Financial Performance - For the year ended December 31, 2022, the Group reported revenue of £14,428.7 million and operating profit of £1,358.2 million[27]. - In 2022, WPP reported total revenue of £14,428.7 million, a 11.3% increase from £12,801.1 million in 2021[58]. - The Global Integrated Agencies segment generated £12,191.0 million in revenue, accounting for 84.5% of total revenue in 2022[58]. - Operating profit rose to £1.358 billion in 2022, up from £1.229 billion in 2021, with a headline operating profit increase of 16.6% to £1.742 billion[99]. - Profit before tax increased to £1.160 billion in 2022, compared to £0.951 billion in 2021, with a headline PBT growth of 17.3% to £1.602 billion[102]. - The reportable revenue for 2022 was £14,429 million, reflecting a 12.7% growth compared to the previous year[155]. - Like-for-like growth for 2022 was 13.3%, indicating strong performance excluding the impact of acquisitions and disposals[155]. Shareholder Information - The company spent £862.7 million on share repurchases in 2022, compared to £818.5 million in 2021[46]. - Funds returned to shareholders in 2022 totaled £1,228 million, including £863 million for share buybacks[121]. - The company expects a further £50 million of share buybacks during 2023[121]. - The company’s share price decreased by 27% in 2022 but rebounded by 15% to 939.6 pence by March 16, 2023[92]. Employee and Workforce - The Group had 115,473 employees as of December 31, 2022[27]. - The total number of employees increased to 115,473 by the end of 2022, compared to 109,382 at the end of 2021, reflecting a growth in workforce[97]. - In 2022, the company invested £31.3 million in learning and development opportunities for its employees[69]. - The proportion of women in executive leadership roles increased to 40% in 2022, up from 39% in 2021[69]. Strategic Initiatives - The Group's strategic plan aims to simplify structure, introduce market-leading products, and identify cost savings[33]. - The Group is undertaking IT transformation programmes to support its strategic plan, prioritizing critical changes[33]. - The company aims to enhance its proposition by investing in talent and leveraging its global media platform and technological capabilities[63]. - The company is focusing on technology integration and digital transformation as part of its strategic initiatives[180]. - The company plans to expand its campuses to at least 65 by 2025, accommodating over 85,000 employees, while reducing space requirements by 15-20%[83]. Market and Client Information - The largest reportable segment, Global Integrated Agencies, accounted for approximately 84% of the Company's revenues in 2022[38]. - The ten largest clients contributed 16% of the Company's revenues for the year ended 31 December 2022[33]. - North America contributed £5,549.5 million to total revenue, which is 38.5% of the total, up from £4,494.2 million in 2021[61]. - The company secured $5.9 billion in net new business in 2022, with key clients including Audible, Danone, and Verizon, while retaining major clients like Sony Playstation and Tesco[94]. Risks and Challenges - The Company faces economic risks due to adverse conditions, including inflation and increasing interest rates, which may lead clients to reduce or suspend marketing budgets[32]. - Geopolitical tensions and conflicts are causing uncertainty and instability, potentially leading clients to delay or cancel marketing plans[32]. - The Company is subject to risks related to supply chain issues affecting the distribution of clients' products, which could impact revenue[32]. - The Company faces reputational risks associated with environmental concerns and the scrutiny of its clients' business models[35]. - The Group's operations could be disrupted by extreme weather and climate-related natural disasters, impacting safety and operations[37]. - The Company is subject to credit risk due to potential defaults from clients, with invoices typically payable within 30 to 60 days[35]. - The Group has previously identified material weaknesses in internal control over financial reporting, which could affect investor confidence[36]. Sustainability and Social Responsibility - WPP's sustainability strategy focuses on using creativity to build better futures for people, the planet, clients, and communities[65]. - The company aims to reduce its absolute Scope 1 and 2 greenhouse gas emissions by at least 84% by 2025, and Scope 3 emissions by at least 50% by 2030, both from a 2019 base year[72]. - In 2022, the company purchased 83% of its electricity from renewable sources, up from 74% in 2021[72]. - The company's scope 1 and 2 carbon emissions per full-time equivalent employee for 2022 were 0.22 tonnes of CO2, representing a 32% reduction from 0.32 tonnes in 2021[72]. - The total social contribution in 2022 was £35.5 million, down from £41.0 million in 2021[72]. - Pro bono work was valued at £9.6 million in 2022, an increase from £7.6 million in 2021[72]. Financial Position and Obligations - The total current liabilities amounted to £26,860.3 million, with short-term due to non-guarantors at £26,723.2 million[144]. - The Group's total contractual obligations amounted to £8,977.9 million as of 31 December 2022[134]. - Adjusted net debt increased to £2.5 billion as of 31 December 2022, compared to £0.9 billion in the prior year[132]. - Cash and short-term deposits decreased to £2,491.5 million in 2022 from £3,882.9 million in 2021, indicating a decline of approximately 36%[175]. Governance and Management - The company is committed to enhancing its governance and strategic decision-making through its diverse board of directors[178]. - The new Chief Financial Officer, Joanne Wilson, will succeed John Rogers following the announcement of the Company's 2023 First Quarter Trading Update[204]. - For the fiscal year ended December 31, 2022, WPP paid a total of £60.6 million in aggregate compensation to key management personnel, which includes the Board and the Executive Committee[206]. - The Board confirmed that all Non-Executive Directors standing for election and re-election at the 2023 AGM continue to demonstrate independence characteristics[205].

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 March 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) _________ ...

WPP PLC (NYSE:WPP) Q4 2022 Earnings Conference Call February 23, 2023 9:00 AM ET Company Participants Mark Read - CEO John Rogers - CFO Conference Call Participants Timothy Nollen - Macquarie Research Michael Nathanson - MoffettNathanson Douglas Arthur - Huber Research Partners Operator Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to WPP Preliminary Financial Results Conference Call and Webcast. [Operator Instructions]. Today's conference is being recorded. At this time, I wo ...

2022 Preliminary Results [Full Year 2022 Performance Highlights](index=2&type=section&id=Full%20Year%202022%20Performance%20Highlights) WPP reported strong 2022 growth across key metrics, including a 12.7% revenue increase and 25.5% headline diluted EPS growth, while returning over £1.1 billion to shareholders FY 2022 Key Financial Figures (£ million) | | 2022 | 2021 | +/(-)% reported | +/(-)% LFL | | :--- | :--- | :--- | :--- | :--- | | Revenue | 14,429 | 12,801 | 12.7 | 6.7 | | Revenue less pass-through costs | 11,799 | 10,397 | 13.5 | 6.9 | | **Reported:** | | | | | | Operating profit | 1,358 | 1,229 | 10.5 | - | | Diluted EPS (p) | 61.2 | 52.5 | 16.6 | - | | Dividends per share (p) | 39.4 | 31.2 | 26.3 | - | | **Headline:** | | | | | | Operating profit | 1,742 | 1,494 | 16.6 | 10.0 | | Operating profit margin | 14.8% | 14.4% | 0.4pt | 0.4pt | | Diluted EPS (p) | 98.5 | 78.5 | 25.5 | - | - The company achieved strong performance across its major agencies, with GroupM LFL revenue less pass-through costs up **9.1%**, Public Relations up **8.2%**, and Specialist Agencies up **5.6%**[17](index=17&type=chunk) - WPP won **$5.9 billion** in net new business, including key assignments with Audible, Danone, SC Johnson, and Verizon[17](index=17&type=chunk)[34](index=34&type=chunk) - The transformation program delivered gross annual savings of approximately **£375 million** against a 2019 base, surpassing the planned **£300 million**[17](index=17&type=chunk) - Over **£1.1 billion** was returned to shareholders in 2022, comprising **£807 million** in share buybacks and **£365 million** in dividends[17](index=17&type=chunk) [Overview and Strategic Progress](index=4&type=section&id=Overview%20and%20Strategic%20Progress) WPP's 2022 performance was driven by strong client demand, strategic acquisitions, and transformation progress within a resilient global advertising market, while addressing geopolitical impacts [Market Environment](index=4&type=section&id=Market%20Environment) The global advertising market grew 6.5% in 2022, driven by digital and retail media, with 5.9% growth projected for 2023 including a China rebound - Global advertising spend grew by **6.5%** in 2022, slightly lower than forecast due to slower growth in China[21](index=21&type=chunk) - Digital advertising grew **9.3%** in 2022, making up **67%** of total advertising, with retail media estimated at **$110.7 billion**[22](index=22&type=chunk) - GroupM forecasts **5.9%** growth in global advertising spend for 2023, including a projected **6.3%** rebound in China[25](index=25&type=chunk) [Performance, Clients, and Partnerships](index=4&type=section&id=Performance,%20Clients,%20and%20Partnerships) Since 2019, WPP achieved 10% LFL growth, bolstered by strong client demand in key sectors, securing $5.9 billion in new billings and expanding strategic tech partnerships - Since 2019, LFL revenue less pass-through costs has grown **10%**, headline operating profit is **15%** higher, and headline EPS has grown by **26%**[30](index=30&type=chunk) - Key client sectors (technology, healthcare & pharma, CPG) showed strong three-year LFL growth of **27.9%**, **19.4%**, and **21.4%** respectively[33](index=33&type=chunk) - Secured **$5.9 billion** of net new billings in 2022, with key wins including Audible, Danone, SC Johnson, and Verizon[34](index=34&type=chunk) - Formed new strategic partnerships with Instacart, Stripe, and BigCommerce to bolster commerce and digital capabilities for clients[37](index=37&type=chunk) [Investments, Transformation, and Creativity](index=5&type=section&id=Investments,%20Transformation,%20and%20Creativity) WPP invested £237 million in strategic acquisitions, exceeded its transformation savings target with £375 million, and was recognized as the most creative company for the second consecutive year - Invested a net **£237 million** in acquisitions, focusing on high-growth areas such as influencer marketing, marketing technology, and ecommerce in regions like North America and Latin America[42](index=42&type=chunk) - The transformation programme delivered **£375 million** in gross annual savings, ahead of the **£300 million** plan, and is on track to reach its **£600 million** target by 2025[17](index=17&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) - Continued to expand its campus program, opening **five** new locations in 2022, bringing the total to **36** campuses housing approximately **half** of its employees[48](index=48&type=chunk) - Recognized as the most creative company of the year at the Cannes Lions International Festival of Creativity for the second year in a row[39](index=39&type=chunk) [Purpose and Sustainability](index=6&type=section&id=Purpose%20and%20Sustainability) WPP advanced its purpose-driven strategy, committing to net-zero emissions by 2025/2030, and made significant strides in DEI, including a $30 million investment for racial