2019 INTERIM RESULTS London 9 AUGUST 2019 2019 INTERIM RESULTS 1 - PowerPoint PPT Presentation

2019 INTERIM RESULTS London 9 AUGUST 2019 2019 INTERIM RESULTS 1

SAFE HARBOUR STATEMENT In order to utilise the ‘safe harbour’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’), WPP plc is providing the following cautionary statement. This presentation contains certain forward-looking statements – that is, statements related to future, not past events and circumstances – which may relate to one or more of the financial conditions, results of operations and businesses of WPP plc and certain of the plans and objectives of WPP with respect to these items. These statements are generally, but not always, identified by the use of words such as ‘will’, ‘expects’, ‘is expected to’, ‘aims’, ‘should’, ‘may’, ‘objective’, ‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’, ‘we see’ or similar expressions. Actual results may differ from those expressed in such statements, depending on a variety of factors including the risk factors set forth in our most recent Annual Report and Form 20- F under “Risk factors” and in any of our more recent public reports. Nothing in this presentation is intended as a forecast, nor should it be taken as such. Our most recent Annual Report and Form 20-F and other period filings are available on our website at www.wpp.com, or can be obtained from the SEC by calling 1-800-SEC-0330 or on its website at www.sec.gov. 2019 INTERIM RESULTS 2

2019 INTERIM RESULTS PROGRESS ON STRATEGY CONCLUSION AND Q&A 2019 INTERIM RESULTS 3

SIX MONTHS OF GOOD STRATEGIC PROGRESS • H1 revenue less pass-through costs -2.0%; signs of progress in Q2 • Encouraging areas of growth: media businesses, tech clients and faster-growth economies • USA (Q1 -8.8%, Q2 -5.4%) remains a major area of focus • Improved client retention and key new business wins: L’Oréal, eBay, Instagram • Kantar transaction further simplifies WPP and significantly reduces leverage • Many key hires now in place; more to come • 2019 guidance unchanged; greater confidence in full year 2019 INTERIM RESULTS 4

2019 INTERIM RESULTS 2019 INTERIM RESULTS 5

FIRST HALF AND Q2 HIGHLIGHTS • H1 LFL revenue less pass-through costs -2.0% • Q2 LFL revenue less pass-through costs -1.4%, improved on Q1 -2.8% • Q2 LFL revenue less pass-through costs improved significantly for North America -5.3% (Q1 -8.5%) and UK 1.3% (Q1 -0.9%) • Western Continental Europe improved slightly in Q2, LFL revenue less pass-through costs flat (Q1 -0.3%). Belgium, France, Italy and Turkey performed well, Germany slower • Asia Pacific, Latin America, Africa & M East and C&E Europe strongest performing region, LFL revenue less pass-through costs up 1.2% in Q2 (Q1 2.3%). Improvement in Latin America, Africa & M East, C&E Europe offset by slower growth in Asia Pacific • H1 operating margin 11.9%, down 1.2 margin points LFL, reflecting revenue less pass- through costs trend; IFRS 16: Leases benefit to reported margin 0.5 margin points • Average net debt £4.384B, down £595M (down £709M constant currency) year-on-year supported by disposal programme 2019 INTERIM RESULTS 6

SUMMARY UNAUDITED IFRS INCOME STATEMENT Δ CONSTANT HALF YEAR TO 30 JUNE 2019 £M 2018 £M Δ REPORTED¹ CURRENCY² Revenue 7,616 7,493 1.6% 0.0% Gross profit 1,226 1,274 -3.8% -5.1% Operating profit³ 673 842 -20.1% -21.0% PBIT⁴ 681 851 -20.0% -20.9% Profit before tax⁵ 478 846 -43.5% -44.1% Tax rate 26.9% 16.7% Profit after tax 349 705 -50.5% -51.2% Reported diluted EPS 24.8p 53.4p -53.6% -54.3% 1. % change in reported sterling 2. % change at constant currency rates 3. Operating profit includes net exceptional gain £10m (2018 gain £143m) and goodwill/intangible charges £67m (2018 charges £84m) 2019 INTERIM RESULTS 7 4. PBIT includes net exceptional loss £3m (2018 gain £114m) and goodwill/intangible charges £67m (2018 charges £84m) 5. PBT includes net exceptional loss £3m (2018 gain £114m), goodwill/intangible charges £67m (2018 charges £84m) and revaluation of financial instruments charge £57m (2018 credit £81m)

SUMMARY UNAUDITED HEADLINE¹ RESULTS Δ CONSTANT Δ LIKE-FOR- HALF YEAR TO 30 JUNE 2019 £M 2018 £M Δ REPORTED CURRENCY LIKE² Revenue 7,616 7,493 1.6% 0.0% -0.6% Revenue less pass-through costs 6,149 6,149 0.0% -1.6% -2.0% EBITDA³ 875 948 -7.7% -8.9% Operating profit 730 783 -6.8% -8.0% PBIT 751 821 -8.5% -9.6% Operating profit margin⁴ 11.9% 12.7% - 0.8⁵ - 0.8⁵ - 1.2⁵ PBIT margin ⁴ 12.2% 13.3% - 1.1⁵ - 1.1⁵ - 1.3⁵ Tax rate 22.8% 22.5% n/a n/a Diluted EPS 34.2p 42.6p -19.7% -20.9% Dividend per share 22.7p 22.7p - - Average net debt (4,384) (4,979) -12.0% -13.9% Rolling average net debt/EBITDA⁶ 2.1x 2.1x n/a n/a 1. Figures before goodwill and intangibles charges, gains/losses on step-ups, gains/losses on disposals of 4. Margin as % of revenue less pass-through costs subsidiaries and investments, investment write-downs, share of exceptional gains/losses of associates, 5. Margin points restructuring and transformation costs, litigation settlement, gain on sale of New York freehold property and 6. Average net debt/EBITDA for 12 months to 30 June 2019 INTERIM RESULTS 8 revaluation of financial instruments 2. Like-for-like growth at constant currency exchange rates and excluding effect of acquisitions and disposals 3. Headline EBITDA excluding reversal of depreciation of right-of-use assets

