REG - WPP PLC - 2025 Interim Results
07/08/2025 07:00
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RNS Number : 3187U WPP PLC 07 August 2025
7 August 2025
2025 Interim Results
H1 performance in line with July 2025 trading update; significant
repositioning and investment in WPP Media; strengthening of data and AI
capabilities
Key figures (£ million) H1 2025 +/(-) % reported(1) +/(-) % LFL(2) H1 2024
Revenue 6,663 (7.8) (2.4) 7,227
Revenue less pass-through costs 5,026 (10.2) (4.3) 5,599
Reported:
Operating profit 221 (47.8) 423
Operating profit margin (%)(3) 3.3 (2.6)pt 5.9
Diluted EPS (p) 4.0 (78.7) 18.8
Dividends per share (p) 7.5 (50.0) 15.0
Headline(4):
Operating profit 412 (36.2) (29.1) 646
Operating profit margin (%) 8.2 (3.3)pt (2.9)pt 11.5
Diluted EPS (p) 20.0 (35.3) 30.9
In line with the July trading update, WPP reports H1 revenue of £6,663m, down
7.8% on a reported basis and down 2.4% like-for-like (LFL), while revenue less
pass-through costs of £5,026m was down 4.3% LFL. Q2 revenue less pass-through
costs of £2,544m was down 12.6% on a reported basis and 5.8% LFL. H1 reported
operating profit margin was 3.3% and headline operating profit margin was
8.2%, representing a LFL decrease of 2.9pt. With H1 results in line with our
trading update issued in early July, we continue to expect 2025 LFL revenue
less pass-through costs of -3% to -5% with headline operating profit margin
down 50 to 175 bps (excluding the impact of FX).
Mark Read, Chief Executive Officer of WPP, said:
"It has been a challenging first half given pressures on client spending and a
slower new business environment. We have, however, made significant progress
on the repositioning of WPP Media, simplifying its organisational model to
increase effectiveness and reduce costs. Meanwhile, the acquisition of
InfoSum, the launch of Open Intelligence and the continued adoption of WPP
Open all strengthen our data and technology capabilities.
"The Board is declaring an interim dividend of 7.5p ahead of a review of the
strategy and future capital allocation policy which will be led by Cindy Rose,
who succeeds me as CEO on 1 September. The priority is to drive sustainable
growth supported by an appropriate level of financial flexibility while
balancing returns to shareholders.
"WPP is a company with enormous strengths in creativity and media, technology
and AI, talented people, deep client relationships and unmatched global reach.
Throughout my seven years as CEO, technological innovation has been a constant
and I believe that thanks to our investment in AI we can look to the future
with confidence. I would like to thank our clients for their partnership and
our people for their dedication and I wish them, and Cindy, every success in
the future."
WPP's 2025 Interim Results announcement has been submitted in full unedited
text to the Financial Conduct Authority's National Storage Mechanism and will
be available shortly for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
The Report is also available at
http://www.rns-pdf.londonstockexchange.com/rns/3187U_1-2025-8-6.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/3187U_1-2025-8-6.pdf) and on
the WPP investor relations website www.wpp.com/investors
(http://www.wpp.com/investors) .
H1 and Q2 2025 performance
• Revenue - H1 reported revenue of £6,663m was down 7.8%, with a LFL
decline of 2.4%. H1 revenue less pass-through costs of £5,026m was down 10.2%
reported and down 4.3% LFL. Q2 revenue of £3,420m was down 10.4%, a LFL
decline of 4.0%. Q2 revenue less pass-through costs of £2,544m was down 12.6%
reported and down 5.8% LFL.
• Business segment and regions - Global Integrated Agencies H1 LFL
revenue less pass-through costs fell 4.5% (Q2: -6.0%) with WPP Media declining
2.9% (Q2: -4.7%) and other integrated creative agencies declining 5.8% (Q2:
-7.2%). By geography, North America declined 2.4% (Q2: -4.6%), UK -6.0% (Q2:
-6.5%), Western Continental Europe -5.5% (Q2: -6.5%) and Rest of World -5.4%
(Q2: -6.8%), with India broadly flat 0.1% (Q2: -3.9%) offset by a decline in
China of -16.6% (Q2: -15.9%).
• Clients - WPP's top 25 clients held broadly flat at 0.1% LFL growth
in the first half. While Tech & Digital Services, Automotive and
Healthcare client sectors were stable across the period, we did see more
pressure in the second quarter with LFL declines across all three. CPG, having
been stable in the first quarter, also saw a LFL step down in Q2.
• Operating profit - H1 headline operating profit was £412m, a margin
of 8.2% (H1 2024: 11.5%), down 2.9pt LFL. The lower margin reflects the
decline in revenue less pass-through costs and higher severance costs, in
particular at WPP Media. H1 reported operating profit was £221m down 47.8%,
including goodwill impairment of £116m.
• Average adjusted net debt as at 30 June 2025 of £3.4bn down £0.2bn
from 30 June 2024, reflecting net sale proceeds received in December 2024
from FGS Global which were used to pay down debt.
• Dividend - The Board has decided to set the interim dividend at 7.5p
(H1 2024: 15.0p). The Board recognises the importance of dividends to
shareholders and today's step balances that, creating room for our incoming
CEO to review the group's strategy and capital allocation policy while
maintaining financial flexibility.
