WPP plc 6-K, filed Apr 27, 2022
WPP plc (WPP)
6-K
2022-04-27
For: 2022-04-27
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Added on
April 12, 2026
About this 6-K
WPP plc filed this 6-K on April 27, 2022.
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 April 2022
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 U.S. Private Securities
Litigation Reform Act of 1995 (the ‘Reform Act’), 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, beliefs,
intentions, strategies, projections and anticipated future economic
performance based on assumptions and the like that are subject to
risks and uncertainties. These statements can be identified 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
similar references to future periods but are not the exclusive
means of identifying such statements. As such, all forward-looking
statements involve risk and uncertainty because they relate to
future events and circumstances that are beyond the control of the
Company. Actual results or outcomes may differ materially from
those discussed or implied in the forward-looking statements.
Therefore, you should not rely on such forward-looking statements,
which speak only as of the date they are made, as a prediction of
actual results or otherwise. Important factors which may cause
actual results to differ include but are not limited to: the impact
of outbreaks, epidemics or pandemics, such as the Covid-19 pandemic
and ongoing challenges and uncertainties posed by the Covid-19
pandemic for businesses and governments around the world; 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; changes
in competitive factors in the industries in which we operate and
demand for our products and services; our inability to realise the
future anticipated benefits of acquisitions; failure to realise our
assumptions regarding goodwill and indefinite lived intangible
assets; natural disasters or acts of terrorism; the Company’s
ability to attract new clients; the economic and geopolitical
impact of the Russian invasion of Ukraine; the risk of global
economic downturn; technological changes and risks to the security
of IT and operational infrastructure, systems, data and information
resulting from increased threat of cyber and other attacks; 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 in Item 3D, captioned
“Risk Factors,” 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. Neither the Company, nor any of its directors, officers
or employees, provides any representation, assurance or guarantee
that the occurrence of any events anticipated, expressed or implied
in any forward-looking statements will actually occur. 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
|
First Quarter Trading Update dated 27 April 2022, prepared by WPP
plc.
|
27 April 2022
WPP
First Quarter Trading Update
Strong start to the year across the business; continued investment
in growth; LFL growth guidance raised to 5.5-6.5%
|
|
£ million
|
% reported[1]
|
% LFL[2]
|
|
First Quarter
|
|
|
|
|
Revenue
|
3,091
|
6.7%
|
8.1%
|
|
Revenue less pass-through costs
|
2,574
|
10.3%
|
9.5%
|
■ Q1 revenue +6.7%; LFL revenue
+8.1%
■ Q1 LFL revenue less pass-through costs
+9.5%
■ Top five markets Q1 LFL revenue less pass-through
costs: USA +8.9%, UK +8.1%, Germany +16.1%, China +11.9%, India
+25.1%
■ LFL revenue less pass-through costs by business
sector: Global Integrated Agencies +8.6% (GroupM +12.8%, ex GroupM
+5.6%), Public Relations +14.1%, Specialist Agencies
+13.0%
■ $1.8 billion net new business won, including Mars,
JDE Peet's, Sky
■ Launch of Everymile, our commerce-as-a-service
proposition; acquisition of Village Marketing; merger of Mediacom
and Essence, and creation of GroupM Nexus
■ £362 million of share buybacks in
Q1
■ 2022 guidance raised: LFL revenue less
pass-through costs growth now expected to be 5.5-6.5%, up from
around 5%
Mark Read, Chief Executive Officer of WPP, said:
"The year has started very well with continued momentum from 2021
resulting in strong growth across all businesses and regions.
Demand is strong for our services, particularly in digital media,
ecommerce, data and marketing technology.
"The war in Ukraine has created an appalling humanitarian
crisis. We continue to support our people in Ukraine,
many of whom are now displaced, with financial and practical
assistance. Our partnership with the UNHCR on their emergency
fundraising appeal has generated $150 million to date, including
over $1.3 million from our employee match-funding programme.
On 4 March, we announced that we would exit the Russian market, and
we have now reached agreement to divest our businesses
there.
