UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM20-F

(Mark One)

OR

For the fiscal year ended 31 December 20172018

OR

For the transition period from to

OR

Date of event requiring this shell company report                

For the transition period from  to

Commission file number0-16350001-38303

WPP plc

(Exact Name of Registrant as specified in its charter)

Jersey

(Jurisdiction of incorporation or organization)

27 Farm StreetSea Containers, 18 Upper Ground

London, United Kingdom, W1J 5RJSE1 9GL

(Address of principal executive offices)

Andrea Harris Esq.

Group Chief Counsel

27 Farm Street,Sea Containers, 18 Upper Ground, London, United Kingdom, W1J 5RJSE1 9GL

Telephone: +44(0) 20 7408 22047282 4600

Facsimile: +44(0) 20 7493 6819E-mail: andrea.harris@wpp.com

(Name, Telephone,E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Not applicable

(Title of Class)

Not applicable

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

At December 31, 2017,2018, the number of outstanding ordinary shares was 1,332,511,5521,332,678,227 which included at such date ordinary shares represented by 14,942,97813,929,272 ADSs.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES  ☒    NO  ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

YES  ☐    NO  ☒

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES  ☒    NO  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES  ☒    NO  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and large accelerated filer”“emerging growth company” inRule12b-2 of the Exchange Act. (Check one):

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.    ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17  ☐    Item 18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act).

YES  ☐    NO  ☒

TABLE OF CONTENTS

Forward-Looking Statements

In connection with the provisions of the Private Securities Litigation Reform Act of 1995 (the Reform Act), the Company (as defined below) may include forward-looking statements (as defined in the Reform Act) in oral or written public statements issued by or on behalf of the Company. These forward-looking statements may include, among other things, plans, objectives, projections and anticipated future economic performance based on assumptions and the like that are subject to risks and uncertainties. As such, actual results or outcomes may differ materially from those discussed in the forward-looking statements. Important factors which may cause actual results to differ include but are not limited to: the unanticipated loss of a material client or key personnel, delays or reductions in client advertising budgets, shifts in industry rates of compensation, regulatory compliance costs or litigation, natural disasters or acts of terrorism, the Company’s exposure to changes in the values of major currencies other than the UK pound sterling (because a substantial portion of its revenues are derived and costs incurred outside of the United Kingdom) and the overall level of economic activity in the Company’s major markets (which varies depending on, among other things, regional, national and international political and economic conditions and government regulations in the world’s advertising markets). In addition, you should consider the risks described in Item 3D, captioned “Risk Factors,” which could also cause actual results to differ from forward-looking information. In light of these and other uncertainties, the forward-looking statements included in this document should not be regarded as a representation by the Company that the Company’s plans and objectives will be achieved.

The Company undertakes no obligation to update or revise any such forward-looking statements, whether as a result of new information, future events or otherwise.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

Overview

WPP plc and its subsidiaries (WPP) comprise oneis a leading worldwide creative transformation organisation offering national and multinational clients a comprehensive range of the largest communications, services businesses in the world.experience, commerce and technology services. At 31 December 2017,2018, the Group, excluding associates, had 134,413134,281 employees. Including all employees of associated companies, this figure was approximately 203,000. For the year ended 31 December 2017,2018, the Group had revenue of £15,265£15,602.4 million and operating profit of £1,908£1,431.4 million.

Unless the context otherwise requires, the terms “Company”, “Group” and “Registrant” as used herein shall also mean WPP.

A. Selected Financial Data

The selected financial data should be read in conjunction with, and is qualified in its entirety by reference to, the consolidated financial statements of the Company, including the notes thereto.

The selected income statement data for each of the years ended 31 December 2018, 2017 2016 and 20152016 and the selected balance sheet data as at 31 December 20172018 and 20162017 are derived from the consolidated financial

statements of the Company that appear elsewhere in this Form20-F. The selected financial data for prior periods

is derived from the consolidated financial statements of the Company previously filed with the Securities and Exchange Commission (SEC) as part of the Company’s Annual Reports onForm 20-F. The consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The reporting currency of the Group is the UK pound sterling and the selected financial data has been prepared on this basis.

