REG - WPP PLC - 2017 Interim Results <Origin Href="QuoteRef">WPP.L</Origin> - Part 2
23/08/2017 07:06
- Part 2: For the preceding part double click ID:nRSW7211Oa
counter-balanced by under-branded faster growth markets growing at faster rates.
Financial guidance
For 2017, reflecting the first half net sales growth and quarter 2 revised forecast:
n Like-for-like revenue and net sales growth of between zero and 1.0%
n Target operating margin to net sales improvement of 0.3 margin points on a constant currency basis in line with full year
margin target
In 2017, our prime focus will remain on improving revenue and net sales, driven by our leading position in horizontality,
faster growing geographic markets and digital, premier parent company creative and effectiveness position, new business and
strategically targeted acquisitions. At the same time, we will concentrate on meeting our operating margin objectives by
managing absolute levels of costs and increasing our flexibility in order to adapt our cost structure to significant market
changes and by ensuring that the benefits of the restructuring investments taken in 2015 and 2016 continue to be realised.
The initiatives taken by the parent company in the areas of human resources, property, procurement, information technology
and practice development continue to improve the flexibility of the Group's cost base. Flexible staff costs (including
incentives, freelance and consultants) remain close to historical highs of around 8% of net sales and should position the
Group well if current market conditions deteriorate.
The Group continues to improve co-operation and coordination among its operating companies in order to add value to our
clients' businesses and our people's careers, an objective which has been specifically built into short-term incentive
plans. We have decided that up to half of operating company incentive pools are funded and allocated on the basis of
Group-wide performance in 2017 and beyond. Horizontality has been accelerated through the appointment of 50 global client
leaders for our major clients, accounting for over one third of total revenue of almost $20 billion and 19 regional and
country managers in a growing number of test markets and sub-regions, covering about half of the 113 countries in which we
operate.
Focus has been laid on the areas of media investment management, healthcare, sustainability, government, new technologies,
new markets, retailing, shopper marketing, internal communications, financial services and media and entertainment. The
Group continues to lead the industry, in coordinating communications services geographically and functionally through
parent company initiatives and winning Group pitches. Whilst talent and creativity (in the broadest sense) remain key
potential differentiators between us and our competitors, increasingly differentiation can also be achieved in three
additional ways - through application of technology, for example, Xaxis, AppNexus and Triad; through integration of data
investment management, for example, Kantar and comScore (now merged with Rentrak); and through investment in content
companies, for example, Imagine, Vice, Media Rights Capital, Fullscreen, Indigenous Media, China Media Capital, and
Refinery29.
In addition, strong and considered points of view on the adequacy of online and, indeed, offline measurement, on
viewability, on internet fraud and transparency, on online media placement and brand safety and, finally, on fake news are
all examples where further differentiation is important and can be secured through considered initiatives. With its
leadership position, as the world's largest media investment management operation, GroupM has developed a strong united
point of view with its leading clients and associates, like AppNexus, in all these areas and has aligned with Kantar's data
investment management capabilities, for example, through comScore, to provide better capabilities. These philosophical
differences and operational capabilities are extremely effective in responding to the trade association and regulatory
issues that have been raised recently.
Our business remains geographically and functionally well positioned to compete successfully and to deliver on our
long-term targets:
n Revenue and net sales growth greater than the industry average
n Improvement in net sales margin of 0.3 margin points or more, excluding the impact of currency, depending on net sales
growth and staff costs to net sales ratio improvement of 0.2 margin points or more
n Annual headline diluted EPS growth of 10% to 15% p.a. delivered through revenue growth, margin expansion, acquisitions
and share buy-backs
For further information:
Sir Martin Sorrell }
Paul Richardson }
Lisa Hau } +44 20 7408 2204
Feona McEwan }
Chris Wade }
Kevin McCormack }
Fran Butera } +1 212 632 2235
Juliana Yeh +852 2280 3790
www.wpp.com/investor
This announcement has been filed at the Company Announcements Office of the London Stock Exchange and is being distributed
to all owners of Ordinary shares and American Depository Receipts. Copies are available to the public at the Company's
registered office.