equity - Committed to reaching net-zero carbon emissions in direct operations (Scope 1 & 2) by **2025** and across its supply chain (Scope 3) by **2030**, with targets verified by the Science-Based Targets initiative (SBTi)[59](index=59&type=chunk) - GroupM launched a media decarbonisation framework and a client coalition representing **$10 billion** in ad investment to accelerate the decarbonisation of the media supply chain[60](index=60&type=chunk) - Pledged to invest **$30 million** over three years to fund inclusion programs and support external organizations to advance racial equity[58](index=58&type=chunk) - Expanded employee support programs, including training over **550** Mental Health Allies and launching women's network Stella across EMEA[55](index=55&type=chunk)[57](index=57&type=chunk) [Outlook and Guidance](index=7&type=section&id=Outlook%20and%20Guidance) WPP guides for 3-5% LFL growth and around 15% headline operating margin in 2023, with medium-term targets of 3-4% growth and 15.5-16.0% margin, noting a £40-50 million Kantar income non-recognition 2023 Guidance | Metric | Guidance | | :--- | :--- | | LFL revenue less pass-through costs growth | 3% to 5% | | Headline operating profit margin | Around 15% (ex-FX) | | Capex | £300 million | | Restructuring costs | Around £180 million | | Effective tax rate | Around 27.0% | Medium-Term Guidance | Metric | Guidance | | :--- | :--- | | Annual revenue less pass-through costs growth | 3% to 4% | | M&A contribution to growth | 0.5% to 1.0% | | Headline operating profit margin | 15.5% to 16.0% | - Due to the carrying value of the investment in Kantar reaching zero, WPP expects that around **£40-50 million** of Kantar's headline income will not be recognized in its 2023 results[66](index=66&type=chunk) [Financial Review](index=8&type=section&id=Financial%20Review) WPP's 2022 financial performance was strong, with 12.7% reported revenue growth and a 40 basis point margin improvement, though adjusted net debt increased to £2.5 billion due to shareholder returns [Overall Financial Results](index=8&type=section&id=Overall%20Financial%20Results) Reported profit before tax rose 22.0% to £1.2 billion, headline diluted EPS grew 25.5% to 98.5p, and the operating margin improved by 40 basis points, leading to a 39.4p full-year dividend Headline Income Statement Summary (£ million) | | 2022 | 2021 | +/(-) % reported | | :--- | :--- | :--- | :--- | | Revenue less pass-through costs | 11,799 | 10,397 | 13.5 | | Operating profit | 1,742 | 1,494 | 16.6 | | Profit before tax | 1,602 | 1,365 | 17.3 | | Profit attributable to shareholders | 1,100 | 954 | 15.3 | | Diluted EPS | 98.5p | 78.5p | 25.5 | - Headline operating profit margin increased by **40 basis points** to **14.8%**, supported by transformation savings and operating leverage[87](index=87&type=chunk)[88](index=88&type=chunk) - Reported diluted EPS was **61.2p**, while headline diluted EPS grew **25.5%** to **98.5p**[93](index=93&type=chunk) - The Board proposed a final dividend of **24.4p**, bringing the total for 2022 to **39.4p**, an increase of **26.3%** year-on-year[9](index=9&type=chunk)[94](index=94&type=chunk) [Business Sector Review](index=8&type=section&id=Business%20Sector%20Review) All business sectors achieved positive LFL growth in 2022, with Global Integrated Agencies up 6.9%, Public Relations up 8.2%, and Specialist Agencies up 5.6%, reflecting broad client demand FY 2022 Revenue Less Pass-Through Costs by Sector (£ million) | Sector | 2022 | 2021 | +/(-) % reported | +/(-) % LFL | | :--- | :--- | :--- | :--- | :--- | | Global Integrated Agencies | 9,742 | 8,683 | 12.2 | 6.9 | | Public Relations | 1,157 | 910 | 27.1 | 8.2 | | Specialist Agencies | 900 | 804 | 11.9 | 5.6 | | **Total Group** | **11,799** | **10,397** | **13.5** | **6.9** | FY 2022 Headline Operating Profit by Sector (£ million) | Sector | 2022 | % margin | 2021 | % margin | | :--- | :--- | :--- | :--- | :--- | | Global Int. Agencies | 1,432 | 14.7 | 1,222 | 14.1 | | Public Relations | 191 | 16.5 | 143 | 15.7 | | Specialist Agencies | 119 | 13.2 | 129 | 16.0 | | **Total Group** | **1,742** | **14.8** | **1,494** | **14.4** | [Regional Review](index=9&type=section&id=Regional%20Review) All geographic regions showed positive LFL growth in 2022, with North America up 6.6% and Rest of World up 8.0%, despite a Q4 decline in China due to lockdowns FY 2022 Revenue Less Pass-Through Costs by Region (£ million) | Region | 2022 | 2021 | +/(-) % reported | +/(-) % LFL | | :--- | :--- | :--- | :--- | :--- | | North America | 4,688 | 3,849 | 21.8 | 6.6 | | United Kingdom | 1,537 | 1,414 | 8.7 | 7.6 | | W. Continental Europe | 2,319 | 2,226 | 4.2 | 5.5 | | AP, LA, AME, CEE | 3,255 | 2,908 | 11.9 | 8.0 | | **Total Group** | **11,799** | **10,397** | **13.5** | **6.9** | FY 2022 Headline Operating Profit by Region (£ million) | Region | 2022 | % margin | 2021 | % margin | | :--- | :--- | :--- | :--- | :--- | | North America | 771 | 16.4 | 656 | 17.0 | | United Kingdom | 187 | 12.3 | 181 | 12.8 | | W. Continental Europe | 301 | 13.0 | 289 | 13.0 | | AP, LA, AME, CEE | 483 | 14.8 | 368 | 12.7 | | **Total Group** | **1,742** | **14.8** | **1,494** | **14.4** | - In Q4, LFL revenue less pass-through costs in China declined by **8.4%** due to widespread COVID-related lockdowns[10](index=10&type=chunk)[85](index=85&type=chunk) [Cash Flow and Balance Sheet](index=11&type=section&id=Cash%20Flow%20and%20Balance%20Sheet) Net cash outflow increased to £1,398 million in 2022, driven by working capital and shareholder returns, leading to adjusted net debt rising to £2.5 billion, with an average net debt/EBITDA ratio of 1.46x Cash Flow Summary (£ million) | Twelve months ended | 31 December 2022 | 31 December 2021 | | :--- | :--- | :--- | | Adjusted free cash flow | 53 | 1,265 | | Disposal proceeds | 51 | 77 | | Net initial acquisition payments | (274) | (464) | | Dividends | (365) | (315) | | Share repurchases and buybacks | (863) | (819) | | **Net cash flow** | **(1,398)** | **(256)** | - Adjusted net debt at year-end was **£2.5 billion**, up from **£0.9 billion** in 2021, primarily reflecting **£1,172 million** returned to shareholders (**£807 million** buybacks and **£365 million** dividends)[96](index=96&type=chunk) - The average adjusted net debt to EBITDA ratio for 2022 was **1.46x**, slightly below the target range of **1.5 - 1.75x**[98](index=98&type=chunk) [Appendix 1: Unaudited Preliminary Consolidated Financial Statements](index=12&type=section&id=Appendix%201%3A%20Unaudited%20Preliminary%20Consolidated%20Financial%20Statements) This appendix presents the unaudited consolidated financial statements for 2022, including the Income Statement, Balance Sheet, and Cash Flow Statement, with detailed notes on segmental performance, taxation, and debt - The appendix contains the full unaudited consolidated financial statements: Income Statement, Statement of Comprehensive Income, Cash Flow Statement, Balance Sheet, and Statement of Changes in Equity[101](index=101&type=chunk)[103](index=103&type=chunk)[105](index=105&type=chunk)[107](index=107&type=chunk) - The notes to the financial statements provide detailed breakdowns and accounting policies, covering areas such as segmental analysis (Note 7), taxation (Note 8), debt (Note 12), and financial instruments (Note 21)[116](index=116&type=chunk)[137](index=137&type=chunk)[140](index=140&type=chunk)[154](index=154&type=chunk) - The financial statements were prepared in accordance with IFRS recognition and measurement criteria, but the announcement does not constitute full statutory accounts[117](index=117&type=chunk)[119](index=119&type=chunk)[121](index=121&type=chunk) [Principal Risks and Uncertainties](index=34&type=section&id=Principal%20risks%20and%20uncertainties) The company identifies principal risks across strategic, operational, financial, and compliance categories, including economic downturns, client loss, cyber-attacks, and data privacy, with emerging climate-related risks - Strategic and External Risks include adverse economic conditions, geopolitical tension, failure to execute the strategic plan, and risks associated with the IT transformation[180](index=180&type=chunk)[181](index=181&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - Operational Risks involve the potential loss of a major client, failure to attract and retain key talent, reputational damage, and cyber-attacks[186](index=186&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - Compliance Risks stem from data protection and privacy legislation, environmental regulations, and laws concerning anti-corruption, sanctions, and taxation[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk)[195](index=195&type=chunk) [Appendix 2: Alternative performance measures for the year ended 31 December 2022](index=36&type=section&id=Appendix%202%3A%20Alternative%20performance%20measures%20for%20the%20year%20ended%2031%20December%202022) This appendix defines and reconciles key non-GAAP financial metrics like 'revenue less pass-through costs' and 'headline operating profit', used for internal analysis and comparability, and includes a glossary of terms - Defines 'Revenue less pass-through costs' as revenue minus directly charged client costs (predominantly media), which management believes better reflects top-line growth[204](index=204&type=chunk)[237](index=237&type=chunk) - Defines 'Headline operating profit' by excluding significant, non-recurring, or volatile items such as goodwill impairment, restructuring costs, and gains/losses on disposals to assess the underlying performance of the business[205](index=205&type=chunk)[228](index=228&type=chunk) - Explains that 'Like-for-like' (LFL) comparisons are calculated on a constant currency basis and adjusted for the impact of acquisitions and disposals to illustrate underlying performance trends[216](index=216&type=chunk)[236](index=236&type=chunk)

Financial Data and Key Metrics Changes - WPP reported a net sales growth of 8% in the first half of 2022, with a slight decrease to 8.3% in Q2 compared to Q1, reflecting strong demand from clients [4] - The company raised its guidance for net sales growth for 2022 from 5.5% - 6.5% to a revised range of 6% - 7% [8] - The headline operating margin is expected to increase by approximately 50 basis points for the year [8] Business Line Data and Key Metrics Changes - Integrated agencies grew by 8.2%, with media showing a stronger performance, while creative agencies grew around 6% in Q2 [4] - Public relations saw a growth of 7.3%, and specialist agencies outperformed with a growth of 10.9% [4] - Digital growth decreased from 32% in the previous year to 12% in the first half of 2022, indicating a slowdown in certain digital categories [11][16] Market Data and Key Metrics Changes - Growth was observed across all major markets, particularly in the U.S., which accelerated WPP's overall growth [5] - China experienced a decline of 6.1% in Q2 due to lockdown impacts, contrasting with an 11.9% growth in Q1 [20] Company Strategy and Development Direction - WPP continues to invest in organic initiatives and M&A, including the acquisition of Bower House Digital and Corebiz [7] - The transformation program is on track to deliver GBP 300 million in savings this year, with a focus on simplifying the business and integrating services [8] - The company aims to pivot into high-growth areas such as commerce, experience, and technology [52] Management's Comments on Operating Environment and Future Outlook - Management anticipates a slower second half of 2022 compared to the first half, with uncertainty surrounding 2023 [12][15] - There is a recognition of the importance of marketing investment during