INNOVATING
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ANNUAL REPORT
& ACCOUNTS 2023
WELCOME TO THE
WPP ANNUAL REPORT
2023
OUR
VISION
To be the most creative
company in the world
OUR
PURPOSE
We use the power of creativity to build
better futures for our people, planet,
clients and communities
OUR
STRATEGY
Pages 9 to 15
ABOUT THIS REPORT
Lead through
AI, data and
technology
Accelerate
growth through
the power
of creative
transformation
Build
world-class,
market-leading
brands
Execute
efficiently to
drive strong
financial returns
Underpinned by a disciplined approach to capital allocation
AI COVER ART
Our cover artwork – reflecting
the reshaping of the landscape
by technology – was produced by
our in-house creative technologists
in collaboration with engineers
at NVIDIA. The imagery is an
evolution of the WPP brand
identity, combining high-fidelity
3D models in NVIDIA Omniverse™
with generative AI using our
proprietary AI production studio
on WPP Open
SUSTAINABILITY
We highlight our approach to
sustainability throughout this
report. The sustainability section
starting on page 53 details our
reporting requirements, including
our TCFD statement. The full 2023
Sustainability Report can be
found at wpp.com/
sustainabilityreport2023
DIGITAL
A digital version of the Annual
Report, providing a concise
summary of its contents,
can be found at wpp.com/
annualreport2023
QR CODES
Scan our QR codes
throughout the report
to access further
content online
This report provides an update
on our strategic progress,
financial performance and
sustainability activities for the
year ended 31 December 2023
To learn more see wpp.com
Indicates the selected metrics have been subject to independent limited
assurance procedures by PricewaterhouseCoopers (PwC) for the year ending
31 December 2023. For PwC’s 2023 Limited Assurance Report and the WPP
Sustainability Reporting Criteria 2023 see wpp.com/sustainabilityreport2023
STRATEGIC REPORT
CONTENTS
STRATEGIC REPORT
INTRODUCTION
Business highlights
Financial highlights
Key events
Chief Executive’s statement
WPP STRATEGY
Journey to today
Market outlook
Innovating to Lead: the next five years
ABOUT WPP
Investment case
Where we operate
Our business model
Our agencies
Clients
WPP AT WORK
Awards and recognition
Creativity
AI, data and technology
2
3
4
6
9
10
12
14
AI and data ethics, privacy and security
People
Our work
16
17
18
20
22
24
30
31
32
33
36
37
40
WPP SUSTAINABILITY
Our approach to sustainability
Sustainability and our strategy
Communities
Planet
Task Force on Climate-related
Financial Disclosures
Carbon emissions statement
Public policy
Supply network
Our work in sustainability
WPP FINANCIAL PERFORMANCE
Chief Financial Officer’s statement
Key performance indicators
Financial review
Assessing and managing our risks
Principal risks and uncertainties
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Chairman’s letter
108
Accounting policies
Consolidated financial statements
172
178
Shareholder information
Five-year summary
Notes to the consolidated financial statements 183
Glossary
Independent auditor’s report
215
Where to find us
Reconciliation to non-GAAP
measures of performance
223
Compliance with the UK Corporate
Governance Code
Our Board
Our Executive Committee
Division of responsibilities
How our Board engages with stakeholders
Board activities
Composition, succession and evaluation
111
112
115
117
118
122
123
Nomination and Governance Committee report 125
Audit Committee report
Sustainability Committee report
Compensation Committee report
Statement of Directors’ responsibilities
130
137
139
169
53
54
56
58
60
62
69
70
71
72
80
81
84
88
93
98
228
231
232
234
WPP ANNUAL REPORT 2023
1
STRATEGIC REPORT INTRODUCTION
BUSINESS HIGHLIGHTS
Our purpose is to build better futures for our people, planet, clients and
communities, and we continued to make progress towards those goals in 2023
PEOPLE
Investing in our
people's futures
114,000
41%
people employed in over 100
countries across the globe
(2022: 115,000)
women in executive
leadership roles1
(2022: 40%)
PLANET
An industry-leading commitment
to reduce carbon emissions from
our own operations to net zero
by 2025, and across our supply
chain by 2030
0.19 tCO₂e
carbon emissions
per person2 from our owned
operations (Scope 1 and 2)
(2022: 0.23 tCO2e)3
88%
electricity purchased
from renewable sources
(2022: 83%)
TECHNOLOGY PARTNERS'
ACCREDITATIONS AND
CERTIFICATIONS AWARDED
TO OUR PEOPLE
2023
2022
2021
34,000+
33,000+
30,000+
MARKET-BASED SCOPE 1
AND 2 CARBON EMISSIONS4
(tCO2e)
2023
2022
2021
21,322
26,102
35,132
CLIENT NET PROMOTER SCORE5
CLIENTS
Delivering transformational
results for our clients
303
of the Fortune Global 500
are WPP clients, reflecting
demand for our services
among the world's leading
companies
(2022: 307)
COMMUNITIES
Helping to bring about
change for the better
in society
Leader
in the 2023 Bloomberg
Gender-Equality Index
KEY
Indicates the selected metrics have been subject to independent limited assurance procedures
by PricewaterhouseCoopers for the year ending 31 December 2023. For PwC’s 2023 Limited
Assurance Report and the WPP Sustainability Reporting Criteria 2023, see wpp.com/
sustainabilityreport2023
2
WPP ANNUAL REPORT 2023
ranked most effective
communications company
in the world (Effies 2023)
2023
2022
2021
27.5
24.5
25.0
£36.1m
total social contribution,
taking into account cash
donations, pro bono work,
in-kind contributions, free
media space and racial equity
initiatives (2022: £35.5m exc.
racial equity initiatives)
CUMULATIVE INVESTMENT IN
RACIAL EQUITY INITIATIVES
($m)
2023
2022
2021
9.3
21.1
16.2
1 Executive leadership roles are defined by WPP as the agency board and executive leadership
population as reported through WPP’s financial reporting system
2 Full-time equivalent (FTE) employee
3 2022 energy metric restated in line with the procedures set out in the WPP Sustainability
Reporting Criteria 2023. For details of the nature and impact of the restatement, see page 61
4 See Carbon Emissions Statement on page 69
5 See definitions in the Glossary on page 232
TECHNOLOGY PARTNERS'ACCREDITATIONS AND CERTIFICATIONS AWARDED TO OUR PEOPLE 34,000+20222021MARKET-BASED SCOPE 1 AND 2 CARBON EMISSIONS4(tCO2e)2022202121,32227.5CLIENT NET PROMOTER SCORE52022202121.1CUMULATIVE INVESTMENT IN RACIAL EQUITY INITIATIVES($m)20222021
INTRODUCTION STRATEGIC REPORT
FINANCIAL HIGHLIGHTS
Our performance in 2023 was resilient: we grew our revenue and improved our
like-for-like headline operating margin, while maintaining an investment grade
balance sheet and increasing dividends to shareholders
CONTINUED REVENUE
GROWTH
In 2023 reported revenue
increased 2.9% and
like-for-like revenue less
pass-through costs
grew 0.9%1
DISCIPLINED COST
CONTROL
Our headline operating
margin of 14.8% was
unchanged on a reported
basis, but grew 0.2
percentage points on a
like-for-like basis, due to
disciplined cost control
£14.8bn
revenue
(2022: £14.4bn)
£11.9bn
revenue less
pass-through costs2
(2022: £11.8bn)
14.8%
headline operating margin3
(2022: 14.8%)
£475m
transformation programme
gross savings since 2019
(2022: £375m)
LIKE-FOR-LIKE REVENUE
LESS PASS-THROUGH
COSTS GROWTH
(%)
2023
0.9
2022
2021
6.9
12.1
HEADLINE OPERATING MARGIN
(%)
2023
2022
2021
14.8
14.8
14.8
14.4
MAINTAINING A STRONG
BALANCE SHEET
Our balance sheet is rated
investment grade by leading
credit agencies. Our leverage
ratio slightly exceeded our
target range of 1.5-1.75x due
to higher average net debt.
Year-end net debt was
unchanged at £2.5bn
S&P BBB
Moody's
Baa2
investment grade ratings
from credit agencies
(2022: S&P BBB,
Moody's, Baa2)
1.8x
leverage ratio of average
adjusted net debt
to headline EBITDA4
(2022: 1.4x)
AVERAGE ADJUSTED NET
DEBT/HEADLINE EBITDA
(x)
2023
2022
2021
0.8
1.8
1.4
REWARDING
SHAREHOLDERS
In 2023, total dividends per
share of 39.4p were in line with
our target payout policy of
around 40% of headline earnings
per share (EPS), and unchanged
from 2022
39.4p
dividends per share
(2022: 39.4p)
£423m
total dividends to shareholders
(2022: £365m)
DIVIDENDS PER SHARE
(p)
2023
2022
2021
39.4
39.4
39.4
31.2
1 Like-for-like growth as defined in the Glossary on page 232
2 The Group uses alternative performance measures in explaining its results, which are described
3 Headline operating profit of £1,750m, as a percentage of revenue less pass-through
costs of £11,860m. Reported profit before tax was £346m (2022: £1,160m)
on pages 223 to 225
4 See definitions in the Glossary on page 232
WPP ANNUAL REPORT 2023
3
20222021LIKE-FOR-LIKE REVENUE LESS PASS-THROUGH COSTS GROWTH(%)20230.914.814.820222021HEADLINE OPERATING MARGIN(%)AVERAGE ADJUSTED NET DEBT/HEADLINE EBITDA(x)1.82022202139.439.420222021DIVIDENDS PER SHARE(p)
STRATEGIC REPORT INTRODUCTION
KEY EVENTS
We continued to invest in new skills, talent, strategic
partnerships and targeted acquisitions, while winning
new business and industry recognition
JUNE
– WPP tops the Global
Effie Index
MARCH
– WPP leads the World
Advertising Research Center
(WARC) Rankings
– A busy month for acquisitions
with influencer marketing
agencies Goat and Obviously,
and German healthcare
specialist 3K Communication,
joining WPP
MAY
– We partner with NVIDIA to
build a generative AI-enabled
content engine for digital
advertising
– Mindshare named Cannes
Lions media network of
the year 2023
– BCW appoints
Corey duBrowa as
Chief Executive Officer
– We invest in diversity-
focused creative
agency Majority
JANUARY
– WPP recognised as
Leader in the 2023
Bloomberg Gender-
Equality Index
FEBRUARY
– We announce new
partnerships with commerce
companies Stripe and
BigCommerce
APRIL
– WPP acquires sonic
branding agency, amp
MAY
– 28 WPP leaders graduate
from Oxford’s Saïd Business
School with a diploma in AI
JULY
– New WPP campus
opens in Manchester
– We are recognised by the
Financial Times as a 2023
climate leader
– Wavemaker wins
Reckitt Benckiser’s media
account in India
– Sustainalytics ranks WPP
with the lowest-risk ESG
rating amongst its peers
– Ogilvy wins Jameson's
global creative account
– New WPP campus opens
in Guangzhou, China
4
WPP ANNUAL REPORT 2023
KEY EVENTS
INTRODUCTION STRATEGIC REPORT
SEPTEMBER
– Nestlé picks WPP as sole
media partner in Europe
– Verizon names Ogilvy
creative agency of record
for its consumer business
– Andrew Scott, COO, is
appointed to the WPP Board
OCTOBER
– Wunderman Thompson
and VMLY&R unite to create
global powerhouse, VML
DECEMBER
– VML named creative
agency partner for
Krispy Kreme
– Shopify and WPP announce
new commerce partnership
NOVEMBER
– Sprinklr and WPP
announce new AI
partnership
– TUI appoints
EssenceMediacom
as media agency for
pan-European account
– New WPP campus
opens in Paris
– FGS Global acquires
Longview in Canada
AUGUST
– Spotify and WPP announce
first-of-its-kind global
partnership
OCTOBER
– Lindsay Pattison appointed
WPP Chief People Officer
NOVEMBER
– Jane Geraghty
appointed WPP Chief
Client Officer
DECEMBER
– GroupM publishes
This Year Next Year:
2023 Global End-of-Year
Forecast
– We launch digital
experiences partnership
with Optimizely
– PayPal hires GroupM as
its global media agency
of record
– Official opening of
our Brussels campus
– GroupM appointed global
media partner to Allianz
– Adweek names Ogilvy 2023
global agency of the year
WPP ANNUAL REPORT 2023
5
STRATEGIC REPORT INTRODUCTION
CHIEF EXECUTIVE’S
STATEMENT
Hogarth, was another standout performer,
benefiting from increasing demand for its
technology- and AI-driven capabilities.
We continued to win new clients and grow
our existing relationships, attracting net new
business of $4.5 billion in 2023, including
new assignments with Allianz, Krispy Kreme,
Mondelēz, Nestlé, PayPal and Verizon. As
I write this today, our pipeline for potential
new business is larger than it was at the
same point in 2023.
We expect 2024 to be a transitional period
of modest growth as we cycle through the
impact of some assignment losses last year
and as technology companies continue to
manage through a period of disruption, but
we are optimistic about the strategic
opportunities ahead of us.
AI, DATA AND TECHNOLOGY
One of the primary reasons for that optimism
is our leadership position in the application
of AI, data and technology to marketing.
Building on that strength is the first pillar
of Innovating to Lead.
While we have been investing in AI for
many years at WPP, the recent explosion
of generative AI has rapidly increased its
relevance to the marketing industry. For the
first time, we can see how computers can
do things we thought only people could do
– take photos, write copy, create videos
and more.
AI is already changing our industry. We have
put it at the heart of our work today as well
as our future strategy. We’re working with
all our top clients on AI-related projects and
delivering exceptional AI-enabled work,
examples of which you can see in this report.
This technology will be fundamental to the
future of WPP, and being at the forefront of
AI ensures we are taking full advantage of
the substantial opportunities it presents.
As part of our technology strategy, we’ve
been consolidating our position as leaders
in the field with future-facing decisions
including the acquisition of AI technology
company Satalia in 2021; strategic
partnerships with technology companies
including Adobe, Google, IBM, Meta,
Microsoft and NVIDIA; and organic
WPP has always been a company of innovators,
driven by an instinct to create, to reinvent, to
move forward and to lead
It’s what makes us the creative
transformation company, and it’s why
the world’s biggest marketers entrust
us with their brands.
It’s also the inspiration for the next phase of
our strategy, which we’re calling ‘Innovating
to Lead’. At our Capital Markets Day in
January 2024 we set out our plans to capture
the opportunities of AI, data and technology,
while realising the full potential of our offer
to clients, building world-class agency
brands and driving strong financial returns
through efficient execution.
We are confident these plans – outlined
in greater detail below and later in this
report – will deliver accelerated and more
profitable growth over the medium term.
A RESILIENT PERFORMANCE
In 2023, our industry felt the impact of a
tougher economic environment. Spending
by clients in the consumer packaged goods
sector – WPP’s largest segment – grew well,
but this was offset by a more cautious
approach to marketing spend in other
sectors, and notably lower spend from
technology clients.
Against this challenging backdrop, our
performance was resilient, with like-for-like
growth in revenue less pass-through costs
of 0.9%. Strong growth in the UK and India
was set against weaker trading in the US,
China and Germany. Thanks to disciplined
cost control, we were able to grow our
like-for-like headline operating margin in
2023, while continuing to invest in AI, data,
technology and talent.
GroupM, our media investment business,
grew well, and Ogilvy – supported by major
new client assignments – also performed
strongly. Our creative production business,
6
WPP ANNUAL REPORT 2023
CHIEF EXECUTIVE’S STATEMENT
INTRODUCTION STRATEGIC REPORT
investment in client-facing technology, data
capabilities and WPP Open, our AI-powered
marketing operating system.
Adidas, The Coca-Cola Company, Duracell,
Mars, Nestlé, Google, Danone and the U.S.
Navy were among the media buys.
phase of its strategy to streamline and
simplify its operational structure.
WPP Open is now used by more than
30,000 people across WPP each month
to experiment, enhance our skills and build
campaigns, and it’s being widely deployed
on client work. In 2023 it gave us the
competitive edge in several major pitches,
and it was adopted by some of our largest
clients, including Nestlé and L’Oréal. Looking
ahead, we expect to serve a growing
number of clients through WPP Open as it
plays an ever more central role in our offer.
Much of this work is the fruit of enduring
partnerships between agencies and brands.
Dove and Ogilvy have enjoyed 66 years of
unbroken partnership, during which time
they have transformed a humble soap brand
into a $7.3 billion social movement. In 2023
we were incredibly proud to celebrate 80
years of collaboration with Ford, while WPP
Open X sprinted to its two-year anniversary
as The Coca-Cola Company’s global
marketing partner.
Our plans include annual cash investment
of around £250 million in proprietary
technology to support our AI and data
strategy and to keep us ahead of the pack.
CREATIVE TRANSFORMATION
I firmly believe that AI will enhance, not
replace, human creativity. Vision, inspiration
and imagination matter more than ever –
and not just in our creative agencies, but in
our media, PR and design companies. The
extraordinary power of bold ideas continues
to drive transformative business results for
the world’s leading brands, and it remains
at the heart of our proposition to clients.
Unlocking the full potential of creative
transformation to accelerate growth is the
second pillar of our strategy. None of our
competitors can match our global scale,
the breadth and depth of our integrated
offer in creative, media, production and PR,
or our capabilities in fast-growth areas such
as commerce, influencer marketing and
retail media. We intend to capitalise on
this advantage to expand our share of a
growing market.
There are few better demonstrations of the
competitiveness of our offer or the strength
of our client relationships than our agencies’
performance at the Super Bowl – one of the
world’s greatest showcases for excellence
in marketing.
2024’s Big Game saw an unprecedented
12 TV spots from WPP agencies plus
media activations for more than 25 brands.
There was creative work for clients
including Hellmann’s, Dove, Pringles,
L’Oréal’s CeraVe, VW and Verizon, while
The creative work we’ve produced together
with The Coca-Cola Company won eight
awards at Cannes Lions in 2023, as part of
another highly successful festival for WPP
that saw our agencies collect a total of 165
Lions and Mindshare win Media Agency of
the Year.
WPP took the award for the world’s most
effective communications company at
the Effies, and Ogilvy won most effective
network. WARC named WPP the top
company in each of its three rankings –
for creativity, media and effectiveness –
while Ogilvy was network of the year for
both creativity and effectiveness and
EssenceMediacom was the winner in media.
Awards like these matter because they
reflect our agencies’ ability to create
commercial success for our clients, they
recognise the industry-leading talent we
have at WPP, and they act as a magnet for
brilliant people to join our Company.
MARKET-LEADING BRANDS
The third pillar of our strategy is to continue
to build world-class, market-leading agency
brands that reduce complexity, maximise
the benefits of our scale and enhance our
offer to clients.
In 2023 we united Wunderman Thompson
and VMLY&R to create VML, the world’s
largest creative agency, and in January 2024
we announced the combination of BCW
and Hill & Knowlton to create Burson, a
leading global strategic communications
firm. GroupM – which in 2023 retained its
clear global leadership position with media
billings of $63 billion – moved to the next
WPP will soon operate largely through
six agency networks – VML, Ogilvy, AKQA,
Hogarth, GroupM and Burson – that together
account for close to 90% of WPP’s revenue
less pass-through costs.
These networks are helping us to expand
client relationships and begin new ones.
VML quickly notched its first win as a new
agency in December 2023, securing Krispy
Kreme’s global creative business, while
GroupM was chosen as the media and
planning partner for Allianz as well as
PayPal’s global media agency.
Verizon named Ogilvy its creative agency
of record for its consumer business, and
we became Nestlé’s sole media partner in
Europe, serving 47 countries through a new
digital-first model.
STRONG FINANCIAL RETURNS
We have a significant opportunity to realise
further scale advantages and savings,
and executing efficiently to deliver strong
financial returns is the fourth and final pillar
of our strategy.
The creation of VML and Burson and the
ongoing simplification of GroupM will deliver
both growth opportunities and structural
cost savings. We also see additional
efficiency opportunities across our back-
office functions and commercial delivery
services, with the scope for further cost
savings over the next three to five years.
The strategy we shared at the Capital
Markets Day and which I have outlined here,
underpinned by a disciplined approach to
capital allocation, is expected to enhance
our financial performance, by improving our
growth, profitability and cash flow over the
medium term.
You can read more on our financial
performance in 2023 and our medium-term
targets in the Chief Financial Officer’s
statement on page 81.
WPP ANNUAL REPORT 2023
7
STRATEGIC REPORT INTRODUCTION
CHIEF EXECUTIVE’S
STATEMENT CONTINUED
PEOPLE
At WPP we aim to attract, develop and
retain the most talented, creative people
in our industry.
We invest significantly in ensuring our
people can benefit from the global, multi-
disciplinary nature of WPP, learn from our
expertise in AI, data and technology, and
enjoy exciting and fulfilling careers within
the Company. I’m particularly proud of our
Future Readiness Academies, a global online
learning programme designed to furnish our
people with the skills of tomorrow. 12,500
employees have taken nearly 50,000 courses
through the platform.
We also continue to invest in state-of-the-art
campuses around the world, providing our
people with inspiring, collaborative and
flexible spaces that ignite creativity and
bring together the best talent, technological
capability and facilities under one roof. I was
delighted to join many of our clients at the
launch events of three new WPP campuses
– in Manchester, Paris and Brussels – in 2023.
WPP’s talented leadership team was
strengthened further during 2023. We
welcomed Joanne Wilson as our new Chief
Financial Officer and Corey duBrowa as the
new CEO of BCW (and now Burson). Former
Landor CEO Jane Geraghty was appointed
as our Chief Client Officer, succeeding
Lindsay Pattison as she became Chief People
Officer. Lindsay replaced Jennifer Remling as
she departed after eight successful years to
join Warner Bros. Discovery. Chief Operating
Officer Andrew Scott joined the Board as
an Executive Director.
We work hard to build a diverse workforce
and an inclusive culture, one that reflects
the societies in which we live. It’s important
to our clients, and it’s important to me.
Companies that want to be at the cutting
edge of innovation and create moments
that become part of popular culture need
teams who represent a range of perspectives
and communities.
In 2023, the proportion of our executive
leaders1 who are women was 41%
(2022: 40%). In the US, our largest market,
the proportion of our senior and executive
managers who are non-white was 22%
(2022: 22%).
8
WPP ANNUAL REPORT 2023
A record number of WPP leaders were
named in Involve’s 2023 Heroes Women
Role Model lists for championing women
in business and nurturing a more inclusive
workplace. In 2023 we once again featured
in the Bloomberg Gender-Equality Index.
The support of the Board, and in particular
the Chairman, has been central to the
progress we’ve made in building a new
culture at WPP, and in our wider strategy
to transform the Company. As he prepares
to hand over to a new Chair, I would like
to thank Roberto for his wise counsel and
encouragement to me and the whole
executive team, and to recognise his role
in ensuring the strength and resilience
of today’s WPP.
A MORE SUSTAINABLE AND
EQUITABLE FUTURE
In 2021, we announced our commitment
to reduce carbon emissions from our own
operations by 84% by 2025, and to halve
carbon emissions across our supply chain
by 2030. We include media buying in these
targets – the first company in our industry
to do so. At the end of 2023, we had achieved
a 76% absolute reduction in tonnes of CO2e
emissions (Scope 1 and 2) since our 2019
baseline, and a reduction of 18% year-on-year.
As part of these efforts, and to help clients
meet their own sustainability goals, in
February 2023 GroupM launched a new
omnichannel media carbon calculator,
enabling clients for the first time to factor
channel-level emissions data into their
media planning.
We aim to use our voice and resources to
support social progress throughout our
industry. One of the ways we do this is
through our Racial Equity Programme, which
funds innovative inclusion projects. 2023 saw
the fourth round of funding, which provided
backing to the Crias Project, a partnership
between Ogilvy, DAVID and GR6 in Brazil that
sets out to hire talented Black creatives from
favelas to work on client projects, and the
OG Creative Technology Academy, which
identifies and supports high-potential
African talent.
Clients have long been aware of the
potential of our work to bring about positive
change. Impactful campaigns in 2023
included EssenceMediacom’s Pre-Loved
Island for eBay, which combatted clothing
waste by dressing contestants on ITV’s
Love Island – which has a huge impact on UK
fashion trends – in stylish second-hand items.
DAVID and Corona helped Chinese
smallholders grow their incomes by
supporting high-quality lime cultivation,
through the award-winning Corona Extra
Lime initiative, and Ogilvy’s #TurnYourBack
campaign for Dove raised awareness of the
harmful impact of toxic beauty content.
You can read about many more examples
of work that makes a difference, and our
wider approach to environmental, social
and governance (ESG) matters, in our
Sustainability Report and in the Sustainability
and Corporate Governance sections of
this report.
THE OPPORTUNITIES AHEAD
One of the privileges of my role is that every
day I get to see remarkable people coming
together to deliver great work like this for
our clients. And there has never been a
more exciting time to be part of our industry,
as the collision of human imagination and
rapidly evolving technologies opens up
a new world of creative possibilities.
I cannot help but be optimistic about the
future, knowing we have such talented
people and such forward-looking clients
who share our passion for exploring the
new opportunities ahead of us. As ever,
my thanks goes to all of them.
Mark Read
Chief Executive Officer
21 March 2024
1 Executive leadership roles are defined as the agency board
and executive leadership population as reported through
WPP’s financial reporting system
Indicates the selected metrics have been subject to
independent limited assurance procedures by
PricewaterhouseCoopers for the year ending 31 December
2023. For PwC’s 2023 Limited Assurance Report and the
WPP Sustainability Reporting Criteria 2023, see wpp.com/
sustainabilityreport2023
STRATEGIC REPORT
WPP
STRATEGY
Our strategy is expected to deliver
accelerated and more profitable
growth over the medium term
In this section
Journey to today
Market outlook
Innovating to Lead: the next five years
10
12
14
WPP ANNUAL REPORT 2023
9
STRATEGIC REPORT WPP STRATEGY
JOURNEY TO TODAY
Over the last five years we’ve transformed WPP. We’re now
radically simpler, with world-class talent, leading capabilities
and improved financial performance
In 2018, WPP was a complex
organisation that had under-
invested in key areas such as
talent, creativity and technology
Today WPP is a stronger company,
with a modern, integrated offer
and simplified structure, and well
positioned for growth
Simplified our structure
Built a world-class
leadership team
– Retired around 300 legacy brands
– Closed 840 smaller, inefficient offices
– Eliminated around 1,400 legal entities,
– Strengthened leadership through new
hires and acquired companies
– Enhanced culture and working
arising from historic acquisitions
environment
– 90+ disposals of non-core businesses,
– Invested in creative and technology talent
raising more than £3.8 billion
for the future
Established a WPP
Executive Committee of senior
WPP and agency leaders
LEADERSHIP
See page 115
TALENT
Hired new talent from
leading companies or through
acquisitions such as Satalia,
our AI technology company
In 2023, 28 WPP leaders graduated
from Oxford’s Saïd Business School
with a diploma in AI
INVESTED
IN FUTURE
TALENT
6
key networks, representing
close to 90% of WPP1
The world’s largest
creative agency2
A leading ideas and
innovation agency
A leading global
creative agency
The world’s largest
media investment
business
A top 2 global PR firm3
The world’s largest
production agency
1 Share of revenue less pass-through costs
2 In October 2023 WPP announced the merger
of Wunderman Thompson and VMLY&R to form VML,
which was effective in January 2024
3 In January 2024 WPP announced the merger of BCW
and Hill & Knowlton to create Burson, which is effective
in July 2024
10
WPP ANNUAL REPORT 2023
JOURNEY TO TODAY
WPP STRATEGY STRATEGIC REPORT
Strengthened our AI, data
and technology capability
Significant progress in our
transformation programme
Improved financial
performance
– Organic investment in client-facing
– Moved 52% of our people into modern,
– Delivered growth: 2.6% compound
technology
– Targeted acquisitions to enhance
our capability in AI, commerce, influencer
marketing and marketing tech
– Developed key strategic partnerships
efficient, multi-agency campuses,
up from 8% in 2018
annual growth (2019-2023)
– Stabilised our headline operating
– Merged agencies and adopted
profit margin
common platforms
– Eliminated multiple financial platforms,
moving to fewer, more modern systems
– Reduced adjusted net debt to
£2.5 billion from £4.1 billion in 2018
– Returned a cumulative £4 billion to
shareholders in the form of dividends
and share buybacks
Organic investment in client-facing tech
Transformation plan
Our AI-powered
marketing
operating
system
Our AI technology
company
Our data
product, service
and technology
company
Targeted technology-led M&A
– Set out a plan to deliver £600 million of
annual gross savings by 2025 against the
2019 cost base. At the end of 2023 we had
delivered around £475 million of gross
savings, which is ahead of the originally
planned £450 million
See pages 81 and 85
£4bn
returned to shareholders since 2018
Sonic branding solutions
Digital commerce platform solutions
Digital innovation and software engineering
Data-driven influencer solutions
Ecommerce consultancy
Tech-led social influencer platforms
Enterprise AI strategy and technologies
Key technology strategic partnerships
WPP ANNUAL REPORT 2023
11
GROSS COST SAVINGS SINCE 2019(£m)GROSS COST SAVINGS SINCE 2019(£m)202320234754752020202102022275375DIVIDENDS AND SHARE PURCHASES(£m)DIVIDENDS AND SHARE PURCHASES(£m)2023202320192020202120224774774127941,1331,228Share purchasesDividendsShare purchasesDividendsShare purchasesDividendsDividendsShare purchasesDividendsShare purchasesDividendsShare purchases
STRATEGIC REPORT WPP STRATEGY
MARKET OUTLOOK
We operate in a large and growing
market segment
In 2023, advertisers continued to invest in
delivering marketing messages to audiences,
driving global growth in advertising
revenue of 5.8% to $889 billion1.
69%
advertising revenue classified as digital
IN 2023, TOTAL AD REVENUE INCREASED
BY AN ESTIMATED
5.8%
(2022: 6.2%)
total advertising spend comprises three
main areas – digital, television and other
sectors including out-of-home (OOH),
print and audio
DIGITAL
The largest single segment of advertising
spend is on digital (internet-based) channels,
representing 69% of the total. Within this are
three sub-groups – search, retail media and
other. Digital search, eg via Google or Bing
(32% of the total) grew 7.8% in 2023. Retail
media (retailers using their websites to sell
advertising space) is the smallest segment
(19% of digital), but is growing quickly, up
an estimated 9.8% in 2023. The largest retail
media platforms, by ecommerce gross
merchandise value in 2022, were Alibaba,
Amazon and JD.com. The remaining 49%
of digital includes social and short-form
media from companies including Meta,
YouTube and TikTok.
2023 GLOBAL AD MARKET GROWTH
(%)
+9.2
+5.8
Total digital ad spend accelerated
throughout 2023, growing an estimated
9.2%, excluding US political advertising.
Digital ad spend is anticipated to remain
the fastest-growing segment, expanding
on average 7.4% on a compound annual
basis through to 2028, driven by search,
social and retail media channels, and is
forecast to represent 76% of total global
ad spend by 2028.
TV
Television remains a significant channel
for global ad revenue, representing 18% of
the total in 2023, given its ability to satisfy
advertisers’ brand-reach goals. Within this,
linear TV ad revenue fell an estimated
4.3% as advertisers moved to data-driven
channels including connected TV streaming
services, which are estimated to have grown
10% in 2023 as they provide more data to
target audiences and more closely measure
ad campaign results. Looking ahead, global
total TV ad revenue is expected to grow
a modest 1% on a compound annual basis
through to 2028, driven mostly by connected
TV, offsetting the declines in linear TV.
5.6%
expected global ad revenue compound
annual growth rate 2023 to 2028
+0.2
-1.9
Total
Total
Digital
Digital
TV TV
Other
Other
12
WPP ANNUAL REPORT 2023
2023 MEDIA CHANNEL SHARE
Digital 69%
TV 18%
Print 6%
Out-of-home 4%
Audio 3%
OTHER
Print, including both traditional and digital
forms of newspapers and magazines (6% of
the total), is expected to decline 4.6% in 2023
as audiences switch to digital versions and
print becomes less commercially viable.
Out-of-home advertising (4% of total spend)
is forecast to grow 10.3% in 2023, benefiting
from the ongoing resurgence of travel and
airport advertising. Within this, digital OOH
(eg digital billboards) is forecast to grow
18.1% in 2023.
Audio ad revenue fell 2.9% in 2023. Within
this, demand for streaming music and
podcast services continued to grow
strongly, offsetting the decline in terrestrial
radio services.
Over the next five years to 2028, growth in
other channels is forecast to be driven by
OOH digital advertising, masking declines
in print and audio channels.
COUNTRIES
During 2023 the industry saw positive
growth across all major markets. The US,
the largest ad market, representing 39% of
total spend, is estimated to have grown
5.7% in 2023 compared with 7.1% in 2022,
led by digital channels.
2023 MEDIA CHANNEL SHARE Total Digital TV Other2023 GLOBAL AD MARKET GROWTH(%)
MARKET OUTLOOK
WPP STRATEGY STRATEGIC REPORT
THE US IS THE LARGEST AD MARKET,
ACCOUNTING FOR
A FAST-CHANGING AND COMPLEX MARKET
39%
of total ad spend
China, the second-largest market (16% of
total spend), grew 6.1%, driven by digital
and OOH spend, bouncing back from the
0.6% decline in 2022 due to Covid-related
lockdowns. Growth in the UK, the third
biggest market, remained strong at 4.4%,
driven by digital advertising channels such
as social media, albeit less than the 8.9%
growth achieved in 2022.
Among other major markets, Brazil and India
achieved double-digit growth of 10% and
11% respectively, led by social media in the
former and retail media spend in the latter.
In the more mature ad markets of Germany,
France and Canada, ad spend growth
continued between 3% and 4% – slightly
down on 2022. In the 10th largest market,
Australia, growth was flat year-on-year.
2023 GLOBAL MEDIA MARKET SHARE
BY COUNTRY
US 39%
China 16%
UK 6%
Japan 5%
Germany 4%
France 4%
Brazil 3%
India 2%
Canada 2%
Australia 1%
Other markets 18%
1 GroupM, This Year Next Year: 2023 Global End-of-Year Forecast,
December 2023. Excludes US political advertising
Our clients are facing an ever-more complex marketing environment
that presents new opportunities to advertise, but also more
fragmentation. This in turn requires more advice from agencies,
which is expected to be a positive driver of future growth.
This complexity is being driven by:
– AI influencing where and how clients invest their money
– Social and influencer channels shaping consumer behaviour
– The convergence of culture and entertainment; for example
Super Bowl LVIII was viewed by 123 million people, the largest
audience in the history of the Big Game
– Clients requiring more data and more insights from that data
– The rapid evolution of media channels providing advertisers
new ways to reach consumers, such as retail media channels
and TV streaming platforms introducing ad-supported tiers
– Significant geopolitical events and an increasingly polarised
political environment
ACCELERATING
AI IMPACT
SOCIAL AND
INFLUENCER-FIRST
MARKETING
CONVERGENCE
OF CULTURE &
ENTERTAINMENT
CHANNEL
PROLIFERATION
EXPLODING
DATA LANDSCAPE
GROWING
GEOPOLITICAL
COMPLEXITY
POLARISED
CONSUMERS
WPP ANNUAL REPORT 2023
13
2023 GLOBAL MEDIA MARKET SHARE BY COUNTRYACCELERATINGAI IMPACTSOCIAL ANDINFLUENCER-FIRSTMARKETINGEXPLODING DATA LANDSCAPECHANNEL PROLIFERATIONGROWINGGEOPOLITICALCOMPLEXITYPOLARISEDCONSUMERSCONVERGENCE OF CULTURE & ENTERTAINMENT
STRATEGIC REPORT
INNOVATING TO LEAD:
THE NEXT FIVE YEARS
The next phase of our strategy aims
to capture the opportunities offered
by AI, maximise the potential of
creative transformation and deliver
faster growth, higher margins and
improved cash generation
14
WPP ANNUAL REPORT 2023
Lead through
AI, data and
technology
Accelerate growth
through the power
of creative
transformation
Build world-class,
market-leading
brands
LEAD THROUGH AI, DATA AND TECHNOLOGY
Capitalise on our AI leadership position, built on: the acquisition
of Satalia in 2021; organic investment in AI, client-facing
technology and data; and deep partnerships, including with
Adobe, Google, IBM, Meta, Microsoft and NVIDIA
ACCELERATE GROWTH THROUGH THE POWER
OF CREATIVE TRANSFORMATION
Integrated offer
Expand our client relationships by further leveraging WPP’s
global scale, integrated offer in creative (including production),
media, PR and specialist communications, and capabilities in
fast-growth areas such as commerce, influencer marketing and
retail media to capture share in a growing market
Creative
Media
PR
Specialist
BUILD WORLD-CLASS, MARKET-LEADING BRANDS
Realise the opportunities from VML as the world’s largest
integrated creative agency and GroupM as the world’s largest
media investment business, and establish Burson as a leading
global strategic communications agency
Execute efficiently
to drive strong
financial returns
EXECUTE EFFICIENTLY TO DRIVE STRONG FINANCIAL RETURNS
Deliver annual net cost savings of around £125 million by 2025
from the mergers of VMLY&R and Wunderman Thompson and
c.£125m
targeted structural net cost
c.£175m
targeted gross efficiency
BCW and Hill & Knowlton, and from the simplification of GroupM,
savings by 2025
savings over the medium term
and a further circa £175 million of gross savings, over the medium
term, from efficiency opportunities across both back office
functions and more efficient delivery of services to clients
Underpinned by a
disciplined approach
to capital allocation
Continued organic investment, a progressive dividend policy
and a disciplined approach to M&A, supported by a strong
balance sheet and an investment grade credit rating
INNOVATING TO LEAD: THE NEXT FIVE YEARS
WPP STRATEGY STRATEGIC REPORT
Lead through
AI, data and
technology
Accelerate growth
through the power
of creative
transformation
Build world-class,
market-leading
brands
Execute efficiently
to drive strong
financial returns
LEAD THROUGH AI, DATA AND TECHNOLOGY
Capitalise on our AI leadership position, built on: the acquisition
of Satalia in 2021; organic investment in AI, client-facing
technology and data; and deep partnerships, including with
Adobe, Google, IBM, Meta, Microsoft and NVIDIA
Our AI-powered
marketing operating
system
Our AI technology
company
Our data product,
service and
technology
company
ACCELERATE GROWTH THROUGH THE POWER
OF CREATIVE TRANSFORMATION
Integrated offer
Expand our client relationships by further leveraging WPP’s
global scale, integrated offer in creative (including production),
media, PR and specialist communications, and capabilities in
fast-growth areas such as commerce, influencer marketing and
retail media to capture share in a growing market
Creative
Media
PR
Specialist
BUILD WORLD-CLASS, MARKET-LEADING BRANDS
Realise the opportunities from VML as the world’s largest
integrated creative agency and GroupM as the world’s largest
media investment business, and establish Burson as a leading
global strategic communications agency
The world’s largest
media investment
business
The world’s largest
creative agency
Top 2 global
PR firm
EXECUTE EFFICIENTLY TO DRIVE STRONG FINANCIAL RETURNS
Deliver annual net cost savings of around £125 million by 2025
from the mergers of VMLY&R and Wunderman Thompson and
BCW and Hill & Knowlton, and from the simplification of GroupM,
and a further circa £175 million of gross savings, over the medium
term, from efficiency opportunities across both back office
functions and more efficient delivery of services to clients
c.£125m
targeted structural net cost
savings by 2025
c.£175m
targeted gross efficiency
savings over the medium term
Underpinned by a
disciplined approach
to capital allocation
Continued organic investment, a progressive dividend policy
and a disciplined approach to M&A, supported by a strong
balance sheet and an investment grade credit rating
WPP ANNUAL REPORT 2023
WPP ANNUAL REPORT 2023
15
15
STRATEGIC REPORT
ABOUT
WPP
We are the world’s largest marketing
services company. Find out how we
use our global reach and scale,
leading capabilities and strong
financial position to benefit our
clients and shareholders
In this section
Investment case
Where we operate
Our business model
Our agencies
Clients
17
18
20
22
24
16
WPP ANNUAL REPORT 2023
ABOUT WPP STRATEGIC REPORT
INVESTMENT CASE
Our exposure to growth markets, strong client relationships, leading capabilities
and robust financial position enable us to accelerate growth, expand margins
and improve cash generation to drive shareholder returns
UNRIVALLED GLOBAL
REACH AND SCALE
We have the industry’s biggest global footprint, and the
#1 creative agency, #1 production agency and #1 media
investment business globally
ATTRACTIVE AND
GROWING
ADDRESSABLE
MARKETS
Stronger-than-ever client demand for marketing services
is driven by an increasingly complex ecosystem and new
opportunities from technology-led services, such as AI
100+
countries in our
global network
5.6%
estimated average annual
growth in global advertising
revenue 2023-20281
DEEP RELATIONSHIPS
WITH LEADING
BUSINESSES
Our clients are some of the world’s largest and most
successful companies, including over 300 of the
Fortune Global 500. These relationships are enduring,
including multi-decade partnerships with many of our
biggest clients
27.5
client net promoter score
(2022: 24.5)
LEADING THROUGH
AI, DATA AND
TECHNOLOGY
We invest in AI expertise, data capability and cutting-
edge technology through organic investment, targeted
acquisitions and strategic partnerships with world-
leading technology companies, to drive our growth
£250m
annual investment in AI,
data and technology
FINANCIAL
STRENGTH WITH
INVESTMENT GRADE
BALANCE SHEET
Our business is cyclical but our cost base is flexible,
allowing maintenance of strong profitability and cash
generation across the cycle. We combine this with a
disciplined approach to capital allocation, enabling us
to reinvest in the business, acquire new companies and
talent, and reward shareholders
1.8x
average adjusted net debt/
headline EBITDA
WORLD-LEADING
TALENT, AMBITIOUS
FOR THE FUTURE
We attract and retain world-leading creative and
technological talent, enabling us to create transformative
work for our clients
114,000
talented people across
the globe
1 GroupM, This Year Next Year: 2023 Global End-of-Year Forecast, December 2023
WPP ANNUAL REPORT 2023
17
STRATEGIC REPORT ABOUT WPP
WHERE WE OPERATE
COUNTRIES
WPP agencies operate in more than
100 countries, providing unrivalled
global reach and scale
2023 REVENUE BY REGION
North America 37%
United Kingdom 15%
Western Continental
Europe 20%
Rest of World (CEE,
LA, AME, AP) 28%
NORTH AMERICA
UNITED KINGDOM
WESTERN
CONTINENTAL EUROPE
CENTRAL &
EASTERN EUROPE (CEE)
PEOPLE
REVENUE
PEOPLE
REVENUE
PEOPLE
REVENUE
PEOPLE
REVENUE
23,000
£5.5bn
12,000
£2.2bn
23,000
£3.0bn
4,000
£0.3bn
Our top 10 markets
%
Revenue
USA
UK
Germany
Greater China1
India
Brazil
Australia
Canada
France
Italy
35
15
7
5
4
2
2
2
2
2
People
21,000
12,000
7,000
8,000
11,000
6,000
3,000
2,000
2,000
2,000
LATIN AMERICA (LA)
AFRICA & MIDDLE EAST (AME)
ASIA PACIFIC (AP)
PEOPLE
REVENUE
PEOPLE
REVENUE
PEOPLE
REVENUE
15,000
£0.8bn
5,000
£0.4bn
£2.6bn
32,000
1
Including Hong Kong and Taiwan
18
WPP ANNUAL REPORT 2023
2023 REVENUE BY REGIONNorth America 37% United Kingdom 15% Western ContinentalEurope 20%Rest of World (CEE, LA, AME, AP) 28%
ABOUT WPP STRATEGIC REPORT
WHERE WE OPERATE
CAMPUSES
WPP campuses bring our agencies together
in inspiring, collaborative workspaces
OUR CAMPUSES
Amsterdam
Beijing
Bogotá
Brisbane
Brussels
Bucharest
Chicago
Detroit
Düsseldorf
Frankfurt
Gurugram
Hamburg
Helsinki
Hong Kong
Jakarta
Kansas City
Lisbon
London Rose Court
London Sea
Containers
Madrid
Mexico City
Milan
Montevideo
Mumbai
New York
Prague
Rome
Santiago
Shanghai
Singapore
Tokyo
Toronto
Warsaw
NEW IN 2023:
Atlanta
Austin
Cincinnati
Dallas
Guangzhou
Manchester
Montreal
Paris
41
campuses rising
to 47 by 2025,
accommodating
75,000 people
Every WPP campus is
designed to:
– support flexible and
hybrid working
– give clients access to
integrated WPP talent
– unlock cost savings
through consolidating
less efficient buildings into
more modern workspaces
Atlanta: hosts 400 people in Atlanta’s historic Old
Fourth Ward neighbourhood
Paris: accommodates 2,000 people in an inspiring
space in Levallois-Perret
Manchester: home to 500 people in a modern
environment within the city’s iconic Media City
WPP ANNUAL REPORT 2023
19
STRATEGIC REPORT ABOUT WPP
OUR BUSINESS MODEL
WPP is the creative transformation company
OUR OFFER
WHAT
WE DO
WHAT SETS
US APART
We provide marketing
communications services that
help brands grow and transform
their businesses
Our work spans the full marketing
spectrum, from advertising
campaigns, social media
management and influencer
marketing to commerce solutions,
app development, CRM
implementation and more
We have market-leading agency
brands, deep relationships with
major clients, unrivalled global scale
and reach, award-winning creative
talent and leading technology, data
and AI capability
We provide an end-to-end
integrated approach connecting
creative, media, PR and specialist
services for all client needs
CREATIVE
MEDIA
PR
SPECIALIST
OUR OFFER
Create scalable ideas and
experiences that bring to life
brands and their relationships
with customers
Connect brands to consumers
across the full range of media
channels and platforms
Manage reputation
and communication
with key stakeholders
Branding, design and
other specialist services
OUR SERVICES
INCLUDE
– Brand experience
– Commerce
– Customer experience
– Marketing strategy
– Production
– Technology
implementation, eg CRM
– Commerce media
– Consulting
– Data analytics and insight
– Media activation
– Media planning and buying
– Media strategy
– Media relations
– Public affairs
– Reputation, risk and
crisis management
– Social media management
– Strategic advice
– Brand consulting
– Brand identity
– Corporate and
brand publications
– Events management
– Product launches
– Sonic branding
OUR OFFER
IN ACTION
THE LV APP
AKQA provided Louis Vuitton,
one of the world’s leading
fashion houses, with a new
precision-designed digital
touchpoint to become the
go-to destination for its clients
EBAY: PRE-LOVED
ISLAND
EssenceMediacom together
with eBay refocused the
narrative on ITV’s Love Island
from new to pre-loved clothes
FITCHIX
VML, BCW and Mindshare
collaborated with Airbag
to create chicken-friendly
fitness trackers for Honest
Eggs Co.’s verifiably free
range eggs
{ACCESS}ORIES
Landor created adaptive
add-ons that can be applied
to any electric or manual
toothbrush to help the
millions of people living
with dexterity challenges
Page 52
Page 50
Page 46
Page 79
20
WPP ANNUAL REPORT 2023
OUR BUSINESS MODEL
ABOUT WPP STRATEGIC REPORT
OUR OPERATING MODEL
WPP supports its agencies, enabling them to leverage the best talent and capabilities.