The following cautionary statement is included for safe harbour purposes in connection with the Private Securities
Litigation Reform Act of 1995 introduced in the United States of America. This announcement may contain forward-looking
statements within the meaning of the US federal securities laws. These statements are subject to risks and uncertainties
that could cause actual results to differ materially including adjustments arising from the annual audit by management and
the Company's independent auditors. For further information on factors which could impact the Company and the statements
contained herein, please refer to public filings by the Company with the Securities and Exchange Commission. The statements
in this announcement should be considered in light of these risks and uncertainties.
Appendix 1: Interim results for the six months ended 30 June 2017
Unaudited condensed consolidated interim income statement for the six months ended
30 June 2017
£ million Notes Six months ended30 June 2017 Six months ended30 June 2016 +/(-)% Constant Currency1+/(-)% Year ended 31 December 2016
Billings 26,906.4 25,318.8 6.3 (4.7) 55,245.2
Revenue 6 7,403.6 6,536.5 13.3 1.9 14,388.9
Direct costs (1,041.7) (942.7) (10.5) - (1,991.1)
Net sales 6 6,361.9 5,593.8 13.7 2.2 12,397.8
Operating costs 4 (5,637.5) (5,040.2) (11.9) (1.0) (10,334.7)
Operating profit 724.4 553.6 30.9 12.6 2,063.1
Share of results of associates 4 59.5 15.9 274.2 205.0 49.8
Profit before interest and taxation 783.9 569.5 37.6 18.2 2,112.9
Finance income 5 44.9 43.1 4.2 (9.3) 80.4
Finance costs 5 (133.5) (122.1) (9.3) 1.3 (254.5)
Revaluation of financial instruments 5 83.9 (65.4) - - (48.3)
Profit before taxation 779.2 425.1 83.3 52.4 1,890.5
Taxation 7 (145.5) (143.1) (1.7) 9.6 (388.9)
Profit for the period 633.7 282.0 124.7 80.6 1,501.6
Attributable to:
Equity holders of the parent 596.1 245.8 142.5 92.1 1,400.1
Non-controlling interests 37.6 36.2 (3.9) 7.6 101.5
633.7 282.0 124.7 80.6 1,501.6
Headline PBIT 6,19 882.0 768.7 14.7 1.9 2,160.3
Net sales margin 6,19 13.9% 13.7% 0.22 - 17.4%
Headline PBT 19 793.4 689.7 15.0 1.8 1,986.2
Earnings per share
Basic earnings per ordinary share 9 47.1p 19.1p 146.6 94.8 109.6p
Diluted earnings per ordinary share 9 46.6p 18.9p 146.6 95.1 108.0p
1 The basis for calculating the constant currency percentage changes shown above and in the notes to this appendix are
described in the glossary attached to this appendix.
2 Margin points.
Unaudited condensed consolidated interim statement of comprehensive income for the six months ended 30 June 2017
£ million Six months ended30 June2017 Six monthsended 30 June 2016 Yearended31 December 2016
Profit for the period 633.7 282.0 1,501.6
Items that may be reclassified subsequently to profit or loss:
Exchange adjustments on foreign currency net investments (257.8) 990.9 1,378.0
Loss on revaluation of available for sale investments (0.4) (1.4) (93.1)
(258.2) 989.5 1,284.9
Items that will not be reclassified subsequently to profit or loss:
Actuarial loss on defined benefit pension plans - - (15.9)
Deferred tax on defined benefit pension plans - - (0.4)
- - (16.3)
Other comprehensive (loss)/income relating to the period (258.2) 989.5 1,268.6
Total comprehensive income relating to the period 375.5 1,271.5 2,770.2
Attributable to:
Equity holders of the parent 348.0 1,199.7 2,600.6
Non-controlling interests 27.5 71.8 169.6
375.5 1,271.5 2,770.2
Unaudited condensed consolidated interim cash flow statement for the six months ended 30 June 2017
£ million Notes Six months ended 30 June 2017 Six months ended 30 June 2016 Year ended 31 December 2016
Net cash inflow from operating activities 10 85.6 66.2 1,773.8
Investing activities
Acquisitions and disposals 10 (201.4) (182.8) (638.8)
Purchase of property, plant and equipment (100.0) (126.7) (252.1)
