• WPP reported a significant increase in revenue: The company’s reported revenue increased by 12.7% compared to the previous year, while like-for-like (LFL) revenue grew by 6.7%.

• Strategic progress and recognition for creativity: WPP’s major agencies delivered strong performances, with GroupM seeing an FY LFL revenue less pass-through costs growth of +9.1%. Additionally, the company won $5.9 billion of net new business and was recognized for creativity, being named the most-awarded company at the 2022 Cannes Lions Festival for the second year in a row.

WPP, the global advertising and communications company, has reported strong financial results for the fiscal year (FY) ending December 31, 2022. The company’s reported revenue increased by 12.7% compared to the previous year, while like-for-like (LFL) revenue grew by 6.7%.
Mark Read, Chief Executive Officer of WPP, commented on the company’s strong financial results for FY 2022, saying, “WPP delivered strong growth in 2022, despite the macro challenges, reflecting the priority placed by our clients on investing in communications, customer experience, commerce, data, and technology.” The company’s strategic progress, recognition for creativity, and return of over £1.1 billion to shareholders in 2022 all indicate a promising future for the global advertising and communications company.

The FY LFL revenue, less pass-through costs, increased by 6.9%, with Q4 seeing a good performance with a growth of 6.4%. The Q4 LFL revenue less pass-through costs varied by significant market, with the US growing by 3.5%, the UK by 12.0%, Germany by 4.9%, China decreasing by 8.4%, and India increasing by 8.5%.
Over the last three years, FY LFL revenue, less pass-through costs, increased by 10.0%, with Q4 showing growth of 10.2%. The FY headline operating margin was 14.8%, up 0.4 points LFL due to strong top-line growth and efficiency savings supporting investment and margin expansion.
WPP’s reported diluted earnings per share (EPS) were 61.2 pence, with headline diluted EPS up 25.5% to 98.5 pence. As of December 31, 2022, the company’s adjusted net debt was £2.5 billion after investments and over £1.1 billion of cash returned to shareholders. The average adjusted net debt to EBITDA ratio was 1.46x, slightly below the 1.5-1.75 target range.

Despite an adverse movement of trade working capital of £226 million at year-end driven by mix and timing factors, the average trade working capital across 2022 remained flat year-on-year. As a result, WPP proposed a final dividend of 24.4 pence, up 30.5%, for a proposed total compensation for 2022 of 39.4 pence, in line with the company’s policy of approximately 40% of headline diluted EPS.

Strategic Progress and Recognition for Creativity

WPP’s major agencies delivered strong performances, with GroupM seeing an FY LFL revenue less pass-through costs growth of +9.1%, while Public Relations and Specialist Agencies delivered 8.2% and 5.6% LFL growth, respectively. The company won $5.9 billion of net new business, including clients like Audible, Danone, SC Johnson, and Verizon. Additionally, WPP was recognized for creativity, being named the most-awarded company at the 2022 Cannes Lions Festival for the second year in a row.
WPP’s transformation program achieved gross annual savings of around £375 million against a 2019 base, which is ahead of the planned £300 million. The savings were achieved through the property, procurement, and working methods, which enabled additional investment in talent for growth areas. As a result, the company is on track to reach its target of £600 million by 2025. In 2022, WPP returned over £1.1 billion to shareholders through share buybacks and dividends.
For 2023, WPP expects LFL revenue less pass-through costs growth of 3 to 5%, with further margin improvement reflecting continued operating leverage. As a result, the company aims to deliver a headline margin of around 15% (excluding the impact of FX). These goals are supported by the company’s strength across major WPP agencies, with GroupM delivering a solid performance with FY LFL revenue less pass-through costs growth of 9.1%, Public Relations and Specialist Agencies delivering LFL growth of 8.2% and 5.6%, respectively.

WPP’s breadth and depth of capabilities have resonated well with clients, resulting in the company winning $5.9 billion of net new business, including Audible, Danone, SC Johnson, and Verizon. Additionally, the company was recognized for creativity, being named the most awarded company at the 2022 Cannes Lions Festival for the second year in a row.

Transformation program exceeding planned savings

WPP’s transformation program has achieved gross annual savings of around £375 million, exceeding its planned savings of £300 million, with additional investments in talent for growth areas. As a result, the company is on track to reach its target of £600 million in savings by 2025. In addition, in 2022, WPP returned over £1.1 billion to shareholders through share buybacks and dividends, reflecting the company’s commitment to delivering shareholder value.
Overall, WPP’s strong financial results, strategic progress, and recognition for creativity all point to a bright future for the company. With a strong performance across its major agencies, a track record of delivering savings, and plans for further growth and margin improvement in 2023, WPP is well-positioned to continue its success in the global advertising and communications industry.