Selected Consolidated Income Statement Data

Selected Consolidated Balance Sheet Data

Dividends

Dividends on the Company’s ordinary shares, when paid, are paid to share owners as of a record date, which is fixed by the Company. The following table sets forth the amounts of interim or first interim, final or second interim and total dividends paid on the Company’s ordinary shares in respect of each fiscal year indicated. In the United States, the Company’s ordinary shares are represented by ADSs, which are evidenced by American

Depositary Receipts (ADRs) or held in book-entry form. The Group uses the terms ‘ADS’ and ‘ADR’

interchangeably. The dividends are also shown translated into US cents per ADS using the approximate average rates as shown in the exchange rate table below,on page 2, for each year presented.

The 20172018 interim dividend was paid on 65 November 2017 to share owners on the register at 6 October 2017. The 2017 final dividend will be paid on 9 July 2018 to share owners on the register at 15 June5 October 2018.

Exchange rates

Fluctuations in the exchange rate between the pound sterling and the US dollar The 2018 final dividend will affect the dollar equivalent of the pound sterling prices of the Company’s ordinary sharesbe paid on 8 July 2019 to share owners on the London Stock Exchange and, as a result, are likely to affect the market price of the ADSs in the United States. US dollar amounts paid to holders of ADSs also depend on the sterling/US dollar exchange rateregister at the time of payment.14 June 2019.

The following table sets forth for each of the most recent six months, the high and low exchange rates between the pound sterling and the US dollar. As at24 April 2018, the closing exchange rate was1.3977.

Principal risk		Potential impact
Financial
The Group is subject to credit risk through the default of a client or other counterparty.		The Group is generally paid in arrears for its services. Invoices are typically payable within 30 to 60 days.   The Group commits to media and production purchases on behalf of some of itsour clients as principal or agent depending on the client and market circumstances. If a client is unable to pay sums due, media and production companies may look to the Groupus to pay such amounts to which it committed on behalf of those clients.amounts.
Operational
The Group’s performance could be adversely impacted if it failed to ensure adequate internal control procedures are in place in relation to the Group’s media trading.		Failure to ensure that trading activities are compliant with client obligations where relevant could adversely impact client relationships and business volumes.
The Group has commenced a three-year strategic plan to return the business to growth by the end of 2021 which includes the merger of some operations, disposals and the simplification of our structure.		A failure or delay in implementing the transformation plan may have a material adverse effect on our market share and our business, revenues, results of operations, financial condition or prospects.
People and succession
The Group’s performance could be adversely affected if it does not react quickly enough to changes in itsour market and fails to attract, develop and retain key creative, commercial and management talent at the parent and operating companies, including but not limited to long-serving members of the management team.talent.		The Group is highly dependent on the talent, creative abilities and technical skills of our personnel as well as their relationships with clients. The Group isWe are vulnerable to the loss of personnel to competitors (traditional and emerging) and clients, leading to disruption to the business.

ITEM 4. INFORMATION ON THE COMPANY

WPP’s offer to clients encompasses communications, experience, commerce and technology. The Company provides communicationsthese services through a number of established global, multinational and national advertising and marketing servicesoperating companies that are organised into four business segments. Our largest segment is Advertising and Media Investment Management, which accounted for approximately 47%46% of the Company’s revenues in 2017.2018. The remaining 53%54% of our revenues were derived from the business segments

of Data Investment Management; Public Relations & Public Affairs; and Brand Consulting, Health & Wellness and Specialist Communications (including direct, digitalinteractive and interactive)ecommerce). Excluding associates, the Company currently employs over 134,000130,000 full-time people in 112 countries.

The Company’s ordinary shares are admitted to the Official List of the UK Listing Authority and trade on the London Stock Exchange and American Depositary Shares (which are evidenced by ADRs or held in book-entry form) representing deposited ordinary shares are listed on the New York Stock Exchange (NYSE). At24At 23 April 20182019 the Company had a market capitalisation of approximately £14.136£11.814 billion.

The Company’s executive office is located at 27 Farm Street,Sea Containers, 18 Upper Ground, London, United Kingdom, W1J 5RJ,SE1 9GL, Tel:+44 (0)20 7408 22047282 4600 and its registered office is located at Queensway House, Hilgrove Street, St Helier, Jersey JE1 IES.

A. History and Development of the Company

WPP plc was incorporated in Jersey on 25 October 2012 under the name WPP 2012 plc.