Delivering on strategic priorities for 2025
• Improving the competitiveness of WPP Media - WPP Media's performance
during the course of the first half reflects the continued impact of client
losses and a challenging macro environment. During the second quarter,
however, we have seen significant progress on the implementation of the plan
laid out by Brian Lesser at the preliminary results announcement in February.
Operationally, with the launch of Open Intelligence and supported by the
acquisition of InfoSum, WPP Media is well advanced on its plan to create the
next generation of AI-enhanced data and marketing solutions for clients,
delivered through the industry's most powerful and secure infrastructure. In
addition, action taken in the second quarter to make WPP Media's
organisational model more client-centric gives greater flexibility for
reinvestment and allows us to focus our resources on continuing to improve our
competitive proposition and on our client success.
• Further adoption of WPP Open - AI, data and technology are central to
the way we serve our clients and continues to drive increased scope of work
with existing clients. It is also supporting our new business activity. Usage
of WPP Open continues to grow, with c.85% of our client-facing staff using the
platform in June (up from c.60% in March).
• New business - Amid lower levels of activity at a market level, H1
wins include Electronic Arts, Hisense and Hero Motocorp in Media, L'Oréal and
Samsung in Influencer, TK Maxx and Honda in PR and Generali, IKEA and Heineken
in Creative/Commerce.
• Cost discipline enabling investment in WPP Open, AI and data - In
addition to the annualisation of structural cost savings and a continued focus
on back-office efficiency, we are also taking a proactive approach to managing
our flexible cost base. Headcount since the start of the year was down 3.7%,
broadly in line with the LFL revenue decline and we expect the severance
action taken in the second quarter alone to generate £150m+ of annualised
gross cost savings from 2026. We continue to prioritise investment in WPP
Open, AI and data including the integration of new AI tools into WPP Open,
driving day-to-day productivity improvements for our people.
Financial outlook for 2025
• LFL revenue less pass-through costs - In line with our trading
update issued in early July, we continue to expect 2025 LFL revenue less
pass-through costs of -3% to -5%.
• Headline operating profit margin - Again, in line with commentary
in early July, we continue to expect headline operating profit margin to be
down 50 to 175 bps year on year (excluding the impact of FX). This
incorporates the benefit of cost action taken in the first half which will
support an improved margin in the second half, while we continue to prioritise
appropriate investment in the business.
• Adjusted operating cash flow before working capital - As a result of
our LFL revenue less pass-through cost and headline operating profit margin
guidance, we now expect adjusted operating cash flow before working capital
for 2025 to be in the range of £1.1bn to £1.2bn relative to our original
expectation of around £1.4bn.
• Other financial indicators - Further detail on 2025 guidance is
provided on page 10.
Conference Call at 9.30am UK/4.30am EDT:
• Dial-in Details: UK +44 (0) 20 3936 2999; US +1 646 233 4753;
Passcode: 211445
• Webcast: Live listen-only webcast will be available here
(https://www.investis-live.com/wpp/68483804d645df000ef705f7/wywts)
For further information:
Media Investors and analysts
Chris Wade, WPP +44 20 7282 4600 Thomas Singlehurst, CFA +44 7876 431922
Richard Oldworth, +44 7710 130 634 Anthony Hamilton +44 7464 532903
Burson Buchanan +44 20 7466 5000 Melissa Fung +44 7353 107064
press@wpp.com irteam@wpp.com wpp.com/investors (file:///C%3A/Users/BC/Documents/WPP/wpp.com/investors)
(1.) Percentage change in reported sterling.
(2.) Like-for-like. LFL comparisons are calculated as follows: current year,
constant currency actual results (which include acquisitions from the relevant
date of completion) are compared with prior year, constant currency actual
results, adjusted to include the results of acquisitions and disposals for the
commensurate period in the prior year.
(3.) Reported operating profit divided by revenue.
(4.) In this press release, not all of the figures and ratios used are readily
available from the unaudited interim results included in Appendix 4.
Management believes these non-GAAP measures, including like-for-like, revenue
less pass-through costs and headline profit measures, are both useful and
necessary to better understand the Group's results. Details of how these have
been arrived at are shown in Appendix 4.
First half 2025 overview
Revenue in the first half was £6,663m, down 7.8% from £7,227m in H1 2024,
and down 2.4% LFL. Revenue less pass-through costs was £5,026m, down 10.2%
from £5,599m in H1 2024, and down 4.3% LFL.
£ million Q2 2025 % % % +/(-) % LFL
reported M&A FX
Revenue 3,420 (10.4) (2.8) (3.6) (4.0)
Revenue less pass-through costs 2,544 (12.6) (3.3) (3.5) (5.8)
£ million H1 2025 % % % +/(-) % LFL
reported M&A FX
Revenue 6,663 (7.8) (3.0) (2.4) (2.4)
Revenue less pass-through costs 5,026 (10.2) (3.5) (2.4) (4.3)
Segmental review
Business segments - revenue less pass-through costs
+/(-) % LFL Global Public Relations Specialist Agencies
Integrated Agencies
Q2 2025 (6.0) (7.8) (1.9)
H1 2025 (4.5) (7.2) (0.4)
Global Integrated Agencies: WPP Media saw a LFL decline in revenue less
pass-through costs of 2.9% in H1 (Q2: -4.7%) impacted by cuts in client
spending as well as the impact of one-off factors in Q2. Cuts to client
spending and lower net new business, including the ramping down of a Q1 client
loss, particularly weighed on Q2 LFL.