This drives revenue while keeping costs down, funding further investment for the
benefit of our clients and shareholders
Reinvestment
We use our cash flow to reinvest
in the business through disciplined
capital allocation: comprising
investment in our people,
technology capabilities and
campuses, targeted acquisitions
and returns to shareholders
Page 82
Profit and cash
Our profit and cash generation
has historically been strong,
reflecting our robust business
model due to diverse revenue
streams and a flexible cost base.
We are taking steps to improve
our cash flow conversion of
headline operating profit to at
least 85% over the medium term
Page 83
T
VEST M E N
EIN
R
H
S
A
C
D
N
A
T
I
F
O
R
P
WPP HQ
The core WPP team supports our
agencies by providing functions
including finance, people, legal and
compliance, strategy, communications,
marketing and growth, operations,
sustainability and technology
WPP HQ
A
G
E
N
C
I
E
S
A robust business model
to meet client and
shareholder needs
C
L
I
E
N
T
S
COSTS
R
E
V
ENUE
Agencies
Our agencies provide a range of
services, covering creative work
and media planning and buying,
which represent 83% of revenue
less pass-through costs; public
relations (10%); and specialist
communications (7%)
Page 22
Clients
Our client portfolio is highly
diversified and covers every
business sector. Our top
30 clients account for
31% of revenue less
pass-through costs
Page 24
Costs
Most of our costs are variable in nature. 62% of
our total headline costs are staff costs; 23% are
pass-through costs; 11% are other costs of services
and general and administrative costs; and 4% are
establishment costs.1 Pass-through costs comprise
fees paid to external suppliers where they are
engaged to perform part or all of a specific project
and are charged directly to clients
1 See definitions in the Glossary on page 232
Revenue
Revenues tend to vary with the economic
environment and client demand, but our broad
geographic spread, diverse client base and exposure
to high-growth areas provide resilience in our
business. Revenues are principally derived from fixed-
fee contracts, retainer agreements and commissions
on media placements. Some engagements include
performance-related incentives
WPP ANNUAL REPORT 2023
21
STRATEGIC REPORT ABOUT WPP
OUR AGENCIES
WPP is home to a range of exceptional creative, media, public relations
and specialist agencies1
GLOBAL INTEGRATED AGENCIES
Our creative agencies bring brands and products to life through advertising campaigns, experiences, ecommerce
strategies and platforms, technology services such as CRM implementation, and more. Our media agencies connect
brands with consumers – planning, buying and activating the distribution of creative content across the full range of
media channels including digital display, search, social, TV, print and billboards
28,0002
15,000
6,000
6,000
41,000
(including the GroupM agencies below)3
8,000
6,000
10,000
600
PUBLIC RELATIONS AGENCIES
Our PR firms help clients communicate with their stakeholders, build reputation and manage risk
3,5004
3,0004
1,300
SPECIALIST AGENCIES
Our specialist agencies provide tailored services including branding and design
800
1,000
1,000
KEY
Employees
1 The agencies on this page account for around 94% of WPP employees
2 In October 2023 WPP announced the merger of Wunderman Thompson and VMLY&R to form VML, which was effective in January 2024
3 Includes employees in GroupM and its agencies: Mindshare, EssenceMediacom, Wavemaker, mSix&Partners, and other agencies not listed here
4 In January 2024 WPP announced the merger of BCW and Hill & Knowlton to create Burson, which is effective in July 2024
22
WPP ANNUAL REPORT 2023
OUR AGENCIES
ABOUT WPP STRATEGIC REPORT
Making WPP easier to manage
and simpler to navigate
We continue to make strong progress
on streamlining our business, reducing
structural complexity and merging and
combining agencies. This creates a simpler
WPP, making it easier to manage and
easier for our clients to access the best
of our expertise.
SIMPLIFYING OUR OFFER
Over the last five years we have made
great progress in removing unnecessary
complexity to transform the way we work:
we have reduced the number of individual
brands within WPP by over 300, eliminated
1,400 legal entities, decommissioned
multiple enterprise resource planning
systems, closed 840 small, inefficient offices,
and disposed of more than 90 business units,
raising more than £3.8 billion.
During 2023 we continued these initiatives.
In September we announced the merger of
Wunderman Thompson and VMLY&R to
form VML, the industry’s largest creative
company with 28,000 people across more
than 64 markets. VML unites two of the most
awarded creative agencies in the world,
each with world-class commerce,
customer experience and marketing
technology capabilities.
We also announced the further integration
of GroupM, the world’s largest media
investment business, with plans to develop
common media products, a single technology
platform, streamlined operations and shared
back-office functions across finance, IT and
HR. These common services will support the
client-facing agency brands – Wavemaker,
EssenceMediacom, Mindshare and
mSix&Partners.
As part of this simplification, all GroupM’s
media activation processes, tools and
delivery teams will be consolidated under
GroupM Nexus, our 11,500-strong media
performance organisation, and certain
individual brands will be retired including
Xasis, Finecast1 and Sightline.
We also invested in Majority, a diversity-
focused US creative agency.
In January 2024 we announced the merger
of two of our largest communications
agencies, Hill & Knowlton and BCW, to form
Burson, an industry-leading, full-service
communications agency focused on building
and protecting reputation.
We will now operate largely through six
agency networks: VML, Ogilvy, AKQA,
Hogarth, GroupM and Burson, which
represent close to 90% of our revenue less
pass-through costs.
GROUPM: THE WORLD #1 IN MEDIA
$63bn
global media billings2
These networks are helping us attract
new clients and expand existing relationships.
In December 2023 VML secured its first win
as a new agency, with Krispy Kreme’s global
creative business, and GroupM was chosen
as global media partner for Allianz.
STRENGTHENING OUR CAPABILITIES
During 2023 we continued to bolster our
agencies’ capabilities through targeted
acquisitions in specific high-growth areas,
investing net £280 million. This included
buying several companies: Goat, a London-
based, data-driven influencer marketing
agency, joined GroupM; Obviously, a
New York-based, technology-led influencer
marketing agency, joined VMLY&R (now
VML); 3K Communication, a Frankfurt-based
healthcare PR agency, joined Hill & Knowlton;
and amp, one of the world’s leading sonic
branding companies, joined Landor.
INTEGRATED AGENCY SOLUTIONS
During 2023, we continued to progress
our campus programme, bringing agencies
together to facilitate collaboration and give
clients access to the breadth and depth of
WPP talent. We added eight new campuses
during the year, taking the total to 41,
accommodating around half of our people.
We continued to build on our integrated
agency model, combining our various
agencies and capabilities into a single,
custom-made entity and point of contact
in a simple partnership format as required
by clients.
In 2023, Nestlé announced WPP OpenMind
as its sole media agency in Europe. OpenMind
is a bespoke internal team of agencies that
brings together digital-first talent with
advanced data and analytics to drive
innovation, connected through a unified
operating system that will act as a catalyst for
Nestlé’s growth across Europe. For Colgate,
our dedicated WPP@CP team provides every
element of the marketing mix, including
experience, commerce, technology and
data. And for The Coca-Cola Company, our
bespoke WPP Open X team now serves its
iconic brands through a worldwide network
of WPP agencies.
1 Finecast (which is now part of the connected TV solutions
offering inside GroupM Nexus) is committed to transparent
reporting of campaign delivery to its users. For example, in
the UK (its largest and most established market), it delivers
at least 85% of video ad impressions on television broadcaster
inventory on a campaign basis, with no more than 50% of
impressions to any one broadcaster in aggregate. This
commitment was subject to independent testing and
verification by PwC under the international assurance
standard ISRS 4400 (Revised)
2 Source: COMvergence 2022
WPP ANNUAL REPORT 2023
23
STRATEGIC REPORT ABOUT WPP
DELIVERING FOR OUR CLIENTS
We provide services to clients through integrated creative,
media, PR and specialist agencies
DIVERSIFIED CLIENT
PORTFOLIO
We serve a diversified client portfolio across the
globe and all industry sectors, including our biggest
segments: consumer packaged goods, technology
& digital, healthcare & pharma, automotive and retail
100+
markets served across
the globe
DEEP CLIENT
RELATIONSHIPS
BESPOKE CLIENT
LEADERS
Our top 100 clients are served by dedicated Global
Client Leaders, providing the breadth and depth
of WPP capability both locally and globally
Top 10
clients with decades-long
relationships, accounting
for 19% of WPP1
34
Global Client Leaders
dedicated to our top
50 clients
RECOMMENDED
BY CLIENTS
Maintained a high score of 8 out of 10 for Likelihood
to Recommend (LTR) from clients in 2023
Our client net promoter score improved to 27.5 from
24.5 in 2022
8/10
LTR score from clients
(2022: 8/10)
NEW BUSINESS
WINS
1 percentage of revenue less pass-through costs
24
WPP ANNUAL REPORT 2023
$4.5bn
net new billings
(2022: $5.9bn)
ABOUT WPP STRATEGIC REPORT
CLIENTS
Creative innovation leads to
dynamic growth for clients
Our global reach, in-country expertise
and diversified portfolio come together to
create extraordinary impact for our clients.
The world’s biggest, most demanding
companies trust WPP as their partner. In
2023, our business with our top 10 clients
grew by 7%.1 Key to this is our integrated
offer and simpler structure, helping us better
service our clients and seamlessly
collaborate across WPP as a whole.
GLOBAL REACH AND SCALE
More than any of our competitors, we have
the ability to deliver for clients around the
world. In markets like India, where we have
11,000 people, or Brazil, where we have
6,000, we have the depth and breadth of
strategic, creative and media expertise
that global brands and organisations need.
We are the world leader in media, managing
more than $60 billion in billings annually.
CLIENT SECTOR DISTRIBUTION OF
REVENUE LESS PASS-THROUGH COSTS
(2023)
CPG 27%
Tech & Digital
Services 18%
Healthcare &
Pharma 12%
Automotive 10%
Retail 9%
Telecom, Media
& Entertainment 6%
Financial Services 6%
Other 5%
Travel 4%
We work with some of the biggest brands
in the world, including three of the top four
most valuable companies (Microsoft, Apple
and Google). On average, we work across 36
markets with each of our top 10 clients.
DIVERSIFIED PORTFOLIO
Our ability to meet client needs across the
spectrum of media, creative, PR and specialist
skills, as well as serving all key industries
from tech to retail to consumer packaged
goods (CPG), means we can act as a
one-stop-shop for clients. For example,
for The Coca-Cola Company we deliver all
aspects of their marketing needs, including
PR, social media and commerce (see page 28
for more).
DEEP CLIENT RELATIONSHIPS
We have long-standing and enduring
relationships with many of our top clients.
We first partnered with Unilever in 1902, and
today we work with them across 39 markets.
Ogilvy and Unilever's Dove first worked
together 66 years ago. Since then, they have
transformed a humble soap brand into a $7.3
billion social movement focused on the
creative idea ‘Real Beauty’.
IMPROVEMENT IN CLIENT NPS
25.025.0
24.524.5
22.322.3
27.5
6.96.9
Government, Public
Sector & Non-profit 3%
1.51.5
2018
2019
2020
2021
2022
2023
1 Revenue less pass-through costs
WPP ANNUAL REPORT 2023
27%
consumer packaged goods clients,
our biggest sector, account for 27%
of revenue less pass-through costs
Over the 80 years we’ve worked with Ford,
our role has evolved from advertising slogan
writer to major creative partner, applying the
best of WPP to deliver engaging customer
experiences, strategic media planning,
buying and performance marketing
capabilities, commerce services and even
supply chain transformation.
Since the beginnings of the partnership
between EssenceMediacom and Google
in 2007, the companies have together
pioneered new ways of working, launched
new products, and grown new markets.
The relationship has pushed the envelope
of what data and creativity can do together.
BESPOKE SERVICE
Across WPP, many clients use multiple
agencies (90% of the top 50 use seven or
more). So, over the last eight years we have
developed a dedicated client practice with
the mission of accelerating WPP’s impact for
clients by bringing them the best of WPP.
Our top 50 clients (representing 38% of WPP1)
are supported by our Global Client Teams,
each fronted by a Leader focused solely on
growth for our clients, the quality of work
and talent of the team. Each team is
custom-built around meeting a client’s
specific needs and challenges, by providing
easy access to the right people and
capabilities. Our Country Leaders, who cover
the majority of our larger markets, coordinate
client services geographically. For our
multinational clients Country Leaders work
with both Global Client Leaders and local
agencies to provide services across WPP.
25
IMPROVEMENT IN CLIENT NPS202327.524.525.022.36.91.5CLIENT SECTOR DISTRIBUTION OF REVENUE LESS PASS-THROUGH COSTS(2023)
STRATEGIC REPORT ABOUT WPP
CLIENTS CONTINUED
WE HAVE INCREDIBLE
PEOPLE AT WPP DOING
EXTRAORDINARY WORK.
I’M LOOKING FORWARD
TO UNLOCKING MORE OF
OUR CAPABILITIES TO
DRIVE GROWTH FOR
OUR CLIENTS”
Jane Geraghty
Chief Client Officer, WPP
also helps our clients define and establish
the right talent, behaviours, processes and
tools within their own organisations to ensure
world-class creativity can really flourish.
NEW BUSINESS WINS
Our unique offer continues to drive
partnerships with new clients. In 2023 we
won $4.5 billion of new business billings,
including key accounts with Adobe, Allianz,
Estée Lauder, Ford, Hyatt, Krispy Kreme,
Lenovo, Lloyds Banking Group, Maruti Suzuki,
Mondelēz, Nestlé, Pernod Ricard, SC Johnson
and Verizon.
CLIENT-LED AI
We have been at the forefront of embracing
AI to drive sustained growth for our clients
for several years. Since 2021 we have been
using AI with L’Oréal to develop faster and
more effective ecommerce, leading to
double-digit improvements in ROI. We also
jointly developed an AI Lab in Paris to test
the development of L’Oréal brand-compliant
digital content.
We are leveraging partnerships with leading
players including Adobe, Google, IBM, Meta,
Microsoft and NVIDIA to co-create future
marketing models with our global clients.
This includes developing a content engine
harnessing NVIDIA Omniverse™ and AI to
enable our creative teams to produce
high-quality commercial content faster,
meaning clients can target consumers in
highly personalised and engaging ways.
To further strengthen our AI offer to clients,
in 2021 we acquired Satalia, a leading AI
technology company. Satalia acts as a hub
of AI expertise for all WPP agencies.
CREATIVE TECHNOLOGY
POWERING CLIENT WORK
The potent combination of creativity
and technology is at the heart of the
services we provide to our clients.
From advertising and PR campaigns to
commerce transformation, digital-to-
live experiences, cutting-edge data
solutions and dynamic influencer
marketing, creative technology helps
us deliver growth for clients.
COMMERCE
– A new global partnership with
Shopify pairs our network of
over 13,500 commerce experts
with Shopify’s platform, bringing
the best of its direct-to-consumer
and conversion expertise to help
ambitious brands scale faster and
reach more customers
TECHNOLOGY
– Together with Sprinklr, a leading
software customer experience
company, we are creating integrated
AI solutions to help our global
clients offer more personalised and
consistent experiences to customers
INFLUENCER MARKETING
– Acquisitions including Goat, a
data-driven influencer marketing
agency, and Obviously, a technology-
led influencer marketing agency,
are delivering unique insights and
expertise to our global clients
We’re building further bespoke services
for clients through WPP Open, our AI-
powered marketing operating system that
brings together all of WPP’s service offerings,
technology and data. Over the past year,
we’ve been deploying WPP Open to some
of our largest global clients, including L’Oréal
and Nestlé, helping them standardise and
automate their marketing operations.
SATISFIED CLIENTS
One of our proudest achievements is
seeing our client net promoter score (NPS)
grow significantly across our client base
since we began tracking in 2018 – a testament
to the work we’ve been doing to solidify our
client relationships, and a platform for our
ongoing growth.
We also maintained a high score of 8.0 out
of 10 for Likelihood to Recommend (LTR)
from clients in 2023.
The work we do for clients earns important
recognition. Unilever picked up multiple
awards at Cannes Lions this year: Dove’s
#TurnYourBack campaign by DAVID, Ogilvy
and Mindshare won a Grand Prix, and Dove’s
The Cost of Beauty by Ogilvy and Mindshare
won a Gold Lion.
TRAINING AND INVESTMENT
We continue to invest in, train and support
our Global Client Leaders, developing
their leadership skills and ensuring they
are ahead of the curve in new technological
developments. In 2023, we sponsored a
cohort of 28 leaders through a postgraduate
Diploma in AI for Business at Oxford
University’s Saïd Business School.
We also invested in developing a Creative
Excellence Framework that not only elevates
internal excellence across our agencies, but
26
WPP ANNUAL REPORT 2023
ABOUT WPP STRATEGIC REPORT
CLIENTS:
SUSTAINABILITY
We work for and with clients
to bring about change
WORK WITH INTEGRITY
We are committed to the highest standards
of honesty and integrity in our work, and will
not undertake assignments that are intended
or designed to mislead or deceive. We work
hard to maintain strong compliance in areas
including ethics, human rights, privacy and
data security. These are covered in our Code
of Business Conduct and mandatory online
ethics training. Our agencies are required to
comply with copy-checking and clearance
processes with our legal teams before
publication of their work. In 2024 we will
harness the latest in AI and technology
to help clients navigate rapidly evolving
regulations and consumer expectations
through the development of an AI
compliance tool.
WPP’s Green Claims Guide contains
principles and practical tips for making
effective green claims that are not misleading
in any way. In 2023 we launched a client
version of the guide and ran targeted training
for employees in Europe, North America and
Asia Pacific, and for clients in potentially
higher-risk and higher-emissions sectors,
including automotive, energy and
financial services.
ACCEPTING NEW ASSIGNMENTS
We have a process in place to review new
assignments and clients. Each of our agencies
has a global risk committee, chaired by its
respective CEO, to ensure that leadership
has a full understanding of the risks
across businesses and markets (see Risk
Governance Framework on page 93).
Our clients are navigating a complex
sustainability landscape as investors,
consumers and employees alike
increasingly look to brands to drive
meaningful change.
At the same time, consumer research by
Kantar found that while 97% of people say
they want to live a more sustainable life, only
13% are actively changing their behaviours
to do so. Closing this gap could open up new
business opportunities of nearly $1 trillion for
companies in the consumer packaged goods
sector alone.1
BRAND-LED SUSTAINABILITY
We help clients deliver sustainability work
that is creative, credible and actionable –
whether through strategic expertise,
low-carbon production and media
distribution, products and services that
are sustainable or inclusive by design,
or work that drives consumer behaviour
towards a sustainable future.
In 2023, award-winning work from DAVID
(part of Ogilvy) with Corona helped create
a new source of income for farmers in China
through increased lime cultivation (see page
42). As a result, Corona sales rose 29%, while
farmers’ incomes rose 21%. The campaign
won a Titanium award at Cannes Lions 2023.
Landor’s brand-led sustainability model
resulted in {access}ories, a new standard
for accessible design, using innovation in
technology and manufacturing to make oral
health accessible to all. This one-of-a-kind
solution, whose business potential is
estimated at $620 million,2 has been
recognised by Dezeen, Fast Company and
Design Week, and named one of the Best
Inventions of 2023 by TIME Magazine.
1 Kantar, Who Cares, Who Does, 2023
2 Source: Landor analytics
WPP ANNUAL REPORT 2023
WPP agencies are required to follow
our Assignment Acceptance Policy and
Framework when taking on new business.
This applies to all client sectors and provides
guidance on how to conduct additional
due diligence in relation to clients and any
work they are asked to undertake. It requires
various categories of work to be considered
by our agencies’ risk committees, or
escalated to WPP for review.
AD NET ZERO AWARDS
We were proud to win six awards,
including both Grands Prix, at the
2023 Campaign Ad Net Zero Awards,
which recognise creative work and
organisations driving behaviour change
for a sustainable future. The Grands Prix
were won by EssenceMediacom’s
Pre-Loved Island for eBay, and Grey
Colombia’s Life Extending Stickers for
Makro; both were recognised for their
innovative approach and behaviour-
changing results.
SUSTAINABLE INNOVATION
We continue to innovate to support clients
as they work towards their own sustainability
commitments and respond to evolving
consumer and stakeholder expectations.
For example, GroupM’s new omnichannel
media carbon calculator enables clients,
for the first time, to factor channel-level
carbon emissions data into their media
planning. In 2023, we measured the footprint
of around 2,800 campaigns. Our client
coalition of leading advertisers, worth
$10 billion in global advertising investment, is
driving support for greater transparency and
standardisation of emissions measurement.
See more in the Clients section of our
2023 Sustainability Report
27
STRATEGIC REPORT ABOUT WPP
WPP + THE COCA-COLA COMPANY
TRANSFORMING A MARKETING ICON
Our brief from The Coca-Cola Company is
simple: to transform its marketing and be
a catalyst for growth. So, we created WPP
Open X, the bespoke global agency model
integrated at its core and unprecedented
in its scale. We have over 5,000 people from
our agencies worldwide working across
200 master brands in more than 200 countries
and territories. Entering the third year of our
global partnership, our innovative model is
bringing together all our marketing services
across WPP, from creative and production
to media, experience, social, PR, influencer,
shopper, design, data and technology. We’re
transforming The Coca-Cola Company’s
marketing at a truly global scale.
We have established new ways of working
in an always-on world and shown how we
can optimise in real-time and in locally
relevant ways. We have reimagined how
The Coca-Cola Company approaches data
and technology, embraces AI and engages
across music, sports, gaming and other
passion-driven occasions for brands
including Coca-Cola, Fanta and Sprite.
We are generating powerful ideas that are
reaching the next generation of consumers
from all around the world. Tapping into
passions and occasions, we have worked
with The Coca-Cola Company to create
engagement platforms such as Coca-Cola
Foodmarks – creating the first-ever food
‘landmarks’ across the globe inspired
by cultural moments, movies and must-
visit destinations.
We are creating modern marketing
teams and integrating in entirely new
ways and across agencies, geographies
and capabilities. Through Studio X, the
creative execution arm of WPP Open X,
we are working with greater speed and
agility and delivering best-in-class creative,
media, data, social and production as one
integrated, globally connected team.
SHOPPER
TECHNOLOGY
PRODUCTION
INFLUENCER
MEDIA
SOCIAL
CREATIVE,
EXPERIENCE
& DESIGN
PR
THE COCA-COLA COMPANY
CREATIVE AWARDS 2023
8 AWARDS
CANNES LIONS
2 SILVER & 2 BRONZE
EFFIES
1 SILVER
CLIO
28
WPP ANNUAL REPORT 2023
DATA
COMMERCE
200
brands
9
regions
200
countries
STRATEGIC
PARTNERSHIP
WITH
ABOUT WPP STRATEGIC REPORT
WPP ANNUAL REPORT 2023
29
STRATEGIC REPORT
WPP
AT WORK
Our work showcases the very best
of human creativity, enhanced by AI,
data and technology
In this section
Awards and recognition
Creativity
AI, data and technology
AI and data ethics, privacy and security
People
Our work
31
32
33
36
37
40
30
WPP ANNUAL REPORT 2023
STRATEGIC REPORT
AWARDS AND RECOGNITION
#1 Creative 100,
#1 Effective 100, #1 Media 100
WARC 2023
Most Effective Communications
Company in the World
Effie Awards 2023
Most Awarded Company
World Creative Rankings
The Drum Awards 2023
CREATIVE
GLOBAL AGENCY OF THE YEAR
The Drum Awards
2023
#1 CREATIVE & #1 EFFECTIVE
GLOBAL AGENCY NETWORK
WARC 2023
81 AGENCY OF THE
YEAR AWARDS
since 1999
BEST COMMERCIAL CATEGORY
New York Emmy Awards
2023
MEDIA
#1 MEDIA NETWORK
& #1 MEDIA AGENCY
WARC 2023
#1 MEDIA NETWORK:
BUSINESS WINS & RETENTIONS
COMvergence 2023
MEDIA NETWORK
OF THE YEAR
Cannes Lions 2023
BEST SOCIAL STRATEGY
Campaign Media Awards
2023
PR
7 AWARDS, INCLUDING 1 GOLD
Cannes Lions
2023
LARGE REGIONAL CONSULTANCY
OF THE YEAR
PRovoke SABRE Awards, EMEA, 2023
RANKED TOP IN CRISIS & RISK MANAGEMENT,
LITIGATION AND PUBLIC AFFAIRS
Chambers and Partners 2023
SPECIALIST AGENCIES
5 PENCILS
D&AD Awards
2023
SILVER LION FOR
INNOVATION
Cannes Lions
2023
MOST INNOVATIVE HEALTH & WELLNESS
ADVERTISING AGENCY – USA
AI Business Excellence Awards 2023
WPP ANNUAL REPORT 2023
31
STRATEGIC REPORT WPP AT WORK
CREATIVITY
The most powerful force
in our industry
AT WPP, CREATIVITY
DRIVES INNOVATION,
INSPIRES PEOPLE
AND LEADS TO
TRANSFORMATIVE
GROWTH”
Rob Reilly
Chief Creative Officer, WPP
Creativity is at the heart of everything
we do. From the first work for Unilever
in 1902 to an unprecedented number
of commercials at the 2024 Super Bowl,
our creative drive remains the same:
harness the incredible power of ideas
to connect brands with people and
culture to grow our clients’ businesses.
Today, we bring our transformative creativity
to life in many different ways: from classic
brand campaigns to customer experience,
commerce, influencer marketing and much
more. We invest in companies that see what’s
possible in these fast-evolving disciplines.
For example, our 2023 acquisition of amp
takes sonic branding to the next level,
while the addition of Goat and Obviously
will help us lead in influencer marketing.
BEYOND ADVERTISING
Much of our work breaks new ground,
redefining what is understood by the term
‘advertising’. Lu from Magalu, brand icon for
Brazil’s largest retailer, is the world’s biggest
virtual influencer. Creatively re-imagined by
Ogilvy, Lu crossed over into real life when
she created content for some of the world’s
biggest brands, including Adidas, MAC and
Ray-Ban. She has over 30 million followers
on social media.
Also in Brazil, VMLY&R worked with Telefonica
Vivo and Motorola to revise the famous City
of God film, bringing together the original
director, cast and writers in a sequel where
the main character is now a photojournalist
using Motorola’s newest camera. With over
one million hours of viewing and record
sales, the film was commissioned as a new
series by HBO Max.
1
In a Forbes article, work from WPP agencies made up four
of the top five most effective Super Bowl commercials
32
WPP ANNUAL REPORT 2023
In 2023, EssenceMediacom and TUI launched
The World Cook, a competitive international
cooking series streamed on Amazon Prime
and fronted by celebrities Fred Sirieix and
Emma Willis, which resulted in a 10% increase
in purchase intent.
And Hogarth and Makerhouse’s production
work for Ford supported the expansion
of the all-electric Mach-E BlueCruise into
21 markets. By using virtual production,
the agencies were able to increase delivery
of assets without the time, expense or carbon
cost of traditional production methods.
POWERED BY TECHNOLOGY
We believe that AI will fuel a new era of
creativity. Our partnerships with leading
companies driving technology trends
worldwide give our clients a unique creative
advantage. For example, utilising NVIDIA’s AI
engine, we connect an ecosystem of design,
manufacturing and creative tools to help
our artists and designers simply and
effectively integrate 3D content creation
with generative AI. The system is already
revolutionising the production of high-
quality commercial content for clients.
We built the Ford Configurator for Ford,
a powerful AI database containing millions
of pieces of content, allowing for
comprehensive creative personalisation and
customer engagement. Meanwhile, our use
of Google’s generative AI means we can
fast-track the creative process by rapidly
testing the effectiveness of campaigns and
concepts that help build better connections
between our clients and their customers.
SUPERBOWL LVIII
There’s no bigger platform on the world
stage for creative brilliance than the
Super Bowl. 2024’s Big Game was the
12
creative TV spots
19
media activations
4 out of top 5 ads
Forbes1
most-watched event on US TV since the
moon landing, with 123 million people
viewing across all platforms.
We broke records of our own with an
unprecedented number of spots and other
activations. From TV commercials and media
buys to multi-media campaigns, PR strategies
and more, the creativity and innovation of
our people, agencies and clients were on
display for millions to enjoy.
GLOBAL RECOGNITION
Our ability to deliver creative transformation
on a global scale was underlined in 2023 as
we celebrated a Cannes Lions Grand Prix win
on every continent. Our agencies won a total
of 165 Lions: one Titanium, five Grands Prix,
24 Gold, 57 Silver and 78 Bronze.
We were also proud to be named the most
awarded company in The Drum’s World
Creative Rankings in 2023, while VML and
Ogilvy were among the top three most
awarded agency networks.
WPP AT WORK STRATEGIC REPORT
PLATFORM
– invest in and expand WPP Open,
bringing together all service
offerings, technology (both
proprietary and from our partners)
and data in one AI-driven marketing
operating system
AI, DATA AND TECHNOLOGY
Our AI, data and technology
strategy has five pillars
DATA
– collect and use data
responsibly and innovatively
– leverage WPP-owned data plus
client and contextual data to
improve performance for clients
– safeguard client information,
brand safety, copyright
and ethics
AI
– capitalise on leadership
in AI, investing in
long-term growth
– focus on key acquisitions
and partnerships
PARTNERSHIPS
– build ground-breaking
partnerships with the world’s
leading tech companies
SKILLS
– empower our people to lead
technological innovation
50k
Future Readiness
Academies lessons in 2023
WPP ANNUAL REPORT 2023
33
STRATEGIC REPORT WPP AT WORK
AI, DATA AND TECHNOLOGY
The backbone of our success
At the core of WPP’s offer are exceptional
technological capabilities and partnerships
with the world’s most influential tech
players, a combination that helps us
meet the needs of modern marketers.
We have been investing in AI capability for
almost a decade. We have done so because
it is fundamental to our future, and the
future of our industry. We believe AI has
the power to transform creativity, elevating
our people’s ideas and abilities in ways
never seen before.
LEADING THE FIELD
In 2023 we capitalised on our sector lead
through new partnerships with innovators
including NVIDIA and Google. Alongside
these relationships, continuous investment in
client-facing technology such as WPP Open
and our data product, service and technology
company, Choreograph, helps us drive results
for some of the world’s biggest brands.
By delivering on the five pillars of our
technology strategy – platform, AI, data,
skills and partnerships – we achieve
exceptional outcomes for our clients,
powered by knowledge, talent and
cutting-edge technology.
WPP OPEN
Our AI-powered marketing operating
system, WPP Open, shares the latest
innovations across all of WPP. WPP Open
is completely adaptive and built around
client needs, meaning we can unify the best
technology from every agency and every
partner in a single system, and deliver it in a
way that is uniquely optimised for the client.
WPP Open was key to Nestlé’s decision
in 2023 to appoint WPP as its sole European
media partner. WPP OpenMind – built for
Nestlé on the WPP Open platform – will
coordinate Europe-wide marketing
communications for hundreds of brands,
including KitKat and Nescafé.
INVESTMENTS IN AI
We have long believed in the extraordinary
potential of AI. Back in 2014, our AI technology
company Satalia built an AI-powered system
for Tesco to optimise online food shopping
delivery routes. An ongoing annual
investment of £250 million in data and
technology to support our AI strategy
is included in our 2024 financial plans.
1.5 million
large language prompts
1.6 million
image prompts
Over 30,000 of our people
access WPP Open
In 2023 we launched WPP Open 2.0 and
introduced WPP Brains, bespoke AI models
trained in specific competencies to help
provide highly targeted solutions for clients.
AI WILL BE FUNDAMENTAL
TO WPP’S FUTURE
SUCCESS, AND WE
ARE COMMITTED TO
EMBRACING IT TO DRIVE
LONG-TERM GROWTH
AND VALUE”
Stephan Pretorius
Chief Technology Officer, WPP
We have four specialised WPP Brains:
– WPP Brand Brain: brand guidelines and
tone of voice
– WPP Audience Brain: specific audience
groups, mindsets and demographic data
– WPP Performance Brain: business and
channel performance data
– WPP Channel Brain: performance and
variation of channels
See page 39 to find out how our people
are using WPP Open to access the full range
of AI capabilities
DOING DATA DIFFERENTLY
Data is a critical element of modern
marketing, and is set to become even more
important as its symbiotic relationship with
AI develops. We already know data can help
drive great creativity, elevating campaigns
with rich insights on human behaviour.
Over the next few years, however, the data
landscape is set to evolve rapidly as the end
of third-party cookies, changing data privacy
laws and increased regulation come into force.
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WPP ANNUAL REPORT 2023
AI, DATA AND TECHNOLOGY
WPP AT WORK STRATEGIC REPORT
WPP-OWNED DATA
16bn+
data points across 63,000 brands
Choreograph takes a purposeful approach
to data. Utilising WPP-owned data points
and combining them with public data,
contextual data (for example based on
location), client data and data from our
partnerships with Amazon, Google, Spotify
and many others, Choreograph offers instant
and actionable insights that responsibly
inform brand campaigns for media planning,
content and activation.
Data products and technologies
Data consulting services
1,200 people
16 billion+ owned data points
across 63,000 brands
300 million profiles in the US with
10,000 unique attributes
Ready for the post-cookie world
SKILLS DEVELOPMENT
We dedicate considerable time and
resources to providing our people – and
emerging talent – with the tools and skills
to excel in AI. In 2023, WPP people earned
more than 34,000 accreditations and
certifications from leading technology
partners including Adobe, Google, Meta,
Microsoft and TikTok.
New online learning programmes as part of
our Future Readiness Academies included a
Demystifying Data & AI Academy, developed
by WPP experts in partnership with Circus
Street and the Open Data Institute.
We also set up and run Creative Tech
Apprenticeships and a Creative Data School,
aimed at educating and inspiring future
champions of AI. Since its launch, the
School has provided technical training
to over 6,000 young people across the UK.
In 2023, we sponsored a cohort of senior
WPP leaders through a postgraduate
Diploma in AI for Business at Oxford
University’s Saïd Business School.
OPTIMISED PARTNER PORTFOLIO
Much of our success in delivering AI
innovations is a result of collaboration with
leading companies driving technology
trends worldwide.
We have strategic partnerships with 34 of
the world's leading technology companies,
helping us provide cutting-edge solutions
to clients.
ANNUAL INVESTMENT
£250m
in technology, data and AI
Each partnership has a joint business plan
covering product development, preferential
access to data and technology, training
programmes and joint go-to-market
approaches.
These partnerships help us lead the industry
on the issues that matter to our clients. For
example, in November 2023, in partnership
with Google Chrome, GroupM announced
the launch of the first and largest post-
cookie technology readiness programme.
This global initiative brings together GroupM
clients to accelerate their understanding of
Google Privacy Sandbox APIs and their use in
advertising. Clients can assess and improve
their post-third-party cookie deprecation
readiness in a real-life environment, using
their own products and audiences.
We also partnered with NVIDIA to build
a generative AI-enabled content engine for
digital advertising. This allows our artists and
designers to integrate 3D content creation
with generative AI, enabling clients to reach
consumers in highly personalised and
engaging ways.
TECHNOLOGY PARTNERS
34
including Adobe, Amazon, Google,
IBM, Meta, Microsoft, NVIDIA, Salesforce
and TikTok
And we collaborated with Sprinklr, a leading
company in enterprise software designed
to improve customer experiences, on a new
offering, CX Live AI. This first-of-its-kind
offering will connect Sprinklr’s AI+ platform
with WPP’s own AI resources, helping our
teams create optimised content that reaches
the right audiences.
WPP ANNUAL REPORT 2023
35
STRATEGIC REPORT WPP AT WORK
AI AND DATA ETHICS,
PRIVACY AND SECURITY
A strong approach to governance,
privacy and security
A transparent and accountable approach
to data, privacy and AI is important for
clients, consumers and WPP. We go beyond
the legal minimum to maintain the highest
ethical standards.
OUR APPROACH TO DATA
We have well-established and robust
governance in place for data privacy and
risk management. The end of third-party
cookies, evolving data privacy laws and
increased regulation mean adaptation and
agility are a key tenet of our approach.
Advertising should respect privacy while
delivering exceptional value for consumers
and advertisers. That’s why Choreograph,
our data product, service and technology
company, was specifically designed to help
clients get more out of their data while
taking an ethical approach.
In 2023 GroupM, in partnership with
Google Chrome, launched the first global
post-cookie readiness programme, helping
create technologies to reduce tracking
and protect people’s online privacy.
to understand, monitor and evaluate this
evolving technology on an ongoing basis.
USING AI SAFELY
We are dedicated to employing systems
that align with fundamental principles in
the responsible development and use of AI.
All AI models and platforms used by WPP
are reviewed by a multidisciplinary team
to assess them from a legal, ethical and
technical perspective. We have been training
WPP people since 2019 to ensure they use
AI responsibly and effectively, taking into
account the use of personal data, privacy
and intellectual property (IP) laws, and
confidentiality.
In 2023 we launched our AI Toolkit, offering
guidance to all WPP agencies on topics
including IP and deep fakes. We updated
our acceptable use and data ethics policies
to supplement the toolkit.