On 2 January 2013, under a scheme of arrangement between WPP 2012 Limited (formerly known as WPP plc), (Old WPP), the former holding company of the Group, and its share owners pursuant to Article 125 of the Companies (Jersey) Law 1991, and as sanctioned by the Royal Court of Jersey (the Jersey Court), a Jersey incorporated and United Kingdom tax resident company, WPP 2012 plc became the new parent company of the

WPP Group and adopted the name WPP plc. Under the scheme of arrangement, all the issued shares in Old WPP were cancelled and the same number of new shares were issued to WPP plc in consideration for the allotment to share owners of one share in WPP plc for each share in Old WPP held on the record date, 31 December 2012. Citibank, N.A., depositary for the ADSs representing Old WPP shares, cancelled Old WPP ADSs held in book-entry uncertificated form in the direct registration system maintained by it and issued ADSs representing shares of WPP plc in book entry uncertificated form in the direct registration system maintained by it to the holders. Holders of certificated ADSs, or ADRs, of Old WPP were entitled to receive ADSs of WPP plc upon surrender of the Old WPP ADSs, or ADRs, to the Depositary. Each Old WPP ADS represented five shares of Old WPP and each WPP plc ADS represents five shares of WPP plc.

Pursuant to Rule12g-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act), WPP plc succeeded to Old WPP’s registration and periodic reporting obligations under the Exchange Act.

Old WPP was incorporated in Jersey on 12 September 2008 and became the holding company of the WPP Group on 19 November 2008 when the company now known as WPP 2008 Limited, the prior holding company of the WPP Group which was incorporated in England and Wales, completed a reorganisation of its capital and corporate structure. WPP 2008 Limited had become the holding company of the Group on 25 October 2005 when the company now known as WPP 2005 Limited, the original holding company of the WPP Group, completed a reorganisation of its capital and corporate structure. WPP 2005 Limited was incorporated and registered in England and Wales in 1971 and is a private limited company under the Companies Act 1985, and until 1985 operated as a manufacturer and distributor of wire and plastic products. In 1985, new investors acquired a significant interest in WPP and changed the strategic direction of the Company from being a wire and plastic products manufacturer and distributor to being a multinational communications services organisation. Since then, the Company has grown both organically and by the acquisition of companies, most significantly the acquisitions of J. Walter Thompson Group, Inc. (now known as J. Walter Thompson Company LLC) in 1987, The Ogilvy Group, Inc. (now known as The Ogilvy Group LLC) in 1989, Young & Rubicam Inc. (now known as Young & Rubicam LLC) in 2000, Tempus Group plc (Tempus) in 2001, Cordiant Communications Group plc (Cordiant) in 2003, Grey Global Group, LLC (Grey) in 2005, 24/7 Real Media Inc (now known as Xaxis LLC) in 2007, Taylor Nelson Sofres plc (TNS) in 2008, AKQA Holdings, Inc. (AKQA) in 2012, IBOPE Participações Ltda (IBOPE) in 2015, and Triad Digital Media, LLC and the merger of most of the Group’s Australian and New Zealand assets with STW Communications Group Limited in Australia(re-named WPP AUNZ) in 2016. During 2018, the Company focused on simplifying its organisation with the completion of the merger of VML and Y&R to create VMLY&R and the merger of Burson-Marsteller and Cohn & Wolfe to create Burson Cohn & Wolfe, and the beginning of the merger of Wunderman and J. Walter Thompson to create Wunderman Thompson.

The Company received £440.3 million and spent £228.8 million and £697.1 million and £693.1 million forrelated to acquisitions and investments in 2018, 2017 2016 and 2015,2016, respectively, including payments in respect of loan note redemptions and earnout payments resulting from acquisitions in prior years, net of cash and cash equivalents acquired (net) and proceeds on disposal of investments. For the same periods, cash spent on purchases of property, plant and equipment and other intangible assets was £375.2 million, £326.2 million £285.1 million and £246.4£285.1 million, respectively, and cash spent on share repurchases andbuy-backs was £207.1 million, £504.2 million £427.4 million and £587.6£427.4 million, respectively.

The Company is subject to the informational requirements of the Exchange Act. In accordance with these requirements, the Company files reports and other information with the United States Securities and Exchange Commission. You may read and copy any materials filed with the SEC at www.sec.gov that contains reports, proxy statements and other information regarding registrants that file electronically with the SEC. The Company’s Form20-F is also available on the Company’s website, www.wpp.com.

B. Business Overview

Introduction

CertainNon-GAAP measures included in this business overview and in the operating and financial review and prospects have been derived from amounts calculated in accordance with IFRS but are not themselves IFRS measures. They should not be viewed in isolation as alternatives to the equivalent IFRS measure, rather they should be read in conjunction with the equivalent IFRS measure. These include constant currency,pro-forma(‘like-for-like’), headline PBIT (Profit Before Interest and Taxation), headline PBT (Profit Before Taxation), headline EBITDA (Earnings before Interest, Taxation, Depreciation and Amortisation), headline operating costs, billings, estimated net new billings, free cash flow and net debt and average net debt, which we define, explain the use of and reconcile to the nearest IFRS measure on pages24 to28.pages 25 to 28.