Other Global Integrated Agencies declined 5.8% (Q2: -7.2%) as a result of
lower overall client spending, particularly at Ogilvy which declined
high-single digits in the first half. There was also continuing pressure on
project-based work which weighed on our agencies, albeit both AKQA and Grey
saw a slight sequential quarterly improvement on easier comparisons. VML and
Hogarth performed relatively better in the first half (down low-single digits
and broadly flat, respectively), benefiting from recent new business wins.
Public Relations: In Q2, Burson saw a broadly similar trend to Q1 with LFL
revenue less pass-through costs down mid-to-high-single digit as the business
continued to face a challenging environment for client discretionary spending,
in particular in Europe. We are however encouraged by improved new business
momentum in H1, in particular in the US.
Specialist Agencies: Overall, Specialist Agencies was broadly flat, with H1
LFL revenue less pass-through costs declining 0.4%, with a Q2 decline of 1.9%.
Landor, and a number of our smaller specialist agencies, continued to be
affected by the macro environment and further delays in project-based
spending, particularly in Q2. However, CMI Media Group, our specialist
healthcare media planning and buying agency, continued to grow strongly in H1,
building on double-digit growth in 2024. Encouragingly, Design Bridge and
Partners returned to growth in Q2.
( )
Regional segments - revenue less pass-through costs
+/(-) % LFL North America United Kingdom Western Cont. Europe Rest of World
Q2 2025 (4.6) (6.5) (6.5) (6.8)
H1 2025 (2.4) (6.0) (5.5) (5.4)
North America declined by 2.4% in H1 2025, driven by a Q2 decline of 4.6%
reflecting a quarter-on-quarter deterioration against a tougher Q2 comparison
(Q2 2024: +2.0%) and the ramp down of a Q1 client loss. This was partially
offset by a resumption of growth in Healthcare and a robust performance in
Government. VML saw broadly flat H1 growth, while Ogilvy and AKQA suffered
cuts in client spend.
The United Kingdom declined 6.0% in H1, with Q2 seeing a 6.5% decline despite
an easing comparison (Q2 2024: -5.3%). Ogilvy grew in H1 benefiting from new
business, offset by declines in other agencies. The UK saw pressure in
Telecom, Media & Entertainment, reflecting client losses.
Western Continental Europe also remained weak against an easier comparison,
down 5.5% in H1 and 6.5% in Q2. France and Italy saw mid-to-high-single digit
declines, reflecting the continuing impact of macroeconomic pressures weighing
on client spending and the impact of one-off factors. Germany declined 3.2% in
H1, however with a sequential improvement in trend (Q2: -1.6%).
Rest of World declined 5.4% in H1. India remained flat (+0.1%) against a tough
comparison (H1 2024: +8.1%), impacted by the timing of sporting events, but
this was offset by a decline of 16.6% in China on client assignment losses and
persistent macroeconomic pressures. There were also declines in Latin America
(-2.7%) and Middle East & Africa (-2.6%). Central & Eastern Europe,
meanwhile, continued to grow (+2.2%).
Top five markets - revenue less pass-through costs
+/(-) % LFL USA UK Germany China India
Q2 2025 (4.5) (6.5) (1.6) (15.9) (3.9)
H1 2025 (2.3) (6.0) (3.2) (16.6) 0.1
Client sector - revenue less pass-through costs
Q2 2025 H1 2025 H1 2025
% share, revenue less pass-through costs(1)
+/(-) % LFL +/(-) % LFL
CPG (8.3) (4.2) 27.8
Tech & Digital Services (1.2) 1.5 17.8
Healthcare & Pharma (0.5) (0.2) 11.7
Automotive (4.5) 0.1 10.7
Retail (3.9) (3.5) 8.9
Telecom, Media & Entertainment (7.4) (6.2) 6.5
Financial Services (4.5) (1.1) 6.2
Other (14.6) (14.2) 4.1
Travel & Leisure (5.3) (5.3) 3.6
Government, Public Sector & Non-profit 8.6 10.7 2.7
(1.) Proportion of WPP revenue less pass-through costs in H1 2025; table made
up of clients representing 82% of WPP total revenue less pass-through costs.
Financial results
Unaudited income statement(1):
Headline Reported
£ million H1 2025 H1 2024 +/(-) % H1 2025 H1 2024 +/(-) %
Revenue 6,663 7,227 (7.8) 6,663 7,227 (7.8)
Revenue less pass-through costs 5,026 5,599 (10.2) 5,026 5,599 (10.2)
Operating profit 412 646 (36.2) 221 423 (47.8)
Operating profit margin (%)(2) 8.2% 11.5 % (3.3)pt 3.3% 5.9% (2.6)pt
Earnings from associates 17 15 13.3 17 16 6.3
Profit before interest & tax 429 661 (35.1) 238 439 (45.8)
Net finance costs (129) (136) 5.1 (140) (101) 38.6
Profit before taxation 300 525 (42.9) 98 338 (71.0)
Tax (55) (146) 62.3 (28) (92) (69.6)
Profit after taxation 245 379 (35.4) 70 246 (71.5)
Non-controlling interests (26) (41) 36.6 (26) (41) (36.6)
Profit attributable to shareholders 219 338 (35.2) 44 205 (78.5)
Diluted EPS (p) 20.0p 30.9p (35.3) 4.0p 18.8p (78.7)
(1.) Non-GAAP measures in this table are reconciled in Appendix 4.