We also published our Generative AI
Principles, acknowledging our responsibility
AI GOVERNANCE
We established an AI Governance Committee
to oversee the application, adoption and
risks associated with AI across WPP. This
Committee includes the CEO, CTO and Chief
Privacy Officer and other senior stakeholders
in the business with responsibility for the safe
and responsible use of AI within the Company.
The Committee has carried out a risk
assessment, which can be found on page 99.
WORKING WITH INDUSTRY
WPP welcomes government guidance and
regulatory frameworks that set guardrails
for responsible stewardship of AI, data and
technology, while recognising the need to
highlight the possibilities they offer. Through
active engagement with industry bodies
including the Advertising Association in the
UK and the Network Advertising Initiative in
the US, we are able to monitor and influence
the changing regulatory landscape.
PRIVACY AND SECURITY
We have strong systems in place to ensure
privacy and security for ourselves, our
clients and our suppliers.
– The Risk Subcommittee regularly reviews
and monitors our data ethics, privacy
and security risk, as well as our approach
to regulatory and legal compliance
– Our Chief Privacy Officer leads our work
on privacy, supported by our Data
Protection Officer. Alongside the WPP
privacy team, they provide practical
support to our agencies, promote best
practices and ensure that privacy risks
are well understood
– The WPP Data Privacy and Security
Charter (reviewed and updated
throughout the year) sets out core
principles for responsible data
management through our Data Code
of Conduct, our technology, privacy
and social media policies, and our
security standards
– Safer Data training, which includes
content on data protection, security
and privacy, must be completed by all
new and current employees, as well
as consultants. Throughout the year,
agency and subject matter-specific
training is provided across WPP.
This has included sessions focused
on new regulations such as the Digital
Personal Data Protection Act in India
– Our privacy teams establish direct
relationships with their client
counterparts to ensure engagement and
alignment, as well as organising training
across WPP and client teams
– Our annual Data Health Checker provides
insight into how data is used, stored and
transferred and helps us to identify any
parts of the business that need further
support. In 2023, the average risk score
was 1.6 (2022: 1.6), where five indicates
maximum risk
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WPP ANNUAL REPORT 2023
WPP AT WORK STRATEGIC REPORT
PEOPLE
Our lifeblood
Put simply, our people are the key to our
success. That’s why we have bold objectives
to attract, engage and develop the best
in the industry, with a strong emphasis
on diversity, equity and inclusion.
UNLOCK LONG-TERM CAREERS
We’re committed to unlocking opportunities
for our people both in their own agencies
and across the global network, so they can
pursue exciting careers within WPP and
benefit from our global scale and diverse
capabilities.
We offer a number of ways for people
to learn, develop and thrive:
– Throughout 2023, WPP employees
were able to earn more than 34,000
accreditations and certifications (2022:
33,000+) from leading technology
partners including Adobe, Google,
Meta, Microsoft and TikTok
– We continued to invest in on-demand
online learning, expanding our Future
Readiness Academies to include
a Demystifying Data & AI Academy,
developed by WPP experts in partnership
with Circus Street and the Open Data
Institute. To date, 12,500 employees
around the world have completed nearly
50,000 lessons
– We piloted a new AI-driven platform,
Career Pathways, offering users
personalised guidance, recommending
career journeys and development
activities unique to them. We piloted it
in Wunderman Thompson North America,
where 2,500 people signed up in the first
three months
– We rolled out new tools and technology
to facilitate regular ‘career conversations’
throughout the organisation, enabling our
people to articulate their career aspirations,
goals and challenges, while managers
offer guidance, feedback and support.
These serve as a catalyst for building a
resilient and thriving workforce, promoting
a culture of continuous learning and
development
BUILD STRONG SUCCESSION
We continue to invest in our leadership
through global programmes including
Maestro, an immersive programme to help
senior leaders hone their skills. We also run
Walk the Talk, which has helped more than
3,000 of our female leaders to develop their
confidence and accelerate their careers.
We ensure our leaders have opportunities
across the network and across disciplines,
providing experiences that build the
professional skills and personal qualities
needed to become excellent leaders.
In 2023, 80 senior leaders completed an
extensive assessment and development
programme, yielding data-driven insights
into motivation for future roles, individual
and team strengths and areas for
development. The findings informed the
framework for succession planning for senior
executives and other key roles.
ATTRACT AND RETAIN TALENT
We are committed to attracting and
retaining the brightest and best in our
industry. In 2023 we appointed Jane
Geraghty as Chief Client Officer. Jane was
previously CEO at Landor, and brings with
her 30 years of international marketing,
brand and commerce experience.
AS OUR MOST VALUABLE
ASSET, INVESTING IN
OUR PEOPLE IS KEY
TO OUR SUCCESS”
Lindsay Pattison
Chief People Officer, WPP
Lindsay Pattison, previously Chief Client
Officer, was appointed Chief People Officer
and Andrew Scott, Chief Operating Officer,
was appointed an Executive Director of
the Board. Corey duBrowa, formerly Vice
President of Global Communications and
Public Affairs at Google and Alphabet, was
announced as CEO of BCW (now Burson)
in May.
COMMON PLATFORMS FOR
OUR PEOPLE
We have made significant progress over
the past year on our core HR systems, with
a consistent global design that works across
agencies and for all employees. This will
enable us to report globally and work more
efficiently. We are also introducing intuitive
self-service tools and cutting-edge people
management software that leverages AI to
match employee skills to client needs and
career progression aspirations.
We’re inviting all our people to join WPP
Open, our AI-powered marketing operating
system that provides access to a set of
best-in-class solutions and enables greater
collaboration across agencies for our clients’
benefit. See page 39 for more on this.
WPP ANNUAL REPORT 2023
37
STRATEGIC REPORT WPP AT WORK
PEOPLE CONTINUED
LEARNING AND DEVELOPMENT
£27.9m
invested in 2023 (2022: £31.3 million)
SUPPORT DIVERSE TALENT
An important objective is to create a
workplace that is reflective of the diverse
communities in which we live and work.
We believe diversity, in all forms, fuels
creativity and business performance.
We are committed to ensuring equitable
opportunity across WPP and, within that,
the aim of reaching gender parity at all
levels of our business.
In 2023, 53% of our senior managers
were women, and 22% of senior and
executive managers in the US, our largest
market, were non-white.
During the year we were proud to invest
in Majority, a US-based creative agency
with award-winning marketing capabilities
that promotes multicultural talent.
To diversify our talent pipeline, we removed
barriers such as the need for college degrees
from some roles, and we continue to invest
in partnerships to ensure we’re hiring from
a diverse talent pool. We helped to expand
One School in the UK, encouraging Black
creatives into the industry, and continue to
support Visible Start, which provides midlife
women with the skills they need to (re)enter
the advertising world. We also launched our
nine-month Creative Tech Apprenticeship
programme in the UK, providing an
opportunity to the next generation of
creatives to learn how to code, build game
engines, and explore virtual production,
future machines and generative AI.
2024 DIVERSITY LEADER
We were proud to be placed 158 out
of 850 in the Financial Times 2024
Diversity Leaders ranking. This is
particularly significant as 70% of
scores come from employee surveys.
PROMOTE INCLUSION
In order to promote inclusion we launched
Inclusion as a Skill, a global programme
for everyone to learn and practise the skills
needed to grow as inclusive leaders, and
set up global, company-wide Employee
Community Groups to provide support
for our people with a shared identity
or experience, spanning groups including
LGBTQ+, parents and caregivers,
neurodiversity and disability.
We invest in programmes that provide
these groups with tools to support their
career growth, personal development and
wellbeing, for example Summit, for mid-level
Black women in Brazil. And we signed
up as founding member to Neurodiversity
in Business, to improve the wellbeing of
neurodivergent people within our Company,
our industry and beyond.
We also continue to develop our benefits
programmes to make them more inclusive,
including enhanced fertility, surrogacy and
adoption cover in the US and improvements
to LGBTQ+ partner and spouse cover in China,
India, Philippines, Singapore and Thailand.
22%
of senior and executive managers in the US,
our largest market, are non-white
INDUSTRY RECOGNITION
WPP was named once again in the Bloomberg
Gender-Equality Index, and a record-breaking
22 WPP leaders were included in Involve’s
2023 Heroes Women Role Model lists. Eleven
WPP leaders were recognised in the 2023
Empower Role Model Lists, celebrating
leaders championing inclusion for people
of colour within global businesses.
The&Partnership and its client, skincare
brand E45, won Channel 4’s 2023 Diversity
in Advertising Award, reflecting the team’s
commitment to authentically representing
LGBTQ+ communities in TV advertising.
OUTSTANDING DISABILITY
NETWORK OF THE YEAR
Wavemaker’s Enable community won
Outstanding Disability Network of the
Year at the 2023 European Diversity
Awards, in recognition of its mission
to create an equitable working
environment for everyone, irrespective
of their neurological, psychological or
physical differences.
EMPLOYEE ENGAGEMENT
A record 83,241 employees took part in
our annual All In staff engagement survey
(an increase of 14% on 2022) and our listening
team ensured every agency had support
to analyse and act on its own results.
The results revealed that people care most
about career growth, feeling valued and
supported by managers, and contributing
to the overall company vision. They also
showed our people would like to see a
renewed commitment to their mental
health and wellbeing.
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WPP ANNUAL REPORT 2023
PEOPLE
WPP AT WORK STRATEGIC REPORT
That’s why we published a new global
mental health policy outlining the steps
we will take if anyone has a mental health
concern, to make sure we listen without
judgement, and do our best to support
each and every individual. We also offered
all employees access to a free one-year
Headspace app membership.
We continue to invest in our Mental
Health Allies programme in the UK, US
and Singapore, which encourages open
conversations about mental health in the
workplace and guides people to support.
Our Employee Assistance Programme
offers all employees and eligible family
members 24/7 access to free confidential
counselling and support, as well as resources
on managing stress, dealing with loss and
referrals to local financial or legal help.
FLEXIBLE WORKING
Over the past few years, due to
extraordinary events, we’ve learned to be
much more flexible in where we do our jobs.
We've found it can help us deliver great
outcomes for ourselves and our business.
At the same time, our success continues
to rely on collaboration, culture and talent
development, which thrive when we spend
time together in person.
We have therefore adopted a hybrid
approach, with people based largely in one of
our 41 campuses around the world, alongside
a continued element of remote working.
LOOKING AHEAD TO AN
AI-ENHANCED FUTURE
Our AI-powered marketing operating
system, WPP Open, is already being
used by more than 30,000 people
across WPP.
Within WPP Open is a variety of
studios, offering our people a range
of AI-powered capabilities – workflows,
tools and prompt engineering –
across creative, production, media,
commerce, experience and PR.
WPP Brains are bespoke models trained
on individual brands’ tone of voice and
brand elements. They help our people
produce brand-specific, accurate,
differentiated content at every step
of the creative journey.
The organic adoption of WPP Open
across the organisation is a strong
indicator that our people’s curiosity and
creativity, coupled with the potential of
AI, will continue to drive extraordinary
work for clients in the future.
See more in the People section of our
2023 Sustainability Report
GENDER DIVERSITY
Board and executive1
41% (1,471)
59% (2,082)
2023
40% (1,432)
60% (2,121)
2022
Senior managers
53% (10,768)
47% (9,404)
2023
54% (11,401)
46% (9,781)
2022
All other employees
58% (51,039)
42% (37,567)
2023
57% (50,979)
43% (38,237)
2022
Total employees
56% (63,277)
44% (49,053)
2023
56% (63,812)
44% (50,138)
2022
Female
Male
Gender diversity figures exclude a small proportion
where gender is unknown or undisclosed. In 2023,
this accounted for less than 1% of total headcount
AGE DIVERSITY
19 or under <1%
20-29 33%
30-39 39%
40-49 19%
50-59 8%
60 and over <2%
Age diversity figure excludes a small proportion where
age is unknown or undisclosed. In 2023, this accounted
for less than 1% of headcount
1 Executive leadership roles are defined as the agency
board and executive leadership population as reported
through WPP’s financial reporting system
Indicates the selected metrics have been subject
to independent limited assurance procedures by
PricewaterhouseCoopers for the year ending
31 December 2023. For PwC’s 2023 Limited Assurance
Report and the WPP Sustainability Reporting Criteria 2023,
see wpp.com/sustainabilityreport2023
WPP ANNUAL REPORT 2023
39
2023GENDER DIVERSITY59% (2,082)47% (9,404)42% (37,567)44% (49,053)202320232023 Female Male60% (2,121)46% (9,781)43% (38,237)44% (50,138)AGE DIVERSITY
STRATEGIC REPORT WPP AT WORK
OUR
WORK
Our integrated offer across creative, media,
production and PR delivers exceptional results
for our clients
The next 12 pages showcase some of our
award-winning campaigns from 2023
40
WPP ANNUAL REPORT 2023
CASE STUDIES
WPP AT WORK STRATEGIC REPORT
AB INBEV: CORONA EXTRA LIME
Creating a beer that bears fruit for Chinese farmers
42
DOVE: TURN YOUR BACK
Challenging toxic beauty standards online
44
HONEST EGGS: FITCHIX
Changing the egg industry one step at a time
46
HUNGERSTATION: SUBCONSCIOUS ORDER
Using AI to tap into our subliminal desires
48
EBAY: PRE-LOVED ISLAND
An innovative partnership to promote second-hand fashion
50
LOUIS VUITTON: LV APP
A digital touchpoint crafted to elevate the client experience
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WPP ANNUAL REPORT 2023
41
STRATEGIC REPORT WPP AT WORK
CASE STUDIES
CORONA
EXTRA LIME
A beer that bears fruit
OFFER
COMMUNICATIONS
PR
AGENCY
DAVID, COLOMBIA
CLIENT
AB INBEV
THE QUESTION
The best way to enjoy Corona is with lime.
While China drinks the most beer in the
world, not many local farmers were
growing limes. So, Corona should just
import limes, right?
THE ANSWER
There was a better answer. Instead of
importing, Corona and Ogilvy's DAVID
thought – why not start a new business?
So Corona partnered with local governments
and industry leaders to provide local farmers
with the knowledge and tools they needed
to grow lots of high-quality limes. It’s the
biggest commitment the company has
ever made in a single market.
After a thousand days of learning, growing
and making, Corona Extra Lime – made
exclusively with Chinese-grown limes – hit
the shelves. Corona’s lime supply problem
was solved, while local farmers had a new
economic opportunity.
THE IMPACT
Corona beer sales were boosted by 29%,
while farmers’ incomes rose 21%. Profits are
being reinvested in farming, and Corona’s
commitment in 2024 is to increase farmers’
incomes by 30%.
2m
limes sold in first year
1bn+
impressions
$11m+
earned media
Awards
Titanium
Cannes Lions 2023
Scan the
QR code
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CASE STUDIES
WPP AT WORK STRATEGIC REPORT
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STRATEGIC REPORT WPP AT WORK
CASE STUDIES
TURN YOUR
BACK
Challenging toxic beauty
standards online
OFFER
PR
INFLUENCER
AGENCY
OGILVY, DAVID & MINDSHARE, UK
CLIENT
DOVE (UNILEVER)
THE QUESTION
In March 2023, a new AI-based filter, Bold
Glamour, shocked the world. The filter
presented an 'ideal' of beauty, and looked
very real. Almost too real. Dove has always
fought against damaging and unrealistic
expectations of beauty. Along with Ogilvy
and DAVID, Dove wanted to encourage
people to #TurnYourBack on the Bold
Glamour filter as part of its
#NoDigitalDistortion mission.
THE ANSWER
An influencer-led campaign kicked off with
creators sharing their feelings on the filter
and the damage it can do to people's
perceptions and expectations of beauty.
As word spread, thousands of women
around the world started to turn their
backs on toxic beauty. The campaign
made it to the Oscars, where entertainment
host Nischelle Turner and actor Gabrielle
Union bravely used the forum to show their
support. What started on social media
quickly became a global 360o campaign.
THE IMPACT
Over one billion impressions, and 54 million
views in the first 72 hours.
94%
positive sentiment
in key markets
Awards
Grand Prix
Cannes Lions 2023
Scan the
QR code
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CASE STUDIES
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STRATEGIC REPORT WPP AT WORK
CASE STUDIES
FITCHIX
Changing the egg industry
one step at a time
OFFER
BRAND EXPERIENCE
CUSTOMER EXPERIENCE
AGENCY
VMLY&R (VML), BCW (BURSON) &
MINDSHARE, AUSTRALIA
CLIENT
HONEST EGGS CO.
THE QUESTION
Australians eat 6.6 billion eggs a year, almost
half marked ‘free range’. Consumers believe
this is an ethical choice. But ‘free range’ just
means the birds are not caged. Honest Eggs
Co. treats its animals fairly, with fewer than
30 chickens per hectare of farmland. Its quality
product stands apart from the competition.
But how to show consumers that?
THE ANSWER
FitChix. Fitbits for chickens. VMLY&R
collaborated with Airbag to create chicken-
friendly fitness trackers that wouldn’t impose
on the day-to-day life of the birds. The
resulting step counts were printed on the
company’s eggs, showing how healthy and
free their birds are.
To create awareness and drive traffic to
stores, VMLY&R, BCW and Mindshare ran an
integrated campaign across social, outdoor
and earned media. They also made the device
open source so every honest egg farmer
in the world could use it.
THE IMPACT
Happy chickens. And purchase orders from
existing stockists increased 40% in the first
three weeks.
222
new stockist
applications
25%
sales revenue
increase
493%
increase in online
conversions
Awards
Gold
Cannes Lions 2023
Scan the
QR code
46
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CASE STUDIES
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STRATEGIC REPORT WPP AT WORK
CASE STUDIES
HUNGERSTATION
Your subconscious knows better
OFFER
AI
DIGITAL
PR
AGENCY
WUNDERMAN THOMPSON (VML),
SAUDI ARABIA
CLIENT
HUNGERSTATION
THE QUESTION
They say the eyes eat before the brain can
taste. But we waste on average 132 hours a
year scrolling through countless online menus.
The result? Too much choice. What if
Wunderman Thompson and HungerStation,
Saudi Arabia’s leading food delivery app,
could help people find exactly what they’re
looking for?
THE ANSWER
Introducing the Subconscious Order:
a new feature on the HungerStation app that
recognises when a person has been hopelessly
scrolling and provides an innovative tool to
help them decide what they really crave.
As a variety of delicious cuisines is displayed,
a front-facing camera meticulously tracks the
eye’s interest using advanced algorithms. Smart
AI then narrows down the options and presents
a data report of what the subconscious mind is
craving, providing the user with a list of relevant
HungerStation restaurants to order from.
THE IMPACT
In the first two weeks after launch,
HungerStation gained 78,000 new customers.
2.5m
media impressions
630k
portal visits
6k
new customers
per day
Awards
Grand Prix
Cannes Lions 2023
Scan the
QR code
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CASE STUDIES
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STRATEGIC REPORT WPP AT WORK
CASE STUDIES
PRE-LOVED
ISLAND
A new campaign to make
second-hand clothes desirable
OFFER
BRAND EXPERIENCE
COMMUNICATIONS
AGENCY
ESSENCEMEDIACOM, UK
CLIENT
EBAY
THE QUESTION
Many clothes are cheap; often worn only
a few times, then binned. eBay, which has
been selling pre-loved clothes since 1995,
offers the perfect antidote to clothing waste.
How could EssenceMediacom ignite a
second-hand revolution, showing that used
clothes could be on-trend and desirable?
THE ANSWER
ITV’s Love Island. One of the UK’s biggest
and most talked-about fashion influencers,
this show makes and breaks fashion trends
amongst the Gen Z and Millennial audience
eBay wanted to target. The items islanders
were wearing were selling out in minutes.
Using product placement throughout the
show, islanders were dressed in stylish
pre-loved clothes, with viewers able to
bid on shoppable edits of the looks seen
on screen.
Co-branded TV and video ads and X (Twitter)
content celebrated the looks and embedded
pre-loved fashion into the conversation of
the moment.
THE IMPACT
Over 1,700 pieces of positive press coverage,
and a significant increase in searches for
‘pre-loved fashion’ on eBay.
1.7k
pieces of positive
press coverage
Scan the
QR code
50
WPP ANNUAL REPORT 2023
CASE STUDIES
WPP AT WORK STRATEGIC REPORT
WPP ANNUAL REPORT 2023
51
STRATEGIC REPORT WPP AT WORK
CASE STUDIES
THE LV APP
Enter the world of Louis Vuitton
OFFER
DIGITAL
AGENCY
AKQA, PARIS
CLIENT
LOUIS VUITTON
THE QUESTION
Louis Vuitton, one of the world’s leading
fashion houses, wanted to create a digital
touchpoint crafted to elevate the client
relationship and experience. How would
AKQA fulfil the brief?
THE ANSWER
With the re-imagining of the LV App.
A precision-designed digital touchpoint
showcasing exclusive experiences. The app
strategically establishes itself as the primary
platform for personalised interactions,
distinct from the website, immersing users
in the LV universe.
Through UX, UI and navigation restructuring,
the LV App was transformed with three main
pillars: personalisation, immersion and
exclusivity. A dedicated personalised section
showcases exclusive previews of collections,
app-only products and personalised services
from a client advisor, helping to kick-start the
user journey.
New services, including repairs,
customisations and appointment bookings,
add to the LV story and create added value.
THE IMPACT
The LV App has become the go-to destination
for Louis Vuitton clients, leading to a 40%
increase in engagement.
40%
increase in
engagement
Scan the
QR code
52
WPP ANNUAL REPORT 2023
STRATEGIC REPORT
WPP
SUSTAINABILITY
We use our creativity combined with our global
reach and scale to drive sustainability within our
own business, our clients’ businesses and across
our industry
In this section
Our approach to sustainability
Sustainability and our strategy
Communities
Planet
Task Force on Climate-related
Financial Disclosures (TCFD) statement
Carbon emissions statement
Public policy
Supply network
Our work in sustainability
54
56
58
60
62
69
70
71
72
WPP ANNUAL REPORT 2023
53
STRATEGIC REPORT WPP SUSTAINABILITY
OUR APPROACH TO SUSTAINABILITY
Our governance processes and policies help
us manage sustainability risks and opportunities
consistently across the Company
SUSTAINABILITY GOVERNANCE MODEL1
THE BOARD
– Responsible for the overall long-term success of WPP and for setting
the purpose, values and culture and strategic direction, including
on sustainability
BOARD COMMITTEES
SUSTAINABILITY COMMITTEE
– Supports the Board in its oversight of corporate responsibility,
sustainability, environmental, social and governance (ESG) and related
reputational matters
– Understands WPP's sustainability-related risks and opportunities
– Reviews and monitors the management and implementation of our
sustainability strategy and Net Zero Transition Plan
– Reviews policy statements on environmental and social matters
– Meets at least four times a year, receiving in-depth progress reviews
from management at each meeting, and provides an update to the
Board following each meeting
Page 137
EXECUTIVE COMMITTEES
Page 115
– Approves our Sustainability Policy and Environment Policy and, where
relevant, considers the identification and mitigation of sustainability
issues, including climate change, when overseeing major decisions
(set out in WPP Matters Reserved for the Board, available on wpp.com)
AUDIT COMMITTEE
– Monitors the integrity of WPP’s ESG disclosures, including the relationship
with our ESG assurance provider
– Provides oversight of internal controls and risk management, including
our ESG controls
Page 130
EXECUTIVE COMMITTEE
– Assists the CEO in discharging his
responsibilities
– Collectively responsible for implementing
strategy, including sustainability strategy,
ensuring consistent execution and
embedding the Company’s culture
and values
DISCLOSURE COMMITTEE
– Reports to the Audit Committee
– Responsible for overseeing the accuracy and
timeliness of Group disclosures, including
sustainability and ESG, and reviewing
controls and procedures in relation to the
public disclosure of financial information
RISK COMMITTEE
– Assists the Board and Audit Committee
by reviewing, monitoring and advising on
compliance with laws, regulations, internal
procedures, and industry standards, the
design and implementation of WPP’s
compliance framework, compliance policies
and procedures and risks that present
themselves throughout WPP, including
material sustainability and ESG issues
GROUP FUNCTIONS AND AGENCIES
– The Chief Sustainability Officer has overall operational responsibility
for sustainability
– Our agencies are required to comply with our Sustainability Policy,
and report performance to WPP on an annual basis
– We set a clear policy framework through our Code of Business Conduct,
Sustainability Policy, Supplier Code of Conduct and other policies
included in the WPP Policy Book
– Our sustainability team works to ensure consistent implementation of
our standards and supports the business to identify sustainability-related
risks and opportunities, informing the business through targeted
briefings, programme meetings and status updates
– Our sustainability team monitors key performance metrics and collates
status updates from the business, which are reported to the Chief
Sustainability Officer, the relevant Executive committees and Board
committees, and the wider business
– In 2023, this included training on ESG reporting and controls, our Green
Claims Guide, and employee capability building on our net zero strategy
– Progress against sustainability metrics and targets is communicated
to the business on an annual basis
1 References to sustainability and ESG are inclusive of the climate change issues identified as relevant to WPP in the TCFD statement (pages 62 to 68)
54
WPP ANNUAL REPORT 2023
OUR APPROACH TO SUSTAINABILITY
WPP SUSTAINABILITY STRATEGIC REPORT
OUR MATERIALITY PROCESS
We continually assess changing stakeholder
priorities through ongoing dialogue in
the course of doing business. We also
use a materiality process to ensure our
sustainability strategy, investments and
reporting focus on the issues of greatest
importance and relevance to our business
and our stakeholders.
In 2024, we will conduct a double materiality
assessment in line with the requirements
of the EU Corporate Sustainability
Reporting Directive and informed by our
most recent impact materiality assessment,
completed in January 2023 (see our 2023
Sustainability Report).
STAKEHOLDER ENGAGEMENT
Dialogue with our stakeholders, including
our people, clients and shareholders,
provides valuable feedback and insight into
sustainability risks and opportunities, for our
Company and our clients.
Most stakeholder engagement takes place
in the course of doing business. We work
with clients on sustainability issues (see page
27). Information on employee engagement
including our All In employee survey is on
page 38. During the year, WPP and agencies
including GroupM, Hill & Knowlton and
Wunderman Thompson rolled out training
to equip our people with knowledge on
climate change and give them the practical
tools with which to respond. This remains
a priority in 2024.
INVESTOR ENGAGEMENT
We believe the more we behave in line
with our purpose, the better our business
will perform, thereby maximising
shareholder returns.
We regularly engage with investors on ESG
topics, and in 2023 we engaged with rating
agencies and benchmarking organisations
on sustainability, including: Bloomberg
Gender-Equality Index; Ecovadis; Ethibel;
Equileap; Vigeo Eiris; FTSE Russell; ISS;
Moody’s; MSCI Research Inc.; Tortoise
Responsibility 100; Sedex; and Sustainalytics.
We are included in the FTSE4Good Index
and participate in CDP's climate change
questionnaire. In 2023, our score was B (2022:
A-) reflecting changes in CDP's scoring criteria,
which are designed to ensure companies
continually improve their climate ambitions.
In 2021, we linked the margin of our $2.5
billion revolving credit facility to specific
sustainability measures. We refinanced the
facility in February 2024 and are working
to update the sustainability measures linked
to the facility as we continue to embed
carbon-reduction targets and broader
sustainability commitments into our
financing arrangements.
INSTITUTE OF BUSINESS ETHICS
WPP is a member of the Institute of Business
Ethics (IBE) and considers it an important
partner and support for the approach that
the Company takes to business integrity,
sustainability and ethics. As set out more
fully in the Risk Governance Framework on
page 93 and Business Integrity Programme
on page 94, we want to champion and
facilitate a culture where our people feel
that acting with transparency, honesty and
integrity is an expected metric for success,
and this is also the IBE’s ethos.
The IBE shares knowledge and good practice
as well as advice on the development and
embedding of relevant policies through
networking events, regular publications
and training sessions, research and
benchmarking reports.
The IBE is a registered charity funded
by corporate and individual donations.
ABOUT OUR REPORTING
Sustainability data included in this Annual
Report is for the calendar year 2023 and
covers all subsidiaries of the Company.
The selected ESG performance metrics
marked with the symbol
throughout this
report have been subject to independent
limited assurance procedures by
PricewaterhouseCoopers LLP (PwC) for
the year ending 31 December 2023 in
accordance with International Standard
on Assurance Engagements 3000 (revised)
and, in respect of greenhouse gas emissions
data, International Standard on Assurance
Engagements 3410, issued by the International
Auditing and Assurance Standards Board.
A copy of PwC’s report and our reporting
criteria are available at wpp.com/
sustainabilityreport2023. The majority of
our data is collected locally, and a common
challenge is reconciling inconsistencies
in calculations and data capture. This
prevented us from obtaining independent
limited assurance over certain metrics
including waste, and health and safety data.
We are reviewing our reporting in line with
emerging ESG regulations and standards,
including the EU’s Corporate Sustainability
Reporting Directive and the International
Sustainability Standards Board’s Sustainability
Standards. The outputs of our Double
Materiality Assessment, which will be
conducted in 2024, will shape the future
format and content of our disclosures.
For further information on data quality,
see page 61
NON-FINANCIAL AND
SUSTAINABILITY
INFORMATION STATEMENT
This section provides information required
by regulation in relation to:
– Environmental matters (pages 60 and 61)
and TCFD statement including climate-
related risks and opportunities (pages 62
to 68)
– Social matters (pages 58 and 59)
– Human rights (page 71)
In addition, other related information can be
found as follows:
– Our people (pages 37 to 39)
– Corruption and bribery (pages 94 and 95)
– Business model (from page 20)
– Principal risks and how they are managed
(from page 98)
– Non-financial key performance indicators
(from page 84)
For more information, see our
2023 Sustainability Report
WPP ANNUAL REPORT 2023
55
STRATEGIC REPORT WPP SUSTAINABILITY
SUSTAINABILITY AND OUR STRATEGY
Our sustainability strategy sets
out how we use the power of
creativity to build better futures
for our people, planet, clients
and communities
Our sustainability commitments support
our corporate strategy and help us navigate
a dynamic social and economic landscape,
responding to evolving stakeholder
expectations and shaping our contribution
to the world around us
They add focus and meaning for our people,
who want to work for a company that shares
their values, and our clients, who look to us to
help them find and scale solutions to achieve
their own goals and deliver positive impact
WPP IS THE CREATIVE
TRANSFORMATION COMPANY
WHY
PROGRESS
HOW
PEOPLE
PEOPLE
Become the employer
of choice for all
To foster exceptional and diverse
talent and equip our people with
the knowledge and capability to
creatively tackle some of society's
biggest challenges
PLANET
Maximise our positive
impact on the planet
To decouple our emissions from
growth and lead the industry
to decarbonise
– Build a culture where everyone is
– 53% of senior managers are women (2022: 54%)
treated with dignity and respect
– 22% of senior and executive managers in the US,
– Ensure an inclusive working
our largest market, are non-white (2022: 22%)
41%
environment with fair
representation
– 14% increase in employee participation in our
annual All In staff survey
of executive leaders
across WPP are women1
– Grow sustainability skills and
– Inclusion as a Skill training rolled out to all
(2022: 40%)
knowledge across our industry
employees worldwide
FIND OUT MORE
See pages
37 to 39
See the
People section
of our 2023
Sustainability
Report
PLANET
– Develop common carbon
metrics across our industry
– Build campuses that make
a positive contribution to
local communities
– Reach net zero across our
sources (2022: 83%)
supply chain by 2030
– GroupM's coalition of leading advertisers –
year-on-year
– 0.19 tCO2e emissions per person from
direct operations (Scope 1 and 2), a 17% reduction
year-on-year and 77% since our 2019 baseline
(2022: 0.23 tCO2e2)
– 88% of electricity sourced from renewable
representing $10 billion in global advertising
investment – to accelerate decarbonisation
of the world’s media supply
76%
absolute reduction in
tCO2e emissions (Scope 1
and 2) since 2019 and 18%
See pages
60 and 61
See the
Planet section
of our 2023
Sustainability
Report
CLIENTS
Enable our clients
on their sustainability
journeys
To support progress towards a
sustainable and inclusive economy
where our clients thrive
– Ensure fairness and high
– 82% of top 50 clients have set or committed to set
science-based carbon reduction targets (2022: 78%)
– Client version of our Green Claims Guide launched
with targeted training for clients in potentially
higher-risk and higher-emissions sectors
COMMUNITIES
Use the power of our
creativity and voice
to support healthy,
vibrant communities
To build a resilient global
society where consumers and
communities alike are included
and empowered
– Buy responsibly and build
a diverse supplier network
– $21.1m invested in inclusion programmes since 2020
as part of our commitment to invest $30 million in
– Advance equity and inclusion
racial equity
£36.1m
See pages
58 and 59
– £205,000 donated to disaster relief through
employee donations matched by WPP
total social contribution,
See the
including cash donations,
Communities
1 Executive leadership roles are defined as the agency board
and executive leadership population as reported through
WPP’s financial reporting system
2 2022 energy metric restated in line with the procedures set out
in the WPP Sustainability Reporting Criteria 2023. For details of
the nature and impact of the restatement, see page 61
Indicates the selected metrics have been subject to independent
limited assurance procedures by PricewaterhouseCoopers for
the year ending 31 December 2023. For PwC’s 2023 Limited
Assurance report and the WPP Sustainability Reporting Criteria
2023, see wpp.com/sustainabilityreport2023
56
WPP ANNUAL REPORT 2023
CLIENTS
privacy and data ethics
standards in our work
– Ensure our client work is
inclusive and accessible
– Support our clients as they
deliver their emissions reduction
and wider sustainability goals
COMMUNITIES
through our work, external
partnerships and initiatives
– Work with partners, social
enterprises and clients to
drive sustainability
8.0
score out of 10 from
our clients for our
ability to support their
sustainability goals and
8.3 for their DEI goals
See page 27
See the
Clients section
of our 2023
Sustainability
Report
pro bono work, in-kind
contributions, free
media space and racial
equity initiatives
(2022: £35.5 million exc
racial equity initiatives)
section of
our 2023
Sustainability
Report
SUSTAINABILITY AND OUR STRATEGY
WPP SUSTAINABILITY STRATEGIC REPORT
PEOPLE
Become the employer
of choice for all
WHY
To foster exceptional and diverse
talent and equip our people with
the knowledge and capability to
creatively tackle some of society's
biggest challenges
PLANET
Maximise our positive
impact on the planet
To decouple our emissions from
growth and lead the industry
to decarbonise
CLIENTS
Enable our clients
on their sustainability
journeys
To support progress towards a
sustainable and inclusive economy
where our clients thrive
COMMUNITIES
Use the power of our
creativity and voice
to support healthy,
vibrant communities
To build a resilient global
society where consumers and
communities alike are included
and empowered
We aim to build better futures for our people, planet, clients and communities
through the four pillars of our sustainability strategy
HOW
PEOPLE
PROGRESS
– Build a culture where everyone is
treated with dignity and respect
– Ensure an inclusive working
environment with fair
representation
– 53% of senior managers are women (2022: 54%)
– 22% of senior and executive managers in the US,
our largest market, are non-white (2022: 22%)
– 14% increase in employee participation in our
annual All In staff survey
– Grow sustainability skills and
– Inclusion as a Skill training rolled out to all
41%
of executive leaders
across WPP are women1
(2022: 40%)
knowledge across our industry
employees worldwide
FIND OUT MORE
See pages
37 to 39
See the
People section
of our 2023
Sustainability
Report
PLANET
– Develop common carbon
metrics across our industry
– Build campuses that make
a positive contribution to
local communities
– Reach net zero across our
supply chain by 2030
CLIENTS
– Ensure fairness and high
privacy and data ethics
standards in our work
– Ensure our client work is
inclusive and accessible
– Support our clients as they
deliver their emissions reduction
and wider sustainability goals
COMMUNITIES
– Buy responsibly and build
a diverse supplier network
– Advance equity and inclusion
through our work, external
partnerships and initiatives
– Work with partners, social
enterprises and clients to
drive sustainability
– 0.19 tCO2e emissions per person from
direct operations (Scope 1 and 2), a 17% reduction
year-on-year and 77% since our 2019 baseline
(2022: 0.23 tCO2e2)
– 88% of electricity sourced from renewable
sources (2022: 83%)
– GroupM's coalition of leading advertisers –
representing $10 billion in global advertising
investment – to accelerate decarbonisation
of the world’s media supply
76%
absolute reduction in
tCO2e emissions (Scope 1
and 2) since 2019 and 18%
year-on-year
See pages
60 and 61
See the
Planet section
of our 2023
Sustainability
Report
– 82% of top 50 clients have set or committed to set
science-based carbon reduction targets (2022: 78%)
– Client version of our Green Claims Guide launched
with targeted training for clients in potentially
higher-risk and higher-emissions sectors
– $21.1m invested in inclusion programmes since 2020
as part of our commitment to invest $30 million in
racial equity
– £205,000 donated to disaster relief through
employee donations matched by WPP
8.0
score out of 10 from
our clients for our
ability to support their
sustainability goals and
8.3 for their DEI goals
See page 27
See the
Clients section
of our 2023
Sustainability
Report
£36.1m
total social contribution,
including cash donations,
pro bono work, in-kind
contributions, free
media space and racial
equity initiatives
(2022: £35.5 million exc
racial equity initiatives)
See pages
58 and 59
See the
Communities
section of
our 2023
Sustainability
Report
WPP ANNUAL REPORT 2023
57
STRATEGIC REPORT WPP SUSTAINABILITY
COMMUNITIES
We use our scale, skills and voice to
support healthy and vibrant communities
ADVANCING RACIAL EQUITY
In June 2020, as part of a set of commitments
and actions to help combat racial injustice
and support Black and ethnically marginalised
talent, we set up our Racial Equity Fund,
committing to invest $30 million over three
years in inclusion programmes and to
support external organisations.
$21.1m
invested in inclusion programmes as part
of our commitment to invest $30 million
over three years
We designed the programme to deliver
immediate impact while also establishing
the foundation for meaningful and sustainable
change. We invested across three pillars:
internal equity and inclusion; creative use of
media value and pro bono work to support
non-profit organisations and charities with
anti-racist objectives; and funding for 'bold,
audacious and creative' initiatives that will
create measurable impact in advancing racial
equity around the world (see example, right).
To date, we have invested $21.1 million and
committed a further $1.9 million to projects
kicking off from 2024. We will continue to
invest to reach our $30 million commitment.
See more at wpp.com/racialequityprogramme
We are committed to inspiring widespread
change through powerful communications
and investment in communities.
A VOICE FOR CHANGE
We believe that good communications can
help bring about the shift in attitudes and
behaviour needed to tackle extreme
poverty, inequality and climate change,
and contribute towards the UN Sustainable
Development Goals.
We help amplify the impact of charities
and non-governmental organisations by
providing marketing and creative services,
often on a pro bono basis.
This work is mutually rewarding and often
worth more than an equivalent cash donation,
helping to improve fundraising efforts,
recruit new members, change behaviour
or achieve campaign goals. It also gives
WPP people the chance to work on fulfilling,
impactful and sometimes award-winning
campaigns that build their skills and raise
the profile of our agencies.
LIFE-CHANGING CLIENT WORK
We are proud to deploy our creativity to
rethink the status quo. In 2023, campaigns
included Ogilvy’s Heaven Fish, which
turned the 'miracle' of fish falling from
the sky into a source of income for
residents of Yoro, Honduras.
In Kenya, Scanad and fashion brand ZEVA
launched Stain Not Shame, a campaign
that prompted the government to make
period shaming a punishable offence. And
in Argentina, Grey’s The Postponed Day
brought cancer charities together to delay
their usual publicity around Breast Cancer
Awareness Day. The campaign highlighted
the fact that 40% of women postpone their
annual breast check-ups, creatively raising
awareness and inspiring action.
58
WPP ANNUAL REPORT 2023
SOMA+ AKQA
One of the projects supported by our
Racial Equity Fund was SOMA+ AKQA,
which expanded the professional
knowledge of Black, Indigenous and
low-income students in Brazil across
three main pillars: education, internship
and transformation.
In 2023, SOMA+ students collaborated
with rapper Criolo on the video for
‘Pretos Ganhando Dinheiro Incomoda
Demais’ (Blacks Making Money is Too
Inconvenient), part of the 'Tree of
Riqueza', a campaign that aims to give
a new meaning to Black prosperity in
a series of five cinematic music videos.
IT IS THROUGH THESE
DIVERSE POINTS OF
VIEW, EXPERIENCES
AND TRAINING THAT
WE AMPLIFY VOICES
AND ENHANCE THE
POWER OF THESE
PROJECTS”
Luiza Bomfim
SOMA+ participant
COMMUNITIES
WPP SUSTAINABILITY STRATEGIC REPORT
ACTION IN LOCAL COMMUNITIES
We encourage our people to use their
creativity and expertise to contribute to
issues they are passionate about. We have
a long tradition of pro bono work covering a
range of issues from the arts to conservation,
health and human rights. Our established
Foundations and active network of Green
Teams around the world provide a platform
for people to act.
In India, our multi-award-winning WPP
India Foundation is transforming the lives
and livelihoods of young people and their
families through a targeted programme
of interventions. In Australia, our REFLECT
RAP (reconciliation and action plan) outlines
our commitment to a more diverse, equitable
and inclusive future – with reconciliation at
its heart. The plan increases awareness of
Aboriginal and Torres Strait Islander cultures,
histories and leadership across all sectors of
Australian society.
EMPLOYEE GIVING AND
VOLUNTEERING
WPP employees around the world donated
generously in 2023 to emergency relief
appeals set up to support those affected
by the devastating earthquakes in Turkey
and Syria and then in Morocco, which we
matched. In October, in response to the
terrible events in Israel and Gaza, employees
once again gave generously; with match
funding we raised a total of £60,000 in
partnership with the British Red Cross.
We will continue to run employee match
funding appeals for disaster relief.
The VML Foundation is an employee-funded
and led giving programme that supports and
celebrates the causes important to VML’s
employees. Every year, VML closes more than
80 offices around the world for a day so that
employees can donate their time and talents
to dozens of non-profit and community
$3m
in 2023 the VML Foundation proudly
surpassed $3 million in charitable giving
on behalf of employees
organisations. In 2023, causes ranged from
reading and recording bedtime stories in
China to planting and cleaning up the Río
de Los Remedios forest in Mexico City.
