Core Insights - CMI Media Group has released a report focusing on equity in healthcare in America and the role healthcare brands can play to support consumers [1] - The report highlights the importance of understanding US consumers' healthcare experiences, particularly through the lens of cultural and location demographics [2] Key Findings - Nearly half of patients are willing to travel between 30-90 minutes to see healthcare professionals that match their demographics, especially among Black patients [5] - Multiple barriers to care are affecting consumers, particularly in rural and urban areas, with patients reporting cancellations due to cost and travel issues [5] - Black and Hispanic audiences show greater trust in advertising and tend to rely on health information from websites, search engines, and pharmaceutical company sites [5] Company Overview - CMI Media Group is a full-service media agency focused on health, wellness, and pharmaceutical marketing, offering services such as Audience Strategy, Data and Analytics, and Customer Experience [4] - The agency has been recognized for its leadership in diversity, equity, and inclusion (DE&I), talent retention, and employee development [4]

Group 1 - WPP plc (NYSE: WPP) is showing margin improvements, but overall performance this quarter has limited positives, particularly due to challenges in the APAC region [2] - The Value Lab focuses on long-only value investment strategies, targeting a portfolio yield of approximately 4% and emphasizing international mispriced equities [1][2] - The Valkyrie Trading Society consists of analysts who share high conviction investment ideas that are expected to yield non-correlated and outsized returns in the current economic environment [3]

Financial Data and Key Metrics Changes - Net revenue growth for 2024 was reported at minus 1%, consistent with the lower end of guidance range [7][19] - Headline operating margin improved to 15%, up 40 basis points year-on-year, despite a GBP 250 million investment in AI and data [9][21] - Operating cash flow conversion improved to 86%, benefiting from strong working capital management [14][25] - Year-end net debt decreased to GBP 1.7 billion, a reduction of GBP 0.8 billion year-on-year [14][46] Business Line Data and Key Metrics Changes - Global Integrated Agencies saw a like-for-like decline of 0.8% in 2024, while GroupM grew by 2.7% for the full year [33][34] - Global integrated creative agencies experienced a decline of 3.9% in 2024, with a more significant drop of 6.5% in Q4 [34] - Public Relations saw a like-for-like decline of 1.7% in 2024, impacted by a challenging environment for discretionary spending [36] - Specialist Agencies reported a decline of 2.3% in revenue less pass-through costs for the year [37] Market Data and Key Metrics Changes - North America experienced a decline of 0.7% in 2024, with growth in automotive and financial services offset by lower revenues in healthcare [38] - The United Kingdom declined by 2.7% in 2024, influenced by a higher weighting towards project-based work [39] - China faced a significant decline of 20.8% in 2024, reflecting macroeconomic pressures and client assignment losses [41] Company Strategy and Development Direction - The company is focused on executing its strategy to deliver long-term sustainable growth and value to shareholders [4][16] - Investment in WPP Open and AI is a key strategic pillar, with a commitment to enhance technology integration across the organization [54][58] - The company aims to improve new business performance and cash conversion while addressing challenges in client discretionary spending [10][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2024, particularly in Q4, but expressed confidence in the strategic progress made [10][91] - The outlook for 2025 includes cautious guidance of flat to minus 2% like-for-like revenue, reflecting macroeconomic uncertainties [50][108] - Management expects performance to strengthen in the second half of 2025 as historical client losses begin to taper off [50][124] Other Important Information - The company plans to continue prioritizing investment in WPP Open, AI, and data, with an incremental cash spend of GBP 50 million planned for 2025 [45][50] - The company reported a flat final dividend of 24.4 pence, consistent with the previous year, representing a cash return to shareholders of over GBP 420 million [31] Q&A Session Summary Question: Why is the guidance for next year similar to 2024 despite better account wins? - Management explained that Q4 was softer than expected, and macro uncertainty has increased, impacting guidance [108][110] Question: How will flat margins be delivered with negative growth? - Management indicated that structural cost savings and efficiencies would support flat margins despite revenue challenges [114][116] Question: What is the expected average net debt to EBITDA ratio for 2025? - Management expects the average leverage to decrease towards the midpoint of the target range of 1.5% to 1.75% [107] Question: Is there a correlation between cuts in discretionary spending and CPG performance? - Management noted that the impact on CPG was driven by various factors, including variable incentives, and does not see in-housing as a significant risk [126][128]

Core Insights - U.S.-listed shares of WPP Plc fell 15% following a decline in revenue and soft guidance, particularly in North America and China [1][5] Financial Performance - WPP reported a 2.3% year-over-year decline in fourth-quarter like-for-like revenue less pass-through costs, with North America down 1.4% and the U.K. down 5.1% [2] - Revenue less pass-through costs in China dropped significantly by 21.2%, while Western Continental Europe saw a modest gain of 1.4% [2] Management Commentary - CEO Mark Read indicated that sales were affected by weaker client discretionary spending and expressed caution regarding the macro environment [3][5] - Despite the challenges, the CEO remains confident in medium-term targets, emphasizing a focus on innovation and operational excellence to support growth [3] Guidance and Market Reaction - WPP's full-year guidance for like-for-like revenue less pass-through costs is expected to be flat to down 2%, which is below the Visible Alpha estimate of a 0.35% increase [3] - The disappointing guidance has resulted in U.S.-listed shares of WPP entering negative territory for the past year [4]