(2.) Headline operating profit margin is headline operating profit divided by
revenue less pass-through costs and reported operating profit margin is
reported operating profit divided by revenue, with the % change expressed in
margin points.
Operating profit
Headline operating profit was £412m (H1 2024: £646m), at a headline
operating profit margin of 8.2% (H1 2024: 11.5%), 3.3 points lower than the
prior period, and 2.9 points lower LFL. This reflects the decline in revenue
less pass-through costs (LFL decline of 4.3%) and increased severance activity
compared to the prior period, in particular at WPP Media.
Total headline operating costs were down 6.8%, to £4,614m (H1 2024:
£4,953m).
Staff costs of £3,685m were down 7.5% compared to the prior period (H1 2024:
£3,985m), representing lower headcount as a result of the actions we have
taken to mitigate the top-line decline in H1, lower incentives and our
restructuring initiatives, which has more than offset wage inflation and
severance costs in the period, which were £86m (H1 2024: £36m).
Incentives of £59m were down 60.1% compared to the prior period (H1 2024:
£148m) due to business performance against annual incentive targets and the
disposal of FGS Global.
The average number of people in the Group in the first half was 106,000
compared to 113,000 in H1 2024. The total number of people as at 30 June 2025
was 104,000 compared to 111,000 as at 30 June 2024.
Establishment costs of £219m were down 9.5% compared to the prior period (H1
2024: £242m) driven by the ongoing benefits from the campus programme and
consolidation of leases, the benefit from the prior year FGS disposal in H2
2024 and a favourable FX impact. IT costs of £340m were broadly flat
supported by our continuing investment in WPP Open, AI and data. Personal
costs of £98m were down 4.9% driven by savings in travel and entertainment,
and other operating expenses of £272m were down 3.5% driven by lower
commercial and office costs.
Headline EBITDA (including IFRS 16 depreciation) for the period was down 29.8% to £531m (H1 2024: £756m).
Reported operating profit was £221m (H1 2024: £423m) at a reported operating
profit margin of 3.3% (H1 2024: 5.9%) with the decrease primarily due to the
same factors as headline operating profit above, with total adjusting items of
£191m (H1 2024: £223m). Reported operating profit includes goodwill
impairment charges of £116m (H1 2024: £nil), amortisation and impairment of
acquired intangible assets of £32m (H1 2024: £57m) and restructuring costs
of £45m (H1 2024: £153m). The prior period included £23m of impairment of
investments in associates.
The restructuring costs represent a decrease of £108m from the prior period,
consistent with the expected ramp down shared at the 2024 Capital Markets day.
Net finance costs
Headline net finance costs of £129m were down 5.1% compared to the prior
period (H1 2024: £136m), primarily due to a lower average adjusted net debt
in H1 2025 compared to H1 2024.
Reported net finance costs were £140m (H1 2024: £101m), including net
expense of £11m (H1 2024: net income £35m) relating to the revaluation and
retranslation of financial instruments.
Tax
The headline effective tax rate (based on headline profit before tax) was
18.3% (H1 2024: 28.0%).
The headline tax charge in the first half is lower than the prior
corresponding period primarily due to the benefit of credits from the
successful resolution of a tax matter.
For the full year, we expect fixed elements within our tax charge to have a
proportionately higher effect on a lower profit before tax, therefore our
expectation is now for the full year headline effective tax rate to be around
31%.
The reported effective tax rate was 28.6% (H1 2024: 27.2%). The reported
effective tax rate is higher than the headline effective tax rate primarily
due to non-deductible goodwill impairment charges.
Given the Group's geographic mix of profits and the changing international tax
environment, the tax rate is expected to increase over the next few years.
Earnings per share ("EPS") and dividend
Headline diluted EPS was 20.0p (H1 2024: 30.9p), a decrease of 35.3% due to
lower headline operating profit offset by lower headline net finance costs and
a lower headline effective tax rate.
Reported diluted EPS was 4.0p (H1 2024: 18.8p), a decrease of 78.7% due to
lower reported operating profit, higher net finance costs and a higher
reported effective tax rate.
For 2025, the Board is declaring an interim dividend of 7.5p (H1 2024: 15.0p).
The record date for the interim dividend is 10 October 2025, and the dividend
will be payable on 3 November 2025.
Cash flow highlights
Unaudited headline cash flow statement(1):
Six months ended (£ million) 30 June 2025 30 June 2024
Headline operating profit 412 646
Headline earnings from associates 17 15
Depreciation of property, plant and equipment 82 81
Amortisation of other intangibles 20 14
Depreciation of right-of-use assets 101 110
Headline EBITDA 632 866
Less: headline earnings from associates (17) (15)
Repayment of lease liabilities and related interest (170) (187)
Non-cash compensation 41 56
Non-headline cash items (including restructuring costs) (35) (144)
Capex (88) (107)
Adjusted operating cash flow before working capital 363 469
Working capital (1,348) (1,056)
Adjusted operating cash flow (985) (587)
% conversion of Headline operating profit (239)% (91)%
Net dividends (to minorities)/from associates (11) (16)
Contingent consideration liability payments (15) (25)
Net interest (93) (49)
Cash tax(2) (168) (168)
Adjusted free cash flow (1,272) (845)
Disposal proceeds 6 33
Net initial acquisition payments (133) (29)
Dividends - -
Share purchases (92) (57)
Adjusted net cash flow (1,491) (898)
Reported:
Net cash outflow from operating activities (1,036) (540)
(1.) A summary of the Group's unaudited cash flow statement and notes for the
six months ended 30 June 2025 is provided in Appendix 1 and any non-GAAP
measures in this table are reconciled in Appendix 4.