Management believes that these measures are both useful and necessary to present herein because they are used by management for internal performance analyses; the presentation of these measures facilitates comparability with other companies, although management’s measures may not be calculated in the same way as similarly titled measures reported by other companies; and these measures are useful in connection with discussions with the investment community.

The following tables show, for the last three fiscal years, reported revenue and revenue less pass-through costs attributable to each business segment in which the Company operates.

The following tables show, for the last three fiscal years, reported revenue and revenue less pass-through costs attributable to each geographic area in which the Company operates and demonstrates the Company’s regional diversity.

The Company’s principal disciplines and operating companies within each of its business segments are described below.

Advertising and Media Investment Management

Advertising – WPP’s creative advertising services are delivered through our network of agencies,integrated agency networks, which include many of the industry’s most celebrated names, such as Ogilvy, J. WalterWunderman Thompson, Worldwide, YVMLY&R and Grey. Among the principal functions of these agencies are the planning and creation of marketing and branding campaigns and the design and production of advertisements across all media.

Media Investment Management – GroupM is the world’s leading global media investment management company serving as parent to ourresponsible for more than $45 billion in annual media investment through agencies including Mindshare, MediaCom, Wavemaker, Essence and m/SIX, andas well as the outcomes-driven programmatic audience company, Xaxis. Responsible for media investment by some of the world’s largest advertisers, GroupM agencies deliver advantage to clients with unrivaled insights into media marketplaces and consumer audiences. GroupM enables its agencies and clients with trading expertise, data, technology and an array of specialist services including addressable TV, content and sports. Our offering in this discipline also includes the network tenthavenue, which integrates some of the Group’s key specialist media offerings in online, mobile, experiential and out of home.

Data Investment Management

OurWPP’s data investment management services are delivered through Kantar, which is home to someone of the world’s leading research, data, insights and insights brands. Individually, these brands – such as Kantar Consulting, Kantarconsulting company.

Public Relations & Public Affairs

WPP’s public relations and public affairs companies advise clients who are seeking to communicate with a range of stakeholders from consumers to governments and the business and financial communities. They include many of the industry’s leading agencies, such as Burson Cohn & Wolfe and Hill+Knowlton Strategies, Finsbury and Buchanan Communications.Strategies.

Brand Consulting, Health & Wellness and Specialist Communications

Brand Consulting – Our consumer, corporate and employee brand consulting and design services, covering areas such as brand strategy, creative services, digital corporate communications, identity, motion graphics and packaging, are delivered through leading firms such as Landor Superunion and FITCH.Superunion.

Health & Wellness – WPP Health & Wellness servesprovides integrated health marketing solutions through its main agency networks in the US and, internationally, specialist firms such as parent to healthcare specialist agenciesghg, Sudler and Ogilvy CommonHealth Worldwide, Sudler & Hennessey, ghg | greyhealth group and CMI/Compas.Healthworld.

Specialist Communications (including direct, digitalinteractive and interactive)ecommerce) – WPP provides thea full range of specialist communications services, including digital marketing, production, ecommerce, shopper, direct, field, retail, promotional,point-of-sale, sports marketing and events, through leading companies such as Wunderman, AKQA, Geometry Global, Mirum, VML and Hogarth.events.

WPP Head Office

The central functions of WPP, the parent company, with its principal offices in London and New York, developsare to develop the strategy of the Group, coordinatesCompany, coordinate the provision of services to cross-Groupcross-Company clients, performsperform a range of cross-Groupcross-Company functions in areas such as new business, talent recruitment and development, training, IT, finance, audit, legal affairs, M&A,mergers & acquisitions (M&A), property, sustainability, investor relations and communications, promotespromote best practice in areas such as our agencies’ approach to diversity and inclusion, drivesdrive operating efficiencies and monitorsmonitor the financial performance of itsWPP’s operating companies.

Our four strategic prioritiesnew strategy in 20172018

We describe our new strategy as a radical evolution. It’s radical because we are making tough decisions and taking decisive action – having restructured a large proportion of our revenue base in 2018 – but an evolution because we are changing our business in a way that respects the people and things that make WPP such a great organisation. WPP has substantial assets, the most important of which is our people. As a talent business we need to transform at the right pace, and bring our people with us on the journey.