economic downturns, with clients showing a greater appreciation for brand building [48] - The company is well-positioned to navigate the uncertain business environment due to its stronger balance sheet and structural cost-saving opportunities [52] Other Important Information - WPP executed GBP 637 million of its GBP 800 million share buyback program in the first half of the year [8] - The company is focusing on helping clients navigate the complexities of data collection and privacy regulations [22][24] Q&A Session Summary Question: Concerns about digital growth slowdown - Management acknowledged a slowdown in digital growth but emphasized that overall demand remains strong, with no significant cuts from clients [12][15] Question: Expectations for China market recovery - Management expects a slight recovery in China in the second half, but it is not a significant part of the overall business [19][20] Question: Impact of third-party cookie elimination delay - Management stated that the delay does not significantly change their strategy, as clients need help navigating the evolving data landscape [22][24] Question: Margin performance and operating leverage - Management provided insights on expected margin improvements in the second half, driven by various cost factors [26][29] Question: Price rises to offset inflation - Management reported a 1.5% to 2% benefit from price rises, with efforts to push through increases to a broader client base [31][39] Question: Transformation business growth - Management indicated that transformation-related services account for about 20% of the business and are expected to grow, though not recession-proof [41][42] Question: Share of associates result line - Management explained the decline in the associates line is primarily due to higher interest expenses at Kantar, with expectations for normalization next year [54][56]

[FORM 6-K Filing Information](index=1&type=section&id=FORM%206-K%20Filing%20Information) This section details WPP plc's Form 6-K filing as a foreign private issuer and its election to file annual reports on Form 20-F [Registrant Details](index=1&type=section&id=Registrant%20Details) WPP plc, as a foreign private issuer, submits this interim report under the Securities Exchange Act of 1934 and elects to file annual reports on Form 20-F - WPP plc, as a foreign private issuer, submits **Form 6-K** reports under Rule 13a-16 or 15d-16[1](index=1&type=chunk) - The company elects to file annual reports on **Form 20-F**[2](index=2&type=chunk) [Forward-Looking Statements](index=1&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding future events and circumstances, subject to various risks and uncertainties including pandemics, client losses, budget cuts, regulatory costs, competitive changes, acquisition benefits, geopolitical conflicts (such as the Russia-Ukraine war), global economic downturns, technological risks, and exchange rate fluctuations; investors should not unduly rely on these statements, and the company assumes no obligation to update them - Forward-looking statements involve future events and circumstances, subject to risks and uncertainties including, but not limited to, pandemics, client losses, budget cuts, regulatory costs, competitive changes, acquisition benefits, natural disasters or terrorism, the geoeconomic impact of the Russia-Ukraine war, global economic downturn risks, IT security risks, exchange rate fluctuations, and levels of economic activity in key markets[4](index=4&type=chunk)[6](index=6&type=chunk) - The company assumes no obligation to update or revise any forward-looking statements[6](index=6&type=chunk) [2022 Interim Results Overview](index=2&type=section&id=2022%20Interim%20Results%20Overview) WPP achieved strong growth in the first half of 2022, with significant increases in reported revenue and revenue less pass-through costs, alongside double-digit growth in diluted EPS and dividends, reflecting broad business expansion and successful transformation initiatives [Key Financial Figures](index=2&type=section&id=Key%20Financial%20Figures) WPP's H1 2022 financial performance shows robust growth across key metrics, including revenue, profit, and diluted EPS, with a slight decrease in headline operating profit margin | £ million | H1 2022 | +/(-) % reported | +/(-) % LFL | H1 2021 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 6,755 | 10.2 | 8.7 | 6,133 | | **Revenue less pass-through costs** | 5,509 | 12.5 | 8.9 | 4,899 | | **Reported Operating profit** | 539 | 11.4 | | 484 | | **Reported Profit before tax** | 419 | 6.1 | - | 394 | | **Reported Diluted EPS (p)** | 22.7 | 10.2 | - | 20.6 | | **Dividends per share (p)** | 15.0 | 20.0 | - | 12.5 | | **Headline Operating profit** | 639 | 8.2 | - | 590 | | **Headline Operating profit margin** | 11.6% | (0.5pt*) | - | 12.1% | | **Headline Profit before tax** | 562 | 12.0 | - | 502 | | **Headline Diluted EPS (p)** | 33.0 | 15.0 | - | 28.7 | [H1 and Q2 Financial Highlights](index=2&type=section&id=H1%20and%20Q2%20Financial%20Highlights) In H1 2022, WPP experienced strong client demand and revenue growth across most business sectors and regions, particularly in the US and Germany, with robust new business performance, though headline operating profit margin slightly declined due to increased staff costs and travel resumption, and net debt rose primarily from share buybacks - Client demand remained strong across most business sectors and regions[13](index=13&type=chunk) - H1 reported revenue increased by **10.2%**, with LFL revenue growth of **8.7%** (Q2 at **9.3%**)[13](index=13&type=chunk) - H1 revenue less pass-through costs increased by **12.5%** reported, with LFL growth of **8.9%** (up **9.4%** from H1 2019)[13](index=13&type=chunk) - Q2 LFL revenue less pass-through costs grew **8.3%**, with the US up **10.4%**, UK up **6.2%**, Germany up **11.5%**, and China down **6.1%** due to lockdowns[13](index=13&type=chunk) - Net new business billings reached **$3.4 billion** in the first half[13](index=13&type=chunk) - H1 headline operating profit margin was **11.6%**, a decrease of **0.5 percentage points** year-on-year, primarily due to increased staff costs and the resumption of business travel[13](index=13&type=chunk) - Adjusted net debt stood at **£3.1 billion** as of June 30, 2022, an increase of **£1.6 billion** year-on-year, including **£1.1 billion** in share buybacks since June 2021[13](index=13&type=chunk) [Strategic progress, shareholder returns and outlook](index=3&type=section&id=Strategic%20progress%2C%20shareholder%20returns%20and%20outlook) WPP CEO Mark Read highlighted broad growth in creative, media, and public relations businesses in the first half, driven by enhanced capabilities in commerce, experience, and technology, alongside continuous investment in creativity and talent, and successful client wins; the company was named most creative at Cannes Lions for the second consecutive year, invested in data capabilities, e-commerce platforms, and strategic acquisitions, with the transformation program on track to deliver £300 million in annual cost savings, declared an interim dividend of 15.0 pence (up 20%), and raised its full-year 2022 LFL revenue less pass-through costs growth guidance to 6.0-7.0% - WPP achieved broad growth in creative, media, and public relations businesses, driven by enhanced capabilities in commerce, experience, and technology[16](index=16&type=chunk) - The company was named the most creative company at the Cannes International Festival of Creativity for the second consecutive year[18](index=18&type=chunk)[21](index=21&type=chunk) - Revenue less pass-through costs from high-growth areas like experience, commerce, and technology accounted for **39%** of global integrated agencies (excluding GroupM)[21](index=21&type=chunk) - The company enhanced data capabilities through Choreograph, launched direct-to-consumer e-commerce platform Everymile, and made strategic acquisitions such as Village Marketing and Bower House Digital[21](index=21&type=chunk) - The transformation program is progressing well, expected to deliver **£300 million** in annual cost savings this year[21](index=21&type=chunk) - An interim dividend of **15.0 pence** for 2022 was declared, representing a **20%** increase year-on-year[21](index=21&type=chunk) - Full-year 2022 LFL revenue less pass-through costs growth guidance was raised to **6.0-7.0%**, with headline operating profit margin expected to improve by approximately **50 basis points**[21](index=21&type=chunk) [First Half Performance and Strategic Initiatives](index=4&type=section&id=First%20Half%20Performance%20and%20Strategic%20Initiatives) This section reviews WPP's first-half performance, highlighting market conditions, financial results, client engagements, creative achievements, growth investments, transformation progress, and ESG initiatives [Market Environment](index=4&type=section&id=Market%20Environment) The advertising market remained strong in H1 2022, with global ad spend projected to grow 8.4% and digital ad revenue by 12%, while the US, UK, and German markets performed robustly, but China's ad growth forecast was downgraded due to lockdowns - The market remained strong in H1 2022, with global advertising expenditure projected to grow **8.4%** (slightly below the December 2021 forecast of **9.7%**), primarily due to China lockdowns[22](index=22&type=chunk) - Digital advertising revenue is expected to grow **12%**, accounting for **67%** of total advertising revenue[23](index=23&type=chunk) - The US advertising market is projected to grow **10.0%**, the UK **9.3%**, and Germany **9.1%**; China's market growth forecast was downgraded to **3.3%** (from an original forecast of **10.2%**), reflecting the impact of H1 lockdowns[24](index=24&type=chunk) [Performance and Progress](index=4&type=section&id=Performance%20and%20Progress) WPP achieved significant growth in both revenue and revenue less pass-through costs in the first half, particularly excelling in high-growth areas like experience, commerce, and technology, with an increased share of digital billings, demonstrating strong momentum in its digital transformation | Metric | H1 2022 (£ billion) | H1 2021 (£ billion) | Reported Growth (%) | LFL Growth (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 6.8 | 6.1 | 10.2 | 8.7 | | **Revenue less pass-through costs** | 5.5 | 4.9 | 12.5 | 8.9 | - Revenue less pass-through costs achieved LFL growth across most industries and major markets, with a three-year LFL growth of **9.4%**[26](index=26&type=chunk) - Revenue less pass-through costs from high-growth areas like experience, commerce, and technology accounted for **39%** of global integrated agencies (excluding GroupM), up from **35%** in 2019[27](index=27&type=chunk) - GroupM's digital billings portfolio increased to **46%**, with commerce billings growing **26%** year-on-year[27](index=27&type=chunk) [Clients and Partners](index=4&type=section&id=Clients%20and%20Partners) WPP achieved strong growth in key sectors like technology, CPG, and healthcare, securing $3.4 billion in new business from clients including Audi, Danone, and Mars, while also forging strategic partnerships with tech giants like Epic Games and Instacart to expand into the metaverse and e-commerce - LFL revenue less pass-through costs in the technology, CPG, and healthcare & pharma sectors grew by **12%**, **7%**, and **7%** respectively[28](index=28&type=chunk) - Net new business billings of **$3.4 billion** were secured in the first half, with key client wins including Audi, Audible, Danone, Mars, and Nationwide[29](index=29&type=chunk) - A partnership with Epic Games was established to help WPP agencies develop digital