WPP - Earnings call transcript Q4 2020

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Mark Read

Thank you, very much, and good morning, everybody. Welcome to our 2021 interim results. I'm here in London with John Rogers, our CFO; and Peregrine Riviere, who heads our Investor Relations team. I’m going to make some opening remarks and John and I will answer any questions that you have. I have four sets of slides in the presentation on the website and I’ll just throw your attention to cautionary statement at the beginning of the slide presentation. make remarks just first on I'll overall. top maybe some on opening the And

saw, year’s strong growth a X.X% first a first we cost year, the think I very following revenues, on first X.X%. acceleration quarter XX.X% of possibly our half half second first the quarter half us performance the in growth the the decline from XX% in in giving to last in in an the in of

a XX.X% two-year bit we stronger media, very now approach in year, That's solid I relations probably our been on Actually, business the didn't WPP, year the XX% for XX.X% we both things the area saw the came strong across of and this around our and That year XXXX. than board a business. way new So remind We business, media to was billion XX.X% years. particularly other creatively everybody our X.X% we little net business communications net-net which it growth retained and in compare e-commerce we year businesses me record. our integrated that into a but was basis we had This really around do opportunities a side the was programmatic strong last strong new we area. previous digital more growth, saw specialist media, a GroupM, on in really at have in standout remind a growth shift that have have all plus fall. very technology of represent of slightly standout just probably in areas. had one business. in and than last performer, there But $X.X into that the public done the the at-risk with agencies. communications new across really reflects growth But And of agencies second I also commerce sectors, experience, in our and quarter. in

with far invested I the the in more so had amounts been pleased of year. talent our a We've good at area It's year, of think hopefully we're be creative the WPP last three and we've some XXXX news the not in tremendous second there'll performance comprises half this as our Chief years. major of Creative least or of company work. was the Reilly And which company in year at creative the focus, Officer. two holding that the Lions, recent with years last winning us most Rob Cannes hiring reflected a of investment of year the over Global

The first we've XXXX. that done since time

the of together upper able the half combine year, of a on we and XXXX, second [Indiscernible] and the range performance basis costs headline this on that. the X.X% in together, a year quarter first up are X% improving in of the the back or slightly ahead that actually share £XXX for to further first quarter, half by buybacks XXXX in the we're guidance second of year to pounds the to the plan XX% – the in levels of second towards X.X% to of in meant on Taken margin time the year revenue we end beginning at growth set pass-through in based XX.X as half with were like-for-like year. the operating that the year. XX% our our our dividend that And million million £XXX raising p this raise

the of the reflect of our significant results together taken durability WPP’s strength the business think change of overall. the I the our long-term and in adaptability of relationships, our company model, phase resilience client

to take I them So to support together. our John hard And for that be people field have, questions and think work. their clients for any their available you great will you thank results, and now to and our I we’ll

Operator

Thank [Operator Thank Instructions] you. you, sir.

Nolan the question of first from line comes today Tim Macquarie. from Your

Tim Nolan

I a debt numbers the this just what want to Great. upgrades returns give And wonder would wonder maybe growth or in beyond could look like? looks Thanks to I'd like Any your net nice nice you things has lot. us I such indication see for if things shareholder to on but to lot very comments level acquire? look in you gotten What bounce your might And post-COVID year. like? to an And you run be of a like see creates cash. rate the your nice types what wonder debt talk I numbers. a do if kind Thanks. low XXXX low of it revenue XXXX could might back I levels, great. almost that to a look and your of M&A pipeline could might now, see about a you there addition, with

Mark Read

M&A are tackle I can we the fill the don't where in on guidance. and John Why pipeline, Okay.

the on what to technology and for an faster a technology meet a I a So good numerator I We've growing last of of target the but from our we we're numerical Kantar. in our absolute quantum And to set sense, probably we've year number targets. deals December terms smaller amount. done versus sort think in they're data start M&A areas in out year made through think of in in around

focus talk bit get doubt or we're when territory acquired really I focusing can to that's is from seeing we much areas John, we Particularly high. little Our to DTI, in are upgrades interest but markets of on the perspective. other marketing M&A most more net of where into do you technology sized there'll to data that We're a our the want be where get evaluations reasonable we opportunities. us, No very Brazil like have can in say analytics. to debt? e-commerce, effort. and good on

John Rogers

follow-on covered. look, was on the net Well, reiterating comment our growth Mark already beyond. were that first, I guidance in think, we debt point the the sure side a I'll question to not on I'm XXXX and But that then whether growth, on and hasn't

topped like-for-like of growth X.X% about if in so. to markets M&A So we the the X.X% you X% up remember of or December, capital X% to by like talked