Our strategy focuses on growth. The restructuring of our business and associated cost savings will enable increased investment in creativity, technology and talent, so that we are well positioned fortop-line growth in the future.

We aim to deliver this strategy over the next three years, incurring cash costs for restructuring of £300 million. The annual savings are anticipated to be £275 million by the end of 2021, approximately half of which will be reinvested in the business.

Our reason for being isfive elements to help our clients grow their businesses. And by adding value for our clients, we deliver value fornew corporate strategy are:

Sustainability

Our clients look to us to provide the insight, expertise and creative solutions they need to navigate this changing landscape and communicate their purpose effectively and authentically. Our own sustainability strategy helps us to do this with credibility, meeting changing client expectations while reducing risks and creating a more resilient business for the long term.

Our sustainability strategy aligns with all five elements of our new corporate strategy, which we introduced in late 2018. We work with clients on sustainability across our disciplines. This work is growing in importance as more of our clients seek to develop brands with purpose and to integrate social and environmental values into their communication. Below sets out the most material ways in which sustainability supports our strategy.

A stronger offer for our clients: A growing number of clients are grappling with sustainability challenges and looking to articulate the purpose of their brands. They look for partners who share their sustainability values and aspirations. Our commitment to responsible and sustainable business practices helps us to broaden and deepen these partnerships, and to meet the growing expectations and sustainability requirements in client procurement processes.

Social investment: Our pro bono work can make a significant difference to charities andnon-governmental organisations (NGOs), enabling our partners to raise awareness and funds, recruit members, and achieve campaign objectives. Pro bono work benefits our business too, providing rewarding creative opportunities for our people that often result in award-winning campaigns that raise the profile of our companies

Diverse and inclusive teams: Creativity thrives on diversity of background and thought. This can include:makes having a diverse and inclusive workplace essential to our long-term business success. We want all of our people to feel valued and able to fulfil their potential, regardless of gender, ethnicity, age, or disability.

Privacy and data ethics: Data – including consumer attitudesdata – can play an essential role in our work for clients. Data security and privacy are increasingly high-profile topics for regulators, consumers and our clients. We have a responsibility to sociallook after this data carefully; to collect data only when needed and environmental issueswith consent where required, and testing the impact of sustainability strategyto store and communications approaches.transfer data securely.

People

Environment

Social contributioninvestment

Clients

The Group works with 369 of the Fortune Global 500, all 30 of the Dow Jones 30, and 71 of the NASDAQ 100. Some 913 clients are served in three disciplines. 629 are served in four disciplines; these clients account for over 53% of Group revenues. The Group also works with 477 clients in six or more countries.

The Company’s 10 largest clients accounted for 14.9%14.4% of the Company’s revenues in the year ended 31 December 2017.2018. No client of the Company represented more than 5% of the Company’s aggregate revenues in 2017.2018. The Group’s companies have maintained long-standing relationships with many of their clients, with an average length of relationship for the top 10 clients of approximately 50 years.

Government Regulation

From time to time, governments, government agencies and industry self-regulatory bodies in the United States, European Union and other countries in which the Company operates have adopted statutes, regulations, and

rulings that directly or indirectly affect the form, content, and scheduling of advertising, public relations and public affairs, and market research, or otherwise limit the scope of the activities of the Company and its clients. Some of the foregoing relate to privacy and data protection and general considerations such as truthfulness, substantiation and interpretation of claims made, comparative advertising, relative responsibilities of clients and advertising, public relations and public affairs firms, and registration of public relations and public affairs firms’ representation of foreign governments.

There has been a trend towards expansion of specific rules, prohibitions, media restrictions, labeling disclosures and warning requirements with respect to advertising for certain products, such asover-the-counter drugs and pharmaceuticals, cigarettes, food and certain alcoholic beverages, and to certain groups, such as children. Though the Company does not expect any existing or proposed regulations to have a material adverse impact on the Company’s business, the Company is unable to estimate the effect on its future operations of the application of existing statutes or regulations or the extent or nature of future regulatory action.

IT

In June 2017, WPP became victim to a sophisticated and destructive cyber attack (commonly referred to as ‘NotPetya’), the scale and impact of which were unprecedented. Subsequently, WPP has prioritized rapid recovery capabilities and sought to strengthen other IT controls. Actions we are taking to manage the cyber and data security risks are set out below.