(2.) Cash tax in H1 2025 includes £43m related to tax payments for the FGS
disposal.
Adjusted operating cash outflow was £985m (H1 2024: £587m). The main drivers
of the larger cash outflow year on year was the decrease in headline operating
profit and a larger working capital outflow, £292m higher than the prior
period, which was partially offset by a decrease in non-headline cash costs to
£35m (H1 2024: £144m). Working capital was a net outflow of £1,348m (H1
2024: £1,056m) and reflects the usual seasonality of client activity and
timing of payments. Non-headline cash items includes £40m of cash
restructuring and transformation costs offset by £5m of investment income
received. The decrease from the prior period is driven by the ramp down of the
previously announced structural cost saving programs and lower spend on our IT
transformation.
Adjusted free cash outflow was £1,272m, higher than prior period (H1 2024:
£845m) due to the higher adjusted operating cash outflow and higher net
interest payments. Adjusted net cash outflow of £1,491m was higher than the
prior period (H1 2024: £898m) due to higher net initial acquisition payments,
mainly for the InfoSum acquisition, and higher share purchases compared to the
prior period.
Reported net cash outflow from operating activities (see Appendix 1) increased
to £1,036m (H1 2024: £540m outflow) due to the decrease in reported
operating profit and a larger working capital outflow.
Balance sheet highlights
Unaudited balance sheet
As at 30 June 2025, the Group had total equity of £3,408m (31 December
2024: £3,734m).
Non-current assets of £11,543m decreased by £305m (31 December 2024:
£11,848m), primarily driven by lower goodwill due to impairment charges
recognised in H1 2025.
Current assets of £11,851m decreased by £1,810m (31 December 2024:
£13,661m). The decrease principally relates to a decrease in cash and cash
equivalents of £1,201m and trade and other receivables which decreased by
£356m to £7,366m.
Current liabilities of £13,760m decreased by £1,756m (31 December 2024:
£15,516m). The decrease principally relates to trade and other payables which
decreased by £1,989m, partially offset by a net increase in current
borrowings of £352m. The increase in current borrowings is due to an increase
of short-term financing offset by the repayment of €500m of 1.375% bonds
which matured March 2025.
The decrease in both trade and other receivables and trade and other payables
is primarily due to the seasonality of client activity and timing of payments,
with the movement from December consistent with prior years.
Non-current liabilities of £6,226m (31 December 2024: £6,259m) remained
broadly flat.
Recognised within total equity, other comprehensive loss of £304m (H1 2024:
£62m loss) for the period includes a £359m loss (H1 2024: £37m loss) for
foreign exchange differences on translation of foreign operations, and an
£88m gain (H1 2024: £18m loss) on the Group's net investment hedges.
A summary of the Group's unaudited balance sheet and selected notes as at
30 June 2025 is provided in Appendix 1.
Adjusted net debt
As at 30 June 2025, the Group had cash and cash equivalents of £1.4bn
(31 December 2024: £2.6bn) and borrowings of £4.8bn (31 December 2024:
£4.3bn). The Group has current liquidity of £3.0bn (31 December 2024:
£4.5bn) comprising of cash and cash equivalents, bank overdrafts and undrawn
credit facilities.
As at 30 June 2025, adjusted net debt was £3.3bn (31 December 2024:
£1.7bn), up £1.6bn since the beginning of the year, reflecting seasonal cash
outflows in the first half of the year. Average adjusted net debt at 30 June
2025 was £3.4bn, compared to £3.5bn at 31 December 2024 and £3.6bn at
30 June 2024.
The average adjusted net debt to headline EBITDA ratio in the 12 months ended
30 June 2025 is 1.98x (12 months ended 30 June 2024: 1.85x), which is
outside our target range of 1.5x-1.75x.
The Group has a five-year Revolving Credit Facility of $2.5bn maturing in
February 2030, with a further one-year extension option and with no financial
covenants.
As at 30 June 2025, our bond portfolio had an average maturity of 6.4 years
(31 December 2024: 6.3 years) and a weighted average coupon rate of 3.5%
(31 December 2024: 3.5%).