"We continue to see strong demand for our services from our clients
and to invest in the many opportunities for growth driven by the
digital transition, including Choreograph and the recent launch of
Everymile. As a result of a strong first quarter, we now
expect our growth to be in the range of 5.5% to 6.5%, up from
around 5% at the start of the year. We remain very mindful of the
impact of the broader macroeconomic environment on our business
and will respond quickly to any changes as the year
progresses."
For further information:
Investors and analysts
Peregrine
Riviere
+44 7909 907193
Anthony Hamilton
+44 7464
532903
Caitlin
Holt
+44 7392 280178
Media
Chris
Wade
+44 20 7282 4600
Richard
Oldworth,
+44 20 7466 5000
Buchanan Communications
+44 7710 130 634
wpp.com/investors
Overview
The
year has started strongly, continuing the positive momentum built
up through 2021. Revenue in the first quarter was up 6.7% at
£3.1 billion. On a constant currency basis, revenue was up
6.4% year-on-year. Like-for-like growth, excluding the impact of
currency, acquisitions and disposals, was 8.1%.
Revenue less pass-through costs in the first quarter was up 10.3%
year-on-year to £2.6 billion, and up 10.0% on a constant
currency basis. Excluding the positive net impact from acquisitions
and disposals, like-for-like growth was 9.5%.
Ukraine
Our
200 people in Ukraine have shown extraordinary resilience and
bravery in the face of the horrific attack on their country, and we
continue to be inspired by their example and the outpouring of
support from their colleagues in the region and worldwide. We are
in constant contact with our leaders in Ukraine to provide
financial and other forms of practical assistance for our
employees.
WPP has partnered with UNHCR, the UN Refugee Agency, to run an
emergency fundraising appeal to help people forced to flee their
homes in search of safety in other parts of Ukraine or neighbouring
countries, raising over $150 million so far, including over $1.3
million from our employee match-funding
programme.
The Board of WPP concluded early in March that WPP's ongoing
presence in Russia would be inconsistent with our values as a
company and we have subsequently reached agreement to divest our
businesses there. Russia represented approximately 0.6% of WPP's
revenue less pass-through costs in 2021.
Operational and strategic progress
We
saw strong growth across all business sectors and regions, as
client demand for our integrated offer remained very positive. We
are benefiting from our excellent new business performance in 2020
and 2021, with the onboarding of Coca-Cola being a significant
focus. In new business reviews so far this year, we extended our
relationship with Mars becoming their global media partner, added
digital to our Sky media remit, won the global creative account for
JDE Peet's and were appointed strategic communications partner by
Migros, with a focus on commerce strategy, data and content. We
also won new assignments with Samsung and Square.
Our agencies continue to be recognised in awards and accolades. In
the 2022 WARC rankings, WPP topped the holding company rankings for
media and effectiveness, and MediaCom, Mindshare and Ogilvy were
all ranked top in their categories. MediaCom was also named
Adweek's 2022 Global Media Agency of the Year for the second
consecutive year. Grey won Gold at the International ANDY Awards
for their Widen the Screen campaign for Procter & Gamble, and
was also recognised in Advertising Age's A List 2022 along with
Cartwright and DAVID.
We further enhanced our offer to clients through continued
investment in a number of new platforms. This week we announced the
launch of Everymile, a new digital commerce managed service that
will offer brands a fully
outsourced direct-to-consumer (DTC)
ecommerce solution.
In February Hogarth, WPP's specialist global creative content
production company, announced the launch of The Metaverse Foundry,
a global team of over 700 people dedicated to delivering brand
experiences for clients in the metaverse from design to
execution.
We continue to transform GroupM, our media investment
business, to
accelerate innovation for clients and further simplify its
operations. Yesterday we announced that Essence and MediaCom will
merge to form EssenceMediacom, a new agency offering combining
Essence's digital and data-driven model with MediaCom's scaled
multichannel audience planning and strategic media expertise.