The Foundation also proudly surpassed the
$3 million mark in collective charitable giving
on behalf of employees since it began.
And in France, our We Care We Act employee
volunteering programme matches the talent,
skills and interests of our people with
requests for volunteer support, enabling
positive action in the community. Our people
completed 60 individual missions supporting
local NGOs in 2023, as well as multiple
agency-wide volunteering initiatives.
INVESTING IN FUTURE
CREATIVES
We believe that AI is fundamental to
the future of our industry (and of many
others). To inspire young people and
build their confidence in data and AI,
in 2023 we launched the Creative Data
School in partnership with leading
non-profit and educational
organisations. Delivered both online
and in schools, the course has already
taught essential technical skills to over
6,000 young people across the UK.
Following the programme, eligible
candidates were invited to apply for
work experience and internships within
the WPP network.
WHAT WE GAVE IN 2023
PRO BONO WORK
(£m)
2023
2022
CASH DONATIONS
(£m)
9.0
9.6
357
2023
2022
3.6
5.2
357
TOTAL SOCIAL INVESTMENT
(£m)
2023
2022
12.6
14.8
WPP media agencies negotiated
free media space worth £19.5 million
on behalf of pro bono clients
(2022: £20.8 million).
£36.1m
total social contribution
(2022: £35.5 million)1
Our total social contribution, taking
into account cash donations, pro bono
work, in kind contributions, free media
space, and investments in inclusion
initiatives through Pillar 3 of our Racial
Equity Programme, was £36.1 million
(2022: £35.5 million).1
See more in the Communities section
of our 2023 Sustainability Report
1 2022 figure excludes investments in Racial Equity initiatives
WPP ANNUAL REPORT 2023
59
9.020223.6202212.62022
STRATEGIC REPORT WPP SUSTAINABILITY
PLANET
Delivering progress against our
sustainability goals to protect
our planet
We are committed to transitioning to net
zero emissions across our own business,
supporting our clients’ carbon reduction
efforts and accelerating progress across
our industry.
OUR CLIMATE STRATEGY
In 2021, we set near-term science-based
targets to reduce our greenhouse gas
emissions in line with limiting global warming
to 1.5°C above pre-industrial levels, and the
aims of the Paris Climate Agreement.
OUR EMISSIONS TARGETS
84%
absolute Scope 1 and 2
emissions reduction by 20251
50%
absolute Scope 3 emissions
reduction by 20301
These targets, which are verified by the
Science-Based Targets initiative, include
emissions from media buying (more than
half our total footprint) – an industry first.
Our targets are ambitious, and require
commitment across all WPP agencies and
functions. From production to procurement
to buildings, our aim is to integrate carbon
reduction into our core commercial strategy,
and to continue to drive progress through
wider transformation programmes. We will
publish our first formal Transition Plan in 2024,
an important milestone as we progress to
net zero.
REDUCING SCOPE 1 AND 2 EMISSIONS
We continue to make good progress
towards our Scope 1 and 2 targets, largely
driven by an increase in electricity purchased
from renewable sources, as well as improved
energy efficiency in our buildings as we
move people into fewer, more efficient
buildings through our campus strategy.
– Our Scope 1 emissions for 2023 were
11,354 tCO2e (2022: 14,105 tCO2e), of which
a subtotal of 8,532 tCO2e (75% of our
total Scope 1 emissions footprint) has been
subject to independent limited assurance
procedures by PwC
– Company cars account for 62% of our
Scope 1 emissions. We continue to shift
company cars to electric and hybrid
vehicles where infrastructure makes it
feasible to do so. In 2023, 46% of centrally
leased company cars were electric or
hybrid (2022: 30%). The Scope 1 emissions
not subject to assurance procedures relate
to locally contracted company cars, for
which emissions have been estimated
– Scope 2 market-based emissions fell by
17% to 9,968 tCO2e . Scope 2 location-
based emissions were 55,720 tCO2e ,
a 3% increase from 2022 reflecting a rise in
energy consumption as office occupancy
rates increased2
– Our carbon intensity per £1 million
revenue was 1.44 tCO₂e, a 21% reduction
since 2022 (2022: 1.81 tCO₂e)2
– Our Scope 1 and 2 market-based emissions
for 2023 were 0.19 tCO₂e/person, a 17%
reduction from 20222 and 77% reduction
from our 2019 baseline
88%
electricity purchased from renewable
sources (2022: 83%) and on track to meet
our target to source 100% by 2025
MARKET-BASED SCOPE 1 AND 2
EMISSIONS PROGRESS
(tCO2e EMISSIONS)
0.82
87,585
87,585
0.32
0.230.23
0.19
35,132
26,1022
26,1022
21,322
2019
baseline
2021
2022
2023
Scope 1 and 2 (tCO2e)
Scope 1 and 2 per person (tCO2e/person)
REDUCING SCOPE 3 EMISSIONS
Our supply chain makes up the
overwhelming majority (98%) of our total
emissions. We know that the complex nature
of our supply chain makes our target to halve
emissions by 2030 ambitious, but nevertheless
it is one we are determined to reach.
MEDIA
WPP is the only advertising holding company
to include emissions from media placement
(more than half our supply chain emissions)1
within our science-based emissions reduction
targets. In 2023, GroupM launched a new
omnichannel media carbon calculator for
clients, enabling them for the first time to
factor channel-level carbon emissions data
into their media planning.
1 Data from 2019 baseline
2 2022 energy metric restated in line with the procedures set out
in the WPP Sustainability Reporting Criteria 2023. For details
of the nature and impact of the restatement, see page 61
These metrics have been subject to independent limited
assurance procedures by PricewaterhouseCoopers for the
year ending 31 December 2023. For PwC’s 2023 Limited
Assurance Report and the WPP Sustainability Reporting
Criteria 2023, see wpp.com/sustainabilityreport2023
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MARKET-BASED SCOPE 1 AND 2 EMISSIONS PROGRESS(tCO2e EMISSIONS)202326,102287,58521,3220.230.19
PLANET
WPP SUSTAINABILITY STRATEGIC REPORT
We used the tool to measure the footprint of
around 2,800 campaigns. Our client coalition
of leading advertisers, worth $10 billion in
global advertising investment, is driving
support for greater transparency and
standardisation of emissions measurement.
flights (79% of the total), which have been
subject to independent limited assurance
procedures by PwC. The business air travel
emissions not subject to assurance
procedures come from flights booked
outside our centralised systems.
PRODUCTION
The emissions generated by the production
of films and other content we create on
behalf of clients are responsible for 14% of
our supply chain carbon footprint.1 Hogarth
continues to invest in generative AI, 3D
and virtual production technologies. In
many circumstances we estimate these
technologies will help lower the carbon
footprint of production, through both
reduced travel and more efficient ways of
generating content. By consolidating WPP’s
production capabilities through Hogarth,
we can strengthen our overall capabilities
and boost skills development for our people.
TECHNOLOGY
The technology we use – from data centres
to emails – generates 6% of our Scope 3
footprint.1 Decommissioning older, less
efficient hardware and migrating our IT
infrastructure to the cloud will reduce energy
use and emissions. By working more closely
with our technology providers to understand
the emissions of the products and services
we use, we are beginning to better track
emissions reduction from IT.
PROCUREMENT
In 2023, we analysed our indirect suppliers’
carbon footprint, identifying those ‘carbon
strategic suppliers’ we can engage with to
help bring down emissions (see page 71).
Business air travel accounts for around 3%
of our baseline carbon footprint. In 2023,
our total Scope 3 emissions from business
air travel were 75,687 tCO2e, including
59,793 tCO2e from centrally contracted
Potential gaps were identified in the data
provided by one of our three central business
air travel suppliers. This is reflected in PwC’s
assurance opinion.
We purchase high-quality carbon credits to
offset emissions from air travel. Since 2007
we've permanently retired 1.7 million credits,
which are charged to each of our agencies
to create an internal carbon cost.
GREEN CLAIMS GUIDE
Scrutiny over brands’ environmental claims
continues to grow, making it more important
than ever that claims we make on behalf of
clients are authentic, material and matched
by real action. WPP’s Green Claims Guide
provides principles and practical tips for
making effective green claims that are not
misleading in any way. In 2023 we launched
a client version of the guide and ran training
for employees and clients in potentially
higher-risk and higher-emissions sectors
(see page 27).
CIRCULAR ECONOMY
We remain committed to phasing out
plastics that cannot be reused, recycled or
composted across our campuses and offices
worldwide. In 2023, we continued to drive
progress within our campuses by introducing
additional waste streams, engaging suppliers,
reviewing the products purchased by our
agencies, and working with campus Green
Teams to encourage our people to change
their behaviour at work.
OFFSETTING
The first step to limiting emissions is to reduce
the total footprint of any of our products or
services as far as possible. Our Environment
Policy sets out how we manage the cost and
quality of the carbon credits we buy to offset
emissions we cannot avoid.
DATA QUALITY
A significant challenge for reducing carbon
emissions is being able to measure them with
confidence. We are working to improve the
quality and coverage of our emissions data.
In 2023 we simplified our reporting to
reflect our campus consolidation programme
(detailed in our 2023 reporting criteria).
An error was highlighted in our 2022 energy
consumption caused by the complexity
of our historic structure and resulting in
an 8% and 6% restatement in Scope 2
market-based and location-based
emissions respectively.
We are working to include the portion
of unassured Scope 1 data, relating to
locally managed company cars, in scope
for assurance in future years.
Data quality is particularly challenging for
Scope 3 emissions, as they are beyond our
direct control. We are reviewing how we
capture and calculate Scope 3 emissions
and aim to improve both data quality and
coverage, so that over time we can seek
assurance over a larger proportion of Scope
3 emissions. In 2023 we integrated travel
by class into our metrics subject to assurance
for the first time, as we continue to work
to improve the consistency and coverage
of flight data across the business.
See more in the Planet section of our
2023 Sustainability Report
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STRATEGIC REPORT WPP SUSTAINABILITY
TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES (TCFD) STATEMENT
TCFD CONTENT INDEX
This section of our reporting includes disclosures relating to WPP’s identified climate-related risks and opportunities.
UK LISTING RULES AND COMPANIES ACT STATEMENT OF COMPLIANCE
KEY
In compliance
Partial compliance
WPP was an early adopter of the Task Force
on Climate-related Financial Disclosures.
WPP’s sixth disclosure, set out below, is
structured around the four TCFD themes
of governance, strategy, risk management,
and metrics and targets. We aim to
develop our disclosures in line with TCFD’s
11 recommended disclosures set out in June
2017 (see table below). We report in line
with the FCA Listing Rule 9.8.6(8)b, which
requires us to report on a ‘comply
or explain’ basis against the TCFD
Recommended Disclosures in respect of
the financial year ended 31 December 2023.
We consider our climate-related financial
disclosures to be consistent with nine of
the 11 TCFD recommended disclosures
and we have explained why we are not
consistent for the remaining two in the
related sections. Therefore our disclosures
are compliant with Listing Rule 9.8.6(8)b
and aligned with The Companies
Regulations 2022, 414CB (2A). Some of the
recommended disclosures, published in the
2021 TCFD Annex, will take more time for us
to become fully consistent with due to
challenges around data access and
quantification. These areas, outlined in the
table below, are most closely aligned with
the UK Companies Regulations 414CB (2A)
sub paragraphs (e) and (f) and relate to
detailed financial impacts and quantitative
scenario analysis of climate-related risks
and opportunities. We will continue to
implement the 2021 TCFD Annex 1
recommendations and intend to apply
these more fully in our future disclosures
through 2024.
TCFD RECOMMENDATION
LOCATION IN REPORT
GOVERNANCE
a) Describe the Board’s oversight of climate-related
risks and opportunities
SUSTAINABILITY GOVERNANCE
The governance of climate-related risks and opportunities is fully integrated
within our sustainability governance structures. References to sustainability and
ESG are inclusive of the climate change issues identified as relevant to WPP in
this TCFD statement
From
page 54
The Sustainability Committee meets at least four times a year, receiving in-depth
progress reviews from management on climate-related issues at each meeting.
The Board receives an update from the Sustainability Committee Chair following
each meeting
SUSTAINABILITY COMMITTEE REPORT
The Sustainability Committee report provides an update on the matters
considered by the Committee in 2023
SUSTAINABILITY GOVERNANCE
Our CEO and CFO (both Executive Directors) have overall responsibility for
climate-related risks and opportunities, and our performance on carbon
reduction is integrated into their incentive plans. The Chief Sustainability Officer
has operational responsibility for assessing and managing climate-related issues
b) Describe management’s role in assessing and
managing climate-related risks and opportunities
STRATEGY
a) Describe the climate-related risks and opportunities
the organisation has identified over the short, medium
and long term
PRINCIPAL RISKS AND UNCERTAINTIES
Descriptions of WPP’s climate-related risks and opportunities are included
in the Principal Risks disclosure
CLIMATE-RELATED RISKS AND OPPORTUNITIES
Detailed descriptions of our climate-related risks and opportunities over the
short, medium and long term
CLIMATE-RELATED RISKS AND OPPORTUNITIES
Detailed descriptions of the impact of climate-related risks and opportunities
on our resilience, strategy and financial planning. We have not yet quantified the
impact of our climate-related risks and opportunities. Information on the status
of quantification is included against each risk and opportunity disclosure
CLIMATE-RELATED RISKS AND OPPORTUNITIES
Detailed descriptions of the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios. We have not yet undertaken
quantitative scenario analysis of our climate-related risks and opportunities.
Information on the status of quantification is included against each risk and
opportunity disclosure
b) Describe the impact of climate-related risks and
opportunities on the organisation’s businesses, strategy
and financial planning
c) Describe the resilience of the organisation’s strategy,
taking into consideration different climate-related
scenarios, including a 2°C or lower scenario
KEY
In compliance
Partial compliance
62
WPP ANNUAL REPORT 2023
From
page 137
From
page 54
From
page 98
From
page 64
From
page 64
From
page 64
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES STATEMENT
WPP SUSTAINABILITY STRATEGIC REPORT
WPP SUSTAINABILITY STRATEGIC REPORT
TCFD RECOMMENDATION
RISK MANAGEMENT
LOCATION IN REPORT
a) Describe the organisation’s processes for identifying
and assessing climate-related risks
IDENTIFYING CLIMATE-RELATED RISKS
Detailed descriptions of how our climate-related risks and opportunities
are managed
b) Describe the organisation’s processes for managing
climate-related risks
CLIMATE-RELATED RISKS AND OPPORTUNITIES
Climate-related risks are integrated into our overall risk management process.
We disclose how we manage our relevant climate-related risks and
opportunities in our risk disclosure table
Page 63
From
page 64
c) Describe how processes for identifying, assessing
and managing climate-related risks are integrated into
the organisation’s overall risk management
IDENTIFYING CLIMATE-RELATED RISKS
Our process for identifying climate-related risks takes into account multiple
sources and stakeholders. It is integrated into our overall risk management process
Page 63
METRICS AND TARGETS
a) Disclose the metrics used by the organisation to
assess climate-related risks and opportunities in line
with its strategy and risk management process
TCFD METRICS AND TARGETS SUMMARY
Metrics and targets relating to our relevant climate-related risks and
opportunities are provided in a summary table
b) Disclose Scope 1, Scope 2, and, if appropriate,
Scope 3 greenhouse gas emissions, and the related risks
CARBON EMISSIONS STATEMENT
Our carbon emissions statement outlines our Scope 1, Scope 2 and Scope 3
business air travel emissions
c) Describe the targets used by the organisation to
manage climate-related risks and opportunities and
performance against targets
TCFD METRICS AND TARGETS SUMMARY
Metrics and targets relating to our relevant climate-related risks and
opportunities are provided in a summary table
Page 68
Page 69
Page 68
IDENTIFYING CLIMATE-RELATED RISKS
The identification of climate-related risks
and opportunities includes input from
multiple sources and stakeholders. In 2022,
our climate-related risks and opportunities
were reviewed as part of a detailed
executive-level workshop which included
representatives from different corporate
functions, including sustainability, finance,
real estate, legal, communications,
procurement and crisis management and
business resilience. In 2023, we worked
with a third-party consultancy to identify
and assess operational risks associated
with our Net Zero Transition Plan.
Annually, we reconfirm the list of risks and
opportunities through analysis and
interviews. This analysis is informed by
interviews with sustainability and consumer
experts from within WPP agencies, as well
as external data sources. As part of our 2023
assessment we considered both existing and
emerging regulatory requirements related
to climate change, incorporating an impact
assessment of the Corporate Sustainability
Reporting Directive and International
Financial Reporting Standards (IFRS)
Sustainability Standards.
Recommendations on changes to the risks
and opportunities and associated disclosures
are reviewed by the Board Sustainability
Committee on an annual basis.
Sustainability risks, including climate-related
risks, are integrated into our overall risk
management processes. Performance and
updated risk implications are reviewed by
the Audit Committee on a regular basis. Our
overall risk management process is outlined
from page 93 and climate change risk is
included as a risk within the principal risks
and uncertainties disclosure from page 98.
WPP has implemented risk committees at
Group level and in our agencies with the aim
of ensuring accountability at both levels to
identify, monitor and proactively manage
risk and compliance issues, and we are
embedding climate risks in their agendas
(see page 93).
CLIMATE-RELATED RISKS
AND OPPORTUNITIES
WPP’s disclosure of climate-related risks and
opportunities provided in this section
outlines the impacts we expect to see on our
business between now and 2030. It includes
qualitative disclosure of both the impact on,
and the resilience of, WPP’s strategy. Details
of the time horizons and climate scenarios
considered as part of this assessment are
included in the tables below. We do not
believe there is a material financial impact of
physical or transition climate change risks on
our current year financial reporting. Further
information is provided in the Notes to the
Financial Statements under Climate Change.
The most significant impacts from the
climate-related risks and opportunities
summarised below are expected to be
realised on a timeframe that exceeds our
current financial planning. Materiality is
described in Our Application of Materiality
(see page 218).
TIME HORIZONS
Time horizon
Short term
Time period
2023-2024
Internal time horizon alignment
Annual reporting periods
Medium term
2024-2027
Scope 1 and 2 science-based reduction target (2025) and transformation programme (2027)
Long term
2027-2030
Scope 3 science-based reduction target (2030)
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FINANCIAL DISCLOSURES STATEMENT CONTINUED
CLIMATE SCENARIOS
Details of the assumptions applied under each scenario are included against each risk and opportunity. These scenarios were selected to cover
a range of potential scenarios exploring how climate change could impact the business. We have used the Intergovernmental Panel on Climate
Change (IPCC) Representative Concentration Pathways (RCPs) to provide inputs and assumptions regarding decarbonisation trajectories and
physical impacts. The IPCC Shared Socioeconomic Pathways (SSPs) are used to provide social, economic and political inputs and assumptions.
Description
RCP alignment
High-carbon (more than 4oC)
Low-carbon (less than 2oC)
Very low-carbon (less than 1.5oC)
RCP 8.5- business as usual,
4-degree Celsius
RCP 2.6- acceptable limit
2-degree Celsius
RCP 1.9- net zero transition,
1.5-degree Celsius
IPCC SSP alignment
SSP4- a road divided
SSP2- middle of the road
SSP1- the green road
WPP’S CLIMATE-RELATED RISKS AND OPPORTUNITIES
POTENTIAL IMPACT AND RESILIENCE
RISK OR OPPORTUNITY
HIGH CARBON
SCENARIO
LOW CARBON
SCENARIO
VERY LOW CARBON
SCENARIO
MANAGEMENT
Increased frequency of extreme weather and climate-related natural disasters
Crisis management and
business resilience (see page
105): provides global standards
for operational resilience;
strategy, governance, policy,
resources and training assets to
better plan for and respond to
crisis events of all types and at
all degrees of scale
Campuses (see page 19):
our campus programme
enables centralisation of
emergency preparedness,
incident response and business
continuity procedures
Employee assistance
programme (see page 39):
is activated in response to
climate-related extreme
weather events
Our climate strategy (pages 60
and 61): in 2021, we set
ambitious near-term science-
based targets to reduce our
greenhouse gas emissions in
line with limiting global warming
to 1.5°C above pre-industrial
levels. Our climate strategy
addresses how we are
managing the implementation
of our net zero commitments
Key assumptions: the physical impacts of climate change are broadly consistent across all
three scenarios considered and start to differentiate after 2050 (in line with the RCP and SSP
narratives). We are already experiencing increased exposure to extreme weather events
Impact: as the longer-term physical impacts of climate change increase, we have assumed
that WPP’s campuses, business continuity procedures and employee support systems
would require some additional investment above inflation to ensure continuity, minimise
risk to infrastructure and, more critically, our people. We would also need to diversify these
programmes to respond to increased climate-related migration, for example supporting
our people through relocations
Area of potential impact:
Expenditure
Includes chronic and acute
extreme weather which can
damage our buildings and
our employees’ homes,
jeopardise the safety and
wellbeing of our people and
significantly disrupt our
operations. We consider this
risk relevant to all operations,
however certain geographies
are more exposed (eg coastal
cities including New York,
Miami, Mumbai and Shanghai)
We are currently unable to
isolate the impact of climate
change from other drivers
and therefore do not publish
a quantified value
Delivering net zero commitments
Area of potential impact:
Expenditure
Delivering WPP’s Scope 3
carbon reduction targets
depends upon the adoption
of new technologies (some
of which have not yet been
conceived or created) and
business model innovations
across the supply chain.
We consider this risk relevant
to all geographies, however
it is more significant for
operations with larger
associated carbon emissions
(eg media and production)
We are in the process of
quantifying the workstreams
identified through our
Transition Plan
Key assumptions: policy
support would be limited
and market-based solutions
prioritised. There would be
limited regulation and
reporting standards specific
to our sector, eg around
green claims and carbon
based products. Clients,
consumers and existing
commitments would drive
decarbonisation
Potential impact: increased
investment would be
required in building
renovation, electrification
and supplier engagement
to meet targets, including
developing internal ESG
capacity and capabilities.
Likely increase in the cost
of carbon removals required
to meet our net zero targets
Key assumptions: policy
support would be limited to
markets currently advancing
policy. This includes the UK,
US and EU and includes
sector-specific requirements.
Market-based solutions
would still feature heavily.
Increased policy action
would embolden client and
consumer expectations,
resulting in wider calls for
decarbonisation
Potential impact: markets
with less policy support and
regulation may require
additional expenditure to
meet targets. Moderate
demand-led increase in
market price per tonne of
carbon removals required
to meet our net zero targets
Key assumptions: policy
support would be
widespread, accelerating
progress towards net zero
across our value chain.
Market-based solutions still
utilised. Increased policy
action would embolden
client and consumer
expectations, substantially
accelerating the required
pace of change
Potential impact: policy
support would accelerate
the pace of change, reducing
investment required to
deliver targets. More rapid
decarbonisation would
reduce pressure on the
carbon removals market,
and reduce overall cost
associated with meeting
our net zero targets
KEY
Risk
Opportunity
Short term
Medium term
Long term
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WPP SUSTAINABILITY STRATEGIC REPORT
WPP SUSTAINABILITY STRATEGIC REPORT
WPP’S CLIMATE-RELATED RISKS AND OPPORTUNITIES CONTINUED
POTENTIAL IMPACT AND RESILIENCE
RISK OR OPPORTUNITY
HIGH CARBON
SCENARIO
LOW CARBON
SCENARIO
VERY LOW CARBON
SCENARIO
MANAGEMENT
Changes in regulation and reporting standards
Key assumptions: no new
disclosure standards and
reporting requirements
emerge. A lack of ESG
reporting regulation and
standards could lead to
mistrust of corporate
carbon emissions data,
net zero commitments
and the advertising of
sustainable products and
services among consumers
and clients
Potential impact: current
resourcing levels would
continue to meet
reporting obligations
Key assumptions: emerging
disclosure standards and
reporting requirements in
markets currently enacting
legislation come into effect
Potential impact:
additional investment in
internal capability building
(managed at a global level),
data capture, reporting
and assurance would be
required to meet the needs
of legislation, including in
the UK, US and EU where
legislation addressing ESG
reporting is currently
being enacted
Key assumptions: disclosure
standards and reporting
requirements cover most
major geographies and
advance beyond what
is currently in place.
This includes the expansion
of reporting requirements
specific to the advertising
sector – eg relating to the
emissions facilitated through
the sale of products
and services
Potential impact: further
additional investment in
internal capability building
(with localised expertise to
support local compliance),
data capture, reporting
and assurance would be
required to meet the needs
of this legislation
Area of potential impact:
Expenditure
WPP could be subject to
increased costs to comply
with potential future
changes in environmental
laws and regulations and
increasing carbon offset
pricing to meet its net zero
commitments. Carbon
emission accounting for
marketing and media is in its
infancy and methodologies
continue to evolve. This is
particularly the case for
emissions associated with
digital media
We are currently unable to
isolate the impact of climate
change from other drivers
and therefore do not publish
a quantified value
Increased demand for sustainable products and services
Area of potential impact:
Revenue
Opportunity to grow
revenues from products
and services which support
clients as they seek to
decarbonise their businesses.
This may include developing
low or net zero marketing,
media and ecommerce
services, developing
sustainability-focused brand
strategies and promoting
sustainable consumption to
consumers. This opportunity
is relevant globally
We have not yet quantified
the scale of this opportunity
due to the availability of data
Key assumptions: under
this scenario we have
assumed that, while some
clients and consumers will
seek sustainable products
and services, the overall
rise in demand is limited
Potential impact: the
overall impact on Group
level financial planning
processes would be limited
Key assumptions: growth
in demand would be steady,
and revenue generated from
sustainable products and
services by 2030 would be
material with some markets
and services seeing more
growth than others
Key assumptions: growth
in demand would be rapid,
and sustainable products
and services would make
up a significant proportion
of revenues by 2030
across most markets and
service offerings
Potential impact: budgets
and cash flow forecasts
would likely reflect an
investment in sustainability-
related skills, as well as new
sustainable product and
service offerings
Potential impact: budgets
and cash flow forecasts
would reflect the required
investment to meet the
opportunity. Significantly
increased investment in
employee capability
required, and growth
through acquisition may
be needed to meet demand.
Innovation and investment
in new products and services
would be extensive
About our reporting (page 55):
we are monitoring
developments in legislation
relating to ESG reporting and
the regulation of environmental
claims and investing in internal
capability building in response
Work with integrity (page 27):
our Green Claims Guide
is informed by guidance from
regulators and complemented
by a legal toolkit that has been
incorporated into our legal
clearance process
Media decarbonisation (page
61): we are working with trade
bodies to agree a consistent
and transparent methodology
for calculating emissions from
media placement
Offsetting (page 61): our
Environment Policy covers how
we manage the cost and quality
of carbon credits purchased to
offset emissions we cannot
remove. We continue to
develop our offsetting strategy
as part of our transition plan
Our approach to sustainability
(pages 54 and 55): outlines our
commitment to developing
products and services which
enable our clients to adopt
leadership positions on climate
change and exceed the
expectations of consumers
Media decarbonisation (page
65): in 2023, GroupM launched
a new omnichannel media
carbon calculator for clients,
enabling them for the first time
to factor channel-level carbon
emissions data into their media
planning. Our client coalition
of leading advertisers, worth
$10 billion in global advertising
investment, is driving support
for greater transparency and
standardisation of emissions
measurement
Advertising production (page
61): we continue to invest in
virtual production capabilities,
partnering with key industry
innovators to create a
compelling alternative to
traditional production methods
KEY
Risk
Opportunity
Short term
Medium term
Long term
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FINANCIAL DISCLOSURES STATEMENT CONTINUED
WPP’S CLIMATE-RELATED RISKS AND OPPORTUNITIES CONTINUED
POTENTIAL IMPACT AND RESILIENCE
RISK OR OPPORTUNITY
HIGH CARBON
SCENARIO
LOW CARBON
SCENARIO
VERY LOW CARBON
SCENARIO
MANAGEMENT
Achieving resource efficiencies through cutting our carbon footprint and improving energy efficiency
Key assumptions: a greater level of policy support for
decarbonisation would widen the pool of opportunities
available to WPP. This includes greater proliferation of
electrified buildings, greater availability of electric vehicles
and greater innovation in value chain solutions. This would
accelerate the overall rate at which WPP could decarbonise
our operations and value chain
Potential impact: the greater availability of decarbonisation
options would accelerate the overall rate at which WPP
could decarbonise our operations and value chain. Overall,
this would lower our reliance on removal-based offsetting
and reduce the cost associated with meeting our net zero
commitments
Our climate strategy (pages
60 and 61): In 2021, we set
ambitious near-term science-
based targets to reduce our
greenhouse gas emissions in line
with limiting global warming
to 1.5°C above pre-industrial
levels. Our climate strategy
addresses how we are
managing the implementation
of our net zero commitments
Additional information can be
found in the Planet section of
our 2023 Sustainability Report
Area of potential impact:
Avoided expenditure
Through carbon reduction
initiatives we have the
opportunity to decrease the
costs associated with energy
use and limit increased costs
associated with carbon
taxation. This relates both
to our buildings, and to
energy-intense activities
such as data storage.
This opportunity is
relevant globally
We are currently unable to
isolate the impact of climate
change from other variables
and therefore do not publish
a quantified range of impact
Key assumptions:
policy support for
decarbonisation would
be limited, placing the
burden for decarbonisation
on private sector funding
Potential impact: our
investment in our net zero
strategy would still
achieve resource
efficiencies. However,
some decarbonisation
opportunities, including
technology-based solutions,
may not be available without
a supportive policy
environment, lowering the
impact of this opportunity.
This may increase our overall
expenditure on carbon
removals and offsets
required to meet our net
zero commitment
Increased reputational risk associated with misrepresenting environmental claims in marketing and advertising content
Area of potential impact:
Fines, Revenue
As societal consciousness
around climate change rises,
our sector is seeing increased
scrutiny of its role in driving
consumption. Our clients seek
expert partners who can give
recommendations that take
into account stakeholder
concerns around climate
change. This risk is globally
relevant, but in the short term
is greater in geographies with
existing or emerging
regulation (Australia, EU, UK
and US)
We are currently unable to
isolate the impact of climate
change from other variables
and therefore do not publish
a quantified range of impact
Key assumptions:
government regulation of
environmental advertising
and marketing claims would
likely be limited. There is
little risk of litigation
Potential impact: the risk
of fines or revenue losses
is negligible under this
scenario. We would
continue to invest in
training to support credible
environmental claims to
respond to consumer and
client concerns around
credibility
As government regulation
of environmental advertising
and marketing claims has
been enacted in geographies
including Australia, EU, UK
and US, we no longer
consider this scenario
as relevant
Key assumptions:
government regulation of
environmental advertising
and marketing claims is likely
to be centred on markets
already advancing climate
policy, in addition to
consumer and client concern
around credibility. This
includes the UK and US.
The risk of litigation
increases in those markets
Potential impact: increased
investment in training and
capability would be required
to ensure advertising and
marketing content is
compliant
Key assumptions:
government regulation of
environmental advertising
and marketing claims would
likely be widespread, in
addition to a significant
rise in consumer and client
concern around credibility.
There would be widespread
risk of litigation and the
potential for revenue losses
should our reputation for
credibility be jeopardised
Potential impact:
investment in localised
training and capability
would be required to ensure
advertising and marketing
content is compliant
Policies, procedures and
culture (page 94): the
misrepresentation of
environmental issues is
governed by our Code
of Conduct
Work with integrity (page 27):
we continue to develop and
implement internal tools,
including our Green Claims
Guide, to help our people make
effective environmental claims
which are not misleading
in any way
Accepting new assignments
(page 27): our Assignment
Acceptance Policy and
Framework provides guidance
on how to conduct due
diligence in relation to clients
and any work we are asked
to undertake
Additional information can be
found in the Clients section of
our 2023 Sustainability Report
KEY
Risk
Opportunity
Medium term
Long term
66
WPP ANNUAL REPORT 2023
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES STATEMENT
WPP SUSTAINABILITY STRATEGIC REPORT
WPP SUSTAINABILITY STRATEGIC REPORT
WPP’S CLIMATE-RELATED RISKS AND OPPORTUNITIES CONTINUED
POTENTIAL IMPACT AND RESILIENCE
RISK OR OPPORTUNITY
HIGH CARBON
SCENARIO
LOW CARBON
SCENARIO
VERY LOW CARBON
SCENARIO
MANAGEMENT
Increased reputational risk associated with working on client briefs perceived to be environmentally detrimental
Key assumptions:
government regulation of
environmental advertising
and marketing claims would
be limited. There would be
little risk of litigation
Potential impact: we
continue to develop
training to support credible
environmental claims to
respond to consumer and
client concerns around
credibility
Area of potential impact:
Revenue
WPP serves some clients
whose business models are
under increased scrutiny, for
example energy companies
or associated industry groups
who are at different stages of
the decarbonisation process.
This creates both a reputational
and related financial risk for
WPP if we are not rigorous
in our content standards
We are currently unable to
isolate the impact of climate
change from other variables
and therefore do not publish
a quantified range of impact
Key assumptions:
government regulation in a
limited number of markets
could outline definitions of
high-carbon products or
services that cannot be
advertised, but this would
be restricted to the most
carbon-intense instances.
The risk of litigation would
increase in those markets
Potential impact: there
would likely be an increased
risk associated with working
on client briefs perceived
to be environmentally
detrimental. Increased
investment in training
and capability would
be required to ensure
advertising and marketing
content is compliant
Key assumptions:
government regulation in
a large number of markets
may outline definitions of
high-carbon products or
services that cannot be
advertised and this covers
a larger number of instances
Potential impact: there
would be a significant
increased risk associated
with working on client
briefs perceived to be
environmentally detrimental.
Investment in localised
training and capability
would be required to ensure
advertising and marketing
content is compliant
Accepting new assignments
(page 27): our Assignment
Acceptance Policy and
Framework provides guidance
on how to conduct due
diligence in relation to clients
and any work we are asked
to undertake
Additional information can be
found in the Clients section of
our 2023 Sustainability Report
KEY
Risk
Medium term
Long term
WPP ANNUAL REPORT 2023
67
STRATEGIC REPORT WPP SUSTAINABILITY
TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES STATEMENT CONTINUED
METRICS AND TARGETS
Metrics and targets are used by WPP to assess and manage our climate-related risks and opportunities. As part of the process of preparing
this disclosure, we have considered the metrics set out by the TCFD in tables A1.1, A1.2 and A2.1 of the TCFD recommendations. In 2023,
we added a new metric to track delivery of green claims training.
WPP risk or opportunity
Risk or opportunity type
Internal time horizon alignment
Increased frequency of extreme
weather and climate-related
natural disasters
Physical risks
Changes in regulation and
reporting standards
Transition risks
Delivering net zero commitments
Greenhouse gas emissions
12% of headcount located in countries at 'extreme' exposure to the
physical impacts of climate change in the next 30 years (2022: 11%)
In 2024, conduct a double materiality assessment in line with the
EU CSRD to determine the materiality of various climate-related
issues. See About Our Reporting page 55
Achieving net zero in our own operations (Scope 1 and 2) by 2025
and across our supply chain (Scope 3) by 2030, including emissions
from media buying – an industry first
Reducing absolute Scope 1 and 2 emissions by 84% by 2025 and
absolute Scope 3 emissions – including media buying – by 50%
by 2030, both from a 2019 base year
Sourcing 100% of our electricity from renewable sources by 2025
Absolute Scope 1 and Scope 2 emissions (see Carbon Emissions
Statement – page 69)
Scope 1 and 2 carbon emissions per person and per unit of revenue
(see Carbon Emissions Statement – page 69)
Scope 3 carbon emissions (see 2023 Sustainability Report)
88% electricity purchased from renewable sources (2022: 83%)
Capital deployment
Deployment of first year of Net Zero Transition Plan
Remuneration
Integration of performance on Scope 1 and 2 carbon reduction
targets in executive remuneration (see Compensation, Succession
and Evaluation – from page 152)
Internal carbon prices
£6.93 per tCO2e associated with business air travel recharged
to WPP agencies (2022: £6.01 per tCO2e)
Increased demand for sustainable
products and services
Climate-related opportunities
82% of our top 50 clients have set or committed to set science-
based carbon reduction targets (2022: 78%)
Achieving resource efficiencies
through cutting our carbon footprint
and improving energy efficiency
Climate-related opportunities
Sourcing 100% of our electricity from renewable sources by 2025
Increased reputational risk
associated with misrepresenting
environmental claims in marketing
and advertising content
Increased reputational risk
associated with working on
client briefs perceived to be
environmentally detrimental
Transition risks
Transition risks
75,000 employees in net zero campuses by 2025
Expand the delivery of Green Claims training, with focus on clients
in higher risk and higher emissions sectors (2022: N/A)
Indicates the selected metrics have been subject to independent limited assurance procedures by PricewaterhouseCoopers for the year ending 31 December 2023. For PwC’s 2023 Limited Assurance
report and the WPP Sustainability Reporting Criteria 2023, see wpp.com/sustainabilityreport2023
KEY
Target
Metric
68
WPP ANNUAL REPORT 2023
WPP SUSTAINABILITY STRATEGIC REPORT
CARBON EMISSIONS STATEMENT
EMISSIONS AND ENERGY1, 3
CO2e EMISSIONS BREAKDOWN (TONNES/ENERGY (MWh)
Emissions source
UK2
Non-UK
Total
2023
2022
Total
2021
Total
2019
Total
Continuing operations
Scope 1 Natural gas
Diesel and heating oil
Company cars (centrally contracted)
Energy
MWh
7,765
5
N/A
Tonnes
of
CO2e
1,574
1
5
Energy
MWh
10,918
1,898
Tonnes
of
CO2e
Energy
MWh
Tonnes
of
CO2e
Tonnes
of
CO2e
Tonnes
of
CO2e
Tonnes
of
CO2e
2,213
18,683
3,787
4,443
5,071
6,299
493
1,903
494
N/A
4,246
N/A
4,251
698
4,911
638
4,429
541
18,175
Sub-total Scope 1
7,770
1,580
12,816
6,952
20,586
8,532
10,052
10,138
Company cars (local contracts)
N/A
17
N/A
2,805
N/A
2,822
4,054
3,154
Total Scope 1
7,770
1,597
12,816
9,757
20,586
11,354
14,105
13,292
25,015
Scope 2 Standard electricity (location based)4
0
0
18,062
7,969
18,062
7,969
10,431
20,602
56,421
Green and renewable electricity (location based)4
14,735
3,051
111,995
42,886
126,730
45,937
41,558
34,150
27,324
Heat and steam4
32
6
10,063
1,808
10,095
1,814
1,964
1,238
1,820
Total Scope 2 (location-based emissions)4
14,767
3,057
140,120
52,663
154,887 55,720
53,953
55,990
85,565
Standard electricity (market based)4
Green and renewable electricity (market based)
Heat and steam4
Total Scope 2 (market-based emissions)4
0
14,735
32
14,767
0
0
6
6
18,062
8,154
18,062
8,154
10,032
20,602
60,750
111,995
0
126,729
0
0
0
0
10,063
1,808
10,095
1,814
1,964
1,238
1,820
140,120
9,962
154,887
9,968
11,996
21,840
62,570
Total
Scope
1 and 2
Total Scope 1 and 2 (location based)4
22,537
4,654
152,936
62,420
175,473
67,074
68,059
69,282
110,580
Total Scope 1 and 2 (market based)4
22,537
1,603
152,936
19,719
175,473
21,322
26,102
35,132
87,585
Scope 3 Business air travel (centrally contracted flights)
Business air travel (locally contracted and uplifted)
Total Scope 3
WPP’S CARBON INTENSITY (TONNES OF CO2e)
N/A
N/A
N/A
59,793
34,315
11,421
122,967
15,894
75,687
21,347
55,662
11,421
122,967
Intensity metric
Total
Scope
1 and 2
Tonnes per full-time employee (market based)4
Tonnes per £m revenue (market based)4
Scope 3 Tonnes per full-time employee
Non-UK
0.12
N/A
0.20
UK
N/A
N/A
N/A
Total
0.19
1.44
0.67
2022
0.23
1.81
0.48
2021
0.32
2.74
0.10
2020
0.82
6.62
1.15
Notes
1 Our carbon emissions statement has been prepared in accordance with the Greenhouse Gas Protocol and aligns with the Scope 2 market-based emissions methodology guidance. Our reporting
incorporates carbon dioxide equivalent emissions from building energy use and business air travel. Emissions data is included for all operations where WPP have control of the entity, either through
majority ownership of the equity share capital or through other facts and circumstances that lead to the conclusion that WPP has power over the investee
2 This year, in line with UK Streamlined Energy and Carbon Reporting (SECR) requirements, we have calculated our energy use and emissions for UK markets, showing in a separate column
3 Additional information on our carbon emissions methodology is included in our Sustainability Report and Reporting Criteria on our website (wpp.com/sustainability)
4 2022 energy metric restated in line with the procedures set out in the WPP Sustainability Reporting Criteria 2023. For details of the nature and impact of the restatement, see page 61
Indicates the selected metrics have been subject to independent limited assurance procedures by PricewaterhouseCoopers for the year ending 31 December 2023. For PwC’s 2023 Limited Assurance
Report and the WPP Sustainability Reporting Criteria 2023, see www.wpp.com/sustainabilityreport2023
WPP ANNUAL REPORT 2023
69
STRATEGIC REPORT WPP SUSTAINABILITY
PUBLIC POLICY
Business can make a valuable contribution
to the public policy debate
To protect the public interest, it is
important that we conduct all lobbying
with integrity and transparency.
Most of our public policy work is carried out
for clients by our public affairs businesses,
including lobbying public officials and
influencing public opinion. We also advocate
on issues that affect our business, people
and wider stakeholders.
Our agencies engaged in public affairs
include BCW, Hill & Knowlton and FGS
Global. The majority of this work takes place
in the US, UK and EU, although many clients
are multinational businesses operating
in many countries.
OUR STANDARDS
Our Code of Business Conduct and Political
Activities and Engagement Policy govern
our political activities. They commit us to
acting ethically in all aspects of our business,
and to maintaining the highest standards
of honesty and integrity. Political activities
should be conducted legally, ethically and
transparently, and all related communication
should be honest, factual and accurate. Our
policies apply to all agencies and employees,
at all levels.