experiences in the metaverse[30](index=30&type=chunk) - A partnership with Instacart was formed to gain product insights, custom features, and a joint certification program[30](index=30&type=chunk) [Creativity and Awards](index=4&type=section&id=Creativity%20and%20Awards) WPP was named "Most Creative Company of the Year" at the 2022 Cannes International Festival of Creativity for the second consecutive year, with its agencies Ogilvy and Mindshare also receiving numerous accolades, underscoring the company's leading position in creativity, effectiveness, and media - WPP was named "Most Creative Company of the Year" at the Cannes International Festival of Creativity for the second consecutive year, with its agencies winning **176 Lions**, including **1 Titanium Lion**, **4 Grand Prix**, and **36 Gold Lions**[32](index=32&type=chunk) - Ogilvy was awarded "Global Network of the Year" and ranked first in creativity and second in effectiveness in the 2022 WARC rankings[32](index=32&type=chunk)[33](index=33&type=chunk) - Mindshare was named the "Number One Media Agency Network" by WARC for the third consecutive year[33](index=33&type=chunk) - GroupM maintained its position as the world's largest media agency group[34](index=34&type=chunk) [Investment for Growth](index=4&type=section&id=Investment%20for%20Growth) In the first half, WPP strengthened its capabilities in influencer marketing, marketing technology, e-commerce, and data through strategic acquisitions and organic investments, aiming to provide future-ready client services - Acquired Village Marketing, a North American influencer marketing leader, and Bower House Digital, an Australian marketing technology services firm[35](index=35&type=chunk) - Acquired Corebiz, a leading Latin American e-commerce agency, in July[36](index=36&type=chunk) - Organically invested in Choreograph (data capabilities), Everymile (commerce-as-a-service platform), and GroupM Nexus (programmatic and connected TV businesses)[37](index=37&type=chunk) [Transformation Programme](index=5&type=section&id=Transformation%20Programme) WPP's transformation program aims to achieve £600 million in annual cost efficiencies by 2025, with £300 million expected this year, as the company continues to simplify its organizational structure and enhance operational efficiency through campus consolidation, IT system modernization, optimized procurement strategies, and business mergers - The transformation program aims to achieve **£600 million** in annual cost efficiencies by 2025, with **£300 million** expected this year (based on 2019 baseline)[38](index=38&type=chunk) - **34 campus locations** have been opened, housing approximately **50,000 employees**, with a goal to open more by year-end, having half of employees working on campuses[39](index=39&type=chunk) - ERP systems Workday and Maconomy are being rolled out, with Maconomy having approximately **18,500 users**[40](index=40&type=chunk) - Businesses were merged to simplify the organization, including Essence and MediaCom into EssenceMediacom, and Design Bridge and Superunion into Design Bridge and Partners[43](index=43&type=chunk) - Approximately **150 statutory entities** were further streamlined in the first half[44](index=44&type=chunk) [Purpose and ESG](index=5&type=section&id=Purpose%20and%20ESG) WPP is committed to attracting and retaining top talent, promoting DE&I, and supporting women's healthcare, while setting ambitious net-zero emission targets, achieving ESG rating recognition, and actively engaging in purpose-driven marketing, Ukrainian humanitarian aid, and economic recovery projects [People](index=5&type=section&id=People) WPP continues to invest in talent strategy, launching the "Making Space" initiative and updating benefits to support women's healthcare in the US, linking DE&I goals to leadership compensation, receiving recognition for LGBTQ+ equality, and committing $30 million to the "Racial Equity Programme" for various initiatives - Launched the "Making Space" initiative, offering company-wide breaks and activities for employees[45](index=45&type=chunk) - Updated benefits to provide travel funding support for women's healthcare (including abortion care) in the US[45](index=45&type=chunk) - Linked DE&I goals to leadership compensation and performance reviews, and was recognized as a best place to work for LGBTQ+ equality[46](index=46&type=chunk) - Committed **$30 million** to the "Racial Equity Programme," funding initiatives such as GroupM GradX Africa Academy, RGBlack, and GIZMOLOGY[47](index=47&type=chunk) [Planet](index=5&type=section&id=Planet) WPP is committed to achieving net-zero carbon emissions in its own operations by 2025 and across its supply chain by 2030, with science-based reduction targets, and has received strong ESG ratings while introducing a framework to measure and reduce advertising carbon emissions - Committed to reducing carbon emissions from its own operations to net-zero by **2025** and across its supply chain to net-zero by **2030**[48](index=48&type=chunk) - Set science-based reduction targets: at least **84%** reduction in Scope 1 and 2 emissions by **2025**, and at least **50%** reduction in Scope 3 emissions by **2030** (all against a 2019 baseline)[48](index=48&type=chunk) - Received an "A-" rating from CDP and a "Prime" ESG rating from ISS[49](index=49&type=chunk) - GroupM launched a framework to measure and reduce advertising carbon emissions[50](index=50&type=chunk) [Clients](index=6&type=section&id=Clients) WPP supports clients' brand strategies and sustainability goals through purpose-driven marketing campaigns, earning recognition at the Cannes International Festival of Creativity for socially impactful work for clients like Cadbury, Dell/Intel, and Maxx Flash - Clients are prioritizing purpose and sustainability at the forefront of their brand strategies[51](index=51&type=chunk) - Received Grand Prix awards at the Cannes International Festival of Creativity for purpose-driven work including Cadbury's personalized advertising, Dell and Intel's "I Will Always Be Me" campaign, and Maxx Flash's "The Killer Pack"[51](index=51&type=chunk) [Communities](index=6&type=section&id=Communities) WPP supported its Ukrainian employees and divested its Russian operations, incurring a £65 million disposal loss; the company partnered with UNHCR to raise over $150 million for Ukrainian refugees and collaborated with the Ukrainian government on the "Advantage Ukraine" campaign to support economic recovery - Divested its Russian operations, resulting in a **£65 million** disposal loss, with Russian operations accounting for approximately **0.6%** of WPP's revenue less pass-through costs in 2021[52](index=52&type=chunk) - Partnered with UNHCR to raise over **$150 million** for Ukrainian refugees, including over **$1.3 million** matched by WPP employees[53](index=53&type=chunk) - Collaborated with the Ukrainian government on the "Advantage Ukraine" campaign to support the country's economic recovery and attract investment[53](index=53&type=chunk) [2022 Guidance and Financial Results](index=6&type=section&id=2022%20Guidance%20and%20Financial%20Results) This section outlines WPP's updated 2022 guidance, including increased revenue growth expectations and profit margin improvements, alongside a detailed review of its unaudited headline income statement, business sector performance, regional contributions, operating profitability, exceptional items, interest and tax, and earnings and dividend [2022 Guidance](index=6&type=section&id=2022%20Guidance) WPP raised its full-year 2022 LFL revenue less pass-through costs growth guidance to 6.0-7.0% and expects headline operating profit margin to improve by approximately 50 basis points, confident in achieving its medium-term targets and planning to complete approximately £800 million in share buybacks in 2022 - Full-year 2022 LFL revenue less pass-through costs growth guidance was raised to **6.0-7.0%** (previously **5.5-6.5%**)[57](index=57&type=chunk) - Headline operating profit margin is expected to improve by approximately **50 basis points**, reflecting revenue growth momentum but impacted by inflationary costs, China lockdowns, and investments in growth areas[57](index=57&type=chunk) - The effective tax rate is projected to be approximately **25.5%**[57](index=57&type=chunk) - Capital expenditure is estimated at **£350-400 million**, with approximately **£100 million** related to ERP system deployment[57](index=57&type=chunk) - Trade working capital is expected to be flat year-on-year[57](index=57&type=chunk) - Approximately **£800 million** in share buybacks are expected to be executed in 2022, with **£637 million** already completed[57](index=57&type=chunk) - Medium-term targets include annual revenue less pass-through costs growth of **3-4%** and a headline operating profit margin of **15.5-16%**[54](index=54&type=chunk) [Unaudited Headline Income Statement](index=6&type=section&id=Unaudited%20Headline%20Income%20Statement) In H1 2022, WPP's headline revenue and revenue less pass-through costs both achieved double-digit growth, with steady increases in headline operating profit and profit before tax, though headline operating profit margin slightly declined, and diluted EPS grew significantly by 15.0% | Six months ended (£ million) | 30 June 2022 | 30 June 2021 | +/(-) % reported | +/(-) % LFL | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 6,755 | 6,133 | 10.2 | 8.7 | | **Revenue less pass-through costs** | 5,509 | 4,899 | 12.5 | 8.9 | | **Operating profit** | 639 | 590 | 8.2 | | | **Operating profit margin %** | 11.6% | 12.1% | (0.5)pt | | | **Income from associates** | 12 | 29 | (56.5) | | | **PBIT** | 651 | 619 | 5.3 | | | **Net finance costs** | (89) | (117) | 23.7 | | | **Profit before tax** | 562 | 502 | 12.0 | | | **Tax** | (143) | (115) | (25.2) | | | **Profit after tax** | 419 | 387 | 8.2 | | | **Non-controlling interests** | (43) | (34) | (24.9) | | | **Profit attributable to shareholders** | 376 | 353 | 6.5 | | | **Diluted EPS** | 33.0p | 28.7p | 15.0 | | - Reported total billings were **£24.6 billion**, an increase of **5.1%** year-on-year, with LFL growth of **3.9%**[59](index=59&type=chunk) - Reported revenue increased by **10.2%** to **£6.8 billion**, with LFL growth of **8.7%**[60](index=60&type=chunk) - Reported revenue less pass-through costs increased by **12.5%**, with LFL growth of **8.9%**[61](index=61&type=chunk) [Business Sector Review](index=7&type=section&id=Business%20Sector%20Review) In H1 2022, WPP's Global Integrated Agencies, Public Relations, and Specialist Agencies all achieved LFL revenue and revenue less pass-through costs growth, with Public Relations and Specialist Agencies showing particularly strong LFL growth rates, and operating profit improving across all sectors [Revenue Analysis by Sector](index=7&type=section&id=Revenue%20Analysis%20by%20Sector) In H1 2022, WPP's Global Integrated Agencies, Public Relations, and Specialist Agencies all demonstrated growth in reported and LFL revenue, with the Public Relations sector showing the most significant reported revenue increase | | Q2 | | | H1 | | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | £m +/(-) % reported | | +/(-) % LFL | £m +/(-) % reported | | +/(-) % LFL | | **Global Int. Agencies** | 3,111 | 13.0 | 10.2 | 5,701 | 9.6 | 9.3 | | **Public Relations** | 302 | 28.0 | 9.0 | 572 | 27.2 | 11.2 | | **Specialist Agencies** | 251 | 1.5 | (0.3) | 482 | 0.5 | 0.2 | | **Total Group** | 3,664 | 13.3 | 9.3 | 6,755 | 10.2 | 8.7 | [Revenue Less Pass-Through Costs Analysis by Sector](index=7&type=section&id=Revenue%20Less%20Pass-Through%20Costs%20Analysis%20by%20Sector) In H1 2022, all of WPP's