally organized (the
registrant’s “home country”), or under the rules
of the home country exchange on which the registrant’s
securities are traded, as long as the report or other document is
not a press release, is not required to be and has not been
distributed to the registrant’s security holders, and, if
discussing a material event, has already been the subject of a Form
6-K submission or other Commission filing on EDGAR.
Forward-Looking Statements
In
connection with the provisions of the Private Securities Litigation
Reform Act of 1995 (the “Reform Act”), WPP plc and its
subsidiaries (the “Company”) may include
forward-looking statements (as defined in the Reform Act) in oral
or written public statements issued by or on behalf of the Company.
These forward-looking statements may include, among other things,
plans, objectives, projections and anticipated future economic
performance based on assumptions and the like that are subject to
risks and uncertainties. As such, actual results or outcomes may
differ materially from those discussed in the forward-looking
statements. Important factors that may cause actual results to
differ include but are not limited to: the unanticipated loss of a
material client or key personnel, delays or reductions in client
advertising budgets, shifts in industry rates of compensation,
regulatory compliance costs or litigation, natural disasters or
acts of terrorism, the Company’s exposure to changes in the
values of major currencies other than the UK pound sterling
(because a substantial portion of its revenues are derived and
costs incurred outside of the United Kingdom) and the overall level
of economic activity in the Company’s major markets (which
varies depending on, among other things, regional, national and
international political and economic conditions and government
regulations in the world’s advertising markets). In addition,
you should consider the risks described in Item 3D, captioned
“Risk Factors” in the Company’s Form 20-F for the
year ended 31 December 2019, which could also cause actual results
to differ from forward-looking information. In light of these and
other uncertainties, the forward-looking statements included in the
oral or written public statements should not be regarded as a
representation by the Company that the Company’s plans and
objectives will be achieved.
The
Company undertakes no obligation to update or revise any such
forward-looking statements, whether as a result of new information,
future events or otherwise.
EXHIBIT INDEX
|
Exhibit No.
|
Description
|
|
1
|
Third Quarter Trading Update dated 28 October 2021, prepared by WPP
plc.
|
WPP PLC ("WPP")
Third Quarter Trading Update
Very strong Q3 performance: LFL revenue less pass-through costs
+15.7% year-on-year, and +6.9% on 2019; full year guidance raised
to +11.5-12.0% LFL
|
|
£
million
|
+/(-)%
reported[1]
|
+/(-)%
LFL[2]
|
|
Third
Quarter
|
|
|
|
|
Revenue
|
3,240
|
9.1
|
14.7
|
|
Revenue less pass-through costs
|
2,640
|
9.9
|
15.7
|
|
|
|
|
|
|
Year to date
|
|
|
|
|
Revenue
|
9,373
|
9.6
|
15.6
|
|
Revenue less pass-through costs
|
7,539
|
6.7
|
12.6
|
■ Q3 revenue +9.1%; LFL revenue
+14.7%
■ Q3 LFL revenue less pass-through costs +15.7%;
+6.9% LFL on Q3 2019
■ Top five markets Q3 LFL revenue less pass-through
costs: US +12.4%; UK +16.9%; Germany +34.5%; Greater China +18.0%;
Australia +2.4%
■ Top five markets Q3 LFL revenue less pass-through
costs on 2019: US +6.2%; UK +9.3%; Germany +32.1%; Greater China
-1.7%; Australia -11.2%
■ Continued new business momentum: $1.7 billion won
in Q3, $4.6 billion net year-to-date
■ Ongoing strategic progress: merger of Finsbury
Glover Hering and SVC, acquisition of Satalia in
AI
■ Net debt £1.6 billion, down £1.0 billion
year-on-year at 2021 exchange rates: continued good working capital
management
■ £448 million share buyback year-to-date:
£600 million completed by year end; continuation of buyback up
to 2021 preliminary results
■ Full year 2021 guidance raised again: LFL revenue
less pass-through costs 11.5-12.0%, headline operating margin
slightly above 14%
Mark Read, Chief Executive Officer of WPP, said:
"Our
very strong performance goes well beyond a cyclical recovery, with
like-for-like growth over 2019 at 6.9% in the quarter. Clients
across all sectors and geographies are making significant
investments in marketing, particularly in digital media and
ecommerce services. We are now above 2019 levels in all of our
business lines, and with the actions we have taken over the last
three years, we are even better positioned for growth.