REVENUE LESS PASS-THROUGH COSTS GROWTH VS PRIOR YEAR Q1 Q1 Q2 Q2 H1 H1 1.1% Like-for-like Like-for-like Like-for-like -2.8% -1.4% -2.0% 1.1% 0.7 0.3 % -3.9% % -5.0% Acquisitions Acquisitions Acquisitions 0.5% 0.4% 0.4% FX FX FX 1.6% 1.7% 1.6% Reported Reported Reported -0.7% 0.7% 0.0% 2019 INTERIM RESULTS 9

IMPACT OF FX ON REVENUE LESS PASS-THROUGH COSTS 2018 FY ACT 2019 Q1 ACT 2019 Q2 ACT 2019 Q3 EST 2019 Q4 EST 2019 FY EST 5% 4% • 2019 H1 currency tailwind 1.6% 3% • 2019 currency tailwind 2% 4.0% 3.9% 2.8% ¹ 2.8% 1% • 2018 full year 1.7% 1.6% headwind -2.8% 0% -1% -2.8% -2% -3% 2019 INTERIM RESULTS 10 1. Based on applying 31 July 2019 exchange rates of £/US 1.22 and £/€1.10 to H2 2019 revenue less pass -through costs

REVENUE LESS PASS-THROUGH COSTS BY REGION Δ CONSTANT Δ LIKE- HALF YEAR TO 30 JUNE % GROUP 2019 £M 2018 £M Δ REPORTED CURRENCY FOR-LIKE North America 35.1 2,157 2,155 0.1% -5.7% -6.9% UK 13.5 831 833 -0.2% -0.2% 0.2% Western Continental Europe 21.2 1,306 1,319 -1.0% 0.2% -0.1% Asia Pacific, Latin America, Africa & Middle 30.2 1,855 1,842 0.7% 1.6% 1.7% East and Central & Eastern Europe Total 100.0 6,149 6,149 0.0% -1.6% -2.0% 2019 INTERIM RESULTS 11

REVENUE LESS PASS-THROUGH COSTS GROWTH BY REGION LIKE-FOR-LIKE % C. & E. Europe % Q1 Q2 5.0 6.3 UK % Q1 Q2 -0.9 1.3 North America % W. Cont. Europe % Q1 Q2 Q1 Q2 -8.5 -5.3 -0.3 0.0 Asia Pacific % Q1 Q2 1.4 -1.6 Africa & M. East % Q1 Q2 -4.7 -0.5 Latin America % Q1 Q2 8.0 9.3 % Q1 Q2 H1 Mature Markets -4.7 -2.5 -3.6 Faster Growing Markets 2.3 1.2 1.7 Total -2.8 -1.4 -2.0 2019 INTERIM RESULTS 12

TOP 5 MARKETS USA UK Germany Greater China² France Headcount 23,000 14,000 8,000 10,000² 4,000 REVENUE LESS PASS-THROUGH COSTS GROWTH¹ 2019 H1 -7.1% 0.2% -2.4% -2.9% -0.3% 2019 Q2 -5.4% 1.3% -5.0% -8.7% 0.9% 2019 Q1 -8.8% -0.9% 0.4% 4.5% -1.5% 2018 FY -4.2% -0.5% 0.0% 2.1% 0.1% 1. Like-for-like growth vs prior year 2. Includes Hong Kong and Taiwan 2019 INTERIM RESULTS 13

BRIC MARKETS Mainland China Greater China² Brazil India Russia Headcount 8,000 10,000 7,000 11,000 2,000 REVENUE LESS PASS-THROUGH COSTS GROWTH¹ 2019 H1 -2.8% -2.9% 10.2% 12.6% 5.0% 2019 Q2 -10.1% -8.7% 11.6% 15.8% 11.1% 2019 Q1 6.6% 4.5% 8.6% 9.3% -1.1% 2018 FY 2.6% 2.1% 5.6% 5.5% 1.3% 1. Like-for-like growth vs prior year 2. Includes Hong Kong and Taiwan 2019 INTERIM RESULTS 14

REVENUE LESS PASS-THROUGH COSTS BY SECTOR¹ Δ CONSTANT Δ LIKE- HALF YEAR TO 30 JUNE % GROUP 2019 £M 2018£M Δ REPORTED CURRENCY FOR-LIKE Global Integrated Agencies 62.8 3,858 3,844 0.4% -1.4% -1.8% Data Investment Management 15.4 949 940 1.0% 0.6% 0.4% Public Relations 7.2 442 430 2.8% -0.1% -1.5% Specialist Agencies 14.6 900 935 -3.8% -5.5% -5.7% Total 100.0 6,149 6,149 0.0% -1.6% -2.0% 1. As outlined in the Group’s RNS statement on 5 August and following a review of the appropriateness of the existing sector rep orting, this has been changed to bring it into line with the various structural changes that have taken place over the last year and the simplification of the Group’s structure. Comparatives hav e been restated to reflect these sector changes 2019 INTERIM RESULTS 15