So that long-term maintain stayed guidance overall still and We confidence got of that regards on And far we've XXXX XXXX, we and that second we through line think this reiterated half. But the to our largely detailed X% momentum we through silent growth against to – upgrading because half we XXXX, provide upgrading got XXXX. Obviously, into also to guidance it today, X% our XX% half maintain X%, first And so with in announced this to to we actually another the sight year. for growth. beyond. year. had today itself in were experience second travel guidance. months itself will very the really the want guidance we to momentum think and that coming before XXXX. will strong six We we coming We

moment, rate, So for X% post-COVID reiterating X% not long-term XXXX. we're like, from rate, to you guiding XXXX at the we're onwards relation sustainable currently if But in the to growth.

covers debt net working great done that that. a relation we've capital, or the piece, position managing I year over obviously, our really think, net debt hopefully So net job squeezing to so last down. the In

the being of as significantly that. can below ratio All I year said times. this a do guidance else range on X.XX X.X think I that's more debt-to-EBITDA there's still at equal, our that end call morning, the to we net up we

we we And there after Capital all look then subject of so that capacity gives or being there said as if Markets at further in that requirement, equal, where we And XXXX. capital left highlighted, to dividend scope that for buybacks any are else scope accelerate can share growth. particularly areas was our organic proactively return in M&A. still at sheet policy through cash that course, buybacks. M&A Day, to But allocation as balance share the all the we clearly we is logically always would the opportunities, being outbound else against looking after after investment, equal we shareholders Mark where If

going so subject to always be to And that. it's

Tim Nolan

years, on your way?, growth, terms other last year the the change And of nature the any a again, for services of clients has accelerated rates, in is side COVID. growth on demand of rate the run any just over guess during like going demand But further on forward? the It's year but several have this strange nature in for got client your I that was rate growth services might your migrating been some the things comments affect last that

John Rogers

marketing, think personalized Look in are they seeing outlined technologies, years e-commerce, certainly pandemic, Capital we looking a I And a compared I fundamental by much out clients think marketing come XX even in underpinned as very are Day. said, as solutions, are the much growth ago. change the what Markets But implementing in data-driven in we of in for, investments to we're greater we demand rates for, marketing. as the

fundamentally So, it different. is

which accelerated we and years. fact we've this year that investments technology. the in the coming over Now the changes it's the I numbers, our think, probably have creativity last look reflects integrated made in COVID, the that and grown we've think a the little offer, bit out of we've a evolution strongly But our of way so three company if that made at certainly we I more

investments clients. that And they our understanding the not for for in no marketing still are in And media, which WPP’s with you traditional to depends – going doubt offer. outdoors of clients at positioned so-called traditional it's from that's mind that way digital to run start in where a in remain there's still that increasingly now, with analog. if doubt start on the But we've no Now, there's also our look and true companies true and my still and there's skills have strategy. business we important. we television creative consumers And

the our like Xaxis, areas connected in things in media, to stronger of more we performance shift. I company the in traditional newer the but reflect continue areas, e-commerce, they in have growth the to saw do you expect we the areas growth results So think in fundamentally. that the of And see business. business Finecast, in the television, opportunity And in changed digital

Tim Nolan

John. Thanks Yes. That Mark. will make sense. Thanks

Mark Read

Thanks Tim.

John Rogers

you. Thank

Operator

you. Thank

Research. comes of from Doug Arthur, Huber Your question the next line

Doug Arthur

that Yes Mark now, the services opportunity to of Criteo point your And sort services your me. just written commerce that is to WPP acquisition commentary term your on how has on in media. there? sort certainly retail do thanks. is Publicis And in commerce mean in it. as e-commerce – driven a of of it? an focused evolve, really made businesses How an focus just nebulous little you the positioned – it competitively sort define how I business?

Mark Read

I contextualize it maybe maybe, can sort try for you. Yes, of to

we strategies. There's e-commerce on our is really think their start by really two focus I areas. commerce in advising clients services,

more move their they that through sales own and implement online do them channels. how direct-to-consumer help So of then their

Unilever through do they indeed websites, Sainsbury's, like how client So or Alibaba, in we're to retailer or sell building Walmart or or direct-to-consumer through platforms they or sell through how Amazon, an MercadoLibre.

enterprise running or build implementation IBM all that we're was websites, stlukes.co.uk, re-platformed through acquired we So Magento and and WebSphere like platforms Hybris, strategy Adobe acquired we've Commerce building enterprise-level Salesforce level built, that we who websites to we websites. built of both or NetFortris' known in what

