2024 Preliminary Results | Company Announcement | Investegate
27 February 2025
2024 Preliminary Results
Strategic progress driving stronger margin and improved cash conversion, despite top line pressures
Key figures (£m)
2024 +/(-) % reported1 +/(-) % LFL2 2023
Revenue 14,741 (0.7) 2.3 14,845
Revenue less pass-through costs 11,359 (4.2) (1.0) 11,860
Reported:
Operating profit 1,325 149.5
Operating profit margin3 9.0%
3.6%
Profit before tax 1,031 198.0
Diluted EPS (p) 49.4 389.1
Dividends per share (p) 39.4*
39.4
Headline4:
Operating profit 1,707 (2.5) 2.0 1,750
Operating profit margin 15.0% 0.2pt 0.4pt 14.8%
Diluted EPS (p) 88.3 (5.9) 0.1 93.8 *including proposed final dividend.
Full year and Q4 financial highlights
• FY reported revenue -0.7%, LFL revenue +2.3%. FY revenue less pass-through costs -4.2%, LFL revenue less pass-through costs -1.0%
• Q4 LFL revenue less pass-through costs -2.3% with growth in Western Continental Europe +1.4% offset by declines in North America -1.4%, UK -5.1% and Rest of World -4.8%, including -21.2% in China
• Global Integrated Agencies FY LFL revenue less pass-through costs -0.8% (Q4: -2.2%): GroupM, our media planning and buying business, +2.7% (Q4: +2.4%), offset by -3.9% in other Global Integrated Agencies (Q4: -6.5%)
• FY headline operating profit £1,707m. Headline operating margin of 15.0% (2023: 14.8%) a 0.4pt LFL improvement reflecting structural cost savings of £85m from Burson, GroupM and VML initiatives; disciplined cost control and continued investment in our AI and data offer; with a 0.2pt FX drag. FY reported operating profit £1,325m up 149.5% primarily reflecting lower amortisation charges and higher gains on disposals
• Adjusted operating cash flow increased to £1,460m (2023: £1,280m) and adjusted free cash flow rose to £738m (2023: £637m) benefiting from strong working capital management
• Adjusted net debt at 31 December 2024 £1.7bn down £0.8bn year-on-year
• Final dividend of 24.4p proposed (2023: 24.4p)
Delivering on strategic priorities
• Simpler client-facing structure: six agency networks represent c92%5 of WPP; more integrated offer across creative, production, commerce and media; improving new business performance in the second half of 2024
• WPP Open: AI, data and technology increasingly central to the way we serve our clients; critical to new business wins including Amazon, J&J, Kimberly-Clark and Unilever; increasing annual investment to £300m (from £250m)
• More efficient operations: stronger headline operating margin, cash conversion and balance sheet
Focus and outlook for 2025
• Lead through AI, data and technology: Increase our investment in WPP Open to keep it at the forefront of AI and further deploy it across the business and our clients
• Accelerate growth through the power of creative transformation: Drive transformation across our clients with an increasingly integrated offer across creative, production, commerce and media
• Build world-class, market-leading brands: Improve the competitiveness of our media offer, globally, with a focus on the US
• Execute efficiently to drive financial returns: Increase our operational efficiency and optimise our investment allocation
• 2025 guidance: LFL revenue less pass-through costs of flat to -2% with performance improving in the second half, and headline operating profit margin expected to be around flat (excluding the impact of FX)
Statements from WPP's Chief Executive Officer
"We achieved significant progress against our strategy in 2024 with the creation of VML, Burson and the simplification of GroupM - some 70% of our business. We sold our stake in FGS Global to create significant value for shareholders. And we increased our margin, while stepping up our investment in AI through WPP Open, which is now used by 33,0006 people across WPP.
"The top line was lower, however, with Q4 impacted by weaker client discretionary spend. We did see growth from our top 25 clients of 2.0% and an improving new business performance in the second half of the year with wins from Amazon, J&J, Kimberly-Clark and Unilever reflecting the strength of our integrated offer.
"The actions we are taking across WPP will strengthen our existing client relationships and drive our new business results. We expect some improvement in the performance of our integrated creative agencies in the year ahead. At the same time, we have comprehensive efforts underway to improve our competitive positioning through new leadership at GroupM, with further investment in AI, data and proprietary media.
"Though we remain cautious given the overall macro environment, we are confident in our medium-term targets and believe our focus on innovation, a simpler client-facing offer and operational excellence will support our growth and deliver greater value for our shareholders."
"WPP's 2024 Preliminary 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.
The Report is also available at http://www.rns-pdf.londonstockexchan