"Our
reshaped offer - which combines creativity with technology and
data, through Choreograph, with the largest global media platform
in GroupM - is proving its value for existing and new clients. This
is reflected in the continuation of our longstanding and successful
partnership with Unilever, and the growth of our relationship with
Bayer. In addition, we are delighted to have won new assignments
with Beiersdorf, L'Oréal, Sainsbury's and TD
Bank.
"We
have also made strategic progress, creating the world's leading
board-level communications firm through the merger of Finsbury
Glover Hering and SVC, and acquiring Satalia, a specialist in
artificial intelligence. We continue to return excess capital to
shareholders, buying back 4% of our shares so far this year. With
strong client demand, a clear strategic direction and a strong
balance sheet, we are well positioned to continue our momentum into
2022 and beyond."
For
further information:
|
Investors
and analysts
Peregrine
Riviere
Caitlin
Holt
Fran Butera
(US)
|
+44 7909
907193
+44 7392
280178
+1 914 484
1198
|
|
Media
Chris
Wade
|
+44 20 7282
4600
|
|
Richard
Oldworth,
Buchanan
Communications
|
+44 7710 130
634
+44 20 7466
5000
|
wpp.com/investors
Overview
During
the third quarter, the global communications market continued to
grow strongly, and this trend was widely reflected across WPP. Our
strength in media combined with our focus on digital, commerce and
data is delivering very positive momentum in the business. We
achieved double-digit growth in like-for-like revenue less
pass-through costs in 15 of our top 20 markets and most of our
agency networks. On a two-year basis, performance was led by GroupM
(37% of WPP in Q3) which was up 14.6% like-for-like, and
VMLY&R, which also grew double-digits. Our key agency networks,
and most of our markets, delivered an improving two-year trend in
Q3 compared to Q2.
In
new business, we continued to perform well. Most importantly, we
retained our long-term partnership with Unilever in media after a
thorough review. Including the business won in China last year, we
have expanded our remit with Unilever. We also grew our
relationship with Bayer, adding the key markets of Germany, Russia
and China to our existing media responsibilities. During the
period, we won new assignments from Beiersdorf, L'Oréal,
Sainsbury's, TD Bank and Under Armour among others.
At
the same time, we made strong strategic progress through mergers
and acquisitions, transforming existing businesses within WPP and
bringing in new capabilities to scale across the
company.
● In July, Kantar completed the acquisition of
Numerator, which
blends proprietary data, including a digital panel of over one
million US consumers, with advanced technology to create unique
insights that help companies understand their customers in real
time and identify growth opportunities. The transaction makes
Kantar a leader in shopper insights in the US and Canada,
consistent with its market position in 45 other
markets.
● In August, we acquired Satalia, a global leader in
enterprise AI and one of the UK's fastest-growing
technology companies, with clients including BT, DFS, DS Smith,
PwC, Gigaclear, Tesco and Unilever. Combining machine learning and
optimisation, it builds technologies that help clients apply AI to
their business. Satalia will join Wunderman Thompson Commerce and
strengthen the global ecommerce consultancy's technology
proposition. It will also act as a hub of AI expertise across
WPP.
● In October, we announced the merger of Finsbury
Glover Hering with SVC to create the world's leading strategic
communications firm, with deep expertise in government affairs,
corporate reputation, crisis management and financial
communications. The new combined group will comprise approximately
1,000 professionals operating from 25 offices in Asia, Europe, the
Middle East and the United States, including its global
headquarters in New York. Pro forma combined 2020 revenue was more
than $330 million.
Revenue
in the third quarter was up 9.1% at £3.2 billion, and up 14.3%
on a constant currency basis. Net changes from acquisitions and
disposals had a negative impact of 0.4% on growth, leading to a
like-for-like performance, excluding the impact of currency and
acquisitions, of 14.7%.