Our Group Chief Counsel has responsibility
for developing and implementing our
Political Activities and Engagement Policy
and public reporting procedures. Agency
CEOs and CFOs in each country or region
are responsible for implementing the
policy locally.
Any third parties conducting political
activities on behalf of WPP or our agencies
must comply with the policy. Third parties
are required to complete WPP mandatory
ethics training or equivalent within their
own organisations.
WPP agencies comply with all applicable
laws and regulations governing the disclosure
of public affairs activities. In the US, this
includes the Lobby Disclosure Act and the
Foreign Agent Registration Act, which are
designed to achieve transparency on client
representation and require lobbying firms to
register the names of clients on whose behalf
they contact legislators or executive branch
personnel. A number of our agencies are
listed on the EU Transparency Register
70
WPP ANNUAL REPORT 2023
of lobbying activities. Our agencies in the US
whose sole or primary business is lobbying
have representatives of both major political
parties among senior management.
Many of our agencies are members of
professional organisations and abide by
their codes of conduct. Examples include
the UK Association of Professional Political
Consultants and the European Public Affairs
Consultancies’ Association.
We will not undertake work that is intended
to mislead, and always seek to identify the
underlying client before taking on work.
Our Assignment Acceptance Policy and
Framework provides guidance to our leaders
and people about how to conduct additional
due diligence in relation to clients and
any work we are asked to undertake (see
page 27).
LOBBYING AND POLITICAL ADVOCACY
We occasionally directly contribute to the
debate on public policy issues relevant to
our business, people and wider stakeholders.
For example, we are part of the Race to Zero
campaign managed by the UNFCCC. We
engaged with the UK Government on its
AI regulatory framework by contributing
to the public consultation, participating
in ministerial roundtables, and providing
insight into AI systems. Where relevant
we contributed to the public policy debate
through trade bodies, such as the Federal
Trade Commission’s updated Green Guides,
or the EU’s rules on late payments.
We also support clients’ advocacy on a
wide range of issues including LGBTQ+ rights,
through both pro bono and paid work. Our
agencies contribute to public policy debate
in areas where they have expertise and
a special interest, such as privacy, data
protection and AI issues.
WPP agencies must implement clear
procedures for employing serving or former
politicians, including a six-month 'cooling-off'
period for people joining WPP from public
office or the public sector.
POLITICAL CONTRIBUTIONS
WPP agencies are not permitted to make
direct cash donations. Other political
donations can only be made with the prior
written approval of a WPP Executive
Director. Donations must be reported to
WPP's legal function before they are made,
to confirm they comply with this policy and
to obtain the necessary approvals.
POLITICAL ACTION COMMITTEES
In countries where it is consistent with
applicable law, individuals working at WPP
agencies may make personal voluntary
political contributions directly to candidates
for office. BCW and FGS Global also maintain
political action committees, which accept
voluntary donations from their people to
support political candidates. In 2023, these
committees made disbursements worth
$164,389 (data from fec.gov).
MEMBERSHIP OF TRADE ASSOCIATIONS
WPP and our agencies are members of
industry groups, business associations and
other membership organisations with robust
governance processes. WPP agencies must
nominate a senior manager to manage and
oversee trade association relationships.
We actively support initiatives and projects
that align with our values and priorities,
such as the Global DEI Census, Ad Net Zero
and Global Alliance for Responsible Media.
This can help accelerate progress across the
industry. For example, we are working with
trade bodies to agree a consistent and
transparent methodology for calculating
emissions from media placement.
WPP’s memberships include: 30% Club,
Accounting for Sustainability, the American
Benefits Council, Business Disability Forum,
Business in the Community, Champions of
Change Coalition, China-Britain Business
Council, Global Equity Organization, Institute
of Business Ethics, Living Wage Foundation,
Media Trust, RE100, UN Global Compact,
Unmind, The Valuable 500, Women on Boards
and Partnership for Global LGBTIQ+ Equality.
At a local level, our agencies are often
members of local advertising, PR, public
affairs and market research industry
associations, as well as national chambers
of commerce and business councils.
WPP SUSTAINABILITY STRATEGIC REPORT
SUPPLY NETWORK
Creating an inclusive, sustainable, ethical
and diverse network of suppliers
The wide range of services we offer and
our organisational structure mean we
have to manage a complex and dynamic
supply chain.
We work with more than 60,000 parent
companies across our supply network.
Our suppliers fall into two main categories:
those providing goods and services such
as IT, telecommunications and travel, and
those used in client work such as production
and media.
In 2023 our newly expanded responsible
procurement team strengthened how
we manage environmental, social and
governance issues in our supply chain,
focusing on supply chain risk, carbon
reduction and supplier diversity.
SUPPLY CHAIN RISK
We continually assess our supply chain risk,
and have established due diligence processes
to help us select suppliers that meet our
responsible sourcing standards.
In 2023, we developed and rolled out a
refreshed risk assessment methodology and
mitigation framework, alongside workshops
to help us identify and rank risks across each
supply category. The next phase will assess
key suppliers in each category, formulating
plans to manage specific supplier risks.
Suppliers are asked to sign a copy of
WPP’s Code of Business Conduct or prove
equivalence within their own policies as a
pre-condition to engagement to confirm
they will comply with its principles.
Our Code of Business Conduct requires
suppliers to apply similar standards to
companies within their own supply chains,
including evidencing diversity and social
responsibility in their cultures, behaviours
and attitudes.
WPP also includes a right-to-audit provision
in the supplier documentation and/or
standard terms and conditions of contract.
CARBON REDUCTION
We are committed to halving carbon
emissions across our supply chain by 2030,
from a 2019 baseline. We know that the
complex nature of our supply chain makes
this target ambitious, but it's one we are
determined to reach.
In 2023 we commissioned sustainability
consultancy Anthesis to help map our indirect
suppliers’ carbon footprint, identifying those
‘carbon strategic suppliers’ we can engage
with to help bring down their emissions.
It revealed that around 800 suppliers make
up 80% of our total indirect purchased
goods and services CO2e emissions – giving
us a clear strategy to work with these
suppliers to understand their emissions
reduction plans. This will remain a priority in
2024 and beyond.
SUPPLIER DIVERSITY
We are committed to including Certified
Diverse Suppliers (CDS) in our purchasing
lifecycle, both internally and for the benefit
of our clients.1
We partner with Supplier.IO to actively
search and include CDS in our sourcing
process. In addition, we are now in our
third year of working with MSDUK (Minority
Supplier Development UK) on its Integrated
Supply Chain Accelerator scheme, hosting
the Accelerator programme in January 2024.
This initiative means we are one of four major
industry leaders collaborating to find ways
of embedding an ethos of diversity in our
ways of working.
HUMAN RIGHTS
Respect for human rights is a fundamental
principle for WPP. In our business activities
we aim to prevent, identify and address
negative impacts on human rights. We look
for opportunities to promote and support
human rights, including children’s rights,
through our business activities and in areas
such as our pro bono work.
All WPP agencies must comply with our
Human Rights Policy Statement, which
reflects international standards and principles
including the UN Guiding Principles on
Business and Human Rights, the International
Labour Organization’s Declaration on
Fundamental Principles and Rights at Work,
and UNICEF’s Children’s Rights and
Business Principles.
Our most direct impact on human rights
is as a major employer. We recognise the
rights of our people, including those relating
to freedom of association and collective
bargaining, and do not tolerate harassment
or any form of forced, compulsory or
child labour.
We work with clients to manage any human
rights risks from marketing campaigns, for
example by protecting children’s rights in
relation to marketing. We will not undertake
work that is intended to mislead on human
rights or any other issue.
MODERN SLAVERY
We do not tolerate any form of modern
slavery or human trafficking in any part
of our business or supply chain.
Modern Slavery Act Transparency Statement,
wpp.com/sustainability/modern-slavery-
act-statement
We recognise the prevalence of modern
slavery across all countries. To strengthen
how we identify and manage modern slavery
risk in our indirect supply chain, we recently
partnered with third-party service provider
SlaveCheck, who identify and flag any
potential slavery risks or incidences within
global supply chains.
We also introduced new mandatory modern
slavery training, which was completed by all
group procurement employees.
Our global Supplier Agreement includes
a specific clause relating to modern slavery
compliance. We reserve the right to
terminate a contract with any supplier
found to breach or fail to comply with any
legislation relating to modern slavery.
See more in the Supply Chain and
Human Rights sections of our 2023
Sustainability Report
1 We define CDS as minority-owned, women-owned,
veteran-owned, LGBTQ-owned, service disabled, historically
underutilised businesses and small businesses
WPP ANNUAL REPORT 2023
71
STRATEGIC REPORT WPP SUSTAINABILITY
OUR WORK IN
SUSTAINABILITY
We believe the work we do can help change the
world for the better, from shifting attitudes to food
waste to promoting new accessible devices
The next seven pages showcase some of our best
sustainability-focused campaigns from 2023
72
WPP ANNUAL REPORT 2023
CASE STUDIES
WPP SUSTAINABILITY STRATEGIC REPORT
AUGMENTAL’S MOUTHPAD^
Changing the game in assistive technology
74
CANCER RESEARCH UK
Using the power of data to maximise charity fundraising
75
NOTCO: NATURAL LIFE EXPECTANCY
How AI helped promote alternatives to meat
76
MAKRO: LIFE EXTENDING STICKERS
Data visualisation to help reduce food waste
77
REGAL SPRING: HEAVEN FISH
Turning a unique phenomenon into an opportunity
for local communities
78
LANDOR: {ACCESS}ORIES
A new standard for accessible design
79
WPP ANNUAL REPORT 2023
73
STRATEGIC REPORT WPP SUSTAINABILITY
CASE STUDIES
AUGMENTAL’S
MOUTHPAD^
Changing the game in
assistive technology
OFFER
TECHNOLOGY
AGENCY
WUNDERMAN THOMPSON (VML),
PERU
CLIENT
AUGMENTAL
THE QUESTION
According to the World Health Organization,
in Peru an estimated 250,000 to 500,000
people suffer a spinal cord injury every
year. Despite advancements in assistive
technologies, many struggle with restricted
computer control and access to web-based
services. As a result, they often experience
reduced autonomy and the sense of
frustration that goes with it.
THE ANSWER
Augmental’s Mouthpad^ is an inspiring,
inclusive design innovation opening up
a new way for people with disabilities to
interact with the world. The simple device
sits comfortably in the mouth, allowing users
to control a wide range of Bluetooth-linked
devices with their tongue.
The tongue offers an alternative for
interacting with digital platforms. Its dexterity
and sensitivity can generate a wide range of
movements, enabling control of computers,
smartphones, tablets and other electronics
in the same way as a fingertip touchpad.
Wunderman Thompson provided brand
support and brand experience for
Augmental’s MouthPad^, led by the team
in Peru and working with the agency’s
inclusive experience practice.
THE IMPACT
1.3bn
media impressions
1k
pre-orders in the
first week
188k
organic impressions
in one week
Awards
Grand Prix & Silver
Cannes Lions 2023
Scan the
QR code
74
WPP ANNUAL REPORT 2023
CASE STUDIES
WPP SUSTAINABILITY STRATEGIC REPORT
CANCER
RESEARCH UK
The power of data
OFFER
DATA
AGENCY
GROUPM NEXUS,
ESSENCEMEDIACOM, UK
CLIENT
CANCER RESEARCH UK
THE QUESTION
When Cancer Research UK relaunched
its biggest fundraising drive, Race for Life,
two key questions drove the campaign:
how to better target men, and how to be
locally relevant – most participants don’t
travel more than 10 miles for a race.
THE ANSWER
Data. And the cross-channel platform from
GroupM Nexus, Unmissable. By overlaying
location-based data, audience insights,
YouGov data and client first-party data,
Unmissable powered hyper-local ads on a
national scale, supported by fluid budget
allocation in real time.
This guaranteed that ads were seen at the
right frequency at each race location, no
matter the channel or device. To minimise
wastage, media across all channels was
switched off just before each race took place.
Spend was then redistributed to continue
supporting active races. The client’s real-time
sign-up data was used to identify which
events needed further support, boosting
sign-up performance.
THE IMPACT
Two-thirds of those exposed to an ad took
action, with one in five making a donation.
This granular, data-driven approach to
media and messaging is set to transform
how Cancer Research supports future
fundraising events.
6x
uplift in sign-up
intent amongst
males
75%
uplift in audience
engagement
Scan the
QR code
WPP ANNUAL REPORT 2023
75
STRATEGIC REPORT WPP SUSTAINABILITY
CASE STUDIES
NATURAL LIFE
EXPECTANCY
Using AI to imagine farm
animals growing old
OFFER
AI
COMMUNICATIONS
AGENCY
AKQA BLOOM, US
CLIENT
NOTCO
THE QUESTION
When was the last time you saw
an old cow, pig or chicken?
THE ANSWER
Most people have never seen old farm
animals, because they only live a fraction
of their natural lives in the food industry.
NotCo, a global food tech company, is
on a mission to eliminate animals from
the food system by using AI to recreate
flavours and textures of animal products
using only plants.
Alongside AKQA Bloom, the company
decided to educate people that, if
allowed to, cows can live up to 48 years,
pigs up to 23 years and chickens up to
20 years. To imagine these animals growing
old, Bloom used AI to create a series of
photographic portraits of elderly farm
animals. The campaign was created using
a combination of AI tools including
Midjourney and Stable Diffusion.
The hyper-realistic images were seen
on social media, billboards and print
advertisements across the US, Chile,
Brazil, Canada, Mexico and Argentina.
THE IMPACT
30%
increase in sales
430m
media impressions
Scan the
QR code
76
WPP ANNUAL REPORT 2023
CASE STUDIES
WPP SUSTAINABILITY STRATEGIC REPORT
LIFE EXTENDING
STICKERS
Data visualisation inspired
by nature
OFFER
BRAND EXPERIENCE
AGENCY
GREY, COLOMBIA
CLIENT
MAKRO COLOMBIA
THE QUESTION
In Colombia, fruit and vegetables make up
40% of the country’s food waste. Many are
still perfectly usable – if you know what to
do with them. Preconceived ideas that fruit
and veg must be perfectly ripe were causing
a huge waste of resources.
THE ANSWER
Makro Colombia wanted to extend the shelf
life of its products and encourage consumers
to consider buying fruit beyond their normal
preference for ripeness. Grey Colombia
worked with them to produce Life Extending
Stickers. Simple, low-cost, low-tech
fruit stickers.
Each sticker shows a range of colours, from
underripe to overripe, for the fruit or veg it
is attached to. For each colour there is a
suggestion of what to do with it – everything
from cupcakes to soup to tempura. And if
customers want to take things hi-tech, they
can check Makro Colombia’s Instagram feed
for corresponding recipes.
A simple but impactful way to reduce
food waste.
THE IMPACT
85k
25
interactions
on social media
countries with earned
media coverage
Awards
Gold
Cannes Lions 2023
Scan the
QR code
WPP ANNUAL REPORT 2023
77
STRATEGIC REPORT WPP SUSTAINABILITY
CASE STUDIES
HEAVEN FISH
Turning a unique phenomenon
into an opportunity
OFFER
BRAND IDENTITY
AGENCY
OGILVY, HONDURAS
CLIENT
REGAL SPRINGS
THE QUESTION
Every year for the past 100 years, it seems
a strange phenomenon occurs in the region
of Yoro, Honduras. Fish appear on the streets.
And they are said to have fallen from the sky.
The locals call it lluvia de peces, the rain
of fish. Some say it’s a miracle. We say it’s an
economic opportunity for the people of Yoro.
THE ANSWER
Yoro is a largely rural area where most people
earn about $1 a day. Ogilvy worked alongside
Regal Springs, a leader in sustainable fish
production, to create a new brand and product
that turns the ‘miracle’ of the rain of fish into
a source of income for Yoro residents.
Enter Heaven Fish. When the fish appear,
locals gather them and take them straight
to their local Regal Springs centre, where
they are cleaned, processed and packaged
in containers mostly made from local banana
peels. Heaven Fish is then sold at restaurants
and markets around the country. Registered
with a protected designation of origin, the
people of Yoro have exclusive rights to
distribute these ever more valuable fish for
the benefit of their families and community.
200+
distribution
alliances
THE IMPACT
80+
Honduran markets
selling Heaven Fish
80%
of revenue goes
to Yoro’s residents
QR
TBC
Scan the
QR code
78
WPP ANNUAL REPORT 2023
CASE STUDIES
WPP SUSTAINABILITY STRATEGIC REPORT
{ACCESS}ORIES
One size fits one
OFFER
BRAND-LED INNOVATION
AGENCY
LANDOR, WORLDWIDE
THE QUESTION
We spend 113,760 minutes of our lives
brushing our teeth. For the 360 million people
living with dexterity challenges worldwide,
this activity can be a daily pain. Could we
help rapidly solve this challenge?
Scan the
QR code
THE ANSWER
Landor created {access}ories, a new
standard for accessible design, using
transformative innovations in oral care
design, technology and manufacturing
to make oral health accessible to all, now.
{access}ories are adaptive add-ons that
can be applied to any electric or manual
toothbrush to make it both accessible
and desirable. People personalise their
handles through an easy-to-use digital
platform that iterates and refines solutions
for each individual. With three different
dimensions across six handle shapes
and over 500 variants, the interface
accommodates the many different
dexterity challenges, making {access}ories
a truly one-size-fits-one solution.
By producing {access}ories with 3D
printing technology, Landor challenged
typical manufacturing processes to provide
essential solutions by designing on demand.
THE IMPACT
TIME Magazine named {access}ories as
one of the best inventions of 2023.
THIS PROJECT HAS GREAT
POTENTIAL FOR DESIRABLE
ORAL CARE, IMPROVING
THE DAY-TO-DAY LIVES
OF ANYONE LIVING WITH
ARTHRITIS OR SIMILAR
CHALLENGES”
Arthritis Action
WPP ANNUAL REPORT 2023
79
STRATEGIC REPORT
WPP
FINANCIAL
PERFORMANCE
Our performance in 2023 was resilient
across a range of key metrics, despite
macroeconomic pressures
In this section
CFO statement
Key performance indicators
Financial review
81
84
88
80
WPP ANNUAL REPORT 2023
CHIEF FINANCIAL
OFFICER’S STATEMENT
Focusing on innovation, scale and efficiency
to drive more profitable growth and higher
cash generation
PROGRESS IN 2023
We delivered a resilient performance in 2023
– despite a challenging macroeconomic
environment and lower spending from key
technology clients – with top-line growth, an
improved margin on a constant currency
basis and stronger cash generation.
Our business in the US felt the most
significant impact from lower spend
from technology clients, with a decline in
like-for-like revenue less pass-through costs
of 2.8%. Outside the US our like-for-like
revenue less pass-through costs grew 3.3%,
with strong performance in the UK and India
offsetting a decline in China.
Strong cost control and the benefits of our
2020 transformation plan enabled us to
deliver a headline operating profit margin in
2023 in line with our original margin guidance
of 15% margin on a constant currency basis.
This represented an underlying margin
improvement of 0.2 percentage points.
We also continued to prioritise organic
investment in the business including in our
client-facing technology and data offer
delivered through our AI-powered marketing
operating system, WPP Open.
Cash flow performance in 2023 was stronger
than the prior year with adjusted operating
free cash flow of £1.3 billion and adjusted
free cash flow of £637 million, benefitting
from a favourable movement of £113 million
from trade working capital in the year.
In addition to organic investment, we
invested a net £280 million in initial
acquisition payments for strategic M&A
including the acquisition of influencer
marketing agencies Goat and Obviously.
During the year £423 million was paid in
dividends. As we indicated earlier in the year,
our average adjusted net debt to headline
EBITDA was slightly above our target range
of 1.5-1.75x, at 1.83x at year end. We are
focused on bringing that metric back within
WPP FINANCIAL PERFORMANCE STRATEGIC REPORT
THE STRATEGIC INITIATIVES
WE ARE IMPLEMENTING
WILL SUPPORT OUR
AMBITION TO DELIVER
MORE PROFITABLE GROWTH
OVER THE MEDIUM TERM”
Joanne Wilson
Chief Financial Officer
our target range. We ended the year with
net debt broadly flat year-on-year at
£2.5 billion.
It has also been a period of strategic
progress, with three key initiatives: we
formed VML, the largest creative agency in
the world, merging VMLY&R and Wunderman
Thompson; announced the creation of a
leading global PR agency, Burson, from the
merger of BCW and Hill & Knowlton; and
initiated the next phase of simplification at
our media investment business, GroupM.
This step forward in leveraging scale and
simplicity means that six brand networks
will represent close to 90% of WPP’s revenue
less pass-through costs. Our simpler structure
and global, scaled capabilities will enable us
to better serve our clients around the world,
leveraging the depth and breadth of our
creative, production, media and PR expertise,
as demonstrated at our Capital Markets Day
in January 2024. It will also deliver further
structural cost savings for the business.
TRANSFORMATION
At our Capital Markets Day in December 2020
we set out a plan to deliver £600 million of
gross savings against the 2019 cost base.
We are pleased with the progress made and
at the end of 2023 we had delivered around
£475 million of gross savings.
Savings have come from three areas.
Firstly, our operating model, where we have
delivered around £152 million of savings from
a simpler WPP and tighter control of personal
costs. Secondly, a further £236 million of
efficiency savings has been delivered from
initiatives including our category-led and
WPP ANNUAL REPORT 2023
81
STRATEGIC REPORT WPP FINANCIAL PERFORMANCE
CHIEF FINANCIAL
OFFICER’S STATEMENT CONTINUED
global approach to procurement and our
campus strategy. In the final area of savings,
functional effectiveness, we have delivered
£87 million of cost savings primarily as a
result of our enterprise IT and finance
transformation.
We continue to make good progress on
our enterprise IT roadmap, including our
migration to the cloud, enhancing our
cybersecurity and investing in our digital
workplace and IT infrastructure.
Our ERP consolidation is taking longer than
we had originally anticipated, but we are
encouraged by the business benefits we are
starting to realise from the deployment of
Workday in North America. We have evolved
our ERP roadmap to reflect learnings from
the past few years and we now expect
the bulk of our ERP consolidation to be
completed by 2026, with restructuring
costs reducing accordingly.
MEDIUM-TERM FINANCIAL
FRAMEWORK
At our Capital Markets Day in January 2024,
we laid out a new medium-term financial
framework, with four key pillars:
– accelerating our organic growth through
scale and innovation
– delivering this growth more profitably
from simplification and efficiencies
– consistent and stronger cash generation
– all executed within a disciplined capital
allocation framework
We expect the output of this in the medium-
term to be 3%+ like-for-like revenue less
pass-through costs growth, 16-17% headline
operating margin, and at least 85% operating
cash flow conversion of headline operating
profit. We will maintain our average net debt
to EBITDA target ratio at between 1.5-1.75x
and an investment grade balance sheet.
The strategic initiatives we are implementing
– in particular the creation of VML and Burson
and the further simplification of GroupM –
will support our ambition to accelerate
growth. We also continue to enhance and
scale our global capabilities through our
proprietary technology, data and AI tools,
all delivered through WPP Open.
WPP has changed and developed
significantly since the 2020 Capital Markets
Day. Our Capital Markets Day in January 2024
was an opportunity to lay out an updated
efficiency plan aligned to our new structure
and building on some of the foundations laid
over the past three years.
There are two key areas of savings. Firstly,
structural cost savings from the creation
of VML and Burson and the simplification of
GroupM, which we expect to deliver around
£125 million of annual net savings in 2025.
Secondly, we are targeting £175 million of
potential savings from efficiencies across both
our back office and our commercial delivery.
Some of these efficiency savings will support
continued investment in our business. Our
2024 plans include annual cash investment
of around £250 million in proprietary
technology including in Choreograph,
our data product, service, and technology
company, and further deployment of AI
and other technology-led tools through
WPP Open.
Cash will continue to be a key focus area
for us, and the fundamentals of our business
mean that we can deliver consistent and
stronger cash generation. Improvement in
our cash generation over the medium term
will be supported by more profitable growth,
lower annual capex and restructuring costs
from 2025 and continued focus on our
working capital management, partially offset
by expected increases in cash tax.
CAPITAL ALLOCATION
We will continue to adopt a consistent and
disciplined approach to our capital allocation.
Our first priority is to invest in our business
– particularly in technology, AI, data and in
our talent – to drive organic growth.
We are maintaining our progressive dividend
policy, which targets a payout of around 40%
of headline EPS. To complement our organic
investment, we will invest in targeted M&A
opportunities that strengthen and accelerate
our capabilities in high-growth areas. And
finally, where we have excess cash, we will
return it to shareholders, as we have
demonstrated in recent years.
82
WPP ANNUAL REPORT 2023
We are also focused on maintaining our
investment grade balance sheet and a target
leverage ratio of 1.5 to 1.75 times our average
net debt (which excludes lease liabilities) to
headline EBITDA.
In May 2023, we refinanced the November
2023 €750 million bond as planned, issuing a
May 2028 €750 million bond priced at 4.125%.
In 2024, we refinanced our five-year
$2.5 billion Revolving Credit Facility, and two
bonds due September 2024 and March 2025,
as planned. See Financial Review, page 92
for details.
For 2023, the Board proposes a final dividend
of 24.4p which, together with the interim
dividend of 15p paid in November 2023,
would represent a full-year dividend for 2023
of 39.4p, in line with 2022 and representing
around 40% of headline EPS, consistent with
our policy.
See Financial Review, page 92 for details
Since joining WPP in April 2023 I have been
struck by the relentless focus and excellence
with which everyone across WPP and our
agencies works to create value for our clients
and shareholders. I believe we have a real
opportunity to turn that into even greater
value, and to execute more efficiently to
deliver strong returns for our shareholders.
I would like to thank colleagues throughout
WPP for their contribution in 2023 and for
the tremendous support they have extended
to me over the past year.
Joanne Wilson
Chief Financial Officer
21 March 2024
WPP FINANCIAL PERFORMANCE STRATEGIC REPORT
FINANCIAL OVERVIEW
Our financial priorities: driving more profitable growth, unlocking
operating model efficiencies, and focusing on our cash generation;
underpinned by a disciplined capital allocation framework
PROGRESS IN 2023
0.9%
Like-for-like growth in revenue
less pass-through costs
(2022: 6.9%)
Strong growth in the UK
and India partially offset by
declines in the US, due to
lower spend by technology
clients, and in China, due to
macroeconomic pressure
14.8%
Headline operating margin
(2022: 14.8%)
73%
Adjusted operating
cash flow conversion1
(2022: 38%)
1.8x
Average adjusted net debt/
headline EBITDA2
(2022: 1.4x)
Our headline operating
margin of 14.8% was stable
on a reported basis, and
grew 0.2 percentage points
excluding foreign exchange
movements, driven by
disciplined cost control
Adjusted operating cash flow
grew to £1.3 billion (2022:
£0.7 billion), and conversion
from headline operating profit
rose, as a result of a smaller
outflow on net working capital
and lower share purchases
Our leverage ratio (average
adjusted net debt/headline
EBITDA) increased due to
a higher level of average net
debt over the year. Year-end
net debt was unchanged at
£2.5 billion
MEDIUM-TERM FINANCIAL TARGETS
3%+
Like-for-like growth in revenue
less pass-through costs
16-17%
Headline operating margin
85%+
Adjusted operating
cash flow conversion
Accelerate our
organic growth
In the four years to 2023, our
organic compound annual
growth rate was 2.6%. We are
increasing our target growth
rate across the medium term
to at least 3%
Enhance profitability through
simplification and efficiencies
The strategic actions we are
taking to deliver structural
cost savings will underpin
margin expansion, and we have
identified further efficiency
opportunities that we will use
to continue to invest in
our business and support
delivery of our medium-term
margin target of 16-17%
Consistent and stronger
cash generation
The fundamentals of our
business mean that we can
deliver consistent and stronger
cash generation, and we are
introducing a medium-term
target for 85% or higher
conversion of headline
operating profit into operating
cash flow
1.5-1.75x
Average adjusted net debt/
headline EBITDA
Maintain our investment
grade balance sheet
We aim to maintain our
investment grade balance
sheet and a target leverage
ratio of 1.5 to 1.75 times
Disciplined capital allocation
– Continue to invest to drive organic growth in our business, particularly in the areas of technology, AI, data and talent
– Maintain our policy of paying a progressive dividend with around 40% payout of headline earnings per share
– Invest in targeted acquisitions that strengthen and accelerate our capabilities in high-growth areas
– Return excess cash to shareholders
1
Conversion ratio of headline operating profit of £1,750m (2022: £1,742m) as a percentage of operating cash flow before interest and tax of £1,280m (2022: £669m)
2 Average adjusted net debt/headline EBITDA (including depreciation of right-of-use assets)
WPP ANNUAL REPORT 2023
83
STRATEGIC REPORT WPP FINANCIAL PERFORMANCE
KEY PERFORMANCE INDICATORS
We track our performance against business and financial
factors. These indicators help our Board, management
and stakeholders compare our performance against our
strategic goals
We made good progress in 2023: delivering
for our clients, investing in talent and
capabilities, reducing our environmental
impact, and achieving our transformation
cost savings ahead of schedule. Some of our
financial KPIs were adversely impacted by
a challenging macroeconomic environment,
but we remain confident about the outlook
for the medium term
ALIGNING PERFORMANCE MEASUREMENT WITH STRATEGY
Performance measures are selected to align to our business strategy, and include a range of financial and non-financial metrics.
Where appropriate these are reflected in our incentives (see page 144 for further detail)
Lead through AI,
data and technology
Accelerate growth
through the
power of creative
transformation
Build world-class,
market-leading
brands
Execute efficiently
to drive financial
returns through
margin and cash
STRATEGIC ELEMENTS
Business KPIs
Client satisfaction score
Digital % of media billings (GroupM)
New business billings
Transformation programme
gross annual savings
Proportion of women in
executive leadership roles1
Employees in shared campuses
Carbon emissions per person
from owned operations
Share of electricity purchased
from renewable sources
Financial KPIs
Like-for-like revenue less
pass-through costs growth2
Headline operating profit margin2
Like-for-like revenue less pass-through
costs growth versus competitors2
Adjusted operating cash flow conversion2
1 Executive leadership roles are defined by WPP as the agency board and executive leadership population as reported through WPP's financial reporting system
2 For definitions, see Glossary on page 232
84
WPP ANNUAL REPORT 2023
KEY PERFORMANCE INDICATORS
WPP FINANCIAL PERFORMANCE STRATEGIC REPORT
BUSINESS
Our business KPIs measure strategic
progress towards meeting our
purpose: building better futures
for our people, planet, clients
and communities
During the year we added new
business billings as a KPI because
it is an important indicator of our
future growth
In 2023 we continued to meet
clients’ needs for modern marketing
solutions, drove growth by attracting
new clients, and operated efficiently
to free up funds for reinvestment in
the Company to support our future
growth and profitability
We have made good progress
on these measures, while making
further progress on providing
diverse and modern workplaces
for our people and playing our
part in protecting the planet
Read more on our strategic progress
on pages 1 to 71
Client satisfaction score
(out of 10)
8.0
New business billings
($bn)
4.5
2023
2022
2021
8.0
8.0
8.1
2023
2022
2021
4.5
5.9
8.7
Description and rationale
This measures how satisfied our clients are
with our services, based on 22,000 clients’
Likelihood to Recommend scores out of ten.
Our ability to retain satisfied clients is a key
driver of our revenue1
Description and rationale
Billings comprise the total amounts billed to
clients, plus our fees.2 New billings measures
new business from new and existing clients,
net of existing client business lost, and is an
important indicator of our future growth
Targets and performance
In 2023 we scored 8 out 10 overall,
maintaining the high levels achieved in
recent years. This includes quality of work
at 8.2 (2022: 8.1) and diversity, equity and
inclusion at 8.3 (2022: 8.2). We aim to
maintain top-quartile performance
Targets and performance
We won $4.5 billion of net new business
billings in 2023. This was lower than last
year, partly due to the loss of certain Pfizer
creative assignments. Key wins in 2023
included Adobe, Allianz, Krispy Kreme,
Mondelēz, Nestlé, PayPal, SC Johnson
and Verizon
Digital % of media billings
(GroupM)
51
Gross annual savings
from our transformation
programme
(£m)
475
2023
2022
2021
51
48
43
2023
2022
2021
475
375
245
Description and rationale
Billings comprise our clients’ spend on
media, plus our fees.2 We measure the digital
(internet-based) mix as digital platforms
account for the majority of the global media
market (69%), to ensure we are staying
relevant to our clients
Description and rationale
Our transformation programme is designed
to simplify WPP, build greater collaboration,
drive efficiency and free up funds for
reinvestment in growth. Our goal was to
achieve £600 million of annual cost savings
against a 2019 base by 2025
Targets and performance
GroupM’s digital billings increased to 51%
of its total billings in 2023, compared to
48% in 2022, driven by the rapid growth in
demand from clients for digital services such
as ecommerce, programmatic buying,
connected TV and retail media
Targets and performance
By the end of 2023 we delivered around
£475 million of gross annual savings against
a 2019 base, ahead of the originally planned
£450 million. Savings have come from our
operating model, including a simpler WPP
and lower travel costs, and from efficiency
initiatives in procurement and our
campus strategy
Includes Kantar
1
2 For a full description, see Glossary on page 232
WPP ANNUAL REPORT 2023
85
8.02022202151202220214.52022202147520222021
STRATEGIC REPORT WPP FINANCIAL PERFORMANCE
KEY PERFORMANCE INDICATORS CONTINUED
Proportion of
women in executive
leadership roles1
(%)
41
Employees in
shared campuses2 60,000
2023
2022
2021
41
40
39
2023
2022
2021
60,000
54,500
47,500
Description and rationale
We believe that diversity powers our
creativity and growth as a business.
We continue to focus on driving greater
gender balance throughout the Company
and, in particular, at the most senior levels.
We aim to achieve equal representation
of women at Board and all other levels
Description and rationale
Campuses bring our agencies together
to make collaboration easy, support flexible
and hybrid working, and give clients access
to the breadth and depth of WPP talent in
one location. They replace smaller offices
with larger, modern units that lower our
environmental footprint
Targets and performance
In 2023, the proportion of women in
executive leadership roles increased to 41%
(2022: 40%). Across the broader workforce,
more than half (53)% of senior managers
are women compared with 54% in 2022
Targets and performance
In 2023, around 60,000 of our people were
based in 41 campuses. We expect this to rise
to 75,000 in 47 campuses by 2025. This is
revised from the previous target of 85,000
in at least 65 campuses, due to the rise in
hybrid working
Carbon emissions
per person from our
owned operations
(tCO2e, Scope 1 and 2)
0.19
Share of electricity
purchased from
renewable sources
(%)
88
2023
2022
2021
0.19
0.233
0.233
2023
2022
2021
0.32
88
83
74
Description and rationale
We support urgent action to tackle the
climate crisis through the Paris Climate
Agreement. We measure carbon emissions
per employee, as headcount is closely
linked to levels of business activity, and this
allows us to reflect the impact of acquisitions
and disposals without needing to adjust
our baseline
Targets and performance
We are committed to reducing absolute
Scope 1 and 2 emissions by 84% by 2025,
and halving Scope 3 emissions by 2030.
In 2023 carbon emissions per employee fell
17% compared with 2022, and by 77% since
our 2019 baseline
Description and rationale
To support our carbon reduction targets
we are a member of RE100, a global initiative
bringing together businesses committed
to 100% renewable electricity to accelerate
change towards zero carbon grids at scale
Targets and performance
During 2023, we purchased 88% of our
electricity from renewable sources compared
with 83% in 2022, reflecting good progress
towards our target of 100% by 2025
1 Executive leadership roles are defined by WPP as the
agency board and executive leadership population
as reported through WPP's financial reporting system
2 Defined as employees and freelancers in campuses
3 2022 energy metric restated in line with the procedures
set out in the WPP Sustainability Reporting Criteria 2023.
For details of the nature and impact of the restatement,
see page 61
Indicates the selected metrics have been subject to
independent limited assurance procedures by
PricewaterhouseCoopers for the year ending
31 December 2023. For PwC’s 2023 Limited Assurance
Report and the WPP Sustainability Reporting Criteria
2023, see our 2023 Sustainability Report at
wpp.com/sustainabilityreport2023
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WPP ANNUAL REPORT 2023
202220214160,000202220210.190.233202220218820222021
KEY PERFORMANCE INDICATORS
WPP FINANCIAL PERFORMANCE STRATEGIC REPORT
FINANCIAL
Our financial targets allow us to
track the health of WPP as a whole,
analysing our market performance
as well as setting remuneration
targets and financial guidance
for investors
During the year we added adjusted
operating cash flow conversion as
a KPI, reflecting our increased focus
on this metric
See more on our financial
performance on pages 88 to 92
1 Reconciliations from reported revenue to revenue
less pass-through costs and subsequently like-for-like
revenue less pass-through costs, and from reported
profit before tax to headline operating profit margin,
are included on pages 223 to 225. For a full
description, see Glossary on page 232
2 Like-for-like basis, excluding the impact of foreign
exchange
3 Like-for-like revenue less pass-through costs growth.
Omnicom data is based on revenue. This chart
shows data over the last 12 months. Competitor
data sourced from publicly disclosed results
4 For a full description, see Glossary on page 232
Like-for-like revenue
less pass-through
costs growth1
(%)
0.9
Headline operating
profit margin1
(%)
14.8
0.9
2023
2022
2021
6.9
12.1
2023
2022
2021
14.8
14.8
14.4
Description and rationale
This is the main measure of our strategic
goal to drive growth. Like-for-like revenue
growth excludes the impact of currency and
acquisitions. Pass-through costs comprise
fees paid to external suppliers when they are
engaged to perform part or all of a specific
project, and are charged directly to clients
Targets and performance
We delivered revenue less pass-through
costs growth of 0.9% in 2023, less than
in 2022 due partly to lower spending from
technology clients. We expect growth
to be in the 0-1% range in 2024 and 3%+
annually over the medium term
Description and rationale
This is a key indicator of our profitability.
It comprises profit on trading activities,
excluding certain one-off or exceptional
items.4 These items are excluded because
their size and nature mask the true
underlying performance year-on-year
Targets and performance
Our headline operating margin of 14.8%
was stable on a reported basis, and grew
0.2 percentage points on a like-for-like
basis,² due to disciplined cost control.
In 2024, we expect a 0.2 to 0.4 percentage
points improvement and to reach 16-17%
over the medium term
Like-for-like revenue less
pass-through costs growth
versus competitors2
(%)
(0.9)
Adjusted operating
cash flow conversion
(%)
73
2023
-0.9
2022
2021
-0.5-0.5
2023
2022
2021
0.8
73
38
127
Description and rationale
This measures our like-for-like growth against
the average of our global marketing services
peers – Dentsu, Havas, IPG, Omnicom3 and
Publicis. Our goal is to grow at a faster rate
than the industry average
Targets and performance
In 2023, our growth rate was 0.9 percentage
points below the average of our main peers,
reflecting our relatively greater exposure to
both clients in the technology sector, who
have reduced spend, and to China, which
remains impacted by macroeconomic
pressures
Description and rationale
This shows how efficiently headline operating
profits are turned into operating cash after
restructuring costs, capex, working capital
and other cash items. Operating cash flow
funds our financing and taxation requirements
and supports our capital allocation policy
Targets and performance
Our medium-term target is at least 85%
conversion of headline operating profit into
operating cash flow. In 2023 the ratio was
73%, a significant improvement on the prior
year (2022: 38%) due to a smaller outflow
on net working capital
WPP ANNUAL REPORT 2023
87
14.8202220210.92022202120232023-0.920222021-0.57320222021
STRATEGIC REPORT WPP FINANCIAL PERFORMANCE
FINANCIAL REVIEW
REVIEW OF RESULTS
Reported revenue was up 2.9% at £14.8
billion. Reported revenue on a constant
currency basis was up 4.4% compared
with last year. Net changes from acquisitions
and disposals had a positive impact of 1.2%
on growth.
Like-for-like revenue growth for 2023
excluding the impact of currency, acquisitions
and disposals, and the other adjustments,
was 3.2%.
Headline operating profit margin was flat
year-on-year at 14.8% and up 0.2 percentage
points year-on-year on a constant currency
basis. Total operating costs were up 0.5% to
£10.1 billion. Staff costs, excluding incentives,
were up 0.1% year-on-year at £7.8 billion,
reflecting wage inflation offset by lower use
of freelancers. Staff costs include severance
costs of £78 million (2022: £44 million).
Incentive costs were down 8.5% year-on-
year to £387 million, compared to £423
million in 2022.
Revenue less pass-through costs was up
0.5%, and up 1.8% on a constant currency
basis. Excluding the impact of acquisitions
and disposals and other adjustments,
like-for-like growth was 0.9%. In the fourth
quarter, like-for-like revenue less pass-
through costs was up 0.3%.
OPERATING PROFITABILITY
Reported profit before tax was £346 million,
compared to £1,160 million in the prior period,
principally reflecting the accelerated
amortisation of previously indefinite life
brands related to the creation of VML and
the impairment taken as a result of the 2023
property review.
Reported profit after tax was £197 million,
compared to £775 million in the prior period.
Headline EBITDA (including IFRS 16
depreciation) for the year was down 1.4%
to £1,976 million. Headline operating profit
was up 0.5% to £1,750 million.
Establishment costs were down 3.8% at £516
million, reflecting the progress in our campus
programme. IT costs were up 12.6% at £698
million, reflecting investment in enterprise
technology and our IT infrastructure, as
well as our global client-facing technology
capabilities including WPP Open,
Choreograph and AI capabilities.
Personal costs rose 9.3% to £223 million,
reflecting greater client-related business
travel and inflationary pressures. Other
operating expenses were down 0.8% at
£535 million.
The average number of people in the Group
in the year was 114,732 compared to 114,129
in 2022. The total number of people as at
31 December 2023 was 114,173 compared to
115,473 as at 31 December 2022.
ADJUSTING ITEMS
The Group incurred £1,219 million of adjusting
items in 2023, mainly relating to the
amortisation of acquired intangible assets,
restructuring and transformation costs, and
property and goodwill impairments. This
compares with net adjusting items in 2022
of £384 million.