A Chief Privacy Officer hasand Data Protection Officer have been appointed at the Company and Data Protection Officers are in place at a number of our operating companies. Our Group companies.Chief Privacy Officer and Data Protection Officer are working with our internal audit team to review privacy risks and practices as part of our company-wide audit programme.

D. Property, Plant and Equipment

The majority of the Company’s properties are leased, although certain properties which are used mainly for office space are owned. In the United States the sole owned property iswas the 214,000 square foot YVMLY&R office condominium for their headquarters located at 3 Columbus Circle in New York, New York. The Company also leases an additional 160,700York, which was sold and converted to a leased location in Q1 2019 in addition to 160,000 of square feet of space for Y&R at the 3 Columbus Circle location.already leased. Other owned properties are in Latin America (principally in Argentina, Brazil, Chile, Mexico, Peru and Puerto Rico), Asia (India and China) and in Europe (Spain, France, UK and Italy). In Europe, owned properties include the 135,626 square foot TNS office located at 2 Rue Francis Pedron, Chambourcy, Paris, France and the 101,592 square foot TNS House at Westgate, Hangar Lane, London. Manufacturing facilities are owned in the United Kingdom.

Principal leased properties, which are accounted for as operating leases, include office space at the following locations:

The Company considers its properties, owned or leased, to be in good condition and generally suitable and adequate for the purposes for which they are used. At 31 December 2017,2018, the fixed asset value (cost less depreciation) representing land, freehold buildings and leasehold buildings as reflected in the Company’s consolidated financial statements was £683.1£780.6 million.

In 2017, the Group’s property portfolio decreased2018, 21% of our floorspace was certified to advanced sustainability standards like LEED and BREEAM. Our target is 25% of global floor space certified to advanced green building standards by over 1%2020.

We will continue to 23.8 million square feet, despite the additiondevelop Campusco-locations to house our agencies in major cities, which deliver world-class working environments and increased efficiencies. The focus for 2019 includes 80 closures at local office

level by end of 0.5 million square feet through acquisitions. This reduction reflects the impact2019 and opening of new WPP Campuses such as Madrid and Amsterdam. 70 of the Group’s continuing strategy100 planned office mergers have been completed and 57 of colocating companies, together with the use of ‘agile working’, supported by more technology in the office environment. Establishment costs increased by 6.2%, 1.4% on a constant currency basis (refer toNon-GAAP measures defined in Item 5), which compares with average headcount growth of 1.3%.

We ensure our new buildings focus on sustainability and we look to achieve BREEAM Very Good or LEED Gold. Our operating companies’ workplaces continue to be cited for their creativity, innovation and effectiveness.

2017 saw the completion of our campus buildings in Lisbon, bringing together 600 people from GroupM, Ogilvy, Hill + Knowlton Strategies, Y&R and J. Walter Thompson, as well as Hamburg with 850 people from Scholz & Friends, Y&R, Kantar, MediaCom, Wavemaker and Burson Cohn & Wolfe. These colocation projects meet our new planning standards and support our goal of horizontality.

Projects expected to be completed in 2018 include colocations at 3 World Trade Center in New York with approximately 4,000 people, Madrid with 2,500 people, Amsterdam with 1,500 people, and Kuala Lumpur with 1,100 people. Longer-term colocation projects are currently committed in London, Chicago, Toronto and Buenos Aires; and in planning for Paris, Prague, Warsaw, Dusseldorf, Bucharest, Mumbai, Gurgaon and Hong Kong.

Our goal is to continue to deliver excellent workspace, while reducing the portfolio further and so mitigate the impact of property inflation.80 offices have been closed.

See note 3 to the consolidated financial statements for a schedule by years of future minimum rental payments to be made and future sublease rental payments to be received, as at 31 December 2017,2018, undernon-cancelable operating leases of the Company.

ITEM 4A.

UNRESOLVED STAFF COMMENTS

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

As introduced on page 7, certainNon-GAAP measures are included in the operating and financial review and prospects.

A. Operating Results

Overview

The Company is one of the world’s most comprehensive marketing communications groups. It operates through a large number of established national, multinational and global advertising and marketing services companies. The Company offers services in four reportable segments:

In 2017,2018, approximately 47%46% of the Company’s consolidated revenues were derived from Advertising and Media Investment Management, with the remaining 53%54% of its revenues being derived from the remaining three segments.

The following discussion is based on the Company’s audited consolidated financial statements beginning onpage F-1 of this report. The Group’s consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB.