Purchase of other intangible assets (including capitalised computer software) (19.6) (15.9) (33.0)
Proceeds on disposal of property, plant and equipment 4.0 9.7 7.7
Net cash outflow from investing activities (317.0) (315.7) (916.2)
Financing activities
Share option proceeds 4.1 5.3 27.2
Cash consideration for non-controlling interests 10 (39.3) (43.4) (58.3)
Share repurchases and buy-backs 10 (290.2) (196.8) (427.4)
Net increase/(decrease) in borrowings 10 894.8 (62.9) (22.5)
Financing and share issue costs (0.6) (0.5) (6.4)
Equity dividends paid - - (616.5)
Dividends paid to non-controlling interests in subsidiary undertakings (46.3) (35.0) (89.6)
Net cash inflow/(outflow) from financing activities 522.5 (333.3) (1,193.5)
Net increase/(decrease) in cash and cash equivalents 291.1 (582.8) (335.9)
Translation differences 17.8 237.3 291.9
Cash and cash equivalents at beginning of period 1,902.6 1,946.6 1,946.6
Cash and cash equivalents at end of period 10 2,211.5 1,601.1 1,902.6
Reconciliation of net cash flow to movement in net debt:
Net increase/(decrease) in cash and cash equivalents 291.1 (582.8) (335.9)
Cash (inflow)/outflow from (increase)/decrease in debt financing (894.2) 63.4 28.9
Debt acquired - (144.4) (144.4)
Other movements (7.4) (46.4) (2.3)
Translation differences 71.5 (327.9) (466.0)
Movement of net debt in the period (539.0) (1,038.1) (919.7)
Net debt at beginning of period (4,130.5) (3,210.8) (3,210.8)
Net debt at end of period 11 (4,669.5) (4,248.9) (4,130.5)
Unaudited condensed consolidated interim balance sheet as at 30 June 2017
£ million Notes 30 June2017 30 June2016 31 December2016
Non-current assets
Intangible assets:
Goodwill 12 13,082.1 12,293.5 13,214.3
Other 13 2,111.3 2,036.7 2,217.3
Property, plant and equipment 930.5 925.9 968.7
Interests in associates and joint ventures 1,234.6 690.8 1,069.4
Other investments 1,171.5 1,303.7 1,310.3
Deferred tax assets 143.7 94.0 140.4
Trade and other receivables 14 214.3 254.9 204.9
18,888.0 17,599.5 19,125.3
Current assets
Inventory and work in progress 443.2 408.8 400.4
Corporate income tax recoverable 260.2 224.2 231.2
Trade and other receivables 14 11,317.1 11,751.1 12,374.5
Cash and short-term deposits 2,856.0 2,147.4 2,436.9
14,876.5 14,531.5 15,443.0
Current liabilities
Trade and other payables 15 (13,428.2) (13,868.2) (15,010.4)
Corporate income tax payable (637.5) (584.0) (752.3)
Bank overdrafts and loans (933.0) (1,057.2) (1,002.5)
(14,998.7) (15,509.4) (16,765.2)
Net current liabilities (122.2) (977.9) (1,322.2)
Total assets less current liabilities 18,765.8 16,621.6 17,803.1
Non-current liabilities
Bonds and bank loans (6,592.5) (5,339.1) (5,564.9)
Trade and other payables 16 (1,119.4) (1,122.0) (1,273.8)
Deferred tax liabilities (688.8) (713.0) (692.4)
Provisions for post-employment benefits (271.5) (260.4) (276.5)
Provisions for liabilities and charges (237.0) (208.9) (227.9)
(8,909.2) (7,643.4) (8,035.5)
Net assets 9,856.6 8,978.2 9,767.6
Equity
Called-up share capital 17 133.2 133.0 133.2
Share premium account 566.3 540.5 562.2
Other reserves 952.1 824.4 1,185.2
Own shares (1,121.6) (760.7) (962.0)
Retained earnings 8,889.3 7,782.5 8,405.9
Equity share owners' funds 9,419.3 8,519.7 9,324.5
Non-controlling interests 437.3 458.5 443.1
Total equity 9,856.6 8,978.2 9,767.6
Unaudited condensed consolidated interim statement of changes in equity for the six months ended 30 June 2017
£ million Called-up Share Other Own shares Retained Total equity share owners' funds Non-controlling interests Total
share premium reserves earnings
capital account
Balance at 1 January 2017 133.2 562.2 1,185.2 (962.0) 8,405.9 9,324.5 443.1 9,767.6
Ordinary shares issued - 4.1 - - - 4.1 - 4.1
Treasury share additions - - - (144.9) - (144.9) - (144.9)
Treasury share allocations - - - 0.7 (0.7) - - -