Goodwill impairment, amortisation and
impairment of acquired intangibles and
other impairment charges were £809 million
(2022: £177 million), mainly related to the
accelerated amortisation of indefinite life
brands resulting from the VML merger.
This includes accelerated amortisation
charges of £431 million and £202 million
for Wunderman Thompson and Y&R
brands respectively.
Restructuring costs of £196 million in 2023
(2022: £219 million) mainly relate to: the
Group’s IT transformation; property costs
associated with impairments prior to 2023;
and costs related to the continuing
restructuring plan, including the creation
of VML and simplification of GroupM.
Charges associated with property, including
the property review conducted in 2023,
were £232 million and primarily relate to
non-cash lease impairments in the US.
FINANCIAL HIGHLIGHTS 2023
£14.8bn
revenue
(2022: £14.4bn)
0.9%
like-for-like revenue less
pass-through costs growth
(2022: 6.9%)
14.8%
headline operating margin
(2022: 14.8%)
73%
adjusted operating
cash flow conversion
(2022: 38%)
This Strategic Report includes figures and ratios that are not readily available from the Financial Statements. Management believes that these non-GAAP measures, including constant currency and
like-for-like growth, and headline profit measures, are both useful and necessary to better understand the Group’s results. Where required, details of how these have been arrived at are shown on pages
223 to 225 and are defined in the Glossary on page 232
88
WPP ANNUAL REPORT 2023
FINANCIAL REVIEW
WPP FINANCIAL PERFORMANCE STRATEGIC REPORT
GroupM grew in all major regions with
mid-single digit growth in ex-US markets and
low-single digit growth in the US. The digital
billings mix within GroupM increased to 51%
(2022: 48%).
Ogilvy’s performance benefited from recent
new business wins including SC Johnson and
Verizon, which contributed to mid-single
digit growth.
Hogarth grew well benefiting from increased
spend by CPG clients and growing demand
for its technology and AI-driven capabilities
as clients seek to produce more personalised
and addressable content.
Other global integrated agencies:
Wunderman Thompson and VMLY&R (which
were merged in January 2024 to become
VML) and AKQA felt the greatest impact from
reduced spend across the technology sector
and delays in technology-related projects.
Revenue less pass-through costs in the retail
sector was impacted by 2022 and 2023
client losses and lower spend by some retail
clients in an uncertain macroeconomic
environment.
INTEREST AND TAXES
Net finance costs (excluding the revaluation
of financial instruments) were £261 million,
an increase of £47 million year-on-year, due
to higher levels of debt through the year,
higher interest rates and lower investment
income partially offset by higher interest
earned on cash.
EARNINGS AND DIVIDEND
Profits attributable to shareholders
were £110 million, compared to a profit of
£683 million in the prior period, principally
reflecting the accelerated amortisation
of previously indefinite life brands and the
impairment taken as a result of the 2023
property review.
The headline tax rate (based on headline
profit before tax) was 27.0% (2022: 25.5%)
and on reported profit before tax was 43.1%
(2022: 33.1%). The increase in the headline
tax rate is driven by lower income from
associates and changes in tax rates or tax
bases in the markets in which we operate.
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.
Reported diluted earnings per share was
10.1p, compared to 61.2p in the prior period.
Headline diluted earnings per share from
continuing operations decreased by 4.8%
to 93.8p.
The Board is proposing a final dividend for
2023 of 24.4 pence per share, which together
with the interim dividend paid in November
2023 gives a full-year dividend of 39.4 pence
per share. The record date for the final
dividend is 7 June 2024, and the dividend
will be payable on 5 July 2024.
BUSINESS SECTOR REVIEW
During 2023, we reallocated a number
of businesses between global integrated
agencies, public relations and specialist
agencies. Prior year figures have been
re-presented to reflect the reallocation.
GLOBAL INTEGRATED AGENCIES
GroupM, our media planning and buying
business, grew well in 2023, benefiting from
continued client investment in media, with
like-for-like growth in revenue less pass-
through costs of 4.9% (Q4 +5.7%), partially
offset by a 1.6% like-for-like decline at other
global integrated agencies (Q4 -3.4%).
REVENUE LESS PASS-THROUGH COSTS GROWTH VERSUS 2022
(%)
Like-for-like
Acquisitions
FX
-1.3
Reported
0.9
0.9
0.5
WPP ANNUAL REPORT 2023
89
Like-for-like0.5-1.30.9
STRATEGIC REPORT WPP FINANCIAL PERFORMANCE
FINANCIAL REVIEW CONTINUED
PUBLIC RELATIONS
FGS Global continued to grow strongly in
2023, while Hill & Knowlton delivered modest
growth lapping strong performance in 2022;
partially offset by a weaker year for BCW.
SPECIALIST AGENCIES
CMI Media Group, our specialist healthcare
media planning and buying agency, grew
strongly, offset by declines at Landor and
Design Bridge and Partners. Our smaller
specialist agencies continued to be affected
by more cautious client spending, including
delays in project-based spending.
REVENUE ANALYSIS
£ million
Global Integrated Agencies
Public Relations
Specialist Agencies
Total Group
REVENUE LESS PASS-THROUGH COSTS ANALYSIS
£ million
Global Integrated Agencies
Public Relations
Specialist Agencies
Total Group
HEADLINE OPERATING PROFIT ANALYSIS
£ million
Global Integrated Agencies
Public Relations
Specialist Agencies
Total Group
2023
12,595
1,262
988
14,845
2023
9,808
1,180
872
11,860
2022
12,192
1,232
1,005
14,429
2022
9,743
1,161
895
11,799
+/(-) %
reported
3.3
2.4
(1.8)
2.9
+/(-) %
reported
0.7
1.6
(2.6)
0.5
+/(-) %
LFL1
3.7
2.0
(2.5)
3.2
+/(-) %
LFL1
1.3
1.4
(3.4)
0.9
2023
1,474
191
85
1,750
% margin*
15.0
16.2
9.7
14.8
2022
1,433
192
117
1,742
% margin*
14.7
16.5
13.0
14.8
* Headline operating profit as a percentage of revenue less pass-through costs
Note
1 Like-for-like growth at constant currency exchange rates and excluding the effects of acquisitions, disposals and other adjustments
REVENUE LESS PASS-THROUGH COSTS BY BUSINESS VERSUS 2022
(%)
Global Integrated Agencies
0.7
Public Relations
1.6
Specialist Agencies
-2.6
Total
0.5
90
WPP ANNUAL REPORT 2023
Total0.71.6-2.6
FINANCIAL REVIEW
WPP FINANCIAL PERFORMANCE STRATEGIC REPORT
REVENUE ANALYSIS
£ million
N. America
United Kingdom
W. Cont. Europe
AP, LA, AME, CEE2
Total Group
REVENUE LESS PASS-THROUGH COSTS ANALYSIS
£ million
N. America
United Kingdom
W. Cont. Europe
AP, LA, AME, CEE
Total Group
HEADLINE OPERATING PROFIT ANALYSIS
£ million
N. America
United Kingdom
W. Cont. Europe
AP, LA, AME, CEE
Total Group
2023
5,528
2,155
3,037
4,125
14,845
2023
4,556
1,626
2,411
3,267
11,860
2023
834
215
258
443
1,750
2022
5,550
2,004
2,876
3,999
14,429
2022
4,688
1,537
2,319
3,255
11,799
+/(-) %
reported
(0.4)
7.6
5.6
3.1
2.9
+/(-) %
reported
(2.8)
5.8
4.0
0.3
0.5
+/(-) %
LFL1
(0.4)
6.5
3.8
6.3
3.2
+/(-) %
LFL1
(2.7)
5.6
1.8
3.7
0.9
% margin*
18.3
13.2
10.7
13.6
14.8
2022
771
187
301
483
1,742
% margin*
16.4
12.3
13.0
14.8
14.8
* Headline operating profit as a percentage of revenue less pass-through costs
Notes
1
Like-for-like growth at constant currency exchange rates and excluding the effects of acquisitions and disposals and
other adjustments
2 Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe
REGIONAL REVIEW
North America like-for-like revenue less
pass-through costs declined by 2.7% in 2023
reflecting lower revenues from technology
clients and in the retail sector. This was
partially offset by growth in CPG and
telecommunications. Lower revenues from
technology clients had a greater adverse
impact on our integrated creative agencies,
whilst GroupM grew low-single digits in
the region.
United Kingdom delivered good like-for-like
growth of 5.6%, building on a strong prior
year performance (2022: +7.6%) with both
GroupM and Ogilvy performing well. CPG
and healthcare were the strongest client
sectors.
In Western Continental Europe, Germany,
our largest market, had a challenging
end to the year with a more uncertain
macroeconomic environment weighing
on client spend in the second half. France
returned to growth in Q4 after several
quarters of decline as new clients
were onboarded.
In Asia Pacific, Latin America, Africa & the
Middle East and Central & Eastern Europe,
we saw good like-for-like growth in 2023
driven by India which was up 7.7% reflecting
strong double-digit growth in the second
half. This was partially offset by China which
declined 3.3% with a consistent level of
decline across the first and second half.
REVENUE LESS PASS-THROUGH COSTS GROWTH BY REGION VERSUS 2022
(%)
North America
-2.8
United Kingdom
Western Continental Europe
Asia Pacific, Latin America, Africa &
Middle East and Central & Eastern Europe
Total
0.3
0.5
5.8
4.0
WPP ANNUAL REPORT 2023
91
Total-2.85.84.00.30.5
STRATEGIC REPORT WPP FINANCIAL PERFORMANCE
FINANCIAL REVIEW CONTINUED
CASH FLOW HIGHLIGHTS
In 2023, net cash inflow was broadly neutral,
compared to a £1.4 billion outflow in 2022.
The main drivers of the improved cash flow
performance year-on-year were a smaller
outflow from investment in net working
capital and lower share purchases.
A working capital outflow of £260 million
(2022: £847 million) includes an adverse
impact of £89 million from less favourable
FX rates at the end of the year compared
to the prior year. The movement in total
working capital of £260 million reflects a
favourable movement of £113 million in trade
working capital and an outflow of £373 million
from non-trade working capital, primarily
reflecting year-on-year movements in bonus,
landlord incentives relating to our campus
programme and prepayments.
BALANCE SHEET HIGHLIGHTS
As at 31 December 2023 we had cash and
cash equivalents of £1.9 billion (2022: £2.0
billion) and total liquidity, including undrawn
credit facilities, of £3.8 billion. Average
adjusted net debt was £3.6 billion, compared
to £2.9 billion in the prior period, at 2023
exchange rates. As at 31 December 2023
adjusted net debt was £2.5 billion, against
£2.5 billion as at 31 December 2022,
unchanged on a reported basis and an
increase of £0.1 billion at 2023 exchange rates.
We spent £54 million on share purchases
during the year to offset dilution from
share-based payments.
Our bond portfolio at 31 December 2023 had
an average maturity of 6.2 years.
Other 2024 financial indications:
In May 2023, we refinanced the November
2023 €750 million bond as planned, issuing a
May 2028 €750 million bond priced at 4.125%.
In February 2024, we refinanced our five-year
Revolving Credit Facility of £2.5 billion to
extend the maturity date from March 2026
to February 2029 with two further one-year
extension options and no financial covenants.
In March 2024 we refinanced the September
2024 $750 million and March 2025 €500
million bonds as planned, issuing two bonds
of €600 million priced at 3.625% and €650
million priced at 4.0%, due September 2029
and 2033 respectively.
The average adjusted net debt to headline
EBITDA ratio in the 12 months to 31 December
2023 is 1.83x, which excludes the impact of
IFRS 16.
OUTLOOK
Our guidance for 2024 is as follows:
– Mergers and acquisitions will add 0.5-1.0%
to revenue less pass-through costs growth
– FX impact: exchange rates at 15 February
2024 imply a c.2% drag on FY 2024
revenues less pass-through costs, with no
meaningful impact expected on FY 2024
headline operating margin
– Headline income from associates and
non-controlling interests at similar levels
to 2023
– Net finance costs of around £295 million
– Effective tax rate (measured as headline
tax as a % of headline profit before tax)
of around 28%
– Capex of around £260 million
– Cash restructuring costs of around
£285 million
– Working capital expected to be broadly
flat year-on-year
MEDIUM-TERM GUIDANCE
In January 2024 we presented an updated
medium-term financial framework including
the following three targets:
– 3%+ like-for-like growth in revenue less
– Like-for-like revenue less pass-through
pass-through costs
costs growth of 0-1%
– Headline operating margin improvement
of 20-40bps (excluding the impact of FX)
– 16-17% headline operating profit margin
– adjusted operating cash flow conversion
of 85%+
For more information on our strategy
see pages 1 to 71
ADJUSTED NET DEBT
(£m)
2,479
2,504
1,540
901
696
2019
2020
2021
2022
2023
92
WPP ANNUAL REPORT 2023
20232,504
STRATEGIC REPORT
ASSESSING AND
MANAGING OUR RISKS
The success of our strategic objectives
as discussed in this report depends to a
significant extent on how we identify and
address the current and emerging risks and
uncertainties we face as a business.
The Board, assisted by the Audit Committee,
has oversight and responsibility for our
approach to risk management, which is
structured through our three lines of defence
model and driven by our risk governance
framework, business integrity programme,
culture based on the principles set out in our
Code of Business Conduct, and our internal
control framework.
The Audit Committee reviews and considers
the principal risk list on a quarterly basis and
any potential emerging risks continually
throughout the year.
The Board has reviewed the design and
effectiveness of this system during the year
and up to the date of this report, and has
carried out a robust assessment of the
principal risks that could impact our business.
The system of controls described below
is designed to manage and mitigate, but
may not eliminate, the risk of failure to
achieve our strategic objectives, and is
not an absolute assurance against material
misstatement or loss.
RISK GOVERNANCE FRAMEWORK
A key element of our risk governance
framework is our Risk Committees. Each
network has a global Risk Committee chaired
by the CEO and with key senior managers
participating to ensure that leadership is
proactively identifying (including through
risk assessments and horizon scanning) and
understanding the current, new, evolving
and emerging risks across businesses and
the remediation steps required from time to
time in certain markets. We also have a WPP
Risk Committee which has oversight of all
network Risk Committees and itself reports
into the Audit Committee. We also have two
sub-committees to focus on the detail of
risks relating to data privacy, security and
ethics and to controls at both WPP and
network levels.
The agenda of the Risk Committees is to
review, monitor and advise on: compliance
with laws, regulations, internal procedures,
and industry standards, including anti-bribery
and corruption matters; the implementation
of our compliance framework (including
setting clear standards and reporting lines
for the accurate and timely monitoring
of exposures and certain risk types of
importance); compliance policies and
practices; and risks that present themselves
throughout each network. This agenda is
framed by our business integrity programme
and internal control environment.
In order to carry out their duties
comprehensively, each Risk Committee has
secure access to an increasing central pool
of data from, or with the potential to affect,
their network. This data is crucial to their
ability to recognise and monitor a full risk
and compliance picture and the impact
of actions taken as a result; this includes
internal audit reports, internal controls over
financial reporting (ICFR) results, general
computing controls results, corroborated
information from whistleblowers, findings
WPP’S RISK GOVERNANCE FRAMEWORK
BUSINESS INTEGRITY PROGRAMME
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INTERNAL AUDIT
FINDINGS AND SOX
TEST RESULTS
KEY RISK
INDICATOR (KRI)
DATA FEEDS
CERTIFICATIONS
AND
DISCLOSURES
WHISTLEBLOWERS
AND
INVESTIGATIONS
ENTERPRISE
RISK MAPS
BUSINESS
INTEGRITY RISK
ASSESSMENT
INTERNAL CONTROLS
WPP ANNUAL REPORT 2023
WPP ANNUAL REPORT 2023
93
93
STRATEGIC REPORT
ASSESSING AND MANAGING
OUR RISKS CONTINUED
from investigations, responses from our
annual risk mapping process and the results
of our annual assessment of business
integrity risks.
BUSINESS INTEGRITY PROGRAMME
Our business integrity programme is central
to ensuring that the policies, procedures
and control environment set by the Board
are understood and adhered to across all
geographies and markets. It is produced by
mapping resources, systems and processes
against WPP’s risk appetite (which the
business integrity team, sitting within WPP’s
legal function, helps the Board and WPP Risk
Committee to set), governance requirements
and regulator expectations and then crafting
actions from the results for both the business
integrity team and the Risk Committees.
Actions for the business integrity team focus
on tackling root causes of risk and include:
– In respect of resources, championing and
enhancing messages and examples from
global, regional and local leadership with
communications, training sessions,
townhalls and practical guidance,
knowhow and resources for our people
and providing ‘on the ground’ support
for day-to-day queries from our networks
WPP’S BUSINESS INTEGRITY PROGRAMME
OUR RISK APPETITE
GOVERNANCE REQUIREMENTS
REGULATOR EXPECTATIONS
94
94
WPP ANNUAL REPORT 2023
WPP ANNUAL REPORT 2023
– In respect of systems, advising on
the implementation of WPP’s policies,
procedures and controls (including around
internal reporting and approvals) and
providing a compliance lens for the design
and structure of our enterprise resource
planning (ERP) environment (including
promoting the leverage of its functionality
to restrict access to key transactions to
appropriate parties and to ensure adequate
segregation of duties and assets)
– In terms of processes, conducting an
annual assessment of business integrity
risks (which is constantly evolved in terms
of which risks are within scope, the nature
of assessment and the reporting and
recommendations that emanate from the
work), monitoring dynamic data feeds
(including our financial reporting, internal
audit findings and ICFR results), proactive
management of self-certifications and
disclosures from our people, reviewing
and investigating whistleblowing reports
and tracking remediation efforts
RESOURCES
– Our people: everyone is accountable
– Leadership
– Communications, training and guidance
– ‘On the ground’ support
SYSTEMS
– ERP environment
– Policies and controls
– Financial reporting
– Internal reporting and approvals
PROCESSES
– Business integrity risk assessment
– Identifying and monitoring dynamic
data feeds
– Whistleblowing and investigations
– Internal and external due diligence
– Certifications and disclosures
– Remediation; and focus on root causes
– Disciplinary measures including impact
on compensation
– Enterprise risk maps
POLICIES, PROCEDURES AND CULTURE
The quality and competence of our people,
their integrity, ethics and behaviour, and the
culture embedded within our businesses are
all vital to our system of internal control, which
is maintained and reviewed in accordance
with the UK Corporate Governance Code,
FRC guidance on risk management and
internal controls, and the COSO framework.
In order to help our people make the right
decisions, we provide a number of tools.
The baseline reference of our policies and
procedures is set out in our Policy Book,
internal control bulletins, business integrity
booklets and accounting guidelines. To help
our people understand the ethical and
business objectives set out in the WPP Policy
Book, WPP has a mandatory online training
programme that all our people (including
freelancers working for more than four
weeks) are required to complete on an
annual basis. The programme comprises
five modules: How We Behave; Business
Integrity; Safer Data; Sustainability; and
Belonging. In addition, WPP’s business
integrity team organises in-person and
video call training sessions throughout the
year on topics thought necessary or relevant
such as Ethics and Integrity, Respect in the
Workplace and The ABCs of ABC (anti-bribery
and corruption). This top-up programme
is designed and scheduled in response
to data collected and reviewed by WPP’s
business integrity team, including from
concerns raised and corroborated through
investigations and our annual assessment
of business integrity risks. It is underpinned
with daily support on the ground from our
regional compliance and ethics directors
and managers.
The core of our Policy Book is our Code
of Business Conduct, which is regularly
reviewed by the Board and sets out the
principal obligations of all of our people.
As a company and as individuals we have
a collective responsibility to behave in the
right way, to live up to our values and to
conduct our business with integrity. Our Code
outlines the commitments we make to each
other, our business partners, and others with
a stake in what we do; equally therefore it is
mirrored in our Supplier Code of Conduct,
which all vendors and suppliers are required
to sign up to before being onboarded.
ASSESSING AND MANAGING OUR RISKS
STRATEGIC REPORT
The principles of the Code are embedded
in our training courses and our senior
managers are required to certify compliance
with the Code on an annual basis. In 2023,
WPP’s business integrity team digitised
the certification and disclosure process
around Code compliance, with a particular
focus on conflicts of interest and related
party transactions.
Our ABC and Fraud Policy prohibits any form
of bribery, corruption or fraud across WPP
and is supported by the Advisor Payment
Policy which restricts the use of advisors
and details the due diligence that must
be undertaken and approvals needed in the
limited cases where advisors may be used.
In 2024, WPP’s business integrity team
is updating the ABC and Fraud Policy
in response to the new UK Economic Crime
and Corporate Transparency Act 2023 and
implementing related recommendations
including around training and controls.
Our Gifts and Entertaining Policy sets limits,
including on value, on what may be given
or received, supported in each company
by a gift register.
As noted above, our Code of Conduct for
vendors and suppliers replicates all of these
obligations in our supply chain. Our Policy
Book also includes required practices in
operational, tax, legal and human
resource areas.
The application of our policies and
procedures is monitored within each
network and by the internal audit, legal
(in particular, the business integrity team),
and risk and controls functions.
Breaches are investigated by our business
integrity team sitting within WPP’s legal
function and, where appropriate,
external advisors.
WPP’s business integrity team has a
mandate to make recommendations to
realign and support WPP’s networks,
where required, to manage and reduce risk.
Recommended remediation can include
disciplinary action, changes to systems,
controls, approvals or functions, monitoring
and training sessions. This approach is
formalised through WPP’s Whistleblowing
Protocol and Investigations Protocol.
WPP’s approach to performance rewards
continues to support the risk management
and internal control systems, reinforced
by the WPP Risk Committee and the
Compensation Committee.
WHISTLEBLOWING
WPP’s Code of Business Conduct sets
out our responsibilities to our people,
partners and shareholders to act ethically
and legally. We want to encourage a
culture of integrity and transparency
where our people make the right decisions
automatically and instinctively.
Part of this culture is making sure that our
people have confidence and know how
to speak up and raise concerns with their
managers or supporting teams, through
their employee forums, WPP’s business
integrity team or by calling our Right to
Speak hotline (which is confidential and
allows for anonymity) if they experience
or hear about behaviour which is at odds
with the principles stated in our Code.
Every report received from a whistleblower
is investigated and reported into the Audit
Committee by WPP’s business integrity
function. In general, there has been a steady
increase in the number of reports received
over the past few years, though they fell
year-on-year in 2022 following a particular
spike in 2020 and 2021 reflecting concerns
raised and connected with Covid-19 and
lockdowns. In 2023, we continued to focus
on our speak up culture and a total of 612
reports were received from whistleblowers
(2022: 372; 2021: 494; 2020: 418), 476 of which
were through the Right to Speak hotline. The
most commonly raised concerns were about
respect in the workplace and protection
of WPP’s assets.
RISK IMPACT FROM WHISTLEBLOWER
REPORTS 2023
All whistleblower reports received by the
Group Chief Counsel and General Counsel,
Corporate Risk, which includes all Right
to Speak reports, are handled in line with
WPP’s Whistleblowing and Investigations
Protocols and logged, investigated and
tracked through to a conclusion including
any remediation or follow-up actions
that might be required. Recommended
remediation can include disciplinary action,
changes to systems, controls and processes
or wider review and monitoring for a
particular time period.
Reports are also analysed for risk impact
and root causes. Learnings generated
from this analysis are converted into
recommendations including for training
sessions and practical resources by WPP’s
business integrity team and implemented
together with the support and input of the
TOTAL NUMBER OF REPORTS
FROM WHISTLEBLOWERS
RISK IMPACT FROM WHISTLEBLOWER REPORTS
(%)
612
People
6464
494
418
372
Legal and regulatory
1616
Financial
Clients
Operational
88
66
55
2020
2021
2022
2023
Data privacy,
security and ethics
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ASSESSING AND MANAGING
OUR RISKS CONTINUED
In addition, our companies must maintain
and update documentation on their internal
controls and processes. This documentation
incorporates an analysis of business risks,
detailed control activities and monitoring,
together with IT and financial controls and
controls over security of data and the
provision of timely and reliable information
to management.
The information collated feeds up to each
network’s Risk Committee which uses it to
assess and monitor current risk exposures,
identify new risk types and any that rise to
principal risk level, set future risk strategy,
and compile it into reporting and insights
for the WPP Risk Committee and executive
management.
2. EXECUTIVE MANAGEMENT REVIEWS
The network reviews are formally
communicated to executive management
in monthly reports and quarterly review
meetings and, in turn, to the Board. At
each Board meeting, the management team
presents a business review of each of the
operations, including an assessment of the
risks in each business and details of any
change in the risk profile since the last
Board meeting.
The business review includes: the possibility
of winning or losing major business;
succession and the addition or loss of a key
employee; regulatory changes; sustainability,
including risks relating to marketing ethics,
privacy, diversity and employment; political
instability; and changes in accounting or
corporate governance practice.
To add to this, the WPP Risk Committee,
supported by the business integrity team,
has evolved our enterprise-wide risk
management process through the design
and build of a risk analytics platform. This sits
over data feeds and alongside refreshed risk
appetite statements and tolerances, and
incorporates our internal risk management
framework including around policies,
controls and reporting (whether through
disclosures, monitoring, audit work,
investigation work or internal reporting
processes). The resulting dashboard analysis
allows risks to be monitored and tracked
across all businesses and markets and feeds
into the regular risk discussions of executive
management, the Audit Committee and
the Board.
In addition, the Risk and Controls Group
remains focused on driving continuous
improvement in WPP’s internal control
environment, looking at the design and
implementation of internal financial controls
as well as controls that support WPP’s risk
framework and transformation programmes.
3. INTERNAL AUDIT AND AUDIT
COMMITTEE OVERSIGHT
The internal audit function, with Audit
Committee oversight and external resource
as required, provides an independent review
of risk management and internal control via
internal audits and management of the
testing programme for ICFR.
Risk Committees. WPP’s business integrity
team also merges these learnings with other
data feeds (both internal such as revenue
source and breakdown or margin patterns,
and external such as Transparency
International’s Corruption Perception
Index) to identify and focus on potential
risk concerns.
The nature of each report, action taken and
outcome is reported to the Audit Committee.
WPP is committed to providing a safe and
confidential way for people with genuine
concerns to raise them, and to do so without
fear of reprisals. WPP does not tolerate any
retaliatory behaviour against individuals
reporting concerns and is equally committed
to preserving the anonymity of an individual
who makes a report and does not wish to
have their identity revealed.
The consequences of misconduct or
retaliation range from individual performance
management, training for a business or an
office and one-on-one training or coaching
for an individual through to staff relocation
and staff dismissal.
RISK MANAGEMENT
We use a ‘three lines of defence’ model
in relation to risk management.
1. COMPANY REVIEWS
Each network undertakes monthly and
quarterly procedures and day-to-day
management activities to review its
operations and business risks, supported
by our policies, training and guidance on
required internal controls over financial
reporting and monitoring controls and
reviews within its network.
LINES OF DEFENCE
FIRST LINE OF DEFENCE
Functions that own and manage risk
SECOND LINE OF DEFENCE
Functions that oversee or specialise in
risk management and business integrity
THIRD LINE OF DEFENCE
Functions providing independent
assurance, in particular internal audit
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STRATEGIC REPORT
VIABILITY STATEMENT
RISK ASSESSMENT
ASSESSMENT OF PROSPECTS
An understanding of the Group’s business
model and strategy detailed on pages 9 and
20 is central to understanding its prospects.
The Directors assess the Group’s prospects
on a regular basis through the financial
reporting and planning process, agency
reviews at each Board meeting, quarterly
reviews of the agencies by the executive
team and ongoing reviews of the Group’s
profitability, cash flows and funding
requirements. The Board reviews the
longer-term risks and opportunities for the
Group discussed in the Strategic Report and
considered these in greater depth at a Board
strategy session in 2023, which covered
changes in the macroeconomic environment,
the potential impact of data, commerce and
AI upon clients’ marketing activities,
technological disruption and the Group’s
working culture, the impact of climate
change and increased regulation. The Board
has also considered the ongoing economic
and geopolitical impacts of the conflicts in
Ukraine and Gaza.
VIABILITY STATEMENT
The Directors’ assessment of the Group’s
viability has been made over a three-year
period. This period has been chosen as it
aligns with the period in which we believe
our principal risks tend to develop, and
is in line with the structure of long-term
management incentives and the outputs
from the long-range business planning cycle.
The Directors’ assessment has been made
with reference to:
– The Group’s principal risks and how these
are managed and the impact of a principal
risk materialising
– The ongoing reviews, short-term notice
periods or assignment nature of many
of the client engagements
– The Group’s current financial position,
prospects and strategy
– The ongoing transformation programme
updated in this report
– The changes taking place in our industry
– The long-term impact of technological
disruption
– The ongoing simplification of the Group
structure and improvements in our
integrated service offering to clients
– The volatility of global economic conditions
as a consequence of the ongoing
economic and geopolitical impacts of the
conflicts in Ukraine and Gaza
– The impact on the Group of epidemics
or pandemics including restrictions on
businesses, social activities and travel,
and the resulting impact on the economies
in which the Group operates, our clients
and demand for our services
In testing the viability of the Group, we have
undertaken a robust scenario assessment
of the principal risks which could threaten
the viability or existence of the Group.
The ongoing impact of the conflicts in
Ukraine and Gaza has been considered.
In the scenario modelling of the principal
risks, we have stress-tested our forecast cash
flows to reflect the potential impact of one
or more of the Group’s principal risks
occurring and leading to client loss, loss
of reputation, contract breach, our inability
to win new business, and the impact
of a revenue less pass-through costs decline.
The Group’s forecasts and projections took
account of: (i) reasonably possible declines
in revenue less pass-through costs; and (ii)
remote declines in revenue less pass-through
costs for stress-testing purposes; and
considered the Group’s liquidity headroom
including the suspension of share buybacks,
dividends and acquisitions.
A range of revenue less pass-through cost
declines have been modelled up to a decline
of 31% compared with the year ended
31 December 2023, followed by a small
rebound in growth for 2025 (0.1% above
plan) and at previously expected levels from
2026 to 2027. In the most extreme scenarios
tested, the Directors have considered the
further actions that could be taken to mitigate
negative cash flow impact and ensure
additional liquidity, including cost mitigations
of 70% of the decline in net sales and the
suspension of share buybacks and dividends.
The Directors have assumed that the
Company will be able to refinance existing
bonds and, as a result, the Group will
continue to operate with sufficient liquidity
available. However, the long-term viability
of the Group could be impacted by other
as yet unforeseen risks and the mitigating
actions that have been put in place in
respect of the principal risks could turn out
to be less effective than intended.
Having assessed the current position of the
Company, its prospects and principal risks
and taking into account the assumptions
above, the Board has determined that it has
a reasonable expectation that the Company
will be able to continue in operation and
meet its liabilities as they fall due over a
period of three years from 1 January 2024.
GOING CONCERN
The Group’s business activities, together
with the factors likely to affect its future
development, performance and position
are set out in the Financial Review on pages
88-92 and Principal Risks and Uncertainties
on pages 98-105. The financial position of the
Group, its cash flows, liquidity position and
borrowing facilities are described in the
financial statements and the notes to the
financial statements include: the Company’s
objectives, policies and processes for
managing its capital; its financial risk
management objectives; details of its
financial instruments and hedging activities;
and its exposures to credit risk and liquidity
risk. The Company’s forecasts and
projections, taking account of (i) reasonably
possible declines in revenue less pass-
through costs and (ii) remote declines
in revenue less pass-through costs for
stress-testing purposes compared to 2023,
considering the Group’s liquidity headroom
taking into account the suspension of share
buybacks, dividends and acquisitions, and
cost mitigation actions which are and which
could be implemented, show that the
Company and the Group would be able
to operate with appropriate liquidity and
be able to meet its liabilities as they fall due.
The ongoing impact of the conflicts in
Ukraine and Gaza has been considered.
The Company modelled a range of revenue
less pass-through cost declines up to 31%
compared with the year ended 31 December
2023. The Directors therefore have a
reasonable expectation that the Company
and the Group have adequate resources
to continue in operational existence for the
foreseeable future. Thus they continue to
adopt the going concern basis of accounting
in preparing the financial statements.
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PRINCIPAL RISKS AND UNCERTAINTIES
The Board has carried out a robust assessment of the principal risks and uncertainties affecting the Group and the
markets we operate in and strategic decisions taken by the Board as at 31 December 2023 and up to the date of this
report – including any adverse effects of the geopolitical situation resulting from the conflicts in Ukraine and Gaza
– which are described in the table on the following pages.
PRINCIPAL RISK
POTENTIAL IMPACT
HOW IT IS MANAGED AND
REFLECTED IN OUR STRATEGIC PRIORITIES
ECONOMIC RISK
Adverse economic conditions,
including those caused by the
conflicts in Ukraine and Gaza,
severe and sustained inflation in
key markets where we operate,
supply chain issues including
around resilience affecting the
distribution of our clients’ products
and/or disruption in credit markets,
pose a risk our clients may reduce,
suspend or cancel spend with us
or be unable to satisfy obligations.
GEOPOLITICAL RISK
Growing geopolitical tension
and conflicts continue to have
a destabilising effect in our markets
and across geographical regions.
This rise in geopolitical activity
continues to have an adverse effect
upon the economic outlook, the
general erosion of trust and an
increasing trend of national ideology
and regional convergence over
global cooperation and integration.
Such factors and economic
conditions may be reflected in
our clients’ confidence in making
longer-term investments and
commitments in marketing spend.
PANDEMIC
The impact of a pandemic on our
business will depend on numerous
factors that we are not able to
accurately predict, including the
duration and scope of a pandemic,
any existing or new variants,
government actions to mitigate
the effects of a pandemic and the
continuing and long-term impact
of a pandemic on our clients’
spending plans.
Economic conditions, including inflation and
increasing interest rates, among others, have
a direct impact on our business, results
of operations and financial position.
Our account teams work proactively with our clients to understand
the challenges they are facing, determine general trends in
marketing spend and develop plans in advance to help us prepare,
redeploy resources and manage costs accordingly.
In the past, clients have responded to weak
economic and financial conditions by reducing
or shifting their marketing budgets which are
easier to reduce in the short term than their
other operating expenses.
Our crisis management and business resilience team works with our
networks to identify priority services and the key dependencies
they rely on and develops market-specific incident response and
service continuity plans to best ensure business operations are
resilient to external factors.
Actual or threatened geopolitical tension
and conflicts lead to greater uncertainty,
economic instability and a general lack of
confidence for many of our clients who are
inclined to scale back, delay or cancel their
marketing plans and budgets.
Our client portfolio is diverse, consisting of organisations operating
in different industry sectors and across a broad geographical
spread which further helps mitigate the impact of any specific
challenges individual clients or markets might be facing.
We work closely with our in-country teams, third-party advisors,
clients and other agencies in monitoring the level and nature of
geopolitical issues, events and developments across all markets
and regions.
Our primary focus is the safety and security of our people, and for
extreme events or periods of disruption we have developed a series
of crisis and response plans with clear lines of escalation to the
Board and Executive Committee that focus upon the wellbeing
of our people and their families.
We have detailed operational and financial plans, developed
through the consideration of a range of potential scenarios and
outcomes that are continuously monitored and, if required, used
to make interventions and support decision-making over our
operations, investments and advice to clients.
A pandemic and any new variants and the
measures to contain its spread may have
an adverse effect on our business, revenues,
results of operations and financial condition
and prospects.
A strong balance sheet, supported further by action to maintain
liquidity including, if needed, the suspension of share buybacks,
dividends and acquisitions, cost reduction and cash conservation
measures, savings on property and IT capex.
Constant monitoring of working capital position and detailed
operational and financial plans, developed from previous
experience and, as noted above, continuously assessed against
potential scenarios and outcomes.
KEY
Increased risk
No change from last year
Reduced risk
New risk
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PRINCIPAL RISK
POTENTIAL IMPACT
HOW IT IS MANAGED AND
REFLECTED IN OUR STRATEGIC PRIORITIES
STRATEGIC PLAN
The failure to successfully complete
the strategic plan updated in
January 2024 to lead through AI,
data and technology, to accelerate
growth through the power of
creative transformation, to build
world-class, market-leading brands
and to execute efficiently to drive
financial returns through margin
and cash.
GENERATIVE AI STRATEGY
Delayed adoption and leverage of
the opportunities and commercial
models offered by generative AI in
the services WPP provides to its
clients, as well as the overall
operation of the business.
WPP may incur costs when ensuring
it can comply with the introduction
of artificial intelligence laws and
regulations, including the EU AI Act.
This will be through review of IT
systems and processes, which may
require refinement or amendment,
to ensure regulation can be
adhered to.
IP laws and in particular the analysis
of copyright infringement is
evolving in generative AI. Where AI
is used in client deliverables, IP
infringement risk, in particular
copyright infringement risk, must
be assessed in the context of the
underlying data sets used in the
creation of client works.
A failure or delay in implementing or realising
the benefits from the strategic plan may
have a material adverse effect on our market
share and our business, revenues, results of
operations, financial condition or prospects.
Without the automation and efficiency gains
offered by generative AI, we may experience
increased costs and inefficiencies in our
operations impacting profitability and
competitiveness.
Clients will increasingly expect us to use
generative AI-driven tools and technologies
in our services and deliverables. If we fail
to adopt generative AI at pace and evolve our
commercial model, we may struggle to keep
up with these demands, leading to decreased
relevance and effectiveness of our services
and deliverables for clients, and allow an
opportunity for AI vendors to contract directly
with our clients.
Falling behind competitors leveraging the
opportunities generative AI offers to gain
a competitive advantage could result in lost
market share, decreased revenue and
reduced profitability.
We may struggle to attract and retain talent,
further hindering our ability to innovate
and compete.
Generated materials may infringe third-party
IP resulting in legal costs and client
reputation impact.
Board oversight of the implementation of the strategic plan and
Group simplification and regular briefings on the Group’s response
to economic and geopolitical risks.
The Executive Committee regularly reviews progress against the
strategic plan and actions required to deliver against the plan and
convenes regularly to discuss the Group’s response to and
implementation of the measures highlighted above to mitigate the
impact of economic and geopolitical risks on the Group’s
operations, people, clients and financial condition.
The focus on managing cost and changes in ways of working have
accelerated aspects of the strategic plan as we continue to move
towards a simplified company structure and enhanced use of
technology, including generative AI, by our people.
The Chief AI Officer is responsible for the strategic direction
of generative AI in the business.
We have established a Generative AI Governance Committee
which oversees the application and adoption of and risks
associated with generative AI across WPP. This committee includes
the CEO, CTO and Chief Privacy Officer and other senior
stakeholders in the business with responsibility for the safe and
responsible use of generative AI within the Group.
We have developed and continue to invest in a WPP generative AI
platform using market-leading technologies which is available to all
staff in order to support our work and deliverables both internally
and for clients.
We have established partnerships with leading generative AI
platforms, technologies and companies, including NVIDIA.
We actively monitor the changing regulatory landscape and the
introduction of new laws regulating AI to assess the impact on our
business and work, including detailed review of the EU AI Act and
evolving IP laws (including copyright), and how they will impact
how we service our clients.
We have a comprehensive due diligence process in place to
review the third-party generative AI tools/platforms used in the
business. This process considers the use case for the tool/platform
and includes reviews of the security, legal and technology aspects
of the tool/platform as well as sources of underlying learning data,
where applicable, to develop a ‘traffic light’ approach to risk.
Whilst AI provides many opportunities (including efficiencies
and new services and offerings) we also continue to review
and consider the impact around our business model through
the Generative AI Governance Committee, reporting to the Board
and Audit Committee on identified risks and impacts.
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STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
PRINCIPAL RISK
POTENTIAL IMPACT
HOW IT IS MANAGED AND
REFLECTED IN OUR STRATEGIC PRIORITIES
IT AND SYSTEMS
We continue to undertake a series
of IT programmes devised to
prioritise the most critical changes
necessary to support the Group’s
strategic plan whilst maintaining
the operational performance and
security of core systems.
The Group is reliant on third parties
for the performance of a significant
portion of our worldwide
information technology and
operations functions.
A failure to provide these functions
could have an adverse effect on
our business.
CLIENT LOSS
We compete for clients in a highly
competitive industry which is
continuously evolving and
undergoing structural change
and advancements in AI, data
and technology. Client net loss
to competitors or as a consequence
of client consolidation, insolvency
or a reduction in marketing budgets
due to a geopolitical change or
shift in client spending, would have
a material adverse effect on our
market share, business, revenues,
results of operations, financial
condition and prospects.
Any failure or delay in implementing the IT
programmes may have a material adverse
effect upon the overall strategic plan and
the realisation of key targeted benefits
and savings.
Disruption and unavailability of critical
systems may lead to disruption in our
operations and client service delivery.
The Board and management team provide oversight and governance
of the most important IT and systems change initiatives the business
is pursuing.
Detailed plans have been prepared for each major systems initiative
and overall progress, challenges and risks are monitored as part
of our project management processes and discussed in dedicated
steering committees who also agree upon any corrective action
that may be required, including around supplier resilience.
Progress reports are also completed as part of regular briefings
that the Board receives on the overall implementation of the
strategic plan.
The competitive landscape in our industry
is constantly evolving and the role of more
traditional services and operators in our sector
who have not successfully diversified is being
challenged. Competitors include multinational
advertising and marketing communication
groups, marketing services companies,
database marketing information and
measurement and professional services, and
consultants and consulting internet companies.
Client contracts can generally be terminated
on 90 days’ notice or are on an assignment
basis and clients put their business up for
competitive review from time to time.
The ability to attract new clients and to retain
or increase the amount of work from existing
clients may be impacted if we fail to react
quickly enough to changes in the market and
to evolve our structure, as a consequence
of any loss of reputation, and may be limited
by clients’ policies on conflicts of interest.
The strategic plan updated in January 2024 places emphasis
on leading through AI, data and technology, accelerating growth
through the power of creative transformation, building world-
class, market-leading brands and executing efficiently to drive
financial returns through margin and cash.
The plan is also delivering a continued simplification of our
organisational structure by reducing the number of legal entities
in the Group, the disposal of non-core minority holdings and more
collaborative working through the opening of further campus
co-locations (see page 19).
