British-based holding company WPP has released its results for calendar year 2021.
Mark Read, chief executive officer, WPP, commented: “It has been an outstanding year for WPP. Our top-line growth, driven by strong demand for our services in digital marketing, media, e-commerce and technology, has resulted in our fastest organic growth for over 20 years. As a result, we are two years ahead of our plan, hitting our 2023 revenue target in 2021.”
Staff globally have been able to share in the improved profit they generated, with bonus payments doubling from the 2019 number. Reports indicate that around 50,000 staff will share a total bonus pool of close to $1b.
WPP full year and Q4 financial highlights
• FY continuing operations reported revenue +6.7%, LFL revenue +13.3%
• FY LFL revenue less pass-through costs +12.1%; Q4 +10.8%
• 2-year FY LFL revenue less pass-through costs +2.9%; Q4 +3.6%
• FY headline operating margin 14.4%, up 1.7pt LFL on prior year with strong top-line growth and efficiency savings supporting significant reinvestment in incentives
Like-for-like revenue less pass-through costs growth vs prior year from continuing operations
WPP strategic progress, shareholder returns and 2022 guidance
• Improving business mix: growth areas of experience, commerce and technology around 38% of revenue less pass-through costs in Global Integrated Agencies ex GroupM
• GroupM very strong: 2021 LFL revenue less pass-through costs +16.1%
• Continued investment in client offer: creation of Choreograph, acquisitions including Sard Verbinnen, Satalia, Cloud Commerce and Numerator (Kantar)
• Breadth and depth of capabilities resonating well with clients: market-leading $8.7 billion[5] of net new business won, including global Coca-Cola account
2022 guidance: LFL revenue less pass-through costs growth around 5%; headline operating margin up around 50 bps; trade working capital expected to be flat year-on-year; £800 million share buyback, of which £129 million already completed; tax rate of around 25.5% in 2022.
WPP’s Mark Read
Mark Read continued: “As clients seek to accelerate their growth and transform how they reach customers, the depth, breadth and global scale of our offer – which combines creativity with technology and data, through Choreograph, and the largest global media platform in GroupM – is proving its value for existing and new clients. The talent, dynamism and commitment of our people have also shone through. Our extensive partnership with The Coca-Cola Company, the expansion of our work with Google and the continuation of our longstanding relationship with Unilever demonstrate the value that three of the world’s leading marketing organisations place in WPP.
“We have made substantial strategic progress, creating the world’s leading board-level communications firm through the merger of Finsbury Glover Hering and Sard Verbinnen, and acquiring capabilities in AI, commerce and technology services to leverage across all of WPP for future growth. Cash generation continues to be very strong, underpinned by efficiencies achieved in our transformation program, allowing us to make significant investments in our offer and reward our people for their huge contribution, while returning over £1 billion in cash to shareholders through dividends and share buybacks.
“We look forward to 2022 with confidence. We are guiding to strong top-line growth, improving profitability and continued investment in our people and services.”
WPP in Australia
WPP operates around 40 separate companies in Australia including GroupM.
GroupM labels itself as the world’s leading media investment company responsible for more than US$60B in annual media investment through agencies Mindshare, MediaCom, Wavemaker, Essence, Neo and m/SIX, as well as the as well as the addressable TV business Finecast and outcomes-driven programmatic audience company, Xaxis.
See also: Mindshare moves – Katie Rigg-Smith now chief strategy officer WPP ANZ