Revenue
less pass-through costs in the third quarter was up 9.9%
year-on-year to £2.6 billion, and up 15.3% on a constant
currency basis. Net changes from acquisitions and disposals had a
negative impact of 0.4% on growth, leading to a like-for-like
performance, excluding the impact of currency and acquisitions, of
15.7%.
Regional review
Revenue analysis
|
£
million
|
Q3
2021
|
Q3
2020
|
+/(-) %
reported
|
+/(-)
% LFL
|
|
N.
America
|
1,143
|
1,087
|
5.2
|
11.8
|
|
United
Kingdom
|
494
|
426
|
16.0
|
17.1
|
|
W.
Cont Europe
|
676
|
587
|
15.1
|
21.1
|
|
AP, LA, AME, CEE[3]
|
927
|
869
|
6.7
|
12.8
|
|
Total Group
|
3,240
|
2,969
|
9.1
|
14.7
|
Revenue less pass-through costs analysis
|
£
million
|
Q3
2021
|
Q3
2020
|
+/(-) %
reported
|
+/(-)
% LFL
|
|
N.
America
|
975
|
922
|
5.6
|
12.2
|
|
United
Kingdom
|
362
|
311
|
16.4
|
16.9
|
|
W.
Cont Europe
|
562
|
493
|
14.0
|
21.5
|
|
AP,
LA, AME, CEE
|
741
|
675
|
9.9
|
15.6
|
|
Total Group
|
2,640
|
2,401
|
9.9
|
15.7
|
North
America saw like-for-like
revenue less pass-through costs up 12.2% in the third quarter, with
strong growth in both the US and Canada. The US in particular saw a
strong acceleration in its two-year LFL growth rate, from 1.8% in
Q2 to 6.2% in Q3, driven mainly by GroupM.
In the United
Kingdom, like-for-like
revenue less pass-through costs was up 16.9% and achieved an
acceleration in its two-year LFL growth rate from 1.1% in Q2 to
9.3% in Q3. AKQA Group and VMLY&R performed particularly
strongly.
Western Continental
Europe like-for-like
revenue less pass-through costs grew by 21.5%. Performance in the
region accelerated strongly, driven by Germany where broad-based
growth was further boosted by a COVID-related contract. Italy
continued to perform strongly while Spain and France also recovered
to 2019 levels like-for-like.
Asia Pacific, Latin America,
Africa & the Middle East and Central & Eastern
Europe like-for-like
revenue less pass-through costs was up 15.6%. Latin America was
comfortably the strongest region, led by Brazil. Asia Pacific
continued to recover more slowly, with China, Australia and several
other markets still below 2019 levels.
Business sector review
During
2020, we announced that we would bring together Grey and AKQA under
the AKQA Group, brought Geometry and GTB into VMLY&R, and
International Healthcare into VMLY&R and Ogilvy. As a result
AKQA, Geometry, GTB and International Healthcare are now reported
within Global Integrated Agencies, having previously been reported
within Specialist Agencies. 2020 comparable revenue and revenue
less pass-through costs figures have been adjusted by a total of
£229 million and £211 million respectively to reflect
this change.
Revenue analysis
|
£
million
|
Q3
2021
|
Q3
2020
|
+/(-) %
reported
|
+/(-)
% LFL
|
|
Global
Integrated Agencies
|
2,748
|
2,545
|
8.0
|
13.1
|
|
Public
Relations
|
245
|
219
|
11.7
|
17.4
|
|
Specialist
Agencies
|
247
|
205
|
20.7
|
32.7
|
|
Total Group
|
3,240
|
2,969
|
9.1
|
14.7
|
Revenue less pass-through costs analysis
|
£
million
|
Q3
2021
|
Q3
2020
|
+/(-) %
reported
|
+/(-)
% LFL
|
|
Global
Integrated Agencies
|
2,185
|
2,016
|
8.3
|
13.5
|
|
Public
Relations
|
231
|
210
|
10.4
|
16.0
|
|
Specialist
Agencies
|
224
|
175
|
27.9
|
41.5
|
|
Total Group
|
2,640
|
2,401
|
9.9
|
15.7
|
Global Integrated
Agencies like-for-like
revenue less pass-through costs was up 13.5%. GroupM (37% of WPP's
revenue less pass-through costs in the third quarter) was up 19.0%
like-for-like, and up 14.6% like-for-like over 2019, reflecting
strong structural growth in digital and commerce media. VMLY&R
was the next best performer, growing double-digits like-for-like
year-on-year and over 2019. All the other agencies showed an
improving two-year trend compared to the second
quarter.
