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 2023
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 ‘aim’,
‘anticipate’, ‘believe’,
‘estimate’, ‘expect’,
‘forecast’, ‘guidance’,
‘intend’, 'may', ‘will’,
‘should’, ‘potential’,
‘possible’, ‘predict’,
‘project’, ‘plan’, ‘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, epidemics or pandemics including restrictions on
businesses, social activities and travel; 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; changes in client advertising, marketing and
corporate communications requirements; 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, slower growth, increasing interest rates and
high and sustained inflation; supply chain issues affecting the
distribution of our clients’ products; 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” in the
company's 2022 Annual Report on Form 20-F, 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 2023, prepared by WPP
plc.
|
27 April 2023
WPP PLC ("WPP")
First Quarter Trading Update
Positive start to the year; reaffirmed guidance for 3-5% LFL growth
in 2023 with an operating margin of around 15%
|
|
£ million
|
% reported[1]
|
|
|
First Quarter
|
|
|
|
|
Revenue
|
3,460
|
11.9
|
4.9
|
|
Revenue less pass-through costs
|
2,829
|
9.9
|
2.9
|
■
Q1
revenue +11.9%; LFL revenue +4.9%
■
Q1
LFL revenue less pass-through costs +2.9%, demonstrating continued
momentum
■
$1.5
billion net new business won, including from Adobe, Ford, Maruti
Suzuki, Mondelēz and Swissport
■
WPP
topped all three WARC rankings: Creative 100, Effective 100 and
Media 100, for 2023
■
Acquisitions
of Obviously and Goat to invest in influencer marketing expertise;
and 3K Communication, a healthcare PR agency in Germany
■
KKR to take minority investment in FGS
Global at
a valuation of $1.425 billion
■
2023
guidance reaffirmed: LFL revenue less pass-through costs growth
expected to be 3-5%; with headline operating margin around 15%
(excluding the impact of FX)
Mark Read, Chief Executive Officer of WPP, said:
"We have seen a positive start to the year, in line with
expectations, reflecting continued spending by clients in
communications, customer experience, commerce, data and technology
to support their businesses and brands.
"We are continuing to strengthen the company - winning new clients,
hiring new creative leadership, investing in our technology
platforms and data, making three acquisitions in the growth areas
of healthcare and influencer marketing and bringing in a minority
partner to FGS Global. Our focus on AI over the last five years is
paying off, with many examples of our work with clients, using the
main AI platforms, in-market today.
"We remain on track to deliver our full year guidance, thanks to
the competitiveness of our offer and our role as a modern, trusted
partner to clients in a world further disrupted by
technology."
For further information:
|
Investors and analysts
Tom
Waldron
Anthony
Hamilton
Caitlin
Holtirteam@wpp.com
|
+44
7867 975920
+44
7464 532903
+44
7392 280178
|
|
Media
Chris
Wade
Richard
Oldworth
Buchanan
Communications
|
+44 20
7282 4600
+44
7710 130 634
+44 20
7466 5000
|
|
wpp.com/investors
|
|
Overview
|
|
Q1 2023
£ million
|
%
reported
|
%
M&A
|
%
FX
|
%
LFL
|
|
Revenue
|
3,460
|
11.9
|
0.8
|
6.2
|
4.9
|
|
Revenue less pass-through costs
|
2,829
|
9.9
|
0.7
|
6.3
|
2.9
|
Business segment
|
|
Global
Integrated Agencies
|
o/w[3]
GroupM
|
o/w
GIA ex GroupM
|
Public Relations
|
Specialist Agencies
|
|
Q1 2023 +/(-)% LFL
|
3.0
|
6.1
|
0.7
|
2.2
|
1.9
|
Top five markets
|
|
USA
|
UK
|
Germany
|
China
|
India
|
|
Q1 2023 +/(-)% LFL
|
2.3
|
7.4
|
4.0
|
(13.0)
|
(1.4)
|
Operational and strategic progress
We saw encouraging growth against last year's first quarter which
was the strongest LFL growth quarter of the year. Performance was
broad-based across all our business lines and regions. GroupM, our
media planning and buying business, performed strongly, reflecting
its unparalleled global scale and the strength of its integrated
digital and offline offer.
Our
momentum in new business continues with $1.5 billion of net new
business in the quarter. Account wins include work for Adobe
(media), Ford (social media), Maruti Suzuki (media), Mondelēz
(production), Lloyds Banking Group (technology), and Swissport
(public relations).