Core Insights - CMI Media Group has released its first Media Vitals HCP Global research, providing insights into the media preferences of healthcare professionals (HCPs) globally [1][2] - The report emphasizes the need for brands to optimize and personalize communications with HCPs, highlighting opportunities for better support from pharmaceutical companies [2] Research Methodology - Insights were gathered from various medical doctors, including General Practitioners, Cardiologists, Pulmonologists, Hematologists, Neurologists, Oncologists, Obstetricians-Gynecologists, and Dermatologists [2] - The survey was conducted across six countries: France, Germany, Italy, Spain, United Kingdom, and Canada [2] Key Findings - Nearly half (46%) of HCPs surveyed collaborate with HCPs in other markets on a weekly basis [6] - In-person interactions remain the most common form of patient interaction, with 46% of HCPs meeting patients in person, while 71% utilize telehealth weekly [6] - A significant portion of HCPs (59%) are confident that patients have enough information to make informed decisions, indicating a role for media in patient education [6] - Over four-fifths (82%) of HCPs are likely to click on an online ad, and 83% are comfortable with personalized ads [6] Company Background - CMI Media Group is a full-service media agency focused on health, wellness, and pharmaceutical marketing, recognized for its leadership in DE&I and employee development [5] - The agency has been providing detailed guidance on pharma marketing efforts since 2013, making it a premier research tool for healthcare marketers [3]

| --- | --- | --- | --- | --- | --- | |---------------------|---------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | Q3 UPDATE | TRADING | | | | | | 23 October 2024 | | | | | | CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This document contains statements that are, or may be deemed to be, "forward-looking statements". Forwardlooking statements give the Company's current expectations or forecasts of future events. These forward-looking statements may include, among ...

Financial Data and Key Metrics Changes - The third quarter delivered a return to growth with a 0.5% increase in net sales, led by GroupM, which grew 4.8% after 1.9% growth in the first half [3][4] - Revenue less pass-through costs fell 2.6% on a reported basis but was up 0.5% on a like-for-like basis, with a 2.9 percentage point headwind from foreign exchange due to sterling strengthening [7][8] - The company reiterated guidance for like-for-like net sales of minus 1.0% to flat for the full year, with expectations for 20 to 40 basis points of margin improvement [6][13] Business Line Data and Key Metrics Changes - Global Integrated Agencies grew 0.5% in the quarter, with GroupM's media planning and buying business growing 4.8%, while integrated creative agencies declined 3.1% [8][9] - Hogarth continued to grow well, benefiting from new business wins and demand for technology and AI-driven capabilities, while VML was impacted by the loss of a healthcare creative assignment [8][9] - PR revenue grew 0.2%, with Burson declining mid-single digits due to the loss of Pfizer assignments, offset by growth at FGS Global [9] Market Data and Key Metrics Changes - North America grew 1.7%, reflecting good growth in GroupM and across the Auto and Financial Services sectors, while the U.K. net sales were stable year-on-year [10] - Western Continental Europe improved with 2.2% growth, while the Rest of the World declined by 2.2%, significantly impacted by a 21.3% decline in China [10][11] - Consumer-packaged goods grew 7.6%, while technology saw growth of 1.3%, automotive grew 5.8%, and healthcare and retail continued to decline [11] Company Strategy and Development Direction - The company is focused on building a simpler, more efficient organization through the simplification at GroupM and the adoption of WPP Open, which leverages AI and new technologies [16][20] - Significant new business wins include Amazon's media account and expanded relationships with Unilever and Starbucks, indicating a competitive edge in the market [5][18] - The strategic focus includes the sale of a stake in FGS Global to KKR, which is expected to strengthen the balance sheet and provide financial flexibility [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, noting that while the past year has been challenging, recent new business wins and a strong pipeline position the company well for 2025 [24][25] - The macroeconomic environment remains uncertain, particularly in China, but management expects stabilization in 2025 [47] - AI is viewed as a transformative force for the company, with significant investments being made to enhance productivity and effectiveness [20][26] Other Important Information - Adjusted net debt was around GBP300 million lower than the previous year, with expectations for it to remain broadly flat at year-end [12] - The company is investing over GBP250 million in WPP Open to enhance AI capabilities across its agencies [20] Q&A Session Summary Question: What will need to happen in Q4 to reach the top end of the full year 2024 guide? - Management indicated that improvement in China, stabilization in tech, and favorable macro conditions are necessary to achieve the top end of the guidance [29] Question: Impact of recent wins on 2025 growth? - Management expects net new business to have a neutral impact on 2025, with the potential for positive contributions if recent successes are built upon [30] Question: Any new initiatives from GroupM's new CEO? - Management noted that the focus remains on the ongoing simplification and synergy projects initiated last year [34] Question: Any M&A activity in the pipeline? - Management stated that while this year has been light for M&A, they expect to return to more normalized levels next year [35] Question: Headwind from account losses in 2024? - Management confirmed that the healthcare loss was a significant drag, estimated at around 1.5% [39] Question: Tone of conversation with automotive and consumer goods companies? - Management observed that companies continue to invest in ongoing marketing, although there is caution regarding discretionary spending [40] Question: Broader impact of Media Studio on existing clients? - Management explained that Media Studio is being gradually deployed, improving media effectiveness and ROI for clients [42] Question: Incremental client losses in China? - Management reported no significant new client losses, emphasizing ongoing efforts to stabilize the business in China [49]