We are also bringing together Finecast, Xaxis, and GroupM Services
- GroupM's global community of activation experts - to form GroupM
Nexus, the world's leading media performance organisation. In
addition, Mindshare will complete its merger with global
performance agency Neo.
During the first quarter we introduced GroupM Premium Marketplace,
a unified programmatic marketplace supported by global partnership
agreements with Magnite and PubMatic that will increase media
buying transparency and efficiency. GroupM Premium Marketplace will
provide clients with direct access to high-quality publisher
inventory across connected TV, digital video and display,
underpinned by new standards for performance measurement, further
reducing opportunities for fraud and inventory misrepresentation in
the media supply chain.
We recently strengthened our commitment to the creator economy
through the acquisition of Village Marketing, the industry leader
in influencer marketing in North America. Village Marketing has 150
employees and was specifically created with the vision of building
brands in a social media and mobile first world. It has led
creative campaigns for some of the foremost consumer brands of the
last decade, including Equinox, Nike, Netflix and
SoulCycle.
Regional review
Revenue less pass-through costs analysis
|
£
million
|
Q1 2022
|
Q1
2021
|
+/(-) %
reported
|
+/(-) % LFL
|
|
N. America
|
1,015
|
886
|
14.6%
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8.7%
|
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United Kingdom
|
352
|
321
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9.8%
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8.1%
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|
W. Cont Europe
|
507
|
492
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3.2%
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8.9%
|
|
AP, LA, AME, CEE
|
700
|
635
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10.1%
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11.9%
|
|
Total Group
|
2,574
|
2,334
|
10.3%
|
9.5%
|
North America saw
like-for-like revenue less pass-through costs up 8.7%. Growth in
the USA was +8.9%, driven mainly by GroupM, Hogarth and Brand
Consulting.
In the United
Kingdom, like-for-like
revenue less pass-through costs was up 8.1%, with Landor &
Fitch, H+K, AKQA Group and Hogarth being the strongest
performers.
Western Continental Europe like-for-like revenue less pass-through costs grew
by 8.9%. Germany, Denmark and Spain all performed strongly, while
France, Italy and the Netherlands have been slower to
recover.
Asia Pacific, Latin America, Africa & the Middle East and
Central & Eastern Europe like-for-like revenue less pass-through
costs was up 11.9%. The strongest growth was in Latin America,
driven by Brazil. Asia Pacific also grew double-digits, supported
by good performances in China and India.
Business sector review
Revenue less pass-through costs analysis
|
£
million
|
Q1 2022
|
Q1
2021
|
+/(-) %
reported
|
+/(-) % LFL
|
|
Global
Integrated Agencies
|
2,106
|
1,947
|
8.2%
|
8.6%
|
|
Public
Relations
|
262
|
206
|
27.4%
|
14.1%
|
|
Specialist
Agencies
|
206
|
181
|
14.0%
|
13.0%
|
|
Total Group
|
2,574
|
2,334
|
10.3%
|
9.5%
|
Prior year figures have been restated to reflect the reallocation
of a number of businesses between Global Integrated Agencies and
Specialist Agencies. This increases Global Integrated Agencies' Q1
2021 revenue less pass-through costs by £13 million and
reduces Specialist Agencies' by the same amount.
Global Integrated Agencies like-for-like revenue less pass-through
costs was up 8.6%, with GroupM (approximately 36% of WPP revenue
less pass-through costs in Q1) up 12.8%. Excluding GroupM, Global
Integrated Agencies was up 5.6%, with Hogarth the strongest
performer. AKQA Group, Ogilvy and Wunderman Thompson all recorded
good growth, and VMLY&R also continued to grow despite a strong
prior period.
Public Relations like-for-like revenue less pass-through
costs was up 14.1%, continuing its very strong momentum of the last
18 months. H+K, BCW and Finsbury Glover Hering, now merged with
SVC, all achieved double-digit like-for-like
growth.
Specialist Agencies like-for-like revenue less pass-through
costs was up 13.0%, again showing sustained growth from 2021 and
despite lapping a very strong prior period. Most of the larger
agencies recorded double-digit like-for-like
growth.