At WPP’s Preliminary Results announcement on 1 MarchDuring 2018 following a disappointing year in terms of financial performance, the executive team outlined an acceleration of the Company’s strategy.Like-for-like growth was flat in 2017, and headline PBIT was up marginally – reflecting pressure on marketing budgets and the impact of structural changes in the market, especially technological disruption.

The accelerated strategywe focused on the following areas:a number of short-term strategic priorities, as well as on formulating a new long-term strategy, which was announced in December. The actions taken in 2018 are outlined below.

Following the departure of Sir Martin Sorrell from the Company, the Board has appointed Mark Read and Andrew Scott as jointkey appointments including Chief Operating Officers – reportingOfficer, Chief Client Officer and Chief Technology Officer. WPP Executive Committee established for the first time, drawn from corporate and operating company leadership.

The share price decreased by 26%37% in 2017,2018, closing at 1,341.0p846.6p at year end. Since then it has fallenrisen to 1,116.5p, down 16.7%936.2p, up 11%, at 2423 April 2018.2019. Dividends increased by almost 6% toremain flat at 60.00p a new high.in 2018, same as prior year.

Revenue was down 1.3% at £15.602 billion. Revenue on a constant currency basis was up over 6% to £15.3 billion and up well over 1% in constant currencies1.5% compared with last year, the difference to the reportable number reflecting the weaknessstrength of the pound sterling against most currencies, particularly in the first half of the year. On alike-for-like basis, which excludes the impact of currency and acquisitions, revenue was up 0.8%. Billings were £55.6£55.798 billion, up 0.6% and down almost 4%0.4%, up 3.3% in constant currencies.currency and up 3.2%like-for-like.

GroupThe Group’s revenue is more weighted to the second half of the year across all regions and sectors, and, particularly, in the faster-growingfaster growing markets of Asia Pacific and Latin America. As a result, the Group’s headline PBIT continues to be skewed to the second half of the year, with the Group earning approximatelyone-third 40% of its headline PBIT in the first half andtwo-thirds 60% in the second half.

Reported profitProfit before interest and tax was down over 4%27.0% to £2.022£1.475 billion from £2.113 billion, down over 7% in constant currencies.£2.022 billion. Headline PBIT for 2018 was up almost 5%down 9.7% to £2.047 billion, from £2.267 billion and up well over 1% in constant currencies, reflecting currency tailwinds in the full year.

Profit for the year increased by over 27% to £1.912 billion and almost 23%down 7.4% in constant currencies. Headline EBITDA increasedwas down by almost 5%8.8% to £2.311 billion, from £2.534 billion up over 1%the previous year and down 6.4% in constant currencies.

Profit before tax was up almost 12%fell by 30.6% to £1.463 billion from £2.109 billion reflecting principally the £302 million of restructuring and headlinetransformation costs and £184 million of goodwill impairment charges. Headline profit before tax was up over 5%down 11.0% to £1.863 billion from £2.093 billion.

Profit after tax fell by 40.4% to £1.139 billion from £1.912 billion. In constant currencies, profit after tax fell 38.5%.

Profits attributable to shareholders fell 41.5% to £1.063 billion from £1.817 billion, again reflecting principally the £302 million of restructuring and transformation costs and £184 million of goodwill impairment. In constant currencies, profits attributable to shareholders fell by 39.6%.

Diluted earnings per share were up almost 32%fell by 40.8% to 142.4p.84.3p from 142.4p and decreased 38.9% in constant currencies.

Net cash inflow from operating activities decreasedincreased to £1.4£1.694 billion in the year. In 2018, operating profit was £1.431 billion, depreciation, amortisation and goodwill impairment £728 million,non-cash share-based incentive charges £85 million, working capital and provisions inflow £166 million, net interest paid £162 million, tax paid £384 million, capital expenditure £375 million, earnout payments £120 million and other net cash outflows £266 million, principally £235 million gains on disposal of investments and subsidiaries. Free cash flow amounted to well over £1.5 billion in 2017.available for debt repayment, acquisitions (excluding earnouts), sharebuy-backs and dividends was, therefore, £1.103 billion. This free cash flow was absorbedenhanced by £0.2 billion£849 million of netproceeds from the disposal of associates and investments, offset by £289 million in cash acquisition paymentscosts (investments and investments, £0.5 billion ofnew acquisition payments), £207 million in sharebuy-backs and £0.8 billion of£747 million in dividends, a totalnet outflow of £1.5 billion.£394 million. This resulted in a net cash inflow of £55 million, before any changes in working capital. £709 million.