We big page demand also services, so Ogilvy and a Amazon creative your say, particular, on particularly within consumer sort then commerce create also those AKQA. really that And agencies, and websites, Thompson, on reviews content within within bucket that we content I'd drives on that's VMLY&R create And one, our websites. and content but – business demand, sits GroupM, of to those our then within that and drive have to sits major in that similar. that of sits sits Wunderman

a goes So digital we on is grow saw that we first e-commerce Google, in sends Shopify half through or the of Facebook, amazon.com XX% websites. media, programmatic – those the media that of websites. is media of Part customers also it those classic that demand media, to digital drives spend to Part year. that by said other spend

on our consumers data and So a within Choreograph, purchasing are it's – business online. lot then what data within of we have

WPP to my – commerce of is an across companies. part have and different we offer think I integrated sits mind, multiple So

Doug Arthur

you. Got very helpful. it. That’s Thank

Mark Read

Thanks. helpful? that Is

Operator

line from Nathanson Michael Thank comes next you. [Operator from Instructions] of the Your question MoffettNathanson.

Michael Nathanson

A Mark. Hey, Thanks. for you. question

that One of data the point, the to noted use rising of And is first-party changes clearly. the are to to clearly data be what fundamental seems things on you clients requiring.

that, in establishment others? bit been wonder, So your from apart Choreograph? has What could change you. will you skill needs possible add and the a an the set post about I talk on pandemic, to Thank mean, it And with this there sets? update I capabilities please? more capabilities So data us thinking? give any data of

Mark Read

that Choreograph. established to role key helping our and They build first-party need. we benefit Merkle together media, on that's deploy them why clients helping mind, then more and and clients bring of sort as across channels capabilities we data helping closely see programs GroupM In I'd with Epsilon, build Look, our offer media Choreograph as to own data. data that and agencies. And thirdly, clients of work that the Yes. aligning say the their enrich it channels. their strategy, WPP the would Acxiom aligned both sit multiple the we then very advising see alongside with the And Choreograph that do data data through their because

a were of while into XX business. build – system. around areas that to about to the not cannot and global that U.S. are previously cookie that importance around the in Actually, generally benefits purchase that sort its how of I the world business data probably than that's the think data because there with all we or the that primarily it's future operating is work that us say on management. that's at grow end time first-party in a work the own I the can enrich were where remains and more my that would markets and – in, of we're than of of of all. we – the able launching sources for how are to invest of doing And one world compliant. be we areas advise to operates their to is clients But a particular not in clearer because that business, the clear first-party sets, multiple we data there the able are that looking level from was to sort just a privacy, more them don't I we about with built data a us be set. own in build trick to view want data and data real to way They with want world being of think, combine

using a you drinks? think if many And go that you you if soft food one to go applies – question So occasions a to identify data how not drinks do of It's fast soft client, a in I categories. – versus different who to buys really other. for the

marketplace. through of brings client degree I so differentiates that And Choreograph of think a sort data strategy sophistication to the in thinking

Michael Nathanson

Okay. can more then one I just on GroupM? And ask

Mark Read

Yes.

Michael Nathanson

expected think GroupM TV as I expected where we've the logically, past in have had from past budgets digital. where this would slow down logically, people would move to have people to

accelerating in Now of and move more in wonder you that just I the if even AVOD, do you're the And buy is Connected the media. into you now. if world TV anything, marketplace complicated from terms budgets seeing growth agree the how complications

your by are more wonder because wonder a for services step what I has GroupM? you at lot are fragmented. client on like more I at ground more observing client spending client look more So behaviors on a basis the like when advanced and lot are GroupM, world back a and become at complicated actually those that you the

Mark Read

think there's some Yes, base. I

If we and than which you That business media in figure to for growth that. look at a our digital Connected gave less XX% of is our Finecast, XXX%. statement, GroupM compares TV

gives opportunity XX% yes, less seeing is television. that are and leg connected GroupM. of seeing strong the shift strong terms is So overall strong up strong think of in another thing we improvement And a Xaxis at seeing I yes us growth, I growth Finecast are we to growth, think and business a

for people we asked look, case. have being and persuade to that's GroupM been I've question, mean, to that with back December doing agree I disintermediated that job, growth I the you. people long in you is this run give So tried think I five-year not rates

I shows than business long-term but up it ZIP actually half very I I we're growth in-sourcing, On it's last potential it's it media. and in overdone or in year, think I was a the of more more for a the it's that which in two- first mean way. a the much come think final about comments point, year of year, relates on pandemic business, impacted think that of your fantastic to Kantar X.X% basis, level that. strong up complicated And this code the the cetera, and question. post-code through badly more using it's data et the world. despite one target made a Yes, in television, to information the U.K.