Group 1 - The Zacks Rank emphasizes earnings estimates and revisions to identify strong stocks, while also considering value, growth, and momentum trends [1] - Value investing is a preferred strategy for finding strong stocks, utilizing fundamental analysis and traditional valuation metrics to identify undervalued stocks [1] - The Style Scores system can help investors find stocks with specific traits, particularly in the "Value" category for value investors [1] Group 2 - WPP currently has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential [2] - WPP's Forward P/E ratio is 8.60, which is lower than the industry's average Forward P/E of 10.06, suggesting it may be undervalued [2] - The P/B ratio for WPP is 2.25, significantly lower than the industry's average P/B of 6.05, further indicating potential undervaluation [2] - Over the past year, WPP's P/B has fluctuated between 1.75 and 2.44, with a median of 2.14, showing stability in its valuation metrics [2] - WPP's strong earnings outlook contributes to its classification as an impressive value stock at the moment [2]

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks. Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe ar ...

Financial Data and Key Metrics Changes - Revenue less pass-through costs fell 5% on a reported basis, with a 3.9 percentage point headwind from foreign exchange and a 0.5 percentage point contribution from acquisitions. On a like-for-like basis, revenue less pass-through costs declined 1.6% [13][14] - Adjusted net debt remained broadly flat year-on-year, with expectations of flat working capital in 2024 and net debt at the end of 2024 to be broadly flat versus 2023 [23] Business Line Data and Key Metrics Changes - Global Integrated Agencies declined 0.7% year-on-year, with GroupM growing 2.4% due to increased client investment in media, offset by U.S. client assignment losses and lower spending by technology clients [15] - Global integrated creative agencies saw a like-for-like decline of 3.3%, impacted by lower spend from technology clients and the roll-off of Pfizer [16] - Public Relations revenue less pass-through costs declined 3.3%, with FGS Global growing but offset by declines in BCW and Hill & Knowlton [17] - Specialist Agencies declined 7.6%, with smaller agencies affected by project-based spending delays, although CMI continued to deliver good growth [18] Market Data and Key Metrics Changes - North America declined 5.2%, reflecting larger exposure to technology clients and the loss of Pfizer [19] - The U.K. grew 0.3%, down from 7.4% a year ago, with growth in CPG offsetting declines in technology client spend [20] - Western Continental Europe grew 3.3%, with strength in France and Spain, partially offset by declines in Germany [20] - Asia Pacific declined 3.2%, with India growing 6.6% but China declining 15.4% due to a challenging macroeconomic environment [21] Company Strategy and Development Direction - The company is focused on implementing strategic moves outlined at the Capital Markets Day, aiming for a simpler, more agile organization and integrating technology and AI [3][6] - Continued investment in AI, with 50,000 users of WPP Open and integration of new models to enhance client offerings [11][28] - The company aims for 3% plus organic revenue growth, 16% to 17% headline operating margin, and 85% adjusted operating cash flow conversion [34] Management's Comments on Operating Environment and Future Outlook - Management noted that Q1 performance was in line with expectations, with anticipated improvement in technology client spending over the year [4][5] - The company reiterated guidance for the full year, expecting a return to growth supported by a strong new business pipeline [6][24] - Management expressed confidence in the strategic initiatives and their positive reception from clients [10][35] Other Important Information - The company has received accolades for its creative agencies, with Ogilvy recognized as Ad Age's Global Network of the Year [8] - Structural changes at VML, GroupM, and Burson are on track to deliver targeted savings, with minimal disruption to client-facing operations [9][63] Q&A Session Summary Question: Expectations for technology clients' spending - Management expects stability in technology clients' spending, with a positive trend anticipated over the year, driven by existing clients increasing their budgets [36][38] Question: Initiatives to regain momentum in China - A new management team is in place in China, with cautious budgeting for the year and expectations of continued challenges in the market [39][40] Question: Impact of generative AI tools on margins - The company is investing significantly in AI, with expectations that it will improve efficiency and potentially enhance margins over time [41][44] Question: Q2 performance expectations - Management anticipates improved performance in Q2 compared to Q1, aided by easier year-on-year comparisons and expected recovery in technology spending [49][50] Question: Updates on strategic initiatives and GroupM - Progress on strategic initiatives is strong, with cost actions on track and minimal disruption to client-facing operations [62][64] Question: Data and media capabilities compared to competitors - The company has a competitive data offer and is focused on enhancing its capabilities, particularly in the U.S. market [65][68] Question: Technology spending outlook - Management believes technology spending will recover gradually, similar to trends seen in other sectors [74][91]