The Board is focused on the importance of a positive and inclusive
culture across our business to attract and retain talent and clients.
Accordingly, work continues on diversity and inclusion across
the Group, including focus from the work of the global WPP
Inclusion Council.
Continuous improvement of our creative capability and reputation
of our businesses. The development and implementation of
senior leadership incentives to align more closely with our strategy
and performance.
Business review at every Board, Executive Committee and network
management meeting to identify client loss. Monthly updates
to the executive management team on the status of the Group’s
major clients and upcoming pitches for potential new clients.
Continuous engagement with our clients and suppliers through
this period of uncertainty and reduction in economic activity.
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STRATEGIC REPORT
PRINCIPAL RISK
POTENTIAL IMPACT
HOW IT IS MANAGED AND
REFLECTED IN OUR STRATEGIC PRIORITIES
CLIENT CONCENTRATION
We receive a significant portion of
our revenues from a limited number
of large clients and the net loss of
one or more of these clients or of
a major assignment with them could
have a material adverse effect on
our prospects, business, financial
condition and results of operations.
REPUTATION
Increased reputational risk
associated with working on
client briefs perceived to be
environmentally detrimental
and/or misrepresenting
environmental claims.
A relatively small number of clients contribute
a significant percentage of our consolidated
revenues. Our ten largest clients accounted
for 18.9% of revenue less pass-through costs
in the year ended 31 December 2023.
Clients can reduce their marketing spend,
terminate contracts or cancel projects on
short notice. The loss of one or more of our
largest clients or of a major assignment with
them, if not replaced by new accounts or an
increase in business from existing clients,
would adversely affect our financial condition.
Increased flexibility in the cost structure (including incentives,
consultants and freelancers).
Business review at every Board meeting and regular engagement
at executive level with our clients.
A ‘new and existing business’ tracker is reviewed by the Executive
Committee on a monthly basis with regular updates provided
to the Board.
As societal consciousness around climate
change rises, our sector is seeing increased
scrutiny of its role in driving consumption.
Our clients seek expert partners who can give
recommendations that take into account their
impact and stakeholder concerns around
climate change.
Additionally, WPP serves some clients whose
business models are under increased scrutiny,
for example energy companies or associated
industry groups. This creates both a
reputational and related financial risk for WPP
if we are not rigorous in our content standards.
Our climate training seeks to ensure that our people recognise
the importance of our sector’s role in addressing the climate crisis.
It is part of a broader sustainability training programme being run
in multiple markets with localised content in key regions.
We have developed internal tools to help our people identify
potentially environmentally harmful briefs. These tools embed
climate-related issues within existing content review procedures
across the organisation. The misrepresentation of environmental
issues is governed by our Code of Conduct. We also ensure our
policies reduce the risk that any client brief undermines the
implementation of the Paris Agreement. In 2022, we introduced
the revised Assignment Acceptance Policy and Framework and
the Green Claims Guide to provide further guidance about how
to conduct additional due diligence in relation to clients and any
work we are asked to undertake.
PEOPLE, CULTURE AND SUCCESSION
Our performance could be
adversely affected if we: do not
react quickly enough to changes
in our market; fail to attract,
develop and retain key creative,
commercial, technology and
management talent; are unable
to retain and incentivise key and
diverse talent; or are unable to
adapt to new ways of working by
balancing home and office working.
We are highly dependent on the talent,
creative abilities and technical skills
of our people as well as their relationships
with clients.
The Compensation Committee provides oversight for the Group’s
compensation and incentive plans, which are structured to provide
retention value by, for example, paying part of annual incentives
in shares that vest two years after grant date.
We are vulnerable to the loss of people to
competitors (traditional and emerging) and
clients, leading to disruption to the business.
WPP’s All In survey provides the board, Executive Committee
and senior leaders across the Group with the general sentiment,
opinions and concerns of employees and was completed by 75%
of our people in 2023. Headline findings included general and local
views on engagement, career growth, leadership, client, wellbeing
and inclusion and have contributed to the menu of initiatives
available to our people.
We continue to work across the Group to embed collaboration
and invest in training and development to retain and attract
talented people.
The investment in co-located campus properties continues
to increase the cooperation across our companies and provides
extremely attractive and motivating working environments.
Our real estate teams work closely with people teams across
the business to consider how space is being utilised to support
collaboration and innovation.
We also continue to focus on the mental health of our people
by providing access to wellbeing resources, support networks,
funded events, discussion forums and additional time off.
Looking ahead, succession planning for the Chief Executive Officer,
the Chief Financial Officer and key executives of the Company
is undertaken by the Board and Nomination and Governance
Committee on a regular basis and a pool of potential internal
and external candidates is identified for both emergency and
planned scenarios.
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STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
PRINCIPAL RISK
POTENTIAL IMPACT
CYBER AND INFORMATION SECURITY
WPP has in the past, and may in the
future, experience a cyber attack
that leads to harm or disruption to
our operations, systems or services.
This risk is also likely to increase as
the prevalence and sophistication
of generative AI means there is
potential for both human and
AI-generated attacks.
Such an attack may also affect
suppliers and partners through
the unauthorised access to or
manipulation, corruption or
destruction of data.
We may be subject to investigative or
enforcement action or legal claims or incur
fines, damages or costs and client loss
if we fail to adequately protect data.
A system breakdown or intrusion could have
a material adverse effect on our business,
revenues, results of operations, financial
condition or prospects and have an impact
on long-term reputation and lead to client loss.
The imposition of sanctions and the associated
geopolitical situation following the conflicts in
Ukraine and Gaza have triggered an increase
in cyber attacks generally.
CREDIT RISK
We are subject to credit risk
through the default of a client
or other counterparty.
We are generally paid in arrears for our
services. Invoices are typically payable within
30 to 60 days.
Challenging economic conditions,
heightened geopolitical issues,
shocks to consumer confidence,
disruption in credit markets and
challenges in the supply chain
disrupting our client operations can
lead to a worsening of the financial
strength and outlook for our clients
who may reduce, suspend or cancel
spend with us, request extended
payment terms beyond 60 days or
be unable to satisfy obligations.
We commit to media and production
purchases on behalf of some of our clients
as principal or agent depending on the client
and market circumstances. If a client is unable
to pay sums due, media and production
companies may look to us to pay those
amounts and there could be an adverse
effect on our working capital and operating
cash flow.
HOW IT IS MANAGED AND
REFLECTED IN OUR STRATEGIC PRIORITIES
WPP has a single IT control framework that is mandatory for all
WPP businesses and is aligned to the WPP Data Privacy & Security
Charter, NIST, IS27001 and COBIT.
We monitor and log our network and systems through the WPP
24/7 Cyber Security Operations Centre, as well as undertaking
threat intelligence activities, vulnerability scanning and
penetration testing, where appropriate.
Breach and attack simulation software provides continuous
assessment and WPP’s Cyber Security Incident Exercise Specialists
regularly test the incident response plans and playbooks, with
lessons learned and improvements continually made.
We continually raise our people’s security awareness through our
mandatory WPP Safer Data training and rolling phishing simulation
and education programmes.
WPP’s Data Privacy, Security & Ethics Risk Sub-committee
(a sub-committee of the WPP Risk Committee) meets quarterly
and includes WPP’s Chief Information Officer, Chief Information
Security Officer, Chief Privacy Officer, Chief Sustainability Officer
and Chief Technology Officer. This committee is responsible for
identifying and responding to privacy, technology, data and
cybersecurity risk across WPP.
Evaluating and monitoring clients’ ongoing creditworthiness and
in some cases requiring credit insurance or payments in advance.
We work closely with our clients to ensure timely payment for
services in line with contractual commitments and with vendors
to maintain the settlement flow on media.
Our treasury position and compliance with lending covenants
is a recurring agenda item for the Audit Committee and Board.
Increased management processes to manage working capital
and review cash outflows and receipts.
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PRINCIPAL RISKS AND UNCERTAINTIES
STRATEGIC REPORT
PRINCIPAL RISK
POTENTIAL IMPACT
HOW IT IS MANAGED AND
REFLECTED IN OUR STRATEGIC PRIORITIES
INTERNAL CONTROLS
Our performance could be
adversely impacted if we fail to
ensure adequate internal control
procedures are in place.
If material weaknesses are
identified, they could adversely
affect our results of operations,
investor confidence in the Group
and the market price of our ADSs
and ordinary shares.
DATA PRIVACY
We are subject to strict data
protection and privacy
legislation in the jurisdictions
in which we operate and rely
extensively on information
technology systems. We store,
transmit and rely on critical and
sensitive data such as strategic
plans, personally identifiable
information and trade secrets:
– Security of this type of data is
exposed to escalating external
threats, that are increasing in
sophistication, as well as internal
data breaches
– Data transfers between our
global operating companies,
clients or vendors may be
interrupted due to changes in
law (for example, EU adequacy
decisions, CJEU Schrems II
decision)
Failure to ensure that our networks have
robust control environments, or that the
services we provide and trading activities
within the Group are compliant with client
obligations, could adversely impact client
relationships and business volumes
and revenues.
If material weaknesses in internal controls are
discovered or occur in the future, our ability to
accurately record, process and report financial
information and, consequently, our ability to
prepare financial statements within required
time periods, could be adversely affected.
In addition, the Group may be unable to
maintain compliance with the federal
securities laws and NYSE listing requirements
regarding the timely filing of periodic reports.
Any of the foregoing could cause investors
to lose confidence in the reliability of our
financial reporting, which could have a
negative effect on the trading price of the
Group’s ADRs and ordinary shares.
Transparency and contract compliance are embedded through
the networks and reinforced by audits at a WPP and network level.
Regular monitoring of key performance indicators for trading are
undertaken to identify trends and issues.
An authorisation matrix on inventory trading is agreed with the
Board and the Audit Committee.
Our controls function continually reviews and, as needed,
enhances controls across the Group, under the direction of our
Global Director of Risk and Controls. Our technical accounting
function supports both these review efforts and complex
accounting matters and judgments, and changes in accounting
standards.
Management is committed to maintaining a strong internal control
environment, with appropriate oversight from controls committees
which sit at WPP and at network level as sub-committees of the
risk committees and meet quarterly, and from our Audit Committee.
Regular actions include engagement of an independent valuation
specialist to assist with the impairment assessment of intangible
assets and goodwill, an annual refresh on discount rate
methodology and reviews of the selection of cash flow periods
and net working capital assumptions.
We may be subject to investigative or
enforcement action or legal claims or incur
fines, damages, or costs and client loss if we
fail to adequately protect data or observe
privacy legislation in every instance:
– The Group has in the past, and may in the
future, experience a system breakdown
or intrusion that could have a material
adverse effect on our business, revenues,
results of operations, financial condition
or prospects
– Restrictions or limitations on international
data transfers could have an adverse effect
on our business and operations
We develop principles on privacy and data protection and
compliance with local laws. We also monitor pending changes to
regulations and identify changes to our processes and policies that
would need to be implemented. In the case of data transfers, we also
identify alternative approaches, including using other permitted
transfer mechanisms, in order to limit any potential disruption (for
example, SCCs instead of the US Data Protection Framework).
We implement extensive training ahead of new data protection
regulations (including GDPR and CPPA) and roll out toolkits to assist
our people to prepare for their implementation.
A Chief Privacy Officer and Global Data Protection Officer are
appointed at the Company and are supported by a Data Protection
Office. Data privacy activities across WPP are governed by the WPP
Data Privacy & Security Charter and follow the WPP Privacy
Management Framework.
WPP’s Data Privacy, Security & Ethics Risk Sub-committee
(a sub-committee of the WPP Risk Committee) meets quarterly
and includes WPP’s CIO, CSO, Chief Privacy Officer, Chief
Sustainability Officer and CTO. The committee has responsibility
for identifying and responding to privacy, technology, data and
cybersecurity risk across WPP.
Our people must take Privacy & Data Security Awareness training
and understand the WPP Data Code of Conduct and WPP policies
on data privacy and security.
The Data Health Checker survey is performed annually to
understand the scale and breadth of data we collect so the level
of risk associated with this can be assessed.
Annual reporting to the Audit Committee on significant regulatory
changes, data privacy risks and steps taken to mitigate those risks.
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STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
PRINCIPAL RISK
TAXATION
We may be subject to regulations
restricting our activities or effecting
changes in taxation.
POTENTIAL IMPACT
HOW IT IS MANAGED AND
REFLECTED IN OUR STRATEGIC PRIORITIES
Changes in local or international tax rules and
rates, changes arising from the application of
existing rules, new demands and assessments
or challenges by tax or competition
authorities, may expose us to significant
additional tax liabilities or impact the carrying
value of our deferred tax assets, which would
affect the future tax charge.
We actively monitor any proposed regulatory or statutory changes
and consult with government agencies and regulatory bodies where
possible on such proposed changes.
Biannual briefings to the Audit Committee of significant changes
in tax laws and their application and regular briefings to executive
management. We engage advisors and legal counsel to obtain
opinions on tax legislation and principles.
Online and in-country ethics, anti-bribery, anti-corruption,
anti-fraud and antitrust training on a Group-wide basis to raise
awareness and seek compliance with our Code of Conduct and
ABC and Fraud Policy.
A continuously evolving business integrity function to ensure
compliance with our codes and policies and remediation of any
breaches of policy.
Continuous communication of the confidential, independently
operated Right to Speak helpline for our people and stakeholders
to raise any potential breaches of our Code and policies, which
are investigated and reported to the Audit Committee on a
regular basis.
Due diligence on acquisitions and on selecting and appointing
suppliers, an actively managed disclosure programme around
conflicts of interest and related party interests and restrictions
on the use of third-party consultants in connection with any
client pitches.
Rolling programme of creating shared financial services in the
markets in which we operate and a controls function which
operates at WPP and at network level.
Risk committees are well established at WPP and across the
networks to monitor risk and compliance through all of our
businesses and the enhancement of our business integrity
programme across our markets. For details of the risk
committees’ responsibilities and our business integrity
programme see pages 93-96.
Gift and hospitality register and approvals process.
Online training to raise awareness and seek compliance
and updates for our companies on any new sanctions.
Regular briefings to the Audit Committee and constant monitoring
by the WPP legal team with assistance from external advisors of
the sanctions regimes. Executive Committee briefed and working
with the WPP legal team to ensure compliance with escalating
sanctions as a consequence of the conflict in Ukraine.
We have taken a number of actions as a consequence of the
conflict in Ukraine. We discontinued our operations in Russia and
have ensured compliance with all sanctions as they impact any
clients, suppliers or financial arrangements.
REGULATORY
We are subject to strict anti-
corruption, anti-bribery and
anti-trust legislation and
enforcement and incoming
anti-fraud legislation in the
countries in which we operate.
We operate in a number of markets where the
corruption risk has been identified as high by
groups such as Transparency International.
Failure to comply or to create a culture
opposed to fraud and corruption or failing
to instil business practices that prevent fraud
and corruption could expose us to civil and
criminal sanctions.
SANCTIONS
We are subject to the laws of
the US, the EU, the UK and other
jurisdictions that impose sanctions
and regulate the supply of services
to certain countries.
The conflict in Ukraine has caused
the adoption of comprehensive
sanctions by, among others, the
EU, the US and the UK, which
restrict a wide range of trade
and financial dealings with Russia
and Russian persons.
Failure to comply with these laws could
expose us to civil and criminal penalties
including fines and the imposition of economic
sanctions against us and reputational damage
and withdrawal of banking facilities which
could materially impact our results.
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PRINCIPAL RISKS AND UNCERTAINTIES
STRATEGIC REPORT
PRINCIPAL RISK
POTENTIAL IMPACT
ESG REGULATION AND REPORTING
The Group could be subject to
increased costs to comply with
the potential future changes in
Environmental, Social and
Governance (ESG) law and
regulations.
A failure to manage the complexity
in carbon emission accounting for
marketing and media or to consider
Scope 3 emissions in new
technology and business model
innovation across the supply chain
could have an adverse effect on our
business and reputation.
We could be subject to increased costs
to comply with potential future changes
in ESG laws and regulations. This includes
increasing carbon offset pricing to meet
our net zero commitments.
Increased investment is also required
in building renovation, electrification,
embedding sustainability in AI development
and supplier engagement to meet targets,
including developing internal ESG capacity
and capabilities.
In addition, carbon emission accounting for
marketing and media is in its infancy and
methodologies continue to evolve. This is
particularly the case for emissions associated
with digital media.
HOW IT IS MANAGED AND
REFLECTED IN OUR STRATEGIC PRIORITIES
We are developing an ESG compliance roadmap to deliver against
our regulatory obligations, including for the EU Corporate
Sustainability Reporting Directive.
Our Transition Plan will provide the roadmap to achieving our net
zero commitments. As part of this plan and through our work to
decarbonise media and media supply chains, we are exploring
opportunities to improve accounting for emissions from media.
To manage the cost and quality of carbon credits purchased to
offset residual emissions, in 2022 WPP updated its Sustainability
Policy and released a new Environmental Policy which includes
policy guidance around offsetting and we are further developing
our offsetting strategy as part of our net zero roadmap.
The Board Sustainability Committee, formed in 2019, gives
increased focus on sustainability and implementation of our plans
and policies.
Measuring and monitoring sustainability KPIs is critical to meet our
sustainability strategy and targets. In 2022, we introduced new ESG
controls which we continued to roll out across the business in 2023
and regular testing of which provides crucial measurement data.
ESG KPIs are included as part of the scorecard that determines
the short-term incentive rewards for WPP’s CEO, CFO and some
key members of the Executive Committee. This includes WPP’s
performance against carbon reduction targets.
Further information on ESG governance and ESG reporting is
provided in the Sustainability section of this report (pages 53-61).
EMERGING RISKS
The Group’s operations could
be disrupted by an increased
frequency of extreme weather and
climate-related natural disasters.
This includes storms, flooding, wildfires and
water and heat stress which can damage our
buildings, jeopardise the safety and wellbeing
of our people and significantly disrupt
our operations.
Our Crisis Management and Business Resilience function provides
global standards for operational resilience: strategy, governance,
policy, resources and training assets to better plan for and respond
to crisis events of all types and at all degrees of scale. This includes
extreme weather events.
Co-locating our people in fewer, higher-capacity campus buildings
means we can centralise emergency preparedness procedures and
deploy climate mitigation measures more efficiently. Climate-related
risk is considered when we invest in new campus buildings.
Our hybrid working approach, which incorporates new ways of
working adopted during the pandemic, provides additional resilience
by enabling fully remote working – provided employees and their
families are in safe locations – during extreme weather events.
The Employee Assistance Programme is activated in response
to climate-related extreme weather events.
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105
CORPORATE GOVERNANCE
CORPORATE
GOVERNANCE
In this section
Chairman’s letter
Compliance with the UK Corporate
Governance Code
Our Board
Our Executive Committee
Division of responsibilities
How our Board engages with stakeholders
Board activities
Composition, succession and evaluation
Nomination and Governance Committee report
Audit Committee report
Sustainability Committee report
Compensation Committee report
Statement of Directors’ responsibilities
108
111
112
115
117
118
122
123
125
130
137
139
169
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CORPORATE GOVERNANCE
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CORPORATE GOVERNANCE
CHAIRMAN’S
LETTER
As I approach the end of my time as Chairman
of WPP, and reflect on the progress made
since the change in executive leadership,
I am struck by how far the Company has
come in recent years.
Early in 2018 WPP was contending with a
series of major strategic challenges. Its largest
client was up for review, debt was at an
historic high, there had been no growth
since the first quarter of 2017 and in the US
– the Company’s largest market – no growth
since the third quarter of 2016.
In the face of these and other pressures, the
executive team brought stability and new
direction to WPP, transformed the Company’s
culture and revitalised its offer, as reflected
in new partnerships with clients including
The Coca-Cola Company and other major
global brands.
The team has since navigated a complex
landscape with great skill and commitment,
while investing in creativity, technology and
talent, and evolving the business to meet the
demands of a rapidly changing industry.
At the same time, the Board has refreshed
its composition. Over the past five years, we
have comprehensively renewed the Board,
saying goodbye to a number of directors and
welcoming others, to bring a fresh approach.
As a result, I believe that we now have the
right blend of experience and capabilities
to support the Company’s success in the
contemporary world of marketing.
Today’s WPP is a far stronger company, with
a modern, integrated proposition for clients,
a leading position in a growing market, and
many attractive strategic opportunities ahead
of it. This is a huge achievement by the
leadership team and my thanks go to them for
their tireless efforts to bring success to WPP,
its people, its clients and its shareholders.
TODAY’S WPP IS A FAR
STRONGER COMPANY”
Roberto Quarta
Chairman, WPP
After two years of very strong growth, 2023
was more challenging, largely due to the
impact of reduced spending in the US from
technology clients, to which WPP has
greater exposure than its peers.
Despite these headwinds, the Company
continued to grow and improved its
profitability. And at the Capital Markets Day
early this year, the executive team laid out
WPP’s plans for accelerated growth, further
margin expansion and improved cash flow
over the medium term.
You can read more about these plans in the
Chief Executive’s Statement on page 6 and
Strategic Report on page 9.
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CHAIRMAN’S LETTER
CORPORATE GOVERNANCE
RENEWING THE BOARD
Our Senior Independent Director, Angela
Ahrendts, has led the process to appoint
my successor, and she provides details of
the approach taken in the Nomination and
Governance Committee Report on page 125.
To facilitate the handover to a new Chair, the
Board brought forward the timing of the 2024
external board effectiveness review, the
findings of which can be read on page 127.
In 2023 the Board was delighted to welcome
two new Executive Directors. Joanne Wilson
joined WPP from Britvic, succeeding John
Rogers as Chief Financial Officer, while
Chief Operating Officer Andrew Scott was
appointed to the Board in recognition of the
key role he plays within the Company.
In May we said farewell to Nicole Seligman
as she completed a nine-year period on the
Board, and to Tarek Farahat, who did not put
himself forward for re-election at the 2023
AGM due to other commitments.
Proactively reviewing the composition of
both the Board and executive team, and
preparing for the future, was a priority as
ever. We were pleased to see movement of
key talent within senior roles in 2023. Landor
CEO Jane Geraghty was appointed WPP’s
Chief Client Officer as Lindsay Pattison
moved from that role to become Chief
People Officer, succeeding Jennifer Remling
when she joined Warner Bros. Discovery at
the beginning of 2024.
The Board is working closely with Lindsay
and Mark on succession planning for the
Executive Committee and other leadership
positions.
REVIEWING PROGRESS AND
FUTURE PLANS
The Board’s annual strategy meeting enables
its members to review progress and future
plans in detail and to speak to leaders across
the Company responsible for delivery.
Inviting major clients and partners to Board
meetings is a critical part of the Board’s
regular engagement activity, as is spending
time within the business in its various centres
around the world.
WPP is a global company operating in a
global marketplace. The Board’s regional
reviews provide important insights into key
markets, and in 2023 its members visited
India to meet colleagues, partners and
clients in this fast-growing and strategically
important country.
The review was extremely valuable, spanning
topics from India’s digital transformation and
WPP’s role in that process to the needs of
key clients and how the Company is
supporting communities through the WPP
India Foundation.
Non-executive directors joined WPP’s
India People Forum to hear directly from
employees on subjects that matter to them,
including cross-agency collaboration, the
integration of WPP’s offer, and learning and
development.
The Board’s wider employee engagement
continued through the Workforce Advisory
Panel and other forums, attended by
Workforce Engagement Non-Executive
Director Cindy Rose.
Topics on the agenda for our people ranged
from using our network of campuses to
support sustainability objectives to leveraging
the scale of WPP to enable career
progression within the Company.
Listening to employees, valuing their input
and acting on their feedback is at the heart
of the culture WPP has aimed to build in
recent years. So it was encouraging to see
another record-high level of engagement
in the Company’s annual employee survey,
with more than 80,000 people participating
– an increase of 14% year-on-year.
In 2023, areas of focus included the
opportunities of AI, maximising the value of
data, driving craft and scale in production,
shaping the next era of media, M&A,
back-office transformation and the
financial plan.
During the year the Board also formed a
sub-committee to allow longer and more
in-depth discussion and tracking of
transformation workstreams – in particular
the implementation of Workday and finance
ERPs – outside the existing calendar of
scheduled Board meetings.
It was an active period for M&A, and the
Board gave consideration to transactions
including the investment by KKR in FGS
Global and the acquisition of influencer
marketing agency Goat.
In 2024, the Board’s oversight of strategic
delivery will focus on the recently announced
simplifications and mergers – particularly
GroupM, VML and Burson – to ensure
integration is well executed and planned
cost savings are realised. We have met with
the senior executives of each of the new
agencies to provide Board-level support,
clarity of deliverables and oversight.
ENGAGING STAKEHOLDERS
The Board has continued to engage with
WPP’s stakeholders to understand what is
most important to them and to inform its
decision-making.
Board members met with shareholders
regularly during 2023. As part of this
engagement, I conducted an investor
roadshow ahead of the Capital Markets Day
which helped to gather insights and ensure
the event addressed the needs and interests
of our shareholders. Executive Board
members and the wider leadership team
made themselves available after the event
for further discussion and questions.
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CORPORATE GOVERNANCE
CHAIRMAN’S LETTER CONTINUED
DIVERSITY AND PERFORMANCE
One of the primary objectives of such
planning is to ensure we have the diversity
of representation that we know underpins
strong performance both at board and
executive level. WPP continues to exceed
the recommended targets for board
diversity set by the FTSE Women Leaders
and Parker reviews and the listing rules.
A SPECIAL ORGANISATION
At the Capital Markets Day the leadership
team outlined a clear and compelling
strategy for the future of WPP, which has
the full support of the Board.
I would like to extend my heartfelt thanks to
my colleagues on the Board, the executive
leadership team and every one of the more
than 100,000 people around the world who
make up WPP.
The event was also a showcase for the
Company’s capabilities and the talent of
its people.
It has been a privilege to serve as your
Chairman, and I look forward to seeing WPP
continue to thrive in the years to come.
In 2023 43% of Executive Committee
members and their direct reports were
women, against a FTSE 100 average of 35%.1
At the time of writing this letter, 42% of WPP
Board directors are female.
As we heard from the industry’s foremost
minds in the application of AI, world experts
in media investment, award-winning creative
leaders and more, I was reminded once
again of what a special organisation WPP is.
Since 2021, DEI performance has been linked
directly to leadership incentive plans, and
we remain committed to driving continued
progress in this vital area.
I feel very fortunate to have been Chairman
of this company for the last nine years, and
to have had the opportunity to work
alongside such exceptional people.
Roberto Quarta
Chairman
21 March 2024
While good progress is being made to
find my successor, the process is ongoing
and, on that basis, I will put myself forward
for re-election at the AGM and remain as
Chairman until my successor is appointed
and transitioned into the role.
MONITORING AND MITIGATING RISK
Ensuring there is a strong and effective
risk management culture throughout the
organisation is a key responsibility of
the Board.
During the year, we continued to review
the structure and effectiveness of our risk
management model and assess the principal
and emerging risks that could impact our
business. More information about our
approach is available from page 93.
The simplification of the Company’s
organisational structure and transformation
programme remained a focus for the Board
both from a strategic and operational risk
standpoint in 2023. Similarly, looking ahead,
overseeing the efficient execution of the
strategy articulated at the Capital Markets
Day in January will be a key priority.
1 FTSE Women Leaders Review, 2024
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COMPLIANCE WITH THE UK
CORPORATE GOVERNANCE CODE
CORPORATE GOVERNANCE
During the year ended 31 December 2023,
the Company was compliant with the
provisions of good governance contained
in the 2018 UK Corporate Governance Code
(‘the Code’). The table below shows where
shareholders can find further information on
how the Company has applied the principles
of the Code.
The Company’s American Depositary Shares
are listed on the New York Stock Exchange
(NYSE) and the Company is therefore subject
to the rules of the NYSE as well as to US
securities laws and the rules of the Securities
and Exchange Commission (SEC) applicable
to foreign private issuers. As the Company
follows UK corporate governance standards,
differences from the NYSE governance
standards are summarised in the Company’s
Form 20-F filing.
COMPLIANCE WITH THE CODE
1. BOARD LEADERSHIP AND COMPANY PURPOSE
3. COMPOSITION, SUCCESSION AND EVALUATION
– The role of the Board is set out on page 117
– The Board’s approach to engagement and statement on Section
172 factors is on page 118
– How the Board and management have engaged with
stakeholders is on pages 118 to 121
– The composition of the Board, along with members’ biographies
and tenure, is on pages 112 to 114
– The Nomination and Governance Committee Report is on
pages 125 to 129 and provides information on the Committee’s
work this year, including succession planning
– An overview of the Company’s vision and purpose is set out on
– The outputs of the Board evaluation are on pages 127 to 128
the inside front cover
– How the Board promotes and assesses the desired culture is set
out from page 37 to 39 and 94 to 95
– Our strategy, overseen by the Board, is set out from pages 9 to 15
– A summary of our Group policies and practices is on page 55
2. DIVISION OF RESPONSIBILITIES
– Our Governance Model on page 117 sets out the division of
responsibilities between the Chair, CEO and Non-Executive
Directors
– Details of each Board committee are provided in the respective
committee reports from page 125 to 168
4. AUDIT, RISK AND INTERNAL CONTROL
– Our Viability Statement and how we assess and manage our
risks are on pages 93 to 105
– The Audit Committee Report on pages 130 to 136 provides
details of the Committee’s oversight of the financial reporting
process, the review of our risk management and internal
control framework and responsibilities relating to internal
and external audit
5. REMUNERATION
– The Compensation Committee Report on pages 139 to 168 sets
out responsibilities relating to the Compensation Policy and
determining executive and senior management arrangements
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CORPORATE GOVERNANCE
OUR BOARD
ROBERTO QUARTA
CHAIRMAN
MARK READ CBE
CHIEF EXECUTIVE OFFICER
JOANNE WILSON
CHIEF FINANCIAL OFFICER
ANDREW SCOTT
CHIEF OPERATING OFFICER
Appointed: 1 January 2015 (Chairman 9 June 2015)1
Nationality: Italian and American
Skills and experience:
Roberto has extensive experience in corporate governance and global commerce,
having served on the boards of a number of UK and international companies. His
career in private equity brings valuable experience to WPP, particularly when
evaluating acquisitions and new business opportunities. Roberto is a Partner of
Clayton, Dubilier & Rice, and Chairman of Clayton, Dubilier & Rice Europe. He is an
Independent Non-Executive Director of Gulf Capital. Previously he was Chairman
of Smith and Nephew plc, Chief Executive and then Chairman of BBA Group plc,
Chairman of Rexel SA, Chairman of IMI plc and a Non-Executive Director at BAE
Systems plc, Equant NV, Foster Wheeler AG and PowerGen plc.
External appointments:
Partner, Clayton, Dubilier & Rice;
Chairman, Clayton, Dubilier & Rice
Europe; Independent Non-Executive
Director, Gulf Capital.
1 Roberto will step down as Chairman once
his successor is appointed and transitioned
into the role (for more information see
page 126)
External appointments:
Trustee, Natural History Museum.
Appointed: 3 September 2018 Nationality: British
Skills and experience:
Mark has held multiple leadership positions at WPP since joining in 1989. As CEO of
WPP Digital he was responsible for WPP’s first moves into technology. In 2015, he
became Global CEO of Wunderman, which he transformed into one of the world’s
leading agencies. Mark received a Fellowship in 2021 for outstanding services to the
industry in the IPA’s New Year’s Honours. In 2023 he joined Involve’s Hall of Fame
following multiple listings as an Empower Advocate (including #1) which recognises
leaders who create diverse and inclusive business environments, alongside his five
consecutive years as a Heroes champion of women in business. Mark was awarded a
CBE (Commander of the Order of the British Empire) in the King’s New Year Honours
2024 list, for services to the creative industries.
Mark has an economics degree from Trinity College, Cambridge, was a Henry Fellow
at Harvard University, and has an MBA from INSEAD.
Appointed: 19 April 2023, Chief Financial Officer from 27 April 2023
Nationality: Irish
External appointments:
Non-Executive Director, Informa plc.
Skills and experience:
Joanne has extensive experience both in the UK and internationally in a variety
of financial and commercial roles. She joined WPP from Britvic where she was
Chief Financial Officer and Chair of the ESG Committee. Prior to this, Joanne had
a successful career at Tesco where, at the time of leaving, she held the position of
Chief Financial Officer of dunnhumby, a global leader in customer data science.
Joanne began her career at KPMG, where she qualified as a Chartered Accountant.
External appointments:
None.
Appointed: 7 September 2023 Nationality: British
Skills and experience:
Andrew joined WPP in 1999, holding a number of leadership roles in the UK and
US before being appointed Chief Operating Officer in 2018. He is responsible for
operational performance and implementing the ongoing simplification of the
Company’s portfolio. Andrew is also responsible for the Company’s mergers and
acquisitions activity and, through acquisitions such as Essence, VML, AKQA, Satalia
and 24/7, he has played a critical role in building WPP’s capabilities in technology
and AI. He oversees WPP’s network of Country Leaders who connect and strengthen
the talent and resources of the Company’s agencies in their local markets to deliver
growth for clients. Prior to WPP, Andrew was a management consultant at LEK, the
global strategy consulting firm.
Andrew is an engineering graduate and has an MBA with distinction from INSEAD.
COMMITTEE
MEMBERSHIP KEY
NON-EXECUTIVE DIRECTOR TENURE
AS AT 31 DECEMBER 2023
Audit
Compensation
Nomination and Governance
Sustainability
Committee Chair
Director retirements during the year:
Tarek Farahat retired from the Board
on 17 May 2023
Nicole Seligman retired from the Board
on 17 May 2023
John Rogers retired from the Board
on 27 April 2023
0-3 years 2
3-6 years 6
6-9 years 1
9+ years 0
112
WPP ANNUAL REPORT 2023
OUR BOARD
CORPORATE GOVERNANCE
INDEPENDENT NON-EXECUTIVE DIRECTORS
Appointed: 1 July 2020
Nationality: British and American
Skills and experience:
Angela brings expertise as a leader of creative and technology-driven global
businesses. From 2014 until 2019, she was Senior Vice President, Retail, at Apple Inc.,
where she integrated and redesigned the physical and digital global consumer
experience. Angela was CEO of Burberry from 2006 to 2014, where she repositioned
the brand as a luxury high-growth company and created the Burberry Foundation.
Prior to Burberry, Angela was Executive Vice President at Liz Claiborne, Inc. and
President of Donna Karan International, Inc. Angela was a member of the UK Prime
Minister’s Business Advisory Council from 2010 to 2015.
Appointed: 31 January 2022
Nationality: British
Skills and experience:
Simon has extensive business, capital markets, technology, corporate finance and
governance experience, and is currently Chairman of Genomics plc and a Senior
Advisor at global investment firm The Carlyle Group. He was previously CFO of
GlaxoSmithKline plc from 2011 to 2019. Prior to GSK, Simon worked in investment
banking for 25 years, firstly at SG Warburg and then Goldman Sachs, where he was
Managing Director and Partner as a leader of its European M&A business and Head of
UK Investment Banking. Simon also previously served as Chairman of both the
Financial Reporting Council and the 100 Group of FTSE CFOs.
External appointments:
Non-Executive Director, Ralph Lauren
Corporation and Airbnb, Inc.; Chair
of Save the Children International;
Non-Executive Director, charity:
water; Member of CEO Circle, Imagine;
Director, The HOW Institute for Society;
Member of the Global Leadership
Council of the Oxford University Saïd
Business School and British American
Business International Advisory Board;
Senior Operating Adviser, SKKY Partners.
External appointments:
Chairman, Genomics plc; Senior
Advisor, The Carlyle Group; Trustee,
The Prince’s Trust.
Appointed: 3 February 2020
Nationality: French
Skills and experience:
Sandrine brings substantial financial expertise gained in global companies and
strong strategic capability to the Board. She is currently CFO of UCB, a global
pharmaceutical company. Previously Sandrine was CFO of Proximus. She held a
number of leadership roles at Vivendi in France and the US across its entertainment
and telecommunications business, and has an enthusiasm for cultural, technological
and business transformation. Sandrine began her career as a financial analyst at BNP
and then Credit Agricole in the telecoms sector. She has held other non-executive
director roles, most recently at Solocal Group.
External appointments:
Chief Financial Officer, UCB.
Appointed: 5 October 2020
Nationality: British
Skills and experience:
Tom brings a wealth of expertise as a technology entrepreneur and has extensive
experience of the UK technology sector. He is Chair of the Rugby Football Union
(RFU) and CEO of Crossword Cybersecurity plc. Tom was previously Managing
Director of Consumer Markets at Callcredit Information Group. Prior to Callcredit,
Tom founded and was CEO of Garlik, an identity protection company. Tom has
honorary doctorates from City, University of London, Coventry University,
Portsmouth University and the University of Wolverhampton, and is an Honorary
Fellow of both Jesus College and St Anne’s College, Oxford. In 2017 Tom topped
the Powerlist ranking of the most influential people of African or African Caribbean
heritage in the UK.
Appointed: 1 April 2019
Nationality: British and American
Skills and experience:
Cindy has extensive experience as a leader in the technology and media sectors,
and brings exceptional knowledge of the role technology plays in business
transformation. She was appointed Chief Operating Officer for Microsoft Global
Enterprise in March 2023. Prior to this, Cindy was President of Microsoft Western
Europe, and also CEO of Microsoft UK. She has also held the roles of Managing
Director of the UK consumer division at Vodafone and Executive Director of Digital
Entertainment at Virgin Media. She spent 15 years at The Walt Disney Company,
ultimately as Senior Vice President and Managing Director of Disney Interactive
Media Group. Cindy is a graduate of Colombia University and New York Law School.
External appointments:
Founder and CEO, Crossword
Cybersecurity plc; Chair, Iternal Limited
(previously known as Deathio Ltd);
Founder and Chair, African Gifted
Foundation; Chair, The Rugby Football
Union (RFU).
External appointments:
Chief Operating Officer, Microsoft
Global Enterprise; Advisory Board
Member, Imperial College Business
School in London and McLaren.
ANGELA AHRENDTS DBE
SENIOR INDEPENDENT DIRECTOR,
NON-EXECUTIVE DIRECTOR
SIMON DINGEMANS
NON-EXECUTIVE DIRECTOR
SANDRINE DUFOUR
NON-EXECUTIVE DIRECTOR
TOM ILUBE CBE
NON-EXECUTIVE DIRECTOR
CINDY ROSE OBE
NON-EXECUTIVE DIRECTOR
WPP ANNUAL REPORT 2023
113
CORPORATE GOVERNANCE
OUR BOARD CONTINUED
INDEPENDENT NON-EXECUTIVE DIRECTORS
Appointed: 1 November 2019
Nationality: British
Skills and experience:
Keith has a wealth of experience as a marketing and digital leader, and a deep
understanding of the ways in which technology is transforming businesses. Keith
was previously Chief Marketing and Communications Officer at Unilever, a role that
included creating and leading Unilever’s sustainability programme. Keith was named
the World’s Most Influential Chief Marketing Officer by Forbes in 2017, 2018 and 2019,
and Global Marketer of the Year 2017 by the World Federation of Advertisers. He
received The Drum’s Lifetime Achievement Award in 2018 and was inducted into the
Marketing Hall of Fame in 2019. Keith is a Non-Executive Director of J Sainsbury plc.
External appointments:
Non-Executive Director, J Sainsbury plc;
Trustee Director, Business in the
Community; Board Trustee, Grange Park
Opera; President, Royal Horticultural
Society; Board Trustee, Leverhulme
Trust; Senior Advisor, Alix Partners;
Advisory Board Member, i-Genie
and McLaren.
Appointed: 1 September 2019
Nationality: British and Swiss
Skills and experience:
Jasmine’s experience spans marketing, technology, finance, media,
telecommunications, and not-for-profit organisations. Alongside this breadth of
perspective she brings knowledge of many of WPP’s client sectors to the Board.
Jasmine began her career in marketing in the technology sector, including with
Thomson Financial in the US. After completing the Stanford Executive Program,
Jasmine went on to hold leadership roles with Oxfam and Save the Children,
including as the first Chief Executive of Save the Children International from 2010
to 2015. She was CEO of London First from 2016 to 2021, and was previously a
Non-Executive Director of BT Group plc and Standard Chartered plc.
External appointments:
Chair of the Board, Travis Perkins plc;
Non-Executive Director, Compagnie
Financière Richemont SA; Visiting
Fellow, Oxford University; Vice-
President of the International Advisory
Council, Institute of Business Ethics.
Appointed: 1 January 2021
Nationality: American
Skills and experience:
Ya-Qin is a world-renowned technologist, scientist and entrepreneur with a
particular understanding of the changing consumer technology landscape in China.
He was President of Baidu Inc., the global internet services and AI company,
between 2014 and 2019. Prior to joining Baidu, he held several positions during his
16-year tenure at Microsoft, both in the United States and China, including Corporate
Vice President and Chairman of Microsoft China. Ya-Qin is currently a Non-Executive
Director of AsiaInfo Technologies Limited, ChinaSoft International Limited and
HiSense Group. He is also Chair Professor of AI Science at Tsinghua University and
the founding Dean of the Institute for AI Industry Research.
External appointments:
Non-Executive Director, AsiaInfo
Technologies Limited, ChinaSoft
International Limited, and HiSense
Group; Chair Professor, AI Science and
Founding Dean, Institute for AI Industry
Research, Tsinghua University; Board
Member, Philanthropy Asia Alliance.
Appointed: 27 April 2020
Skills and experience:
Balbir has significant governance experience across various roles in listed
companies. Balbir was Group Company Secretary at William Hill from 2020 to
2021. Prior to joining William Hill, Balbir was Director of Investor Relations at
GlaxoSmithKline plc (GSK), leading on engagement with ESG-focused investors,
and before that held company secretarial roles at GSK, Lastminute.com,
Royal & Sun Alliance and Segro plc.
External appointments:
None.
KEITH WEED CBE
NON-EXECUTIVE DIRECTOR
JASMINE WHITBREAD
NON-EXECUTIVE DIRECTOR
DR. YA-QIN ZHANG
NON-EXECUTIVE DIRECTOR
BALBIR KELLY-BISLA
COMPANY SECRETARY
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WPP ANNUAL REPORT 2023
CORPORATE GOVERNANCE
OUR EXECUTIVE
COMMITTEE
The Executive Committee of WPP is responsible
for leading the Company and executing its strategy.