We
are proud to have topped all three 2023 WARC rankings after WPP was
named the number one company in the Creative 100, Effective 100 and
Media 100 lists. Ogilvy also ranked as the top network of the year
in both the Creative 100 and Effective 100 while EssenceMediacom
took first place in the Media 100.
We
invested organically to accelerate our data and technology
capabilities. Choreograph, our global data products and technology
company, continues to scale its offer.
We
believe that AI will be fundamental to WPP's business and are
excited by its transformational potential. There are many
applications of AI today in the work we do for clients,
particularly in GroupM, our media planning and buying business, and
in Hogarth, our creative production business. We are using AI to
automate workflows, speed the process of ideation and concepting,
and produce innovative creative work for clients, such as our
award-winning work for Cadbury's in India which used AI to allow
Bollywood superstar Shah Rukh Kahn to produce personalised ads for
local businesses. Our expertise in the application of AI to
marketing is based on investments that we have been making for some
time, including the appointment of a Head of Creative AI in 2019
and the acquisition of Satalia in 2021. We are working with
technology from all the main AI companies, including Adobe, Google,
IBM, Microsoft, Nvidia, and OpenAI, with dedicated enterprise
platforms, proprietary to WPP, to deliver work to clients that
protects their information and IP and using legal guidelines that
allow us to responsibly deploy this technology. Finally, we
recognise the challenges of AI to society and are committed to
using it responsibly.
Our
campus programme expanded further, opening two new campuses this
year in Manchester and Guangzhou.
In March, we announced a new strategic partnership with KDDI, one
of Japan's leading telecommunications groups, to jointly develop
next-generation digital capabilities and bridge Japanese content
and culture globally. We also announced a partnership with Braze, a
best-in-class customer engagement platform aimed at helping
brands use its offering to automate the creation of personalised
and timely communications.
We completed three acquisitions during the quarter which will
strengthen our capabilities in strategically important areas of our
offer: Goat, a London-based data-driven influencer marketing
agency; Obviously, a New York-based technology-led influencer
marketing agency; and 3K Communication, a Frankfurt-based
healthcare PR agency to build out our healthcare presence in
Germany.
In April, we announced that global investment firm KKR will become
a strategic partner in FGS Global, our leading strategic advisory
and communications consultancy. KKR will become a 29% shareholder
in FGS Global, acquiring all of Golden Gate Capital's equity and a
proportion of the interests of WPP and FGS Global management. WPP
will remain the majority owner at 51%. The transaction, which
values FGS Global at $1.425 billion, is expected to close before
the end of the third quarter of 2023, subject to regulatory
approvals and other customary closing conditions.
Finally, in April we acquired amp, one of the world's leading sonic
branding companies, to strengthen our offer in experiential
branding and ability to create high-quality, differentiated, and
ownable sound experiences for clients.
Business sector review
Revenue less pass-through costs analysis
|
£
million
|
Q1 2023
|
Q1
2022
|
+/(-) %
reported
|
+/(-) % LFL
|
|
Global
Integrated Agencies
|
2,307
|
2,106
|
9.6
|
3.0
|
|
Public
Relations
|
292
|
262
|
11.5
|
2.2
|
|
Specialist
Agencies
|
230
|
206
|
11.3
|
1.9
|
|
Total Group
|
2,829
|
2,574
|
9.9
|
2.9
|
Global Integrated Agencies like-for-like
revenue less pass-through costs was up 3.0%, with GroupM
(approximately 36% of WPP revenue less pass-through costs in Q1) up
6.1%. Excluding GroupM, Global Integrated Agencies was up 0.7%,
with very good growth at Ogilvy driven by strength in consumer
packaged goods clients and recent new business wins. This was
partially offset by a slower start to the year at Wunderman
Thompson, primarily due to lower spend from some technology
clients, and AKQA Group, reflecting a softer start to the year at
Grey.
Public
Relations like-for-like
revenue less pass-through costs was up 2.2%, with FGS Global
performing particularly strongly and slightly softer performance at
BCW and Hill+Knowlton Strategies.
Specialist
Agencies like-for-like
revenue less pass-through costs was up 1.9%, with very strong
growth in CMI Media Group, our specialist healthcare media agency,
and good growth at Landor & Fitch, partially offset by the
final run-off of a COVID-related government contract in
Germany.