Net profit for the period - - - - 596.1 596.1 37.6 633.7
Exchange adjustments on foreign currency net investments - - (247.7) - - (247.7) (10.1) (257.8)
Loss on revaluation of available for sale investments - - (0.4) - - (0.4) - (0.4)
Comprehensive (loss)/income - - (248.1) - 596.1 348.0 27.5 375.5
Dividends paid - - - - - - (46.3) (46.3)
Non-cash share-based incentive plans (including share options) - - - - 50.6 50.6 - 50.6
Tax adjustments on share-based payments - - - - 8.4 8.4 - 8.4
Net movement in own shares held by ESOP Trusts - - - (15.4) (129.9) (145.3) - (145.3)
Recognition/remeasurement of financial instruments - - 15.0 - (2.5) 12.5 - 12.5
Acquisition of subsidiaries1 - - - - (38.6) (38.6) 13.0 (25.6)
Balance at 30 June 2017 133.2 566.3 952.1 (1,121.6) 8,889.3 9,419.3 437.3 9,856.6
1 Acquisition of subsidiaries represents movements in retained earnings and non-controlling interests arising from changes
in ownership of existing subsidiaries and recognition of non-controlling interests on new acquisitions.
Unaudited condensed consolidated interim statement of changes in equity for the six months ended 30 June 2017 (continued)
£ million Called-up Share Other Own shares Retained Total equity share owners' funds Non-controlling interests Total
share premium reserves earnings
capital account
Balance at 1 January 2016 132.9 535.3 (9.7) (719.6) 7,698.5 7,637.4 378.4 8,015.8
Ordinary shares issued 0.1 5.2 - - - 5.3 - 5.3
Treasury share additions - - - (148.5) - (148.5) - (148.5)
Treasury share allocations - - - 3.5 (3.5) - - -
Net profit for the period - - - - 245.8 245.8 36.2 282.0
Exchange adjustments on foreign currency net investments - - 955.3 - - 955.3 35.6 990.9
Loss on revaluation of available for sale investments - - (1.4) - - (1.4) - (1.4)
Comprehensive income - - 953.9 - 245.8 1,199.7 71.8 1,271.5
Dividends paid - - - - - - (35.0) (35.0)
Non-cash share-based incentive plans (including stock options) - - - - 52.0 52.0 - 52.0
Tax adjustment on share-based payments - - - - (37.8) (37.8) - (37.8)
Net movement in own shares held by ESOP Trusts - - - 103.9 (152.2) (48.3) - (48.3)
Recognition/remeasurement of financial instruments - - (2.3) - 24.4 22.1 - 22.1
Share purchases - close period commitments - - (117.5) - - (117.5) - (117.5)
Acquisition of subsidiaries1 - - - - (44.7) (44.7) 43.3 (1.4)
Balance at 30 June 2016 133.0 540.5 824.4 (760.7) 7,782.5 8,519.7 458.5 8,978.2
Ordinary shares issued 0.2 21.7 - - - 21.9 - 21.9
Treasury share additions - - - (126.0) - (126.0) - (126.0)
Treasury share allocations - - - 0.4 (0.4) - - -
Net profit for the period - - - - 1,154.3 1,154.3 65.3 1,219.6
Exchange adjustments on foreign currency net investments - - 354.6 - - 354.6 32.5 387.1
Loss on revaluation of available for sale investments - - (91.7) - - (91.7) - (91.7)
Actuarial loss on defined benefit pension plans - - - - (15.9) (15.9) - (15.9)
Deferred tax on defined benefit pension plans - - - - (0.4) (0.4) - (0.4)
Comprehensive income - - 262.9 - 1,138.0 1,400.9 97.8 1,498.7
Dividends paid - - - - (616.5) (616.5) (54.6) (671.1)
Non-cash share-based incentive plans (including stock options) - - - - 54.5 54.5 - 54.5
Tax adjustment on share-based payments - - - - 41.7 41.7 - 41.7
Net movement in own shares held by ESOP Trusts - - - (75.7) (28.9) (104.6) - (104.6)
Recognition/remeasurement of financial instruments - - (19.6) - 2.4 (17.2) - (17.2)
Share purchases - close period commitments 117.5 - 8.6 126.1 - 126.1
Acquisition of subsidiaries1 - - - - 24.0 24.0 (58.6) (34.6)
Balance at 31 December 2016 133.2 562.2 1,185.2 (962.0) 8,405.9 9,324.5 443.1 9,767.6
1 Acquisition of subsidiaries represents movements in retained earnings and non-controlling interests arising from changes
in ownership of existing subsidiaries and recognition of non-controlling interests on new acquisitions.
