WPP boosts medium term growth in revenue less pass-through costs view

WPP is announcing the next phase of its strategy to capture the opportunities offered by AI, maximise the potential of creative transformation and deliver faster growth, higher margins and improved cash generation. Four strategic pillars support these goals: Deliver growth and structural cost savings as a result of the creation of VML and Burson and simplification of GroupM, unlocking scale advantages and further efficiency savings. Structural savings to deliver annualised net cost savings of c.GBP 125m in 2025, with 40-50% of that saving expected to be achieved in 2024. Associated restructuring cost of c.GBP 125m in 2024 …Target c.GBP 175m gross savings from efficiency opportunities across both back office and commercial delivery which will be used to invest in growth and support delivery of our medium-term margin target…Updated medium-term targets: 3%+ LFL growth in revenue less pass-through costs; 16-17% headline operating profit margin…Adjusted operating cash flow conversion of 85%+1;Previous medium-term targets, outlined at WPP‘s Capital Markets Day in December 2020, were for 3-4% growth in revenue less pass-through costs including an M&A benefit of 0.5-1.0% annually; with a headline operating profit margin of 15.5-16.0%.