Financial outlook
Our guidance for 2025 is as follows:
Like-for-like revenue less pass-through costs growth of -3% to
-5%
Headline operating margin expected to decline 50 to 175 bps
year-on-year (excluding the impact of FX)
Other 2025 modelling assumptions:
• Mergers and acquisitions will reduce revenue less pass-through
costs by around 3.0 points primarily due to the disposal of FGS Global,
partially offset by anticipated M&A
• FX impact: current rates (at 1 August 2025, with USD/GBP rate of
1.33) imply a c.1.7% drag on FY 2025 revenue less pass-through costs, with
c.10bps reduction expected on FY 2025 headline operating margin
• In keeping with our revenue less pass-through cost and headline
operating margin guidance, we now expect the following:
• Headline earnings from associates of around £40m (unchanged)
• Non-controlling interests of around £65m (unchanged)
• Headline net finance costs of around £280m (unchanged)
• Headline effective tax rate(1) of around 31% vs. 29% previously
• Capex of around £220m vs. £250m previously
• Cash restructuring costs of around £90m vs. £110m previously
• Adjusted operating cash flow before working capital of around
£1.1bn to £1.2bn vs. £1.4bn previously
Medium-term targets
In January 2024, we presented our updated medium-term financial framework
including the following three targets:
• 3%+ LFL growth in revenue less pass-through costs
• 16-17% headline operating profit margin
• Adjusted operating cash flow conversion of 85%+(2)
This announcement contains information that qualifies or may qualify as inside
information. The person responsible for arranging the release of this
announcement on behalf of WPP plc is Balbir Kelly-Bisla, Company Secretary.
(1. ) Headline tax as a % of headline profit before tax.
(2.) Adjusted operating cash flow divided by headline operating profit.
Q2 2025 highlights
At our January 2024 Capital Markets Day we set out four strategic pillars.
Below we highlight key developments from Q2 against these areas of strategic
focus.
1. Lead through AI, data and technology
• Driving investment and adoption of WPP Open - At the preliminary
results in February 2025 we outlined our ambition to drive further investment
in WPP Open, taking the annual spend on our AI-powered marketing operating
system to £300m in 2025 from £250m in 2024. A key metric for us is internal
adoption and we have seen further progress in adoption, with 69,000 of our
people (equivalent to c.85% of client-facing staff) using the platform
actively on a monthly basis, up from 33,000/c.40% in December.
• Supporting WPP Media's ID to AI approach via the acquisition of
InfoSum - The acquisition of InfoSum announced in April (see link
(https://www.wpp.com/en/news/2025/04/wpp-acquires-infosum-in-major-investment-in-its-ai-driven-data-offer)
) marks a major strategic step forward for WPP Media's AI-driven data offer.
The acquisition of InfoSum embeds an AI-enabled, secure and privacy-enhancing
data collaboration platform within WPP Open, enabling data-driven marketing
and AI model training for WPP and its clients, and is a critical milestone in
our journey to leapfrog traditional identity-led solutions. In May, InfoSum
was named as a Leader in the IDC MarketScape (see link
(https://www.infosum.com/blog/infosum-named-a-leader-in-idc-marketscape) ).
• WPP Media launches Open Intelligence - Leveraging the acquisition
of InfoSum and progress on our global media platform, WPP Media launched Open
Intelligence (see link
(https://www.wppmedia.com/news/introducing-open-intelligence) ). Open
Intelligence is an AI-based tool designed to predict audience behaviour and
marketing performance, powering Open Media Studio as well as other
applications within WPP Open. The key characteristics are that it: (a) moves
beyond reliance on identity data by combining it with other data sources,
including partner first party data, for a more comprehensive, multimodal
understanding of audiences; (b) employs a privacy-by-default approach enabled
by InfoSum, enabling custom model training without moving or sharing data
using federated learning; and (c) drives continuous optimisation of audience
segmentation, creative development and media buying to improve ROI for our
clients.
• Burson launches Reputation Capital - In June, Burson, WPP's global
PR and communications agency, launched Reputation Capital, an AI-powered
technology and consulting solution designed to connect drivers of reputation
to specific business outcomes such as stock price, sales, or purchase intent
(see link
(https://www.bursonglobal.com/newsroom/global/burson-introduces-pioneering-ai-powered-solution-to-quantify-impact-of-reputation-on-business-results)
). Available through WPP Open, this tool provides clients with a live view of
their reputation, quantifying the tangible economic value of building and
maintaining a strong corporate perception and enabling immediate
decision-making to drive commercial success for our clients. The launch of
Reputation Capital follows the release of Decipher Tech in late March (see
link
(https://www.bursonglobal.com/newsroom/global/burson-introduces-decipher-tech)
). Decipher Tech uses AI-driven predictive believability and virality
indicators to forecast how messaging will resonate and to drive engagement
with stakeholders.
• Complementing direct investment with further strategic
partnerships - During the course of the quarter, WPP expanded relationships
with a number of strategic partners. In June (see link
(https://www.wpp.com/en/news/2025/06/wpp-and-tiktok-team-up-to-unleash-creative-power-with-symphony-ai-integration-into-wpp-open)
), WPP announced that it is the first advertising and marketing services
company to integrate Symphony, TikTok's groundbreaking generative AI tools,
into WPP Open giving WPP teams early access to TikTok's cutting-edge
innovations, empowering clients to connect with TikTok's massive audience
through dynamic and engaging content. Separately, linked with the launch of
Open Intelligence, WPP Media signed a number of partnerships and integrations
with leading platforms to help advertisers activate their first party data for
enhanced audience reach, measurement and media optimisation. This includes
separate agreements with Amazon Ads (see link
(https://www.infosum.com/blog/infosum-integrates-with-amazon-ads?utm_campaign=Press%20release&utm_source=linkedin&utm_medium=social)
) as well as a number of retailers and technology companies, including Criteo,
DICK's Sporting Goods and Ocado Ads (see link
(https://www.wppmedia.com/news/open-intelligence-retail-premium) ). Finally,
WPP expanded its partnership with Vercel (see link
(https://www.wpp.com/en/news/2025/06/wpp-and-vercel-expand-partnership-to-accelerate-ai-powered-digital-experience-craft)
) which brings Vercel's pioneering AI technologies - v0 and AI SDK - to WPP
teams and their clients. The first-of-its-kind partnership is expected to
increase development efficiency by up to 25%, empowering WPP teams to deliver
higher-value problem-solving through WPP Open and craft more innovative
creative executions for clients.