Debt financing was £6.9£6.660 billion at 31 December 2017,2018, compared to £6.6£6.875 billion at 31 December 2016.2017. Average net debt in 2018 was £5.1£4.966 billion, compared to £5.125 billion in 2017, compared to £4.6 billion in 2016, at 20172018 exchange rates, andrates. On 31 December 2018 net debt atwas £4.017 billion, against £4.483 billion on 31 December 2017, a decrease of £466 million (a decrease of £605 million at 2018 exchange rates). The reduced period end debt figure reflects the benefit of £849 million proceeds in relation to disposal of our interests in certain associates and investments, the principal of which were Globant S.A., Imagina, AppNexus and Bruin.

Segment performance

Performance of the Group’s businesses is reviewed by management based on headline PBIT. A table showing these amounts by operating sectorreportable segment and geographical area for each of the three years ended 31 December 2018, 2017 2016 and 20152016 is presented in note 2 to the consolidated financial statements. To supplement the reportable currency segment information presented in note 2 to the consolidated financial statements, the following tables give details of revenue growth and revenue less pass-through costs growth by geographical area and operating sectorreportable segment on a reported, constant currency, andlike-for-like basis. Headline PBIT and headline PBIT margin by reportable segment are also provided below.

Geographical area

UKUnited Kingdom constant currency revenue less pass-through costs was up over 11%down 2.4% in the final quarter and down 2.7%like-for-like, up well over 8%,slightly weaker than the strongest-2.0% shown in quarter ofthree. Media investment management and the year. Media Investment Management, direct, digital and interactive and Public Relations & Public Affairsspecialist communications businesses were particularly strong with Data Investment Management, Health & Wellnessdata investment management improving. Our public relations and the Group’s Specialist Communicationspublic affairs and direct, interactive and ecommerce businesses also up.were slower. On a full-yearfull year basis, constant currency revenue was up strongly at well over 6%, withlike-for-like up almost 5%, with the second half significantly stronger than the first half, driven by new business wins in the Group’s direct, digital and interactive businesses. Full-year revenue less pass-through costs was up 6% in constant currency,0.2%, withlike-for-like up almost 5%down 0.5%.

Western Continental Europe constant currency revenue less pass-through costs was up well over 1%4.1% in the final quarter, partlya significant improvement on the resultgrowth in quarter three of acquisitions, with1.3%. On alike-for-like basis revenue down over 1%, reflecting volatility in political and macro-economic conditions. Revenue less pass-through costs followed a similar pattern,was also up almost 2%4.1%, the strongest quarter of the year, and compared to-0.4% in constant currency, but down 0.8%like-for-like.quarter three. Twelve of the Group’s top 14 markets showed significant growth in quarter four, particularly Austria, Belgium, Denmark, Finland, Germany, Italy, the Netherlands, Portugal, Sweden and Turkey. For the year, Western Continental Europe constant currency revenue less pass-through costs grew well over 1%4.1% withlike-for-like down 0.3%. Revenue less pass-through costs growth was slightly stronger, up almost 2% in constant currency and flatlike-for-like. Austria, Belgium, Denmark, Finland, Netherlands and Turkey showed growth in2.0%, the final quarter, but Germany, Greece, Ireland, Italy and Switzerland were tougher.second strongest performing region.

In Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe, on a constant currency basis, revenue less pass-through costs was down 1%up 0.4% in the fourth quarter and down 0.1%up 2.6%like-for-like, largely as a resultslightly above the third quarter growth of stronger comparatives in the fourth quarter of 2016, when constant currency revenue was up almost 12% andlike-for-like revenue up almost 4%, the strongest quarter of the year.2.4%. In the fourth quarter, Latin America despite almost 4% growth, was weakergrew over 7%, stronger than the first nine monthsthird quarter, with Central & Eastern Europe also tougher. Constantshowing double-digit growth in the fourth quarter compared with almost 5% in quarter three. Asia Pacific and Africa & the Middle East were slightly weaker. On a full-year basis, constant currency revenue less pass-through costs growth in the region was similar to revenue growth,2.0% withlike-for-like revenue less pass-through costs growth for2.5%, the region as a whole down 0.8%.strongest performing region.

In 2017, 30% of the Group’s revenue came from Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe, up marginally from 2016. With revenue less pass-through costs, the increase was slightly more, up to almost 31% in 2017.

Operating SectorReportable Segments