Notes to the unaudited condensed consolidated interim financial statements
1. Basis of accounting
The unaudited condensed consolidated interim financial statements are prepared under the historical cost convention, except
for the revaluation of certain financial instruments as disclosed in our accounting policies.
2. Accounting policies
The unaudited condensed consolidated interim financial statements comply with the recognition and measurement criteria of
International Financial Reporting Standards (IFRS) as adopted by the European Union and issued by the International
Accounting Standards Board (IASB), IAS 34 Interim Financial Reporting and with the accounting policies of the Group which
were set out on pages 177 to 184 of the 2016 Annual Report and Accounts. No changes have been made to the Group's
accounting policies in the period ended 30 June 2017.
Statutory Information and Independent Review
The unaudited condensed consolidated interim financial statements for the six months to 30 June 2017 and 30 June 2016 do
not constitute statutory accounts. The financial information for the year ended 31 December 2016 does not constitute
statutory accounts. The statutory accounts for the year ended 31 December 2016 have been delivered to the Jersey Registrar
and received an unqualified auditors' report. The interim financial statements are unaudited but have been reviewed by the
auditors and their report is set out on page 45.
The announcement of the interim results was approved by the board of directors on 23 August 2017.
3. Currency conversion
The presentation currency of the Group is pound sterling and the unaudited condensed consolidated interim financial
statements have been prepared on this basis. The 2017 unaudited condensed consolidated interim income statement is prepared
using, among other currencies, average exchange rates of US$1.2591 to the pound (period ended 30 June 2016: US$1.4330; year
ended 31 December 2016: US$1.3547) and E1.1624 to the pound (period ended 30 June 2016: E1.2838; year ended 31 December
2016: E1.2234). The unaudited condensed consolidated interim balance sheet as at 30 June 2017 has been prepared using the
exchange rates on that day of US$1.3008 to the pound (30 June 2016: US$1.3268; 31 December 2016: US$1.2345) and E1.1397 to
the pound (30 June 2016: E1.1982; 31 December 2016: E1.1705).
The basis for calculating the constant currency percentage changes, shown on the face of the unaudited condensed
consolidated interim income statement, is described in the glossary attached to this appendix.
Notes to the unaudited condensed consolidated interim financial statements (continued)
4.Operating costs and share of results of associates
£ million Six months ended 30 June 2017 Six months ended 30 June 2016 Year ended 31 December 2016
Staff costs 4,177.0 3,656.8 7,784.9
Establishment costs 443.9 395.2 836.5
Other operating costs 1,016.6 988.2 1,713.3
Total operating costs 5,637.5 5,040.2 10,334.7
Staff costs include:
£ million Six months ended 30 June 2017 Six months ended 30 June 2016 Year ended 31 December 2016
Wages and salaries 2,919.1 2,520.4 5,395.6
Cash-based incentive plans 53.8 69.6 260.2
Share-based incentive plans 50.6 52.0 106.5
Social security costs 370.2 324.6 658.1
Pension costs 97.2 85.2 178.1
Severance 34.5 29.7 34.5
Other staff costs 651.6 575.3 1,151.9
4,177.0 3,656.8 7,784.9
Staff cost to net sales ratio 65.7% 65.4% 62.8%
Other operating costs include:
£ million Six months ended 30 June 2017 Six months ended 30 June 2016 Year ended 31 December 2016
Amortisation and impairment of acquired intangible assets 97.8 77.6 168.4
Gains on disposal of investments and subsidiaries (5.9) (19.5) (44.3)
Losses/(gains) on remeasurement of equity interests arising from a change in scope of ownership 0.2 38.9 (232.4)
Restructuring costs 19.2 10.5 27.4
Investment write-downs - 83.3 86.1
Goodwill impairment - - 27.0
In 2017, restructuring costs of £19.2 million predominantly comprise severance costs arising from a structural reassessment
of certain of the Group's operations. In the period ended 30 June 2016, restructuring costs of £10.5 million predominantly
comprise costs resulting from the project to transform and rationalise the Group's IT services and infrastructure.