2. Accelerate growth through the power of creative transformation
• Creative Company of the Year at Cannes Lions 2025 - In June, WPP
was named Creative Company of the Year, a testament to the collective creative
excellence of our agencies and their outstanding client partnerships (see link
(https://www.wpp.com/en/news/2025/06/wpp-wins-creative-company-of-the-year-at-cannes-lions-2025)
). In addition, WPP's Mindshare received the joint highest points tally in
Media Network of the Year and Ogilvy and VML were placed in the top four for
Creative Network of the Year.
Overall, WPP agencies collectively secured 168 Lions, featuring a coveted
Titanium Lion and 10 Grand Prix. Key winning campaigns include Ogilvy's
"Vaseline Verified
(https://www.wpp.com/en/featured/work/2025/06/ogilvy-mindshare-vaseline-verified)
" for Unilever (Titanium Lion & 2 Grand Prix), Mindshare's "Real Beauty
Redefined for the AI Era
(https://www.wpp.com/en/featured/work/2025/06/mindshare-dove-real-beauty-redefined-for-the-ai-era)
" for Dove (Grand Prix for Media), DAVID's "Haaland Payback Time
(https://www.wpp.com/en/featured/work/2025/06/david-supercell-haaland-payback-time)
" for Supercell (Grand Prix in Entertainment), VML's "Preser
(https://www.wpp.com/en/featured/work/2025/06/vml-ziploc-preserved-promos) ved
Promos
(https://www.wpp.com/en/featured/work/2025/06/vml-ziploc-preserved-promos) "
for Ziploc (Grand Prix for Creative Commerce), VML & OpenMind's "Phone
(https://www.wpp.com/en/featured/work/2025/06/vml-and-openmind-kitkat-phone-break)
Break
(https://www.wpp.com/en/featured/work/2025/06/vml-and-openmind-kitkat-phone-break)
" for Nestlé (Grand Prix for Outdoor) and AKQA's "Sounds Right
(https://www.wpp.com/en/featured/work/2025/06/akqa-museum-for-the-united-nations-un-lives-sounds-right)
" (Grand Prix for Innovation).
Although a non-financial metric, WPP's performance in awards showcases the
Group's ability to deliver innovative approaches to audience engagement, deep
cultural relevance, and pioneering, responsible applications of technology to
drive growth for clients worldwide.
• New cross-channel B2B brand campaign - In May, WPP launched a
cross-channel B2B brand campaign "Transforming How We Create
(https://www.wpp.com/en/ai) ", targeting business leaders and senior marketing
decision-makers. Led by WPP's Chief Creative Officer Rob Reilly, the campaign
was developed using WPP Open by a cross-agency team to highlight WPP's AI
credentials, our pioneering work and ambition to lead in the age of AI. The
campaign reached 75% of the target audience and saw engagement metrics (video
completion and click-through rates) well above benchmark.
• Appointment of Global Creative & Innovation Lead - In July,
Daniel Barak was appointed as Global Creative & Innovation Lead at WPP,
joining from RG/A where he had been Global Executive Creative Director. At
WPP, Daniel will work closely both with Rob Reilly, WPP's Global Chief
Creative Officer and Elav Horwitz, Global Head of Strategic Partnerships and
AI Solutions, to amplify WPP's creative and innovation efforts by delivering
breakthrough creative campaigns, immersive brand experiences and
innovation-led storytelling that leverages AI, data and technology.
3. Build world-class, market-leading brands
• WPP Media launches as fully integrated, AI-powered media company,
replacing GroupM - In late May, WPP strengthened its position as the leading
marketing services business for the intelligent era with the launch of WPP
Media, an AI-driven media company that replaces GroupM (see link
(https://www.wpp.com/en/news/2025/05/wpp-media-launches-as-fully-integrated-ai-powered-media-company)
). Connected by WPP Open, WPP Media unites media, data, and production
capabilities to deliver creative personalisation at scale, reflecting a
strategic move towards simpler, more integrated solutions for clients in the
AI era.
• WPP Media Business Intelligence releases latest 'This Year, Next
Year' report - In June, WPP Media Business Intelligence published its Mid-Year
Global Advertising Forecast for 2025, projecting global ad revenue to reach
$1.08 trillion with 6.0% growth, a recalibration from previous forecasts due
to global trade disruptions (see link
(https://www.wppmedia.com/news/tyny-midyear-2025) ). The report also
introduces a new classification system for advertising activity (Content,
Commerce, Location, and Intelligence) and examines key trends including the
continued dominance of digital advertising, the rapid growth of retail media
and user-generated content and the increasing impact of AI on media
investment.