Balance sheet highlights
Average
net debt in the first three months of 2022 was £1.6 billion,
compared to £1.0 billion in the first quarter of 2021, at 2022
exchange rates, an increase of £0.6 billion. Net debt at 31
March 2022 was £2.6 billion, compared to £0.9 billion on
31 December 2021, at 2022 exchange rates, an increase of £1.7
billion, driven largely by seasonal net working capital movements
and share purchases. We spent £405 million on share purchases
in the first quarter, of which £362 million were share
buybacks and £43 million were purchases into the employee
benefit trust.
Outlook
The
year has started strongly, with performance well ahead of our
expectations in the first quarter, and client demand for our
services remaining strong as we enter the second quarter. This
underpins our confidence and supports our continued investment in
expanding our offer to drive long-term growth through platforms
such as Choreograph in data, Finecast in connected TV and Everymile
in D2C commerce.
Our updated guidance takes into account the strong first quarter
performance and the impact of the current outlook for the global
economy on our business. Given the uncertain global environment, we
remain ready to respond to any changes in the economy as the year
progresses.
■ Like-for-like revenue less pass-through costs of
5.5-6.5% (previously around 5%)
■ Headline operating margin improvement targeted at
around 50 bps, excluding the impacts of M&A and foreign
exchange
■ Capex £350-400 million
■ Trade working capital expected to be flat
year-on-year
■ Foreign exchange rate benefit of 2.0-2.5% on
reported revenue less pass-through costs from the movement in
sterling year-on-year
■ Mergers and acquisitions benefit of 0.5-1.0% to
revenue less pass-through costs
■ Around £800 million of share buybacks in
2022, of which £362 million was completed in the first
quarter
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
Company'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.
These forward-looking statements may include, among other things,
plans, objectives, beliefs, intentions, strategies, projections and
anticipated future economic performance based on assumptions and
the like that are subject to risks and uncertainties. These
statements can be identified 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 similar references
to future periods but are not the exclusive means of identifying
such statements. As such, all forward-looking statements involve
risk and uncertainty because they relate to future events and
circumstances that are beyond the control of the Company. Actual
results or outcomes may differ materially from those discussed or
implied in the forward-looking statements. Therefore, you should
not rely on such forward-looking statements, which speak only as of
the date they are made, as a prediction of actual results or
otherwise. Important factors which may cause actual results to
differ include but are not limited to: the impact of outbreaks,
epidemics or pandemics, such as the Covid-19 pandemic and ongoing
challenges and uncertainties posed by the Covid-19 pandemic for
businesses and governments around the world; 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; changes in
competitive factors in the industries in which we operate and
demand for our products and services; our inability to realise the
future anticipated benefits of acquisitions; failure to realise our
assumptions regarding goodwill and indefinite lived intangible
assets; natural disasters or acts of terrorism; the Company's
ability to attract new clients; the economic and geopolitical
impact of the Russian invasion of Ukraine; the risk of global
economic downturn; technological changes and risks to the security
of IT and operational infrastructure, systems, data and information
resulting from increased threat of cyber and other attacks; 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 2021, which could also
cause actual results to differ from forward-looking information.
Neither the Company, nor any of its directors, officers or
employees, provides any representation, assurance or guarantee that
the occurrence of any events anticipated, expressed or implied in
any forward-looking statements will actually occur. 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.
Other than in accordance with its legal or regulatory obligations
(including under the Market Abuse Regulation, the UK Listing Rules
and the Disclosure and Transparency Rules of the Financial Conduct
Authority), 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.
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 vs prior year from continuing
operations.
[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 from continuing operations, adjusted to
include the results of acquisitions and disposals for the
commensurate period in the prior year. Both periods exclude results
from Russia.
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.
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WPP PLC
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(Registrant)
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Date:
27 April 2022
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By:
______________________
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|
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Balbir
Kelly-Bisla
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|
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Company
Secretary
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