Public
Relations like-for-like
revenue less pass-through costs was up 16.0%, and up 12.6% over
2019. Demand for board-level strategic communications advice
remains strong, and Specialist PR was again the best performer.
Both BCW and H+K Strategies maintained strong momentum, with growth
accelerating from the second quarter.
Specialist
Agencies, with like-for-like
revenue less pass-through costs up 41.5%, and up 21.8% on 2019, was
again the best performing sector within WPP. Our Brand Consulting
businesses continue to perform very well, as does CMI, our
specialist healthcare media business. Growth for the sector was
boosted by the COVID-related contract in
Germany.
Balance sheet highlights
Average
net debt in the first nine months of 2021 was £1.6 billion,
compared to £2.5 billion in 2020, at 2021 exchange rates, a
decrease of £0.9 billion. Net debt at 30 September 2021 was
£1.6 billion, compared to £2.3 billion on 30 September
2020, or £2.6 billion at 2021 exchange rates, a decrease of
£1.0 billion.
Share
purchases of £458 million were made in the first nine months
of the year, of which £408 million related to share buybacks.
As of 27 October 2021 the total share buyback had reached £448
million.
2021 outlook
As
a result of our continued strong business momentum in Q3, we are
further raising our guidance for 2021:
■ Like-for-like revenue less pass-through costs
growth of 11.5-12.0% (previously 9-10% growth)
■ Headline operating margin slightly above 14%
(previously towards the upper end of the range of
13.5-14.0%)
■ Capex £450-500 million
Our
current projections for foreign exchange movements imply around a 5
percentage point drag to reported revenue less pass-through costs
from the strength of sterling year-on-year. As previously guided,
we anticipate a small net trade working capital outflow for 2021 of
£200-300 million, reflecting some normalisation from the very
strong position at the end of 2020.
We
expect to complete the £600 million share buyback in December.
Given the strength of our balance sheet and strong cash generation,
we anticipate continuing the buyback at a similar rate up to the
date of our 2021 preliminary results, provisionally planned for
late February 2022, at which point we will lay out our capital
allocation plans for the coming year in more detail.
Appendix
Regional Review
Revenue analysis - Nine Months Year-to-Date
|
£
million
|
9M
2021
|
9M
2020
|
+/(-) %
reported
|
+/(-) %
LFL
|
|
N.
America
|
3,327
|
3,264
|
1.9
|
10.7
|
|
United
Kingdom
|
1,421
|
1,184
|
20.1
|
20.1
|
|
W.
Cont Europe
|
2,017
|
1,680
|
20.0
|
22.7
|
|
AP,
LA, AME, CEE
|
2,608
|
2,424
|
7.6
|
14.8
|
|
Total Group
|
9,373
|
8,552
|
9.6
|
15.6
|
Revenue less pass-through costs analysis - Nine Months
Year-to-Date
|
£
million
|
9M
2021
|
9M
2020
|
+/(-) %
reported
|
+/(-) %
LFL
|
|
N.
America
|
2,792
|
2,779
|
0.5
|
9.1
|
|
United
Kingdom
|
1,042
|
897
|
16.2
|
16.9
|
|
W.
Cont Europe
|
1,612
|
1,412
|
14.1
|
17.2
|
|
AP,
LA, AME, CEE
|
2,093
|
1,981
|
5.7
|
12.3
|
|
Total Group
|
7,539
|
7,069
|
6.7
|
12.6
|
Business Sector Review
During
2020, we announced that we would bring together Grey and AKQA under
the AKQA Group, brought Geometry and GTB into VMLY&R, and
International Healthcare into VMLY&R and Ogilvy. As a result
AKQA, Geometry, GTB and International Healthcare are now reported
within Global Integrated Agencies, having previously been reported
within Specialist Agencies. 2020 comparable revenue and revenue
less pass-through costs figures have been adjusted by a total of
£705 million and £646 million respectively to reflect
this change.