In the period ended 30 June 2016, losses on remeasurement of equity interests arising from a change in scope of ownership
primarily comprise losses of £24.0 million in relation to the merger of most of the Group's Australian and New Zealand
assets with STW Communications Group Limited in Australia. The re-named WPP AUNZ became a listed subsidiary of the Group on
8 April 2016. In the second half of 2016, a gain of £260.0 million was recognised in relation to the reclassification of
the Group's interest in the Imagina Group in Spain from other investments to interests in associates, resulting from WPP
attaining significant influence in the period.
Notes to the unaudited condensed consolidated interim financial statements (continued)
4. Operating costs and share of results of associates (continued)
Investment write-downs in 2016 includes £79.6 million in relation to comScore Inc, which has not released any financial
statements in relation to its 2015 or 2016 results due to an internal investigation by their Audit Committee. Following the
announcement of this internal investigation, the market value of comScore Inc fell below the Group's carrying value.
Share of results of associates include:
£ million Six months ended 30 June 2017 Six months ended 30 June 2016 Yearended 31 December 2016
Share of profit before interest and taxation 59.2 39.0 97.1
Share of exceptional gains/(losses) 13.2 (8.4) (15.2)
Share of interest and non-controlling interests (3.2) (3.2) (4.7)
Share of taxation (9.7) (11.5) (27.4)
59.5 15.9 49.8
5. Finance income, finance costs and revaluation of financial instruments
Finance income includes:
£ million Six months ended 30 June 2017 Six months ended 30 June 2016 Year ended 31 December 2016
Income from available for sale investments 5.4 9.6 12.5
Interest income 39.5 33.5 67.9
44.9 43.1 80.4
Finance costs include:
£ million Six months ended 30 June 2017 Six months ended 30 June 2016 Year ended 31 December 2016
Net interest expense on pension plans 3.3 3.2 6.7
Interest on other long-term employee benefits 1.7 1.3 2.7
Interest payable and similar charges 128.5 117.6 245.1
133.5 122.1 254.5
Revaluation of financial instruments include:
£ million Six months ended 30 June 2017 Six months ended 30 June 2016 Year ended 31 December 2016
Movements in fair value of treasury instruments 5.0 (3.9) (19.5)
Revaluation of put options over non-controlling interests 9.5 (23.5) (17.2)
Revaluation of payments due to vendors (earnout agreements) 69.4 (38.0) (11.6)
83.9 (65.4) (48.3)
Notes to the unaudited condensed consolidated interim financial statements (continued)
6. Segmental analysis
Reported contributions by operating sector were as follows:
£ million Six months ended 30 June 2017 Six months ended 30 June 2016 Year ended 31 December 2016
Revenue
Advertising and Media Investment Management 3,488.9 2,963.4 6,547.3
Data Investment Management 1,307.6 1,243.6 2,661.1
Public Relations & Public Affairs 583.6 499.2 1,101.3
Branding & Identity, Healthcare and Specialist Communications 2,023.5 1,830.3 4,079.2
7,403.6 6,536.5 14,388.9
Net sales
Advertising and Media Investment Management 2,830.2 2,423.0 5,413.5
Data Investment Management 996.7 921.7 1,994.0
Public Relations & Public Affairs 568.0 490.4 1,078.8
Branding & Identity, Healthcare and Specialist Communications 1,967.0 1,758.7 3,911.5
6,361.9 5,593.8 12,397.8
Headline PBIT1, 4
Advertising and Media Investment Management 431.8 369.7 1,027.2
Data Investment Management 129.2 124.7 351.5
Public Relations & Public Affairs 79.7 69.3 179.8
Branding & Identity, Healthcare and Specialist Communications 241.3 205.0 601.8
882.0 768.7 2,160.3
Net sales margin2, 4
Advertising and Media Investment Management 15.3% 15.3% 19.0%
Data Investment Management 13.0% 13.5% 17.6%
Public Relations & Public Affairs 14.0% 14.1% 16.7%
Branding & Identity, Healthcare and Specialist Communications 12.3% 11.7% 15.4%
13.9% 13.7% 17.4%
Total assets
Advertising and Media Investment Management 15,189.9 15,150.7 15,984.9
Data Investment Management 4,075.2 4,046.0 3,167.2
Public Relations & Public Affairs 2,075.4 2,029.4 3,222.5
Branding & Identity, Healthcare and Specialist Communications 9,164.1 8,439.3 9,385.2
Segment assets 30,504.6 29,665.4 31,759.8
Unallocated corporate assets3 3,259.9 2,465.6 2,808.5
33,764.5 32,131.0 34,568.3
Total liabilities
Advertising and Media Investment Management (11,367.6) (11,624.6) (12,409.6)
Data Investment Management (1,184.4) (1,204.2) (1,272.0)
Public Relations & Public Affairs (451.1) (473.5) (542.1)
Branding & Identity, Healthcare and Specialist Communications (2,053.0) (2,157.2) (2,564.9)
Segment liabilities (15,056.1) (15,459.5) (16,788.6)
Unallocated corporate liabilities3 (8,851.8) (7,693.3) (8,012.1)
(23,907.9) (23,152.8) (24,800.7)