people it's when quite of retargeting we're So tracking almost than in the did web. your old-fashioned a engaged methods sort perhaps previously on going compliant direct of on – were and to mail, back we lot more

I it you a of on the the as big offers in experience, television, it of So through post-code digital both you're through ZIP that terms speed targeting Kantar level get targeting think richer media. benefits Many or watching as that responsiveness and TV. a a level well

I strong opportunity as growth us. for see a think we that

John Rogers

other the point line time. very, stable seen over Mark well over on in just GroupM five, years just business other well, X%. said think I as as to to increasing around last build margins slightly XX actually, at also point the the top very if in not X% growth We've to that as what

a very it's growth top both and accretive stable line and combination So margins. of very, slightly

Michael Nathanson

guys. you Thank right. All

Operator

you. Thank

Your the BMO. comes Dan next question of from Salmon line from

Dan Salmon

Great. Good morning, everyone, good afternoon.

Mark Read

Dan. Hi

Dan Salmon

bouncing I on, heard bit I products on these And Google where ago But follow you? you you I've think calls. recently, I that expressed on and this you bit. around we'll spoke your little guys, changes. call the alternate few little what a moment little to adjusting what maybe that were align – view I where a don't a expectations a to views conference answer caught Mark, But I wanted are from I up think necessarily a And similar been an guess, different consumer with we've apologize, platform How industry think I of privacy at an identifiers. about bit were

of I'd I'd talk probably your see the Thanks. bit first-party you But be? your that a and those little related moment helping So more about own that should well. little to love then should ago that's about competitors, bit what just more. hear and nature ID? But your from spoke a You WPP's but be identity expand foremost. a of changes, just We clients importance specifically on the changing of to hear that, in about you data in some leverage first as developing love to that role

Mark Read

Yes. Look, sort think into it one of roll I up all I answer.

I think the which much that no people one be used no And as the used. to be tracked cookie they in in to online were. ultimately intended way intended one was cookie to as

mentioned different I the the Study was a that journalist data a think Washington his previous X,XXX I services sent on call, out found from phone. his week being Post to over that said has

to I permission context, that long alternative I of a ID to going What is of term, in succeed. the in so attempt And to successful. an difficult way that be it think recreate secures don't be is consumers will going do the to do using ultimately sort very the not think it? cookie in to

own focus say, information first-party the on, their need they as think, I to i.e., therefore, data, have. their consumers, right about the the clients have to you

working So with WBA. very closely we're

have compliant Choreograph, can other clients can they're platform. look consumers. and and working we know, of Those are can we we what data founding with the and how that on closely activate look in on data with we of WBA to one how privacy the at you enrich then it their people they re-pitch opted at WBA very As

I But – And we're anything what solutions, from makes join going the then notion mission. didn't now unopted if think platforms it together. gives intermediaries perspective, thing and to think can more them I that that WPP increases a and right? for the you of to a have key clients. of undoubtedly is have the middle, value having power the opted-in doing in think connecting an role them work, don't I harder But the for life probably with you it's two

strong fashioned used one the made allows that comment, which contextual know, seeing can call for but planning. to the conceptualize about and we've you we're been working contextual media results it's you medium with called message very think how Google and product targeting, down you down I'll Now to old- what to And on a just very other consumer Pegasus is that they is message the target But would closely to audience, not as working. – which be the the team.

So a I think going more be environment. complicated to it's

that to need is think you wookie, valuable, to are where a clients which programs going the we our more planning basis environment, WPP and willing willing develop But the like, click to the with those help the us advice them consumer that can the be of do. cookies. not they And top share in to of in value be ID, are I clients, more and data and create we're position. that that clients data the marketing looking consumers on opted-in will to good propositions I puts of maximize if think value an many on

Dan Salmon

That’s Mark. great. Thanks

Mark Read

Dan. Thanks,

Operator

Thank you.

further now call have time. questions at Read We further for the any would like Mr. comments. back to to closing hand I no Mark this

Mark Read

Thank operator. you thank listening. everyone for for you very much, Well,

respectable a very half first been it's think I for us.

power, our I we've of I year, work second got business. it the to the the the of half guidance. adaptability, the think our in And viability we're think do demonstrates upgrading but

momentum. some So with we into go it

clients few everybody six you people work we'll see their our in thank delivering months to So for support over in a their last months, not results. and the our all before. and if hard for the And

Operator

gentlemen, you now disconnect. and conclude Thank for participation, all you. and may That Thank call. will your you ladies conference today's

Mark Read

you. Thank

WPP (WPP) 8 Aug 212020 Q4 Earnings call transcript