WPP plc(US:WPP)2023-03-23 20:30Financial 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].