business sectors achieved LFL growth in revenue less pass-through costs, with Specialist Agencies showing the strongest performance and Public Relations recording the highest reported growth rate | | Q2 | | | H1 | | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | £m | +/(-) % | +/(-) % LFL | £m | +/(-) % | +/(-) % LFL | | | reported | | | reported | | | | **Global Int. Agencies** | 2,432 | 13.1 | 8.2 | 4,538 | 10.8 | 8.4 | | **Public Relations** | 283 | 26.7 | 7.3 | 545 | 27.0 | 10.5 | | **Specialist Agencies** | 220 | 14.6 | 10.9 | 426 | 14.3 | 11.9 | | **Total Group** | 2,935 | 14.4 | 8.3 | 5,509 | 12.5 | 8.9 | [Headline Operating Profit Analysis by Sector](index=7&type=section&id=Headline%20Operating%20Profit%20Analysis%20by%20Sector) In H1 2022, all of WPP's business sectors achieved growth in headline operating profit, with Public Relations demonstrating the highest profit margin and Specialist Agencies showing the most significant margin improvement | £ million | 2022 | % margin* | 2021 | % margin* | | :--- | :--- | :--- | :--- | :--- | | **Global Int. Agencies** | 507 | 11.2 | 489 | 11.9 | | **Public Relations** | 83 | 15.2 | 63 | 14.8 | | **Specialist Agencies** | 49 | 11.4 | 38 | 10.3 | | **Total Group** | 639 | 11.6 | 590 | 12.1 | - Global Integrated Agencies' LFL revenue less pass-through costs grew **8.4%** in H1 and **8.2%** in Q2, with all integrated agencies achieving growth[66](index=66&type=chunk) - Public Relations' LFL revenue less pass-through costs grew **10.5%** in H1 and **7.3%** in Q2, with H+K performing particularly strongly, driven by purpose-related communications and ESG consulting[67](index=67&type=chunk) - Specialist Agencies' LFL revenue less pass-through costs grew **11.9%** in H1 and **10.9%** in Q2, with CMI and Landor & Fitch showing strong performance[68](index=68&type=chunk) [Regional Review](index=8&type=section&id=Regional%20Review) In H1 2022, WPP achieved LFL revenue and revenue less pass-through costs growth across all major regions, including North America, the UK, Western Continental Europe, and Asia Pacific/Latin America/Africa/Middle East/Central & Eastern Europe, with North America and Latin America showing particularly strong performance, while the Chinese market was weak due to lockdowns [Revenue Analysis by Region](index=8&type=section&id=Revenue%20Analysis%20by%20Region) In H1 2022, WPP's North America and Asia Pacific/Latin America/Africa/Middle East/Central & Eastern Europe regions demonstrated the most significant growth in reported and LFL revenue, indicating strong momentum in these markets | | Q2 | | | H1 | | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | £m | % reported | % | £m | % reported | % | | | | | LFL | | | LFL | | **N. America** | 1,399 | 24.9 | 12.4 | 2,586 | 18.4 | 10.9 | | **United Kingdom** | 495 | 0.3 | 1.0 | 956 | 3.1 | 3.2 | | **W Cont. Europe** | 731 | 0.4 | 3.7 | 1,352 | 0.9 | 5.3 | | **AP, LA, AME, CEE6** | 1,039 | 16.3 | 14.8 | 1,861 | 10.7 | 11.8 | | **Total Group** | 3,664 | 13.3 | 9.3 | 6,755 | 10.2 | 8.7 | [Revenue Less Pass-Through Costs Analysis by Region](index=8&type=section&id=Revenue%20Less%20Pass-Through%20Costs%20Analysis%20by%20Region) In H1 2022, WPP's North America and Asia Pacific/Latin America/Africa/Middle East/Central & Eastern Europe regions showed outstanding LFL growth in revenue less pass-through costs, with the UK and Western Continental Europe also achieving solid growth | | Q2 | | | H1 | | | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | £m | % reported | % | £m | % reported | % | | | | | LFL | | | LFL | | **N. America** | 1,173 | 26.0 | 10.2 | 2,189 | 20.4 | 9.5 | | **United Kingdom** | 385 | 7.2 | 6.2 | 737 | 8.4 | 7.1 | | **W Cont. Europe** | 579 | 3.6 | 6.6 | 1,086 | 3.4 | 7.7 | | **AP, LA, AME, CEE** | 798 | 11.4 | 8.0 | 1,497 | 10.8 | 9.8 | | **Total Group** | 2,935 | 14.4 | 8.3 | 5,509 | 12.5 | 8.9 | [Headline Operating Profit Analysis by Region](index=8&type=section&id=Headline%20Operating%20Profit%20Analysis%20by%20Region) In H1 2022, WPP's North America and Asia Pacific/Latin America/Africa/Middle East/Central & Eastern Europe regions achieved significant growth in headline operating profit, while the UK and Western Continental Europe experienced a decline in profit margins; North America's LFL revenue less pass-through costs grew 9.5%, driven by GroupM, Hogarth, Superunion, and H+K | £ million | 2022 | % margin* | 2021 | % margin* | | :--- | :--- | :--- | :--- | :--- | | **N. America** | 300 | 13.7 | 271 | 14.9 | | **United Kingdom** | 67 | 9.1 | 83 | 12.3 | | **W Cont. Europe** | 99 | 9.1 | 104 | 9.9 | | **AP, LA, AME, CEE** | 173 | 11.6 | 132 | 9.7 | | **Total Group** | 639 | 11.6 | 590 | 12.1 | - North America's LFL revenue less pass-through costs grew **9.5%** in H1 and **10.2%** in Q2, primarily driven by GroupM, Hogarth, Superunion, and H+K[71](index=71&type=chunk)[72](index=72&type=chunk) - The UK's LFL revenue less pass-through costs grew **7.1%** in H1 and **6.2%** in Q2, with AKQA Group, H+K, and Landor & Fitch achieving double-digit growth[72](index=72&type=chunk) - Western Continental Europe's LFL revenue less pass-through costs grew **7.7%** in H1 and **6.6%** in Q2, with strong performance in Germany and Spain, while France was impacted by client losses in 2021[73](index=73&type=chunk) - Asia Pacific, Latin America, Africa & Middle East, and Central & Eastern Europe's LFL revenue less pass-through costs grew **9.8%** in H1 and **8.0%** in Q2, with Latin America performing strongest and continued growth in India offsetting weakness in the Chinese market[74](index=74&type=chunk) [Operating Profitability](index=9&type=section&id=Operating%20Profitability) In H1 2022, WPP's reported profit before tax and profit after tax both increased, as did headline EBITDA and headline operating profit; however, headline operating profit margin decreased by 50 basis points to 11.6%, primarily due to a significant rise in staff costs, despite a recovery in travel expenses and reduced facility costs from campus consolidation - Reported profit before tax was **£419 million**, an increase of **6.1%** year-on-year[75](index=75&type=chunk) - Headline EBITDA grew **6.5%** to **£745 million**, and headline operating profit increased by **8.2%** to **£639 million**[76](index=76&type=chunk) - Headline operating profit margin decreased by **50 basis points** to **11.6%**[77](index=77&type=chunk) - Staff costs (excluding incentives) increased by **16.7%** year-on-year to **£3.8 billion**, reflecting an increase in headcount and the full impact of 2021 salary adjustments[77](index=77&type=chunk) - Travel expenses increased by **84.6%** year-on-year to **£96 million**[77](index=77&type=chunk) - The Group's average headcount for the first half was **113,000**, an increase of **10.8%** year-on-year[78](index=78&type=chunk) [Exceptional Items](index=9&type=section&id=Exceptional%20Items) In H1 2022, WPP recorded a net exceptional loss of £100 million, primarily stemming from restructuring and transformation costs, losses from the divestment of Russian operations, and amortization and impairment of acquired intangible assets, partially offset by gains on equity remeasurement - The net exceptional loss for the first half was **£100 million**, primarily comprising restructuring and transformation costs, losses from the divestment of Russian operations, and amortization and impairment of acquired intangible assets[79](index=79&type=chunk) - This loss was partially offset by gains on equity remeasurement[79](index=79&type=chunk) [Interest and Taxes](index=9&type=section&id=Interest%20and%20Taxes) WPP's net finance costs decreased by £28 million year-on-year to £89 million in the first half, driven by increased investment income, reduced bond debt, and higher cash interest income; both headline and reported tax rates increased, with a slight further increase expected in the coming years - Net finance costs decreased by **£28 million** year-on-year to **£89 million**, primarily due to increased investment income, reduced bond debt, and higher cash interest income[80](index=80&type=chunk) - The headline tax rate (based on headline profit before tax) was **25.5%** (2021: **22.8%**), and the reported tax rate (based on reported profit before tax) was **28.1%** (2021: **27.2%**)[81](index=81&type=chunk) - Tax rates are expected to increase slightly in the coming years, influenced by the geographical composition of the Group's profits and changes in the international tax environment[81](index=81&type=chunk) [Earnings and Dividend](index=9&type=section&id=Earnings%20and%20Dividend) In H1 2022, WPP's headline profit before tax and profit attributable to shareholders both increased, with headline diluted EPS growing significantly by 15.0% to 33.0 pence, and the Board declared an interim dividend of 15.0 pence, a 20% increase year-on-year - Headline profit before tax increased by **12.0%** to **£562 million**[82](index=82&type=chunk) - Profit attributable to shareholders was **£258 million**, an increase of **2.0%** year-on-year[82](index=82&type=chunk) - Headline diluted EPS increased by **15.0%** year-on-year to **33.0 pence**[82](index=82&type=chunk) - The Board declared a 2022 interim dividend of **15.0 pence**, representing a **20%** increase year-on-year[83](index=83&type=chunk) [Financial Statements and Notes](index=9&type=section&id=Financial%20Statements%20and%20Notes) This section presents WPP's financial statements and detailed notes, covering cash flow, balance sheet highlights, interim income, comprehensive income, cash flow, and balance sheet statements, along with comprehensive notes on accounting policies, currency conversion, cost structures, associate performance, finance income/costs, segmental analysis, taxation, dividends, EPS, cash flow analysis, net debt, goodwill, receivables, payables, related party transactions, going concern, liquidity risk, and fair value measurement of financial instruments [Cash Flow Highlights](index=9&type=section&id=Cash%20Flow%20Highlights) In H1 2022, WPP's net cash outflow significantly increased to £2.2 billion, primarily due to a partial reversal of the strong working capital position at the end of 2021, substantially higher share buybacks, 2021 bonus payments, and temporary collection issues caused by China lockdowns | Six months ended (£ million) | 30 June 2022 | 30 June 2021 | | :--- | :--- | :--- | | **Operating profit** | 539 | 484 | | **Depreciation and amortisation** | 255 | 250 | | **Impairments and investment write-downs** | 8 | 8 | | **Lease payments (inc interest)** | (190) | (202) | | **Non-cash compensation** | 67 | 44 | | **Net interest paid** | (60) | (65) | | **Tax paid** | (163) | (163) | | **Capex** | (117) | (138) | | **Earnout payments** | (63) | (14) | | **Other** | (9) | (44) | | **Trade working capital** | (1,015) | (464) | | **Other receivables, payables and provisions** | (726) | (41) | | **Free cash flow** | (1,474) | (345) | | **Disposal proceeds** | 34 | 43 | | **Net initial acquisition payments** | (46) | (252) | | **Share purchases** | (681) | (298) | | **Net cash flow** | (2,167) | (852) | - Net cash outflow for the first half was **£2.2 billion**, compared to **£852 million** in H1 2021[85](index=85&type=chunk) - Key drivers included a partial reversal of the strong working capital position in December 2021, significantly higher share buybacks, payment of accrued bonuses for FY2021, and temporary collection issues due to China lockdowns[85](index=85&type=chunk) [Balance Sheet Highlights](index=10&type=section&id=Balance%20Sheet%20Highlights) As of June 30, 2022, WPP held £1.5 billion in cash and cash equivalents, with total liquidity (including undrawn credit