WPP Investor Day Presentation Deck slide image

WPP Investor Day Presentation Deck

● ● WPP'S FINANCIAL PLAN- SUMMARY 1 ● ACCELERATED GROWTH THROUGH INVESTMENT • Targeting sector opportunities eg CPG, Tech, Healthcare Accelerating through growth in Communications and expanding Experience, Commerce and Technology from 25% today to 40% by 2025 Innovative engines of growth in media eg Xaxis, Finecast • Capturing the opportunity in higher growth markets eg Brazil, China, India 2021-2022 - recovery 2023 onwards - accelerated growth O 1-2% core business growth potential medium-term O c 1.5% incremental growth from investing c£400m p.a. in technology, talent and incentives O 0.5-1.0% incremental growth from investing £200-400m p.a. in high growth, scalable acquisitions 2 GROWTH FUNDED AND MARGINS IMPROVED THROUGH GROUP-WIDE TRANSFORMATION PROGRAMME ● Plans in place to target £600 million of annual gross-cost savings by 2025 ● Annual net cost savings of £200 million expected by 2025 after £400 million reinvestment in growth • Savings phased over the next five years Key areas of efficiency: o Operating model savings (e.g. new ways of working, consolidating data and technology investment, simplified country structure, stream-lined organisational structures); Efficiency savings (Procurement, Real estate); and o Functional Effectiveness & Shared Service savings (Legal, Finance, HR, & IT) o Efficiencies unlocked by significant capital investment in our campus programme, ERP systems and shared service centres Efficiency measures will also enhance effectiveness: improving business insight and talent management, leaving agencies free to focus on growth CLEAR CAPITAL ALLOCATION FRAMEWORK ● 3 ● Capex £450-500m p.a. expected in 2021 and 2022, reverting to £300- 350m p.a. from 2023 to fund cost savings programme Intention to pay a progressive dividend at around 40% pay-out ratio £200-400m p.a. for high-growth, scalable M&A Average net debt/EBITDA maintained in target range 1.5- 1.75x Kantar share buyback programme to resume in 2021 4 ATTRACTIVE ● FINANCIAL OUTCOMES • Rapid post-COVID recovery: LFL revenue less pass through costs is anticipated to grow mid-single digits over each of the next two years, recovering to 2019 levels through 2022. ● Accelerated medium-term growth: revenue less pass through costs anticipated to grow 3-4% from 2023 onwards Improved profitability: targeting 15.5%-16.0% operating margin in 2023 Double-digit EPS growth over the next three years WPP 81
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