Revenue analysis - Nine Months Year-to-Date
|
£
million
|
9M
2021
|
9M
2020
|
+/(-) %
reported
|
+/(-) %
LFL
|
|
Global
Integrated Agencies
|
7,918
|
7,270
|
8.9
|
15.0
|
|
Public
Relations
|
695
|
666
|
4.3
|
10.8
|
|
Specialist
Agencies
|
760
|
616
|
23.5
|
27.9
|
|
Total Group
|
9,373
|
8,552
|
9.6
|
15.6
|
Revenue less pass-through costs analysis - Nine Months
Year-to-Date
|
£
million
|
9M
2021
|
9M
2020
|
+/(-) %
reported
|
+/(-) %
LFL
|
|
Global
Integrated Agencies
|
6,254
|
5,913
|
5.8
|
11.8
|
|
Public
Relations
|
660
|
636
|
3.9
|
10.3
|
|
Specialist
Agencies
|
625
|
520
|
20.1
|
24.9
|
|
Total Group
|
7,539
|
7,069
|
6.7
|
12.6
|
Cautionary statement regarding forward-looking
statements
This
document contains statements that are, or may be deemed to be,
"forward-looking statements". Forward-looking statements give the
Group's current expectations or forecasts of future events. An
investor can identify these statements by the fact that they do not
relate strictly to historical or current facts. They use words such
as 'anticipate', 'estimate', 'expect', 'intend', 'will', 'project',
'plan', 'believe', 'target' and other words and terms of similar
meaning in connection with any discussion of future operating or
financial performance.
These
forward-looking statements may include, among other things, plans,
objectives, projections and anticipated future economic performance
based on assumptions and the like that are subject to risks and
uncertainties. As such, actual results or outcomes may differ
materially from those discussed in the forward-looking statements.
Important factors which may cause actual results to differ include
but are not limited to: the unanticipated loss of a material client
or key personnel, delays or reductions in client advertising
budgets, shifts in industry rates of compensation, regulatory
compliance costs or litigation, natural disasters or acts of
terrorism, the Company's exposure to changes in the values of other
major currencies (because a substantial portion of its revenues are
derived and costs incurred outside of the UK) and the overall level
of economic activity in the Company's major markets (which varies
depending on, among other things, regional, national and
international political and economic conditions and government
regulations in the world's advertising markets). In addition, you
should consider the risks described under Item 3D 'Risk Factors' in
the Group's Annual Report on Form 20-F for 2020 and any impacts of
the COVID-19 pandemic which could also cause actual results to
differ from forward-looking information. In light of these and
other uncertainties, the forward-looking statements included in
this document should not be regarded as a representation by the
Company that the Company's plans and objectives will be achieved.
Other than in accordance with its legal or regulatory obligations
(including under the Market Abuse Regulation, the UK Listing Rules
and the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority), the Group undertakes no obligation to update
any forward-looking statements, whether as a result of new
information, future events or otherwise. The reader should,
however, consult any additional disclosures that the Group may make
in any documents which it publishes and/or files with the SEC. All
readers, wherever located, should take note of these disclosures.
Accordingly, no assurance can be given that any particular
expectation will be met and investors are cautioned not to place
undue reliance on the forward-looking statements.
Any
forward looking statements made by or on behalf of the Group speak
only as of the date they are made and are based upon the knowledge
and information available to the Directors on the date of this
document.
[1] Percentage
change in reported sterling.
[2] 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 include the results of
acquisitions and disposals for the commensurate period in the prior
year.
[3] Asia
Pacific, Latin America, Africa & Middle East and Central &
Eastern Europe.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
|
WPP PLC
|
|
|
(Registrant)
|
|
Date:
28 October 2021.
|
By:
______________________
|
|
|
Balbir
Kelly-Bisla
|
|
|
Company
Secretary
|