facilities) reaching £3.4 billion; adjusted net debt increased to £3.1 billion, primarily due to £681 million in share buybacks during the first half, resulting in an average adjusted net debt to EBITDA ratio of 1.2x, expected to be slightly below the target leverage range by year-end - As of June 30, 2022, cash and cash equivalents were **£1.5 billion**, with total liquidity (including undrawn credit facilities) at **£3.4 billion**[86](index=86&type=chunk) - Average adjusted net debt for the first half was **£2.4 billion**, compared to **£1.4 billion** in the prior year period[86](index=86&type=chunk) - As of June 30, 2022, adjusted net debt was **£3.1 billion**, an increase of **£1.6 billion** year-on-year[86](index=86&type=chunk) - **£681 million** was used for share buybacks in the first half, with **£1.1 billion** in share buybacks completed since June 2021[87](index=87&type=chunk) - The average maturity of the bond portfolio was **6.8 years** as of June 30, 2022[87](index=87&type=chunk) - The average adjusted net debt to EBITDA ratio for the last 12 months was **1.2x**, expected to be slightly below the target leverage range of **1.5-1.75x** by year-end[87](index=87&type=chunk) [Unaudited Condensed Consolidated Interim Income Statement](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Income%20Statement) In H1 2022, WPP's reported revenue and gross profit both increased, but profit before tax and profit attributable to parent company shareholders saw relatively modest growth due to the negative impact of associates' share of results; diluted EPS rose from 20.6 pence to 22.7 pence | £ million | 30 June 2022 | 30 June 2021 | | :--- | :--- | :--- | | **Revenue** | 6,755.3 | 6,132.5 | | **Costs of services** | (5,708.1) | (5,196.1) | | **Gross profit** | 1,047.2 | 936.4 | | **General and administrative costs** | (508.5) | (452.8) | | **Operating profit** | 538.7 | 483.6 | | **Share of results of associates** | (63.8) | 40.0 | | **Profit before interest and taxation** | 474.9 | 523.6 | | **Finance and investment income** | 55.5 | 30.1 | | **Finance costs** | (144.9) (147.2) | | | **Revaluation and retranslation of financial instruments** | 33.1 | (12.1) | | **Profit before taxation** | 418.6 | 394.4 | | **Taxation** | (117.5) | (107.1) | | **Profit for the period** | 301.1 | 287.3 | | **Attributable to: Equity holders of the parent** | 257.9 | 252.7 | | **Non-controlling interests** | 43.2 | 34.6 | | **Basic earnings per ordinary share** | 23.1p | 20.9p | | **Diluted earnings per ordinary share** | 22.7p | 20.6p | [Unaudited Condensed Consolidated Interim Statement of Comprehensive Income](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) In H1 2022, WPP's total comprehensive income significantly increased to £656.4 million, primarily driven by a £459.7 million gain from exchange adjustments on foreign currency net investments, reversing the loss from the prior year period | £ million | 30 June 2022 | 30 June 2021 | | :--- | :--- | :--- | | **Profit for the period** | 301.1 | 287.3 | | **Exchange adjustments on foreign currency net investments** | 459.7 | (174.9) | | **(Loss)/gain on net investment hedges** | (129.9) | 73.4 | | **Cash flow hedges: Fair value gain/(loss) arising on hedging instruments** | 18.7 | (31.4) | | **Less: (loss)/gain reclassified to profit or loss** | (18.7) | 31.4 | | **Share of other comprehensive income of associates undertakings** | 30.7 | — | | **Movements on equity investments held at fair value through other comprehensive income** | (5.2) | 27.2 | | **Other comprehensive income/(loss) relating to the period** | 355.3 | (74.3) | | **Total comprehensive income relating to the period** | 656.4 | 213.0 | | **Attributable to: Equity holders of the parent** | 593.3 | 183.9 | | **Non-controlling interests** | 63.1 | 29.1 | [Unaudited Condensed Consolidated Interim Cash Flow Statement](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Cash%20Flow%20Statement) In H1 2022, WPP's net cash outflow from operating activities significantly increased to £1,110.8 million, while cash outflow from investing activities decreased, but cash outflow from financing activities increased, leading to a substantial net decrease in cash and cash equivalents of £2,139.3 million | £ million | 30 June 2022 | 30 June 2021 | | :--- | :--- | :--- | | **Net cash (outflow)/inflow from operating activities** | (1,110.8) | 39.2 | | **Net cash outflow from investing activities** | (186.0) | (282.1) | | **Net cash outflow from financing activities** | (842.5) | (644.7) | | **Net decrease in cash and cash equivalents** | (2,139.3) | (887.6) | | **Cash and cash equivalents at beginning of period** | 3,540.6 | 4,337.1 | | **Cash and cash equivalents at end of period** | 1,489.3 | 3,346.9 | [Unaudited Condensed Consolidated Interim Balance Sheet](index=13&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Balance%20Sheet) As of June 30, 2022, WPP's total assets and net assets both increased, with intangible assets (goodwill) significantly rising due to exchange rate movements; current liabilities exceeded current assets, leading to an increase in net current liabilities, and total equity also grew | £ million | 30 June 2022 | 31 December 2021 | | :--- | :--- | :--- | | **Non-current assets** | 13,415.1 | 12,535.2 | | **Current assets** | 13,600.6 | 15,335.6 | | **Current liabilities** | (14,882.8) | (16,485.4) | | **Net current liabilities** | (1,282.2) | (1,149.8) | | **Total assets less current liabilities** | 12,132.9 | 11,385.4 | | **Non-current liabilities** | (7,862.5) | (7,316.4) | | **Net assets** | 4,270.4 | 4,069.0 | | **Total equity** | 4,270.4 | 4,069.0 | | **Goodwill** | 8,237.5 | 7,612.3 | | **Cash and short-term deposits** | 1,775.0 | 3,882.9 | | **Trade and other receivables (current)** | 11,716.1 | 11,362.3 | | **Trade and other payables (current)** | (13,934.9) | (15,252.3) | [Unaudited Condensed Consolidated Interim Statement of Changes in Equity](index=14&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) In H1 2022, WPP's total equity increased from £4,069.0 million at the beginning of the period to £4,270.4 million, primarily driven by profit for the period, exchange adjustments on foreign currency net investments, and non-cash share-based incentive plans, partially offset by share cancellations and dividends paid | £ million | 1 January 2022 | 30 June 2022 | | :--- | :--- | :--- | | **Total equity** | 4,069.0 | 4,270.4 | | **Profit for the period** | — | 301.1 | | **Exchange adjustments on foreign currency net investments** | — | 459.7 | | **Loss on net investment hedges** | — | (129.9) | | **Share cancellations** | — | (637.3) | | **Non-cash share-based incentive plans** | — | 67.3 | | **Dividends paid to non-controlling interests** | — | (37.2) | [Notes to the Financial Statements](index=16&type=section&id=Notes%20to%20the%20Financial%20Statements) The notes to the financial statements provide detailed information on WPP's accounting basis, policies, currency conversion, cost components, associate performance, financial income/costs, segmental information, taxation, dividends, EPS, cash flow, balance sheet items, related party transactions, going concern and liquidity risk, and fair value measurement of financial instruments [Basis of Accounting and Policies](index=16&type=section&id=Basis%20of%20Accounting%20and%20Policies) WPP's condensed consolidated interim financial statements are prepared on a historical cost basis, adhering to IAS 34 and IFRS accounting policies; the adoption of IFRS 9 hedge accounting requirements in this period had no material impact, and prior period equity restatements due to tax asset and liability adjustments are disclosed - The condensed consolidated interim financial statements are prepared on a historical cost basis and comply with IAS 34 and IFRS accounting policies[104](index=104&type=chunk)[105](index=105&type=chunk) - IFRS 9 hedge accounting requirements were adopted from January 1, 2022, with no material impact on the financial statements[107](index=107&type=chunk) - Prior period financial statements were restated due to an error in historical tax asset and liability adjustments, resulting in an overstatement of equity by **£116.3 million** as of January 1, 2021[108](index=108&type=chunk) [Currency Conversion](index=17&type=section&id=Currency%20Conversion) WPP's financial statements are presented in Pounds Sterling; in H1 2022, the average exchange rate for USD to GBP was 1.30 (1.39 in H1 2021), and EUR to GBP was 1.19 (1.15 in H1 2021), with period-end rates as of June 30, 2022, being 1.22 for USD to GBP and 1.16 for EUR to GBP - The Group's presentation currency is Pounds Sterling[111](index=111&type=chunk) | Currency | Average Exchange Rate 30 June 2022 | Average Exchange Rate 30 June 2021 | Period-End Exchange Rate 30 June 2022 | Period-End Exchange Rate 31 December 2021 | | :--- | :--- | :--- | :--- | :--- | | **USD to GBP** | 1.30 | 1.39 | 1.22 | 1.35 | | **EUR to GBP** | 1.19 | 1.15 | 1.16 | 1.19 | [Costs of Services and General & Administrative Costs](index=17&type=section&id=Costs%20of%20Services%20and%20General%20%26%20Administrative%20Costs) In H1 2022, WPP's costs of services and general and administrative costs both increased, primarily driven by higher staff costs (especially wages and salaries) and media pass-through costs; during the period, the company incurred a £48.1 million loss on disposal from divesting its Russian operations and £75.3 million in restructuring and transformation costs related to IT transformation and operational simplification | £ million | 30 June 2022 | 30 June 2021 | | :--- | :--- | :--- | | **Costs of services** | 5,708.1 | 5,196.1 | | **General and administrative costs** | 508.5 | 452.8 | | **Total** | 6,216.6 | 5,648.9 | | £ million | 30 June 2022 | 30 June 2021 | | :--- | :--- | :--- | | **Staff costs** | 3,930.7 | 3,473.3 | | **Establishment costs** | 262.8 | 264.8 | | **Media pass-through costs** | 1,016.7 | 857.0 | | **Other costs of services and general and administrative costs** | 1,006.4 | 1,053.8 | | **Total** | 6,216.6 | 5,648.9 | - Losses on disposal of investments and subsidiaries in 2022 amounted to **£48.1 million**, primarily including a **£65.1 million** loss from the divestment of Russian operations[118](index=118&type=chunk) - Restructuring and transformation costs were **£75.3 million**, of which **£59.5 million** related to the IT transformation program, including **£46.3 million** for the new ERP system rollout[116](index=116&type=chunk) [Share of Results of Associates](index=19&type=section&id=Share%20of%20Results%20of%20Associates) In H1 2022, WPP's share of results of associates was a negative £63.8 million, primarily due to £76.1 million in exceptional losses, including amortization of acquired intangible assets and restructuring costs, contrasting with a positive contribution in the prior year period | £ million | 30 June 2022 | 30 June 2021 | | :--- | :--- | :--- | | **Share of profit before interest and taxation** | 93.3 | 85.9 | | **Share of exceptional (losses)/gains** | (76.1) | 11.7 | | **Share of interest and non-controlling interests** | (58.9) | (39.1) | | **Share of taxation** | (22.1) | (18.5) | | **Total** | (63.8) | 40.0 | - In H1 2022, exceptional losses from associates amounted to **£76.1 million**, primarily including amortization of acquired intangible assets and restructuring costs[120](index=120&type=chunk) [Finance and Investment Income/Costs](index=19&type=section&id=Finance%20and%20Investment%20Income%2FCosts) In H1 2022, WPP's finance and investment income increased to £55.5 million, mainly from equity investments and interest income; finance costs remained stable, while revaluation and