Regional
review
Revenue less pass-through costs analysis
|
£
million
|
Q1 2023
|
Q1
2022
|
+/(-) %
reported
|
+/(-) % LFL
|
|
N. America
|
1,150
|
1,015
|
13.3
|
1.9
|
|
United Kingdom
|
377
|
352
|
7.0
|
7.4
|
|
W. Cont Europe
|
558
|
507
|
10.0
|
3.4
|
|
AP, LA, AME, CEE
|
744
|
700
|
6.4
|
1.9
|
|
Total Group
|
2,829
|
2,574
|
9.9
|
2.9
|
North America saw
like-for-like revenue less pass-through costs up 1.9%. Growth in
the USA was 2.3%, primarily driven by growth in spending from
clients in consumer packaged goods, financial services and
telecoms, media & entertainment offsetting a weaker performance
from some clients in technology & digital services and
retail.
In the United
Kingdom, like-for-like
revenue less pass-through costs was up 7.4%, with strong spending
from clients in consumer packaged goods.
Western Continental
Europe like-for-like
revenue less pass-through costs grew by 3.4% supported by good
growth in Spain, Italy and Germany. France declined year-on-year
mainly due to client losses.
Asia Pacific, Latin America,
Africa & the Middle East and Central & Eastern
Europe like-for-like
revenue less pass-through costs was up 1.9%, with double-digit
growth in Middle East & Africa and Central & Eastern Europe
offsetting declines in Asia Pacific. China declined 13.0%
reflecting high levels of infection at the start of the year and a
strong comparative quarter in 2022 (+11.9%). However, we did see
some improvement in client media expenditure and sentiment towards
the end of the quarter which has continued into
April.
India
declined 1.4% reflecting the impact of macroeconomic uncertainty at
the beginning of the quarter and phasing against the comparative
quarter (Q1 2022) which saw strong growth of 25.1%.
Declines
in China, India and Brazil were partially offset by growth in
Japan, Australia and smaller markets.
Balance sheet highlights
Average
net debt in the first three months of 2023 was £3.2 billion,
compared to £1.6 billion reported in the first quarter of
2022, an increase of £1.6 billion, of which £0.1 billion
was due to FX.
Net
debt at 31 March 2023 was £3.9 billion, compared to £2.5
billion reported on 31 December 2022, an increase of £1.4
billion, driven largely by expected seasonal net working capital
movements and the three M&A transactions in the
quarter.
Outlook
We
are reaffirming our guidance for 2023 as follows:
|
Like-for-like
revenue less pass-through costs growth of 3-5%;
further
margin improvement reflecting continued operating leverage to
deliver a headline margin of around 15% (excluding the impact of
FX)
|
Other 2023 financial guidance:
■
We
also anticipate mergers and acquisitions will add 0.5-1.0% to
revenue less pass-through costs growth
■
Headline income from associates is expected to be
around £40 million[4]
■
Effective
tax rate (measured as headline tax as a % of headline profit before
tax) of around 27.0%
■
Restructuring costs of around £180
million[5]
■
Trade
working capital expected to be broadly flat year-on-year with
operational improvement offsetting increased client focus on cash
management
■
Average
net debt/EBITDA within the range of 1.5x-1.75x
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
'aim', 'anticipate', 'believe', 'estimate', 'expect', 'forecast',
'guidance', 'intend', 'may', 'will', 'should', 'potential',
'possible', 'predict', 'project', 'plan', '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, epidemics or pandemics including restrictions on businesses,
social activities and travel; 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; changes in client advertising, marketing and corporate
communications requirements; 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, slower growth, increasing interest rates and
high and sustained inflation; supply chain issues affecting the
distribution of our clients' products; 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" in the Group's Annual Report on Form-20F
for 2022, 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 at the
time.
[1] Percentage
change in reported sterling vs prior year.
[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. Both periods exclude results from Russia.
[3] Of
which.
[4] In
accordance with IAS 28: Investments in Associates and Joint
Ventures once an investment in an associate reaches zero carrying
value, the Group does not recognise any further losses, nor income,
until the cumulative share of income returns the carrying value to
above zero. At the end of 2022 WPP's cumulative reported share of
losses in Kantar has reduced the carrying value of the investment
to zero. This means that we expect that around £40-50 million
of Kantar headline income will not be recognised in our headline
income from associates during 2023.
[5] Excluding
any restructuring costs arising from a review of our property
portfolio in the US and other regions.
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:
27 April 2023.
|
By:
______________________
|
|
|
Balbir
Kelly-Bisla
|
|
|
Company
Secretary
|
WPP (PK) (USOTC:WPPGF)
Historical Stock Chart
From Dec 2024 to Jan 2025
WPP (PK) (USOTC:WPPGF)
Historical Stock Chart
From Jan 2024 to Jan 2025