• New Leadership at AKQA - In early July, WPP announced the
appointment of Baiju Shah, formerly Global Chief Strategy Officer at Accenture
Song, as the new Global CEO of AKQA (see link
(https://www.wpp.com/en/news/2025/07/wpp-appoints-baiju-shah-as-global-ceo-of-akqa)
). This strategic hire reflects WPP's mission to deliver outstanding
creativity coupled with deep expertise in AI, data, and technology and follows
a more comprehensive rebuild of the global leadership team announced in April
(see link
(https://www.akqa.com/news/akqa-strengthens-global-leadership-to-drive-next-chapter-of-growth/)
) which included the appointment of Miriam Plon Sauer as Chief Strategy
Officer, Ben Royce as Chief Technology Officer, Tim Devine as Chief Innovation
Officer and Jonathan Bolden as Chief Transformation Officer.
4. Execute efficiently to drive financial returns through margin and cash
• Reducing freelancer use - WPP continues to strategically reduce
its reliance on external freelancers, driven by enhanced internal capabilities
and technology-enabled efficiencies. This proactive approach has resulted in a
13% reduction in freelancer usage over the last 12 months, contributing to a
c.25% overall reduction in freelancers over the past two years to fewer than
8,000 in the first half. Freelancers now represent 6.7% of our total
workforce, down from 8.2% two years ago.
• Empowering teams with AI agents - During the quarter, we launched
AgentBuilder Pro within WPP Open, upgrading our existing AgentBuilder tool.
Powered by AgentBuilder, more than 50,000 agents have been created inside WPP
driving significant advances in terms of internal productivity as well as
driving better outcomes for clients. More broadly, deployment of AI-enhanced
tools is associated with an increase in productivity for teams using WPP Open,
incorporating improved production efficiency and a reduction in review and
approval times.
Corporate governance, purpose and ESG
• Annual and Sustainability Reports - Our 2024 Annual Report
(https://www.wpp.com/en/investors/annual-report-2024) was published at the end
of March 2025. The report provides a comprehensive overview of WPP's financial
results, strategic progress and future growth initiatives while including
important updates on corporate governance and ESG. Additional context on ways
WPP is working to deliver against its purpose can be seen in our 2024
Sustainability Report
(https://www.wpp.com/en/sustainability/sustainability-report-2024) .
Business segment and regional analysis
Business segments - revenue analysis
Q2 2025 H1 2025
£ million +/(-) % reported +/(-) % LFL £ million +/(-) % reported +/(-) % LFL
Global Integrated Agencies 3,024 (6.6) (3.9) 5,871 (4.0) (2.2)
Public Relations 176 (43.4) (9.3) 351 (41.6) (7.8)
Specialist Agencies 220 (17.3) (0.5) 441 (13.4) (0.5)
Total Group 3,420 (10.4) (4.0) 6,663 (7.8) (2.4)
Business segments - revenue less pass-through costs analysis
Q2 2025 H1 2025
£ million +/(-) % reported +/(-) % LFL £ million +/(-) % reported +/(-) % LFL
Global Integrated Agencies 2,183 (8.7) (6.0) 4,302 (6.4) (4.5)
Public Relations 168 (42.7) (7.8) 335 (41.0) (7.2)
Specialist Agencies 193 (15.0) (1.9) 389 (10.8) (0.4)
Total Group 2,544 (12.6) (5.8) 5,026 (10.2) (4.3)
Business segments - headline operating profit analysis
£ million H1 2025 % margin(1) H1 2024 % margin(1)
Global Integrated Agencies 352 8.2 551 12.0
Public Relations 39 11.6 80 14.1
Specialist Agencies 21 5.4 15 3.4
Total Group 412 8.2 646 11.5
(1.) Headline operating profit as a percentage of revenue less pass-through
costs.
Business segment and regional analysis
Regional - revenue analysis
Q2 2025 H1 2025
£ million +/(-) % reported +/(-) % LFL £ million +/(-) % reported +/(-) % LFL
N. America 1,279 (12.8) (2.8) 2,537 (8.8) (1.1)
United Kingdom 517 (5.0) (6.6) 1,011 (4.4) (6.2)
W Cont. Europe 713 (6.4) (1.1) 1,351 (7.3) (1.0)
AP, LA, AME, CEE(1) 911 (12.6) (6.2) 1,764 (8.6) (3.1)
Total Group 3,420 (10.4) (4.0) 6,663 (7.8) (2.4)
Regional - revenue less pass-through costs analysis
Q2 2025 H1 2025
£ million +/(-) % reported +/(-) % LFL £ million +/(-) % reported +/(-) % LFL
N. America 974 (15.5) (4.6) 1,966 (10.9) (2.4)
United Kingdom 381 (3.8) (6.5) 749 (3.9) (6.0)
W Cont. Europe 534 (12.2) (6.5) 1,021 (12.3) (5.5)
AP, LA, AME, CEE 655 (13.4) (6.8) 1,290 (11.0) (5.4)
Total Group 2,544 (12.6) (5.8) 5,026 (10.2) (4.3)
Regional - headline operating profit analysis
£ million H1 2025 % margin(2) H1 2024 % margin(2)
N. America 281 14.3 336 15.2
United Kingdom 47 6.3 78 10.0
W Cont. Europe 36 3.5 117 10.1
AP, LA, AME, CEE 48 3.7 115 7.9
Total Group 412 8.2 646 11.5
(1.) Asia Pacific, Latin America, Africa & Middle East and Central &
Eastern Europe.
(2.) Headline operating profit as a percentage of revenue less pass-through
costs.
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