retranslation of financial instruments generated a £33.1 million gain, reversing the prior year's loss | £ million | 30 June 2022 | 30 June 2021 | | :--- | :--- | :--- | | **Income from equity investments** | 20.1 | 5.0 | | **Interest income** | 35.4 | 25.1 | | **Total Finance and investment income** | 55.5 | 30.1 | | **Interest payable and similar charges** | 98.9 | 101.5 | | **Interest expense related to lease liabilities** | 46.0 | 45.7 | | **Total Finance costs** | 144.9 | 147.2 | | **Revaluation and retranslation of financial instruments** | 33.1 | (12.1) | [Segmental Analysis](index=20&type=section&id=Segmental%20Analysis) In H1 2022, WPP's Global Integrated Agencies, Public Relations, and Specialist Agencies all achieved growth in revenue, revenue less pass-through costs, and headline operating profit; North America led in revenue and profit contribution, while the UK and Western Continental Europe experienced a decline in headline operating profit margins | £ million | 30 June 2022 | 30 June 2021 | | :--- | :--- | :--- | | **Revenue by Operating Sector:** | | | | Global Integrated Agencies | 5,701.0 | 5,202.9 | | Public Relations | 572.4 | 449.9 | | Specialist Agencies | 481.9 | 479.7 | | **Revenue less pass-through costs by Operating Sector:** | | | | Global Integrated Agencies | 4,538.2 | 4,097.3 | | Public Relations | 545.4 | 429.4 | | Specialist Agencies | 425.9 | 372.5 | | **Headline operating profit by Operating Sector:** | | | | Global Integrated Agencies | 507.5 | 488.6 | | Public Relations | 83.0 | 63.5 | | Specialist Agencies | 48.6 | 38.3 | | **Revenue by Geographical Area:** | | | | North America | 2,586.5 | 2,183.7 | | United Kingdom | 956.1 | 927.0 | | Western Continental Europe | 1,352.0 | 1,340.6 | | Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe | 1,860.7 | 1,681.2 | | **Revenue less pass-through costs by Geographical Area:** | | | | North America | 2,188.9 | 1,817.6 | | United Kingdom | 737.0 | 679.7 | | Western Continental Europe | 1,086.1 | 1,050.0 | | Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe | 1,497.5 | 1,351.9 | | **Headline operating profit by Geographical Area:** | | | | North America | 299.7 | 271.4 | | United Kingdom | 67.3 | 83.5 | | Western Continental Europe | 98.7 | 103.7 | | Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe | 173.4 | 131.8 | [Taxation](index=21&type=section&id=Taxation) In H1 2022, WPP's reported profit before tax rate was 28.1%, higher than the prior year, with the company expecting a slight increase in tax rates in the coming years due to the geographical composition of profits and changes in the international tax environment; the Group's assessment of tax liabilities is based on its best estimate of tax authorities' acceptance of its positions, currently not anticipating significant risks leading to material additional charges or credits - The reported profit before tax rate was **28.1%** (2021: **27.2%**)[128](index=128&type=chunk) - Tax rates are expected to increase slightly in the coming years, influenced by the geographical composition of the Group's profits and changes in the international tax environment[128](index=128&type=chunk) - The Group's assessment of tax liabilities is based on its best estimate of tax authorities' acceptance of its positions, currently not anticipating significant risks leading to material additional charges or credits[130](index=130&type=chunk) [Ordinary Dividends](index=22&type=section&id=Ordinary%20Dividends) WPP's Board recommended an interim dividend of 15.0 pence for 2022, a 20% increase year-on-year, payable on November 1, 2022, following the payment of the 2021 final dividend of 18.7 pence on July 8, 2022 - The Board recommended a 2022 interim dividend of **15.0 pence** (2021: **12.5 pence**), an increase of **20%** year-on-year[131](index=131&type=chunk) - The record date for the interim dividend is October 14, 2022, with payment on November 1, 2022[131](index=131&type=chunk) [Earnings Per Share](index=22&type=section&id=Earnings%20Per%20Share) In H1 2022, WPP's reported diluted EPS increased from 20.6 pence to 22.7 pence, and headline diluted EPS rose from 28.7 pence to 33.0 pence, both showing significant growth, primarily driven by improved profitability and a reduced weighted average number of shares | | 30 June 2022 | 30 June 2021 | | :--- | :--- | :--- | | **Reported earnings (£ million)** | 257.9 | 252.7 | | **Headline earnings (£ million)** | 375.7 | 352.7 | | **Weighted average shares used in basic EPS calculation (million)** | 1,115.2 | 1,211.9 | | **Reported EPS** | 23.1p | 20.9p | | **Headline EPS** | 33.7p | 29.1p | | **Weighted average shares used in diluted EPS calculation (million)** | 1,137.8 | 1,229.0 | | **Diluted reported EPS** | 22.7p | 20.6p | | **Diluted headline EPS** | 33.0p | 28.7p | [Cash Flow Analysis](index=23&type=section&id=Analysis%20of%20Cash%20Flows) In H1 2022, WPP's net cash outflow from operating activities significantly increased to £1,110.8 million, primarily influenced by movements in trade working capital and payables; cash outflow from investing activities decreased, while cash outflow from financing activities increased, mainly due to share repurchases and bond repayments | £ million | 30 June 2022 | 30 June 2021 | | :--- | :--- | :--- | | **Net cash (outflow)/inflow from operating activities** | (1,110.8) | 39.2 | | **Cash (used in)/generated by operations** | (885.6) | 279.9 | | **Movements in trade working capital** | (1,015.3) | (464.1) | | **Movements in other working capital and provisions** | (725.9) | (41.2) | | **Net cash outflow from investing activities** | (186.0) | (282.1) | | **Net cash outflow from financing activities** | (842.5) | (644.7) | | **Share repurchases and buy-backs** | (680.5) | (297.6) | | **Repayment of €250 million bonds** | (209.3) | — | - Trade working capital typically experiences an outflow in the first half of the financial year and an inflow in the second half, primarily related to the seasonality of media buying activities[137](index=137&type=chunk) [Cash and Cash Equivalents and Adjusted Net Debt](index=25&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Adjusted%20Net%20Debt) As of June 30, 2022, WPP's cash and cash equivalents stood at £1,489.3 million, while adjusted net debt increased to £3,134.8 million, primarily due to a decrease in short-term deposits and an increase in bonds and bank loans; the company's bond portfolio had an average maturity of 6.8 years | £ million | 30 June 2022 | 31 December 2021 | | :--- | :--- | :--- | | **Cash and cash equivalents** | 1,489.3 | 3,540.6 | | **Adjusted net debt** | (3,134.8) | (901.1) | | **Bonds due after one year** | (4,373.0) | (4,216.8) | | **Loans due after one year** | (247.7) | — | - As of June 30, 2022, the company's bond portfolio had an average maturity of **6.8 years**[87](index=87&type=chunk) [Goodwill and Acquisitions](index=26&type=section&id=Goodwill%20and%20Acquisitions) In H1 2022, WPP's goodwill from subsidiaries increased by £625.2 million due to exchange rate translation effects; acquisitions completed during the period were not material to revenue and operating profit, and no indicators of goodwill impairment were identified - Goodwill from subsidiaries increased by **£625.2 million** due to exchange rate translation effects[145](index=145&type=chunk) - Acquisitions completed during the period were not material to revenue and operating profit[146](index=146&type=chunk) - No indicators of goodwill impairment were identified as of June 30, 2022[146](index=146&type=chunk) [Trade and Other Receivables](index=26&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2022, WPP's total trade and other receivables amounted to £11,716.1 million, with net trade receivables at £6,491.7 million; bad debt expense for the period was £11.5 million, reflecting an increase in expected credit losses, and the carrying value of trade and other receivables approximated their fair value | £ million | 30 June 2022 | 31 December 2021 | | :--- | :--- | :--- | | **Trade receivables (net of loss allowance)** | 6,491.7 | 6,600.5 | | **Work in progress** | 343.8 | 254.0 | | **Accrued income** | 3,516.4 | 3,435.7 | | **Total Current Trade and other receivables** | 11,716.1 | 11,362.3 | | **Total Non-current Trade and other receivables** | 198.2 | 152.6 | - Bad debt expense for the period was **£11.5 million**, reflecting an increase in expected credit losses since December 31, 2021[150](index=150&type=chunk) - The loss allowance represented **1.1%** of gross trade receivables[150](index=150&type=chunk) [Trade and Other Payables](index=27&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2022, WPP's current trade and other payables totaled £13,934.9 million, with trade payables at £9,674.4 million; non-current trade and other payables amounted to £640.7 million, primarily comprising payments due to vendors (contingent consideration) and liabilities from put option agreements, and the company believes the carrying value of trade and other payables approximates their fair value | £ million | 30 June 2022 | 31 December 2021 | | :--- | :--- | :--- | | **Trade payables (current)** | 9,674.4 | 10,596.9 | | **Deferred income (current)** | 1,457.2 | 1,334.0 | | **Payments due to vendors (earnout agreements) (current)** | 40.0 | 85.6 | | **Other creditors and accruals (current)** | 2,691.1 | 2,959.3 | | **Total Current Trade and other payables** | 13,934.9 | 15,252.3 | | **Payments due to vendors (earnout agreements) (non-current)** | 133.1 | 111.1 | | **Liabilities in respect of put option agreements with vendors (non-current)** | 329.5 | 333.1 | | **Total Non-current Trade and other payables** | 640.7 | 619.9 | - The company believes the carrying value of trade and other payables approximates their fair value[154](index=154&type=chunk)[155](index=155&type=chunk) [Related Party Transactions](index=28&type=section&id=Related%20Party%20Transactions) WPP has ongoing transactions with associates, including sales, purchases, IT services, and property-related dealings with Kantar; in H1 2022, revenue from US associate Compas was £39.9 million, and as of June 30, 2022, amounts owed by related parties were £70.7 million, while amounts owed to related parties were £72.8 million - The Group has ongoing transactions with Kantar, including sales, purchases, IT services, subleases, and property-related items[160](index=160&type=chunk) - In H1 2022, revenue related to US associate Compas was **£39.9 million**[160](index=160&type=chunk) | £ million | 30 June 2022 | 31 December 2021 | | :--- | :--- | :--- | | **Amounts owed by related parties** | 70.7 | 76.0 | | **Amounts owed to related parties** | (72.8) | (57.6) | [Going Concern and Liquidity Risk](index=29&type=section&id=Going%20Concern%20and%20Liquidity%20Risk) WPP's Board assesses that the company possesses sufficient liquidity and can comply with banking covenants in the foreseeable future, even with an 11-12% decline in revenue less pass-through costs, thus the financial statements are prepared on a going concern basis without significant uncertainties - The Board believes that even with an **12%** decline in revenue less pass-through costs in 2022 and an **11%** decline in 2023, the company can operate under existing financing arrangements and comply with banking covenants[162](index=162&type=chunk) - The Board considers the Group to have sufficient liquidity to meet its needs for the foreseeable future and has prepared the financial statements on a going concern basis[162](index=162&type=chunk)[163](index=163&type=chunk) [Financial Instruments](index=29&type=section&id=Financial%20Instruments) WPP's financial instruments are measured at fair value across three