1 Headline PBIT is defined in note 19.
2 Net sales margin is defined in note 19.
3 Included in unallocated corporate assets and liabilities are corporate income tax, deferred tax and net interest-bearing
debt.
4 PBIT and net sales margins for the six months ended 30 June 2016 have been restated to reflect a reclassification between
sectors of one of the Group's associates.
Notes to the unaudited condensed consolidated interim financial statements (continued)
6. Segmental analysis (continued)
Reported contributions by geographical area were as follows:
£ million Six months ended 30 June 2017 Six months ended 30 June 2016 Year ended 31 December 2016
Revenue
North America1 2,766.6 2,440.5 5,280.8
United Kingdom 978.7 927.0 1,866.3
Western Continental Europe 1,493.8 1,341.7 2,943.2
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 2,164.5 1,827.3 4,298.6
7,403.6 6,536.5 14,388.9
Net sales
North America1 2,409.4 2,103.2 4,603.7
United Kingdom 813.3 774.8 1,587.6
Western Continental Europe 1,230.0 1,112.0 2,425.5
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 1,909.2 1,603.8 3,781.0
6,361.9 5,593.8 12,397.8
Headline PBIT2
North America1 400.9 349.1 895.4
United Kingdom 112.4 97.8 261.4
Western Continental Europe 153.1 137.8 351.7
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 215.6 184.0 651.8
882.0 768.7 2,160.3
Net sales margin3
North America 16.6% 16.6% 19.4%
United Kingdom 13.8% 12.6% 16.5%
Western Continental Europe 12.4% 12.4% 14.5%
Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe 11.3% 11.5% 17.2%
13.9% 13.7% 17.4%
1 North America includes the US with revenue of £2,617.1 million (period ended 30 June 2016: £2,320.8 million; year ended
31 December 2016: £5,005.8 million), net sales of £2,282.0 million (period ended 30 June 2016: £1,998.0 million; year ended
31 December 2016: £4,365.1 million) and headline PBIT of £382.2 million (period ended 30 June 2016: £334.4 million; year
ended 31 December 2016: £849.4 million).
2 Headline PBIT is defined in note 19.
3 Net sales margin is defined in note 19.
Notes to the unaudited condensed consolidated interim financial statements (continued)
7. Taxation
The headline tax rate was 22.0% (30 June 2016: 21.0%; 31 December 2016: 21.0%). The tax rate on reported PBT was 18.7% (30
June 2016: 33.7%; 31 December 2016: 20.6%). The reported tax rate is lower than the headline tax rate largely due to the
revaluation of financial instruments not being taxable.
The tax charge comprises:
£ million Six months ended 30 June 2017 Six months ended 30 June 2016 Year ended 31 December 2016
Corporation tax
Current year 164.8 154.8 569.4
Prior years (11.5) (22.2) (80.3)
153.3 132.6 489.1
Deferred tax
Current year (5.4) 2.4 (88.0)
Prior years (2.4) 8.1 (12.2)
(7.8) 10.5 (100.2)
Tax charge 145.5 143.1 388.9
The calculation of the headline tax rate is as follows:
£ million Six months ended 30 June 2017 Six months ended30 June2016 Year ended 31 December 2016
Headline PBT1
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