levels, with payments due to vendors (contingent consideration) and put option liabilities' fair values dependent on future financial performance, using a weighted average growth rate of 14.7% and a risk-adjusted discount rate of 7.7%; sensitivity analysis indicates that minor changes in growth or discount rates would impact the liability amount by approximately £8-9 million | £ million | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | | **30 June 2022** | | | | | **Derivatives in designated hedge relationships (liabilities)** | — | (64.2) | — | | **Held at fair value through profit or loss:** | | | | | Other investments | 0.4 | — | 241.1 | | Derivative assets | — | 2.2 | — | | Derivative liabilities | — | (3.9) | — | | Payments due to vendors (earnout agreements) | — | — | (173.1) | | Liabilities in respect of put options | — | — | (397.8) | | **Held at fair value through other comprehensive income:** | | | | | Other investments | 19.2 | — | 112.2 | - The fair value of payments due to vendors (contingent consideration) and put option liabilities depends on future financial performance, with a weighted average growth rate of **14.7%** and a weighted average risk-adjusted discount rate of **7.7%**[167](index=167&type=chunk) - Minor changes in growth or discount rates (e.g., **1 percentage point** or **0.5 percentage points**) would impact the consolidated liabilities by approximately **£8.2 million** to **£9.0 million**[168](index=168&type=chunk) [Risks and Forward-Looking Statements](index=31&type=section&id=Risks%20and%20Forward-Looking%20Statements) This section outlines WPP's principal risks and uncertainties, including the ongoing impact of COVID-19, strategic plan execution failures, client losses, cybersecurity threats, economic downturns, regulatory compliance costs, geopolitical shifts, and climate change-related risks, alongside a cautionary statement regarding forward-looking statements [Principal Risks and Uncertainties](index=31&type=section&id=Principal%20Risks%20and%20Uncertainties) WPP faces multiple principal risks and uncertainties, including the ongoing impact of the COVID-19 pandemic, failure or delay in implementing strategic plans, client losses or budget cuts, cybersecurity threats, deteriorating economic conditions, regulatory compliance costs, geopolitical changes, and climate change-related risks - Uncertainty regarding the ongoing impact of the **COVID-19 pandemic** and its effects on client spending plans[171](index=171&type=chunk) - Failure or delay in implementing strategic plans could adversely affect market share, business, revenue, and financial condition[172](index=172&type=chunk) - Client losses, increased industry competition, or reduced marketing budgets could have a significant adverse impact on the business[178](index=178&type=chunk) - Cyber and information security risks, including failure of IT transformation programs, third-party reliance, and increasingly sophisticated cyberattacks[174](index=174&type=chunk)[179](index=179&type=chunk) - Direct impact of economic conditions (e.g., inflation, supply chain issues, Russia-Ukraine war) on client spending and the company's financial position[175](index=175&type=chunk) - Regulatory, sanctions, antitrust, and tax changes could lead to increased compliance costs or additional liabilities[177](index=177&type=chunk)[180](index=180&type=chunk) - Climate change-related physical impacts (extreme weather) and reputational risks (association with environmentally harmful clients or false environmental claims)[185](index=185&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=32&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This document contains forward-looking statements regarding future events and expectations, but actual results may differ materially due to various risks and uncertainties, including client losses, budget cuts, regulatory costs, natural disasters, exchange rate fluctuations, and levels of economic activity; investors should not unduly rely on these statements, and the company assumes no obligation to update them - Forward-looking statements involve future events and expectations, but actual results may differ materially due to various risks and uncertainties[182](index=182&type=chunk)[183](index=183&type=chunk) - Important factors include client losses, budget cuts, changes in industry compensation, regulatory costs, natural disasters, exchange rate fluctuations, and levels of economic activity in key markets[183](index=183&type=chunk) - Investors should not unduly rely on these statements, and the company assumes no obligation to update them[183](index=183&type=chunk) [Independent Review Report and Appendices](index=33&type=section&id=Independent%20Review%20Report%20and%20Appendices) This section includes Deloitte LLP's independent review report on WPP's condensed consolidated interim financial statements, confirming compliance with IAS 34 and UK disclosure rules, along with appendices detailing alternative performance measures, re-presented segmental analysis for 2021, a glossary of terms, and the basis of preparation [Independent Review Report](index=33&type=section&id=Independent%20Review%20Report) Deloitte LLP conducted an independent review of WPP's condensed consolidated interim financial statements for the six months ended June 30, 2022, concluding that they comply in all material respects with IAS 34 as adopted in the UK and the UK Financial Conduct Authority's Disclosure Guidance and Transparency Rules, and found no evidence of directors improperly adopting the going concern basis of accounting or failing to adequately disclose material uncertainties related to going concern - Deloitte LLP conducted an independent review of the condensed consolidated interim financial statements[187](index=187&type=chunk) - The review concluded that the financial statements comply in all material respects with IAS 34 as adopted in the UK and the UK Financial Conduct Authority's Disclosure Guidance and Transparency Rules[188](index=188&type=chunk) - The review found no evidence of directors improperly adopting the going concern basis of accounting or failing to adequately disclose material uncertainties related to going concern[191](index=191&type=chunk) [Appendix 2: Alternative Performance Measures](index=34&type=section&id=Appendix%202%3A%20Alternative%20Performance%20Measures) Appendix 2 provides detailed definitions and reconciliations for WPP's alternative performance measures, including headline operating profit, headline profit before tax, headline EBITDA, revenue less pass-through costs, and adjusted net debt, which are used for internal performance analysis and to help investors understand the Group's financial performance [Reconciliation of Revenue to Revenue Less Pass-Through Costs](index=34&type=section&id=Reconciliation%20of%20Revenue%20to%20Revenue%20Less%20Pass-Through%20Costs) WPP calculates revenue less pass-through costs by deducting media and other pass-through costs from revenue, considering it a better reflection of top-line growth; in H1 2022, revenue less pass-through costs was £5,509.5 million, up 12.5% reported and 8.9% LFL | £ million | 30 June 2022 | 30 June 2021 | | :--- | :--- | :--- | | **Revenue** | 6,755.3 | 6,132.5 | | **Media pass-through costs** | (1,016.7) | (857.0) | | **Other pass-through costs** | (229.1) | (376.3) | | **Revenue less pass-through costs** | 5,509.5 | 4,899.2 | - Re

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) ¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report _________ For the transition period from _________ to _________ Commission file number 001-38303 WPP plc (Exact Name of Registrant as specified in its charter) x ANNUAL REPORT ...

2021 24 February 2022 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation 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' ...

Financial Data and Key Metrics Changes - The company reported a strong performance with revenue growth accelerating from 3.1% in Q1 to 19.3% in Q2, resulting in an 11% growth in the first half of the year compared to a decline of 9.5% in the same period last year [2][6] - The company raised its dividend by 25% to 12.5 pence and announced share buybacks totaling £248 million in the first half, with an additional £350 million planned for the second half [6][7] Business Line Data and Key Metrics Changes - Growth was observed across all business sectors, with public relations growing by 12.9% and specialist agencies by 27.8%, reflecting a shift towards experience, commerce, and technology businesses, which now represent 26% of the company [3][4] - Integrated agencies and GroupM were highlighted as standout performers, particularly in the second quarter [2][3] Market Data and Key Metrics Changes - E-commerce media grew by 60% in the first half of the year, indicating a significant demand for digital media and programmatic advertising [29] - The company noted strong growth in connected television, with Finecast reporting a 113% increase [40] Company Strategy and Development Direction - The company is focusing on M&A in faster-growing areas such as e-commerce, marketing technology, and data analytics, while also managing net debt effectively [11][12] - The strategic emphasis is on advising clients on e-commerce strategies and building direct-to-consumer platforms, integrating services across various WPP companies [26][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining growth momentum into the second half of the year and reiterated long-term growth guidance of 3% to 4% from 2023 onwards [13][15] - The demand for data-driven marketing and personalized solutions has fundamentally changed, with clients increasingly seeking investments in e-commerce and marketing technologies [19][20] Other Important Information - The company has invested significantly in creative talent, which has been recognized with awards such as holding company of the year at the 2021 Cannes Lions [5] - The company is not planning to create its own ID system but aims to help clients maximize the value of their first-party data [54] Q&A Session All Questions and Answers Question: What does the post-COVID revenue growth look like for 2022 or 2023? - Management reiterated long-term growth guidance of 3% to 4% from 2023 onwards, with strong momentum expected to continue into 2022 [13][15] Question: How does the company define commerce services and its competitive positioning? - The company focuses on advising clients on e-commerce strategies and implementing direct-to-consumer channels, positioning itself competitively in the market [26][28] Question: What capabilities will set Choreograph apart in the data landscape? - Choreograph aims to advise clients on data strategy, helping them build and enrich first-party data while aligning closely with media channels [34][36] Question: How is GroupM adapting to the changing media landscape? - GroupM is experiencing strong growth, particularly in connected television, and is well-positioned to navigate the complexities of the evolving marketplace [40][41] Question: What is the company's stance on alternative identifiers in the context of privacy? - Management believes that attempts to recreate cookies with alternative IDs will not succeed and emphasizes the importance of first-party data for clients [50][52]

Annual General Meeting WPP AGM 9 June 2021 Chairman Roberto Quarta 3 2020-2021 WPP Board Appointments Angela Ahrendts DBE Tom Ilube CBE Dr. Ya-Qin Zhang WPP Mark Read CEO · 0 o Do Do Do Do Do Do Do Do Dot . . · · · · · · o Bo Do Do O o Do Do Do Do Do Do Do Do Dot · · · · CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation 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 ...