Its members lead WPP’s largest agency networks
and central corporate functions
EXECUTIVE COMMITTEE
Assists the Chief Executive Officer
in discharging his responsibilities
and is collectively responsible
for implementing strategy,
ensuring consistent execution
and embedding the Company’s
culture and values.
DISCLOSURE COMMITTEE
An executive Disclosure
Committee responsible for
overseeing the accuracy and
timeliness of Group disclosures
and reviewing controls and
procedures in relation to the
public disclosure of financial
information.
RISK COMMITTEE
An executive Risk Committee,
which assists the Board and Audit
Committee in discharging their
responsibilities by reviewing,
monitoring and advising on the
design and implementation of
WPP’s compliance framework,
compliance policies and
procedures and risks that present
themselves throughout WPP.
MARK READ CBE
CHIEF EXECUTIVE OFFICER, WPP
JOANNE WILSON
CHIEF FINANCIAL OFFICER, WPP
ANDREW SCOTT
CHIEF OPERATING OFFICER, WPP
Biography can be found on page 112.
Biography can be found on page 112.
Biography can be found on page 112.
AJAZ AHMED
CHIEF EXECUTIVE OFFICER,
AKQA
Ajaz is the CEO of AKQA, which also
includes Grey. Recognised as a creative
pioneer, AKQA has won over 81 Agency
of the Year awards.
DEVIKA BULCHANDANI
CHIEF EXECUTIVE OFFICER, OGILVY
JON COOK
CHIEF EXECUTIVE OFFICER, VML
Devika was appointed CEO of Ogilvy
in 2022. She joined the agency
in 2021 after spending 26 years at
McCann. Under her leadership, Ogilvy
was named the most creative and
effective global agency network in
2023 by WARC.
Jon is CEO of VML, which was created
following the merger of VMLY&R and
Wunderman Thompson in 2023. He had
led VMLY&R since its formation in 2018,
as well as its predecessor agency (also
known as VML), which he joined in 1996.
ANNAMARIA DESALVA
CHAIRMAN AND CEO,
HILL & KNOWLTON
AnnaMaria has led Hill & Knowlton since
2019. Her previous roles include Chief
Communications Officer of DuPont,
Senior Advisor to DowDuPont’s CEO,
and senior positions at Pfizer and Bristol
Myers Squibb. Effective July 1, 2024,
she will become Chairman of Burson,
formed by the merger of BCW and
Hill & Knowlton.
COREY DUBROWA
CHIEF EXECUTIVE OFFICER, BCW
MEL EDWARDS
PRESIDENT, VML
Corey became CEO of BCW in 2023,
having joined from Google where
he was Vice President, Global
Communications and Public Affairs.
Effective July 1, 2024, he will become
CEO of Burson, formed by the merger
of BCW and Hill & Knowlton.
Mel was appointed President of VML
following the merger of VMLY&R and
Wunderman Thompson in 2023.
She was previously CEO of Wunderman
Thompson, and held prior roles at
Wunderman as Global CEO and UK CEO.
WPP ANNUAL REPORT 2023
115
CORPORATE GOVERNANCE
OUR EXECUTIVE COMMITTEE CONTINUED
LAURENT EZEKIEL
CHIEF MARKETING & GROWTH
OFFICER, WPP & CEO, WPP OPEN X
Laurent became WPP’s first Chief
Marketing & Growth Officer in 2019.
He joined from Publicis where he was
President of Digitas North America
and International, and Global Client
Leader for GSK. In 2022, he was also
appointed CEO of WPP Open X, the
bespoke global agency model for
The Coca-Cola Company.
JANE GERAGHTY
CHIEF CLIENT OFFICER, WPP
RICHARD GLASSON
CHIEF EXECUTIVE OFFICER, HOGARTH
ANDREA HARRIS
GROUP CHIEF COUNSEL, WPP
Jane became WPP’s Chief Client Officer
in 2024. She was formerly Landor’s
Global CEO for six years, having
previously been president of EMEA.
Jane has held senior positions at Naked
Communications, ITV, Ogilvy New York,
McCann-Erickson and Saatchi & Saatchi.
Richard was appointed CEO of
Hogarth Worldwide in 2016, having
joined the company in 2011. Prior to
this he was CEO of Gyro, the B2B
marketing specialist.
Andrea was appointed as Group
Chief Counsel in 2005 having joined
WPP in 1996. Andrea is Chair of the
Risk Committee.
MICHAEL HOUSTON
WPP COUNTRY PRESIDENT, US
CHRISTIAN JUHL
CHIEF EXECUTIVE OFFICER, GROUPM
LINDSAY PATTISON
CHIEF PEOPLE OFFICER, WPP
STEPHAN PRETORIUS
CHIEF TECHNOLOGY OFFICER, WPP
Michael became WPP’s first Country
President for the US in 2022. He was
previously CEO of Grey Group for
five years, following roles including
Global President and CEO of Grey
North America.
Christian was appointed CEO of GroupM
– the world’s largest media investment
group and home to WPP’s media
agencies – in 2019. Previously, he was
CEO of Essence, which he joined in 2013.
Lindsay became Chief People Officer
of WPP in 2024. Her prior roles at WPP
include Chief Client Officer and Chief
Transformation Officer, and she was
formerly Global CEO of Maxus, which
she joined as UK CEO in 2009.
Stephan was appointed as WPP’s
first CTO in 2018. Before that he was
UK Group CEO and Global CTO of
Wunderman, having joined the
agency in 2016.
ROB REILLY
CHIEF CREATIVE OFFICER, WPP
Rob joined WPP in May 2021 from
McCann Worldgroup, where he was
Global Creative Chairman. During his
leadership, WPP has consistently been
recognised as a global creative force,
securing numerous industry accolades.
Before McCann he was Partner and
Chief Creative Officer at Crispin
Porter + Bogusky.
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WPP ANNUAL REPORT 2023
DIVISION OF RESPONSIBILITIES
CORPORATE GOVERNANCE
The WPP Board is committed to ensuring there is a strong and
effective system of corporate governance in place to support
the successful execution of the Company’s strategy
BOARD GOVERNANCE
THE BOARD
– Responsible for the overall long-term success of WPP and for setting
the Company’s purpose, values and culture and strategic direction
– Oversees the implementation of appropriate risk assessment
processes to identify and mitigate WPP’s principal risks and consider
emerging risks
– Responsible for corporate governance
– Oversees the execution of the strategy and responsible for the overall
financial performance of the Company
The Matters Reserved for the Board are available on our website, wpp.com
NON-EXECUTIVE DIRECTORS
– Bring an external perspective to support and
challenge the performance of management
– Assist in developing the Company’s strategy
and offer specialist advice to management
based on their particular skills and
experience
SENIOR INDEPENDENT DIRECTOR
– Provides a sounding board for the Chair
and acts as an intermediary for the
other Directors
– Meets with the Non-Executive Directors
(without the Chair present) when necessary
and at least once a year to appraise the
Chair’s performance and communicates the
results to the Chair
COMPANY SECRETARY
– Ensures the Board operates in accordance
with the corporate governance framework
and that there are good information flows
between the Board and committees
– Advises the Board on matters of corporate
governance
– Supports the Board’s development through
organising training and induction programmes
– Supports the Board and committee Chairs
with annual agenda planning
CHAIR
– Responsible for Board governance
principles, including setting the Board
agenda and ensuring the Board receives
timely and accurate information
– Ensures all Directors are enabled to play
their full part in Board activities
– Represents the Board in discussions with
shareholders and other stakeholders
CHIEF EXECUTIVE OFFICER
– Responsible for the day-to-day leadership
of the Company, representing the Company
to clients, employees, partners, suppliers,
governments and other stakeholders
– Develops the strategic direction for
consideration by the Board
– Sets the tone at the top with regard to
culture and values
– Ensures there are effective processes for
engaging with and listening to employees
and other stakeholders
The responsibilities of our Board committees
are set out within individual committee reports
on pages 125-168
For the responsibilities of our Executive
committees, see page 115
WPP ANNUAL REPORT 2023
117
CORPORATE GOVERNANCE
HOW OUR BOARD ENGAGES
WITH STAKEHOLDERS
OUR APPROACH TO ENGAGEMENT
Our stakeholders are central to our strategy
and critical to the long-term success of our
business. The Board oversees our approach
to engagement as we seek feedback and
make decisions for the long-term benefit of
WPP. For each matter that comes before the
Board for decision, the Board considers the
likely consequences of any decision in the
long-term, identifies stakeholders who may
be affected, and carefully considers their
interests and any potential impact as part
of the decision-making process.
Our stakeholder engagement processes
enable our Board to understand what
matters to stakeholders most, consider all
relevant factors and select the course of
action that best delivers long-term value
for our stakeholders and protects their
interests, reflecting what are referred
to as Section 172 factors.
Corporate Governance Code, the Board
considers the matters described in Section
172 of the Companies Act 2006 in its
decision-making. Section 172 factors are not
only considered at Board level – they are
part of our culture and help drive our
business. Illustrations of this can be found
throughout the Strategic Report.
As a Jersey incorporated company, WPP is
not subject to UK legislation. However, as a
matter of good governance and in order to
comply with the provisions of the 2018 UK
ENGAGEMENT IN ACTION DURING 2023
The table below illustrates our direct and indirect Board engagement with various stakeholders, in addition to details on how the Company
has engaged with each of these stakeholder groups on an operational level.
DIRECT BOARD ENGAGEMENT
INDIRECT BOARD ENGAGEMENT
IMPACT OF ENGAGEMENT
SHAREHOLDERS
Our shareholders provide capital to invest in the business and support the valuation and liquidity of WPP shares. Shareholders benefit from the Board
acting in the best interests of the Company and investing for long-term value generation.
BOARD
ENGAGEMENT
The Chief Executive Officer and the Chief
Financial Officer hosted quarterly results
presentations and took questions from
investors and analysts.
Feedback to the Board on investor views,
particularly from the Chairman, Chair of the
Compensation Committee, Chief Executive
Officer and Chief Financial Officer.
In 2023, the Board oversaw the return of
£423 million (2022: £1.1 billion, including
share buybacks) in cash to shareholders
through dividends.
Monthly reports to the Board detailing
investor relations activities, key themes of
interest from investors and share register
composition and movements.
Analyst and broker briefings and reports
of meetings with major shareholders.
2023 SPECIFIC
The Board received communications from
major shareholders, including in respect of
voting practices.
We disclose relevant information to
shareholders through our Annual Report,
quarterly financial statements and
Regulatory News Service announcements.
2023 SPECIFIC
The Board continued to receive detailed
monthly reports including key investor
issues, changes in shareholding, and
analysts’ reports and consensus estimates.
Performance metrics have been changed
based on feedback from shareholders over
the years and we have evolved
remuneration structures to align more
directly with our strategy, sustainability
targets and shareholder interests.
The Chairman completed an investor
roadshow in November 2023 ahead of the
January 2024 Capital Markets Day, to ensure
the event addressed the needs and
interests of our shareholders.
A Capital Markets Day was hosted in
January 2024, to update investors and
analysts on the Company’s strategic
roadmap. The event was live-streamed via
a webcast hosted by the Chief Executive
Officer and Chief Financial Officer.
COMPANY
ENGAGEMENT
The Chairman, Chairs of the Board
committees and Executive Directors met
regularly with institutional investors to
discuss the business and to respond to
any concerns.
2023 SPECIFIC
The 2023 AGM was live-streamed via
a webcast hosted by the Chairman.
Shareholders were able to watch the
presentations and ask questions in advance
and during the meeting.
We have an extensive investor relations
programme, comprising quarterly results
presentations, investor days, the AGM,
investor and analyst meetings, webcasts
and ongoing email exchanges.
We continued our series of webinars in
2023, providing investors and analysts with
deeper insight into individual agencies,
products and services within WPP.
2023 SPECIFIC
We provided investors with greater insight
on our client-facing activities through
meetings with executive and other senior
leaders at the Cannes Lions awards –
a major industry event.
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WPP ANNUAL REPORT 2023
HOW OUR BOARD ENGAGES WITH STAKEHOLDERS
CORPORATE GOVERNANCE
DIRECT BOARD ENGAGEMENT
INDIRECT BOARD ENGAGEMENT
IMPACT OF ENGAGEMENT
GOVERNMENTS AND REGULATORS
Governments receive the tax contributions we make to public finances, enabling them to invest in public services. Governments and regulators
determine the policy frameworks that affect us and our stakeholders.
BOARD
ENGAGEMENT
The Chief Executive Officer met with
government representatives and
regulators around the world.
2023 SPECIFIC
The Chief Executive Officer met with
representatives of the UK Government to
discuss AI regulation, and with the CEO of
the UK’s Advertising Standards Authority
about advertising self-regulation.
COMPANY
ENGAGEMENT
As a listed global company, engagement
with listing authorities and financial
regulators.
2023 SPECIFIC
In collaboration with our operating
companies, we invite regulators and
thought-leaders to events for our clients
and our people on policy issues including
AI and green claims.
Reports to the Board and its committees
on regulatory changes from the Group
Chief Counsel, Group Company Secretary
and external auditor.
Received reports from the Chief Privacy
Officer and Global Data Protection Officer
on changing regulatory landscapes with
regards to data protection, security
and privacy as well as data ethics and
artificial intelligence.
2023 SPECIFIC
The Audit and Sustainability committees
received reports on the likely impact of
new ESG regulations including CSRD
and will continue to monitor progress
towards compliance.
Participated in consultations associated
with ESG disclosure requirements and
regulation, and supported efforts to
increase ESG standardisation and
alignment.
2023 SPECIFIC
We participated in the UK consultation
on the future of AI regulation, the
consultation on the proposed revision
of the UK Corporate Governance Code
and other relevant consultations through
trade bodies.
We participated in further consultations
and ministerial roundtables relating to AI
regulations, both directly and through
industry bodies in the US, EU and Australia.
With the Company’s expanded and
reinforced focus on AI, we aim to
understand regulatory developments
across the world and prepare guidance
for our business and clients such as the
Company’s Generative AI Principles or
evolving Green Claims Guidance.
In 2023 we contributed £1.6 billion in taxes
to public finances (2022: £1.5 billion).
We support clients’ advocacy on a wide
range of issues.
CLIENTS, PARTNERS AND SUPPLIERS
Our clients come from businesses across every sector. The work we do for clients provides our revenue and helps them to grow their businesses,
build relationships with their customers and ready themselves for future success. Our suppliers range from small businesses to the world’s largest
technology partners. They provide us with the products and services we need to meet our clients’ needs.
BOARD
ENGAGEMENT
Engaged with clients on issues including
strategy, changes taking place in our market
and understanding the changes taking
place in our clients’ and suppliers’ markets.
2023 SPECIFIC
Board engagement with key partners
and clients, including site meetings in
various locations.
Held the Board’s Regional Review in India,
providing the opportunity for interactions
with industry leaders and key clients and
presentations from the local management
team. See page 122 for further details.
Received updates on WPP’s client
satisfaction scores.
Received deep-dive updates at Board
meetings from Global Client Leaders on
key clients.
WPP’s Modern Slavery Act Statement,
available on our website, is reviewed by
the Sustainability Committee each year and
recommended to the Board for approval.
For more detail on how the Company
manages modern slavery risk, see our
website at wpp.com/sustainability/
modern-slavery-act-statement
We were pleased to achieve a score of
8.3 (out of 10) from our major clients over
the last year for our ability to support
their diversity, equity and inclusion goals
and 8.0 out of 10 for our ability to support
their sustainability goals.
Following the 2023 AGM, the Board met
with suppliers and external advisors,
providing a valuable opportunity to
engage with these stakeholder groups
and listen to feedback.
2023 SPECIFIC
The Sustainability Committee received
updates on media decarbonisation and
responsible procurement.
WPP ANNUAL REPORT 2023
119
CORPORATE GOVERNANCE
HOW OUR BOARD ENGAGES WITH STAKEHOLDERS CONTINUED
CLIENTS, PARTNERS AND SUPPLIERS CONTINUED
DIRECT BOARD ENGAGEMENT
INDIRECT BOARD ENGAGEMENT
IMPACT OF ENGAGEMENT
COMPANY
ENGAGEMENT
Our people regularly engage with
suppliers, including through our Chief
Executive Officer in joint product
development, skills development and joint
go-to-market programmes.
We engage with our major clients through
our central team of Global Client Leaders,
our agency CEOs, and their teams.
We evaluate potential suppliers on a variety
of factors, including diversity, carbon
reduction and human rights.
2023 SPECIFIC
We disclose our own sustainability policies
and performance in response to client
questionnaires and in pitches.
We launched a client version of our Green
Claims Guide and ran targeted training for
employees and for clients in potentially
higher-risk and higher-emissions sectors
(page 27).
The Company partnered with NVIDIA to
build a generative AI-enabled content
engine for digital advertising. See page 35
for further details.
GroupM launched a comprehensive
post-cookie readiness programme in
November 2023, in partnership with
Google Chrome. This global initiative
brings together clients to accelerate their
understanding of Google Privacy Sandbox
APIs and their use in advertising. See
page 35 for further details.
PEOPLE
We depend on the talent, creativity and technology skills of our people. And we want our employees to embrace our purpose, culture and values.
In return, our people receive salaries, pension contributions, employee benefits, career development and training.
BOARD
ENGAGEMENT
Cindy Rose, our Workforce Engagement
Non-Executive Director, attended meetings
of the Workforce Advisory Panel (WAP) and
updated the Board on matters discussed.
2023 SPECIFIC
The Board engaged with senior managers
at the Board strategy meeting and during
the course of the year.
A lunch was hosted between the Board
and ‘rising stars’ during the Regional Review
in India, offering valuable insights for the
purposes of career and talent development.
To align management with employees and
shareholders, DE&I goals continue to be
linked to leaders’ compensation and
performance reviews and carbon metrics
continued to be included in incentive plans
for Executive Directors in 2023.
We offer a number of ways for people to
learn, develop and thrive, investing £27.9
million in 2023 (2022: £31.3 million).
We introduced new tools and technology
to facilitate regular Career Conversations
throughout the organisation.
Reports at each Audit Committee meeting
were received on issues raised via Right to
Speak channels.
2023 SPECIFIC
Formal reports to the Board from the
Chief Executive Officer and Chief People
Officer included:
– Updates on ways of working
– Updates on talent, career development
and succession planning
– Reports on employee mental health
and wellbeing
– In-depth reviews of the people strategy,
people risk and workforce engagement
– Progress on DE&I initiatives
– Results of various employee engagement
and culture monitoring surveys
undertaken through the year and actions
taken to address employee feedback
COMPANY
ENGAGEMENT
We regularly survey our staff about their
experiences at work and have extensive
internal communications programmes and
platforms to keep staff informed.
Our All In survey helps us better support
employees, hold ourselves accountable,
and create a culture that is inclusive and
empowering for all (page 38).
2023 SPECIFIC
The Chief Executive Officer hosted 10
townhalls and various leadership events,
which gave him the chance to speak to our
people directly and to hear from attendees
in return.
2023 SPECIFIC
Our global Employee Community Groups
provide support for our people with a
shared identity or experience, including
LGBTQ+, neurodiversity and more.
The Company invited its global workforce
to practise inclusion as a skill in 2023 by
expanding inclusive leadership training to
its 114,000 employees across the world.
We were proud to be placed 158 out of 850
in the Financial Times 2024 Diversity
Leaders Ranking. This is a particularly
important award as 70% of scores come
from employee surveys.
We continued to invest in our Mental Health
Allies programme and published a new
mental health policy.
A record 83,241 employees took part in our
annual All In staff engagement survey (an
increase of 14% on 2022).
120
WPP ANNUAL REPORT 2023
HOW OUR BOARD ENGAGES WITH STAKEHOLDERS
CORPORATE GOVERNANCE
DIRECT BOARD ENGAGEMENT
INDIRECT BOARD ENGAGEMENT
IMPACT OF ENGAGEMENT
PLANET
We are committed to responsible and sustainable business practices. We take steps to optimise our own environmental impact, but recognise that our
greatest contribution to the planet is through our work with clients, which can shift attitudes and change behaviours to build a sustainable future and a
more inclusive society.
BOARD
ENGAGEMENT
The Board undertook deep-dives on a
range of ESG topics, climate-related risks
and opportunities, net zero transition
planning and media decarbonisation.
2023 SPECIFIC
Several of our Sustainability Committee
members are active members of Chapter
Zero, an online community that aims to
empower non-executive directors to lead
crucial UK boardroom discussions on the
impacts of climate change.
COMPANY
ENGAGEMENT
YEARLY
We engage with corporate, government
and NGO clients on issues ranging from
climate action to biodiversity and human
rights during the development of their
campaigns.
We regularly meet with investors, rating
agencies and benchmarking organisations
on sustainability issues.
Reports to the Sustainability Committee
included progress updates on the
Company-wide sustainability strategy and
developing a Net Zero Transition Plan;
progress on WPP’s single-use plastics
commitment; performance against
near-term science-based carbon reduction
targets and sustainability KPIs including
renewable energy; and stakeholder
engagement and feedback. For more
detail see pages 137–138.
2023 SPECIFIC
Regular updates were provided to the
Sustainability Committee on developing
our Net Zero Transition Plan.
YEARLY
We disclose relevant information to
shareholders through our Annual Report,
quarterly financial statements and
Regulatory News Service announcements.
2023 SPECIFIC
In 2023, we analysed our indirect suppliers’
carbon footprint in detail, identifying those
‘carbon strategic suppliers’ we can engage
with to help bring down emissions (see
page 71).
We continue to make good progress
towards our Scope 1 and 2 targets: at the
end of 2023, we had achieved a 76% absolute
reduction in tonnes of CO2e emissions
(Scope 1 and 2) since our 2019 baseline,
and a reduction of 18% year-on-year.
We have linked the margin of our $2.5
billion revolving credit facility to specific
sustainability measures as we work to
embed carbon-reduction targets and
broader sustainability commitments into
our financing arrangements.
WPP’s Green Claims Guide provides
principles and practical tips for making
effective green claims that are not
misleading in any way. In 2023 we launched
a client version of the guide and ran
training for employees and clients in
potentially higher-risk and higher-emissions
sectors (see page 27).
COMMUNITIES
We can help boost the impact of not-for-profit and non-governmental organisations by providing marketing and creative services, often on a pro bono
basis, enabling them to raise awareness and funds, recruit members, and achieve campaign objectives.
BOARD
ENGAGEMENT
The Board received updates on progress
against the 2020 commitment to spend
$30 million over three years to fund internal
and external racial equity programmes.
For more detail on how we are investing
in our communities, see page 58.
2023 SPECIFIC
The Board was able to visit a school
during the Regional Review in India as
part of its engagement with the WPP
India Foundation.
The Board received updates on the 2023
launch of the Creative Data School in
partnership with leading non-profit and
educational organisations. Delivered both
online and in schools, the course has
already taught essential technical skills to
over 6,000 young people across the UK.
The Sustainability Committee oversaw the
work on the sustainability strategy and the
progress made on embedding Group-wide
sustainability targets tied to the WPP
purpose statement.
In 2023, we signed up as founding member
to Neurodiversity in Business, to build a
better future and improve the wellbeing of
neurodivergent people within our company,
our industry and beyond.
Updates received from the business on
elements of the Group’s operations which
impact the wider community, including the
Group’s tax strategy.
Following the 2023 Creative Data School
programme, eligible candidates were
invited to apply for work experience and
internships within the WPP network.
2023 SPECIFIC
Reports to the Sustainability Committee
included updates on a partnership with
UNHCR to support those affected by
events in Ukraine, the floods in Pakistan
and the earthquakes in Turkey and Syria.
COMPANY
ENGAGEMENT
We work closely with communities and
NGO partners to increase our understanding,
and amplify the impact, of their work.
2023 SPECIFIC
We contribute to early-career development
through internships and apprenticeships
and engagement forums such as the WPP
India Foundation and the Creative Data
School in the UK.
We encourage our people to volunteer
their time and continue to run employee
match funding appeals for disaster relief,
including through initiatives such as the
VML Foundation and We Care We Act.
2023 SPECIFIC
In October, in response to the terrible
events in Israel and Gaza, employees once
again gave generously; with match funding
we raised a total of £60,000 in partnership
with the British Red Cross. See page 59.
Our total social contribution in 2023 was
£36.1 million (2022: £35.5 million).
The Company launched the Welcome
Talent initiative in Belgium, to diversify
the talent pipeline in the Belgian
communications industry.
WPP ANNUAL REPORT 2023
121
CORPORATE GOVERNANCE
BOARD ACTIVITIES
A summary of key areas of focus
throughout the Board’s 2023
calendar is set out below
The Board is responsible for setting the
Company’s purpose, values and culture,
in addition to overseeing the Company’s
overall financial performance and execution
of the strategy. The Board recognises the
importance of considering the perspectives
of, and the potential impact on, the
Company’s key stakeholders in its discussions.
Its responsibilities are discharged through
an annual programme of meetings, each of
which follows a tailored agenda. A typical
Board meeting will comprise updates from
the chairs of our Board committees, in
addition to reports on operational and
financial performance, the transformation
programme, progress on strategy, people
updates and a deep-dive into a particular ESG
topic. The annual programme maintains an
element of flexibility to allow emerging and
evolving items to be scheduled as necessary.
REGIONAL REVIEW IN MUMBAI
In September 2023 the Regional Review
was held in Mumbai. The four-day visit
provided opportunities to interact with
industry leaders and key clients, hear
from local management teams and
see how the Company is supporting
communities through the WPP India
Foundation.
Board members were able to engage
directly with individual employees
throughout their visit, and listen to
feedback from our stakeholders within
this fast-growing and strategically
important market. Such opportunities
are integral to the Board’s direct
monitoring and assessment of culture
within the Company. The Board was
also able to host a lunch with ‘rising
stars’, following an India townhall
earlier in the visit, offering valuable
insights for the purposes of career
and talent development.
CALENDAR OF KEY EVENTS 2023
FEBRUARY 2023
– Approved Preliminary
Results
– Approved acquisition
of Goat
APRIL 2023
– Approved Q1 Trading Update
– Joanne Wilson succeeded
John Rogers as CFO
JULY 2023
– Approved Interim Results
– Reviewed All In survey
results
See more on page 38
OCTOBER 2023
– Dedicated Board strategy
meeting
– Approved Q3 Trading Update
– Approved merger of
Wunderman Thompson and
VMLY&R to create VML
122
WPP ANNUAL REPORT 2023
MARCH 2023
– Approved Annual Report
and Accounts, Form 20-F
and Sustainability Report
MAY 2023
– Held 2023 Annual General
Meeting
– Approved Modern Slavery
Act Statement
SEPTEMBER 2023
– Regional Review in Mumbai
See more adjacent
– COO appointed to the Board
DECEMBER 2023
– Reviewed the AI at Work survey
results
– Reviewed principal and
emerging risks
– Approved merger of BCW and
Hill & Knowlton to create Burson
COMPOSITION, SUCCESSION
AND EVALUATION
CORPORATE GOVERNANCE
BOARD ATTENDANCE TABLE: 2023
Total number of scheduled meetings
Members
Roberto Quarta1
Mark Read
Joanne Wilson – appointed on 19 April 2023
Andrew Scott – appointed on 7 September 2023
Angela Ahrendts
Simon Dingemans
Sandrine Dufour
Tom Ilube
Cindy Rose2
Keith Weed
Jasmine Whitbread
Dr. Ya-Qin Zhang
Former Directors who served for part of the year
John Rogers – retired on 27 April 2023
Tarek Farahat – retired on 17 May 2023
Nicole Seligman – retired on 17 May 2023
Number of ad hoc meetings
Board Audit Committee
9
6
Compensation
Committee
4
Nomination and
Governance
Committee
5
Sustainability
Committee
5
Attended
Attended
Attended
Attended
Attended
6
6
4(4)
2(2)
6
6
6
5
6
6
6
6
2(2)
3(3)
3(3)
5
4
3(3)
9
9
8
9
4(5)
0
4
4
2(2)
4
2(2)
3
5
4
4(4)
2(2)
0
5
5
5
5
0
The numbers in brackets denote the number of meetings the Directors were eligible to attend
1 Roberto Quarta did not attend Nomination and Governance Committee meetings focused on Chair succession
2 Cindy Rose stepped down as a member of the Compensation Committee and was appointed to the Nomination and Governance Committee on 17 May 2023
BOARD COMPOSITION
As at the date of this report, our Board
comprised nine independent Non-Executive
Directors, the Chairman and three Executive
Directors. The aim is to ensure that the
compositional balance reflects the needs
of the Company, with a Board that is culturally
diverse and is able to consider matters from
a broad perspective, understanding the views
of all our stakeholders. Each individual Board
member brings a wide range of skills and
experience from different business
backgrounds to Board deliberations.
Further details, including the external
appointments held by Board members and
their committee membership, can be found
on pages 112 to 114. Further detail on the
responsibilities of the Chairman and members
of the Board can be found on page 117.
The chart opposite details those skills and
experience of our Board which are identified
as being particularly important to the
execution of the Company’s strategy.
BOARD KNOWLEDGE AREAS
SKILLS
10
9
6
6
7
11
11
8
Corporate
governance
Audit and
risk
management
Finance
FMCG
Global
media and
advertising
Strategy,
transactions,
M&A
Technology ESG
BOARD GEOGRAPHICAL EXPERIENCE
11
12
11
8
8
6
Africa and
Middle
East
Asia
Pacific
Europe
International
Latin
America
North
America
WPP ANNUAL REPORT 2023
123
CORPORATE GOVERNANCE
COMPOSITION, SUCCESSION
AND EVALUATION CONTINUED
DIVERSITY
WPP believes that diversity, in all forms,
fuels creativity. We are committed to ensuring
equitable opportunity across WPP – and the
same principle applies to the composition
of our Board. The Board has a diverse range
of experience by way of expertise, business
sector background and length of tenure on
the Board. Our Non-Executive Directors
demonstrate expertise from a range of
industries including tech, marketing, financial
services, FMCG and pharma, representative
of our customer base. The chart on page
123 illustrates the range of skills across the
Board, with the new appointments in 2023
bringing additional expertise in finance,
ESG and M&A.
The Board Diversity Policy reinforces the
Board’s ongoing commitment to all aspects
of diversity and supports the board diversity
principles of the listing rules and FTSE
Women Leaders and Parker reviews on
gender and ethnic diversity. For further
information on the Board Diversity Policy,
in addition to a breakdown of the Board
and Executive Committee by gender and
ethnicity, see page 129.
Diversity, equity and inclusion is also
integrated across workforce policy and
the Board is provided with regular updates
covering a range of metrics and measures,
and key trends. In 2023 we once again
featured in the Bloomberg Gender-Equality
Index.
RE-ELECTION OF DIRECTORS
The Chairman, Senior Independent Director
and Non-Executive Directors are appointed
for a three-year term, subject to annual
re-election by the shareholders at the AGM.
Although there may be specific exceptions
to ensure Board continuity, Non-Executive
Directors shall not otherwise stand for
re-election after they have served for the
period of their independence, as determined
by applicable UK and United States standards,
which is nine years. See page 126 for details
on the Chairman’s independence assessment
and page 128 for details of the Directors
standing for re-election at the 2024 AGM.
The Non-Executive Directors’ letters of
appointment are available for inspection
at the Company’s registered office.
INDUCTION PROGRAMME
To ensure that they are able to effectively
contribute to discussion and decision-
making, all Directors participate in an
induction programme on joining the Board.
Each induction programme is tailored to the
individual Director, based on their personal
experience and background, including
matters specific to their role as a member
of the committees upon which they sit.
Each induction programme includes
meetings with members of the Executive
Committee, senior management and external
advisors including the external auditor and
the Company’s corporate brokers. New
Directors will also receive a Board induction
pack, which is devised to assist with building
an understanding of the Company and to
introduce the Company’s key stakeholders,
as well as explain the commercial and
regulatory environment in which the
Company operates. Access to key industry
bodies and publications is also provided.
INDEMNIFICATION OF DIRECTORS
Liability insurance and third-party indemnity
provisions are in force for the benefit of
Directors and officers who held office during
the year and up to the approval of the
Annual Report.
BOARD EVALUATION
Each year, WPP completes a review of the
Board and its committees to monitor their
effectiveness and identify improvement
opportunities. Progress against the outcomes
of the 2022 evaluation and details of the
2023 evaluation, conducted by Dr Tracy Long
from Boardroom Review, are set out on
page 127.
The Senior Independent Director met
with the Non-Executive Directors during
the year to appraise the performance of
the Chairman.
BOARD TRAINING AND DEVELOPMENT
To assist the Board in undertaking its
responsibilities, ongoing training is provided
to all Directors and training needs are
assessed as part of the induction programme
and Board evaluation process. In 2023,
the Board programme included regular
presentations from the management teams
of our businesses on developments in WPP’s
sector and operating environment.
At the Board strategy meeting in October,
members of the senior management team,
together with the Board, had an opportunity
to review WPP’s strategy and discuss
changes in the macroeconomic environment,
the potential impact of data, commerce and
AI upon clients’ marketing activities,
technological disruption and the ESG
regulatory environment.
The Group Chief Counsel and the Group
Company Secretary provide regular updates
on current legal and governance matters
relevant to WPP, with external counsel
providing briefings on the wider landscape.
The Board activities calendar on page 122
sets out further detail on topics covered
during the year.
The Board is asked to complete a
programme of training covering How We
Behave, Business Integrity, Safer Data and
Sustainability, which are connected to the
ethical and business objectives set out in
our Code of Conduct. As part of our
ongoing commitment to create more open
and inclusive workplaces, the Board is also
asked to complete a dedicated Company-
wide inclusion module – Belonging at WPP.
All Directors have access to the advice and
services of the Group Chief Counsel and the
Group Company Secretary. The Board also
obtains advice from professional advisors,
as and when required, and Directors may,
as required, obtain external advice at the
expense of the Company.
TIME COMMITMENT
In addition to attending Board and
committee meetings, each of the Non-
Executive Directors devotes sufficient
time to the Company to ensure that their
responsibilities are met effectively. When
making new appointments, the Board takes
into account other demands on Directors’
time. Prior to appointment, significant
commitments are disclosed by Directors
to the Board. Any additional external
appointments are not undertaken by any
of the Directors without prior approval
from the Board. See page 128 for the
Nomination and Governance Committee’s
in-year assessment of each Director’s
external appointments.
124
WPP ANNUAL REPORT 2023
NOMINATION AND
GOVERNANCE COMMITTEE REPORT
CORPORATE GOVERNANCE
Committee members
– Roberto Quarta (Chair)*
– Angela Ahrendts DBE
– Tom Ilube CBE
– Cindy Rose
The Company Secretary is Secretary to the
Committee and attends all meetings.
Key responsibilities:
– Reviewing the Board Diversity Policy and
overseeing its implementation
– Reviewing the composition of the Board
including the balance of skills, knowledge
and expertise, experience and diversity
– In conjunction with the Board, considering
succession planning for Non-Executive
Directors, Executive Directors and senior
management
– Making recommendations to the Board
for the appointment or reappointment
of Directors
– Considering other significant commitments
and interests of prospective and existing
Directors
– Overseeing the Board’s compliance with
corporate governance standards and
monitoring external governance
developments
Attendance at Committee meetings during
the year can be found on page 123.
* Committee meetings focused on Chair succession during
the year were chaired by Angela Ahrendts, as the Senior
Independent Director
The Committee also considered the findings
of the 2023 Board evaluation which was
conducted externally by Dr Tracy Long from
Boardroom Review. I am pleased that the
review concluded that the Committee and
the Board continue to operate effectively,
whilst also highlighting areas for development
in 2024. Further details can be found on
page 127.
As part of the Committee’s governance
oversight role, it reviewed the operation
and remit of the Sustainability Committee
during the year, with the outcome of partially
combining certain Sustainability Committee
and Audit Committee meetings from 2024.
This change will streamline the review
and assurance processes associated with
sustainability reporting across the two
committees.
As I prepare to step down from the Board
having reached my nine-year tenure, I would
like to thank the members of the Committee,
together with management, for their support
during the year and throughout my time
on the Committee. The sections that follow
provide a more detailed explanation of the
work of the Committee undertaken during
the year.
Roberto Quarta
Chair of the Nomination
and Governance Committee
21 March 2024
ROBERTO QUARTA
CHAIR OF THE NOMINATION AND
GOVERNANCE COMMITTEE
DEAR SHAREHOLDER
As Chair of the Nomination and Governance
Committee, I am pleased to report on the
Committee’s work in 2023. Our Senior
Independent Director, Angela Ahrendts,
will also present part of this report due to
the Committee dedicating a significant
amount of its time during the year to the
search for a new Non-Executive Chair.
In addition to focusing on the Non-Executive
composition, the Committee reviewed the
Board’s Executive Director composition
during the year. The Company’s Chief
Operating Officer, Andrew Scott, was
appointed to the Board as an Executive
Director in September 2023. Andrew joined
the Company in 1999 and was appointed as
global Chief Operating Officer in 2018. He
brings to the Board a deep understanding
of our business from his 24 years with WPP.
Details of the Committee’s review of the
Board Diversity Policy and its assessment
of progress against it can be found on
page 129, alongside gender and ethnicity
information. Following its review, the
Committee recommended to the Board that
the Policy was amended to cover a broader
range of diversity characteristics in line with
the Company’s progress. I am pleased to
report that the Company complies with the
targets outlined within the listing rules, with
42% of the current Board Directors being
women, two of the senior positions currently
held by women and two members of our
Board being from non-white ethnic minority
backgrounds.
WPP ANNUAL REPORT 2023
125
CORPORATE GOVERNANCE
NOMINATION AND GOVERNANCE
COMMITTEE REPORT CONTINUED
The Board has considered the matter
of Roberto’s independence in light
of this extension and has concluded,
notwithstanding his serving for more
than nine years, he continues to make
high-quality contributions to Board and
committee meetings and, following this
assessment, the Board has determined
that Roberto Quarto remains independent.
It was further considered by the Board that
Roberto’s extension is in the best interests
of the Company.
The Committee will oversee the delivery
of the induction and training programme
for the Chair-designate throughout the
transition period.
criteria, which included: an individual
with deep board leadership experience
with the ability to bring a strategic
perspective to Board topics; who shares
the Board’s ambition to grow the Company;
and has experience of operating in
international markets.
A structured search was conducted, and
a suitable longlist of diverse candidates
was assessed to determine a further
shortlist for Committee members to meet.
Once the ongoing and extensive selection
process has concluded, and following the
Committee’s recommendation, the Board
intends to appoint a Chair-designate to
the Board. Reflecting the desire to ensure
an orderly transition, the Board and
Roberto Quarta have agreed for Roberto
to remain as Chairman, until his successor
is appointed and transitioned into the role.
On this basis, Roberto will put himself
forward for re-election at the AGM.
Roberto helped WPP successfully navigate
the Covid-19 pandemic in 2020 and 2021,
with the Company implementing measures
that protected the business, preserved
employment and yielded strong financial
results in 2022.
Throughout his tenure he has fostered
a culture of openness and respect. His
commitment to high ethical standards
and sound governance is evidenced
through WPP’s record on diversity –
today women make up 42% of the Board
– and the establishment of the Board’s
Sustainability Committee, instrumental in
WPP’s ESG objectives, including setting
industry-leading carbon emissions
reduction goals in 2021.
Roberto’s guidance and wise counsel has
ensured continuity and stability. He has
skilfully and successfully managed Board
refreshment with key appointments
and farewells of long-serving directors,
ensuring effectiveness and high standards
of governance.
On behalf of my Board colleagues, I would
like to thank Roberto for his dedicated
service and exceptional contribution during
a period of profound change. It has been
a privilege to serve alongside you.
Angela Ahrendts
Senior Independent Director
21 March 2024
SENIOR INDEPENDENT DIRECTOR
NON-EXECUTIVE CHAIR SEARCH
As the Senior Independent Director, I led
the search process during the year for a
new Non-Executive Chair, on behalf of the
Committee. Russell Reynolds, which was
formally appointed to assist with the
search, is independent of the Company
and all the Directors, in addition to being a
signatory of the voluntary code of conduct
for executive search firms. The Committee
and Board aligned on the desired candidate
A THANK YOU TO ROBERTO QUARTA
Roberto’s tenure as Chairman of WPP’s
Board has been one of the foundations of
the organisation’s strategy, transformation
plan and renewed financial strength.
He has overseen the successful sale of
Kantar, significantly reducing WPP’s
debt, the revitalisation of WPP’s offer
to clients and the radical simplification
of the organisation. The reshaping of the
Company has included the creation of new
industry leaders such as VML, Burson and
FGS Global, and Roberto has been pivotal
in guiding WPP’s growth into a creative
and technological powerhouse, with every
capability brands need for success in
modern marketing. Under his chairship,
WPP became the global marketing partner
of The Coca-Cola Company in the largest
pitch in the industry’s history.
126
WPP ANNUAL REPORT 2023
NOMINATION AND GOVERNANCE COMMITTEE REPORT
CORPORATE GOVERNANCE
2023 BOARD EVALUATION
In accordance with the Code requirements,
the Board undertakes an externally facilitated
evaluation every three years, with the next
one due in 2024. However, to help facilitate
the intended Chair transition process, the
Board agreed to bring forward the external
evaluation by a year.
The external evaluation was facilitated by
Dr Tracy Long from Boardroom Review, who
has no other connection with the Company.
The evaluation comprised pre-briefings and
information reviews, interviews with Board
members and a facilitated workshop
discussion on key themes, including Board
contribution and composition, the work
of the Board and the use of time and
information. The evaluation included
reference to internal reviews conducted
and the 2021 externally conducted review.
Progress against the outcomes of the 2022
evaluation was also considered, details of
which are set out below.
KEY RECOMMENDATIONS FOR 2023
WHAT WE HAVE DONE IN 2023
Briefings/deep-dives: Enhance depth of Board operational and commercial
knowledge through deep-dive sessions outside scheduled meetings on
key themes and component parts of the strategy including technology,
key markets, key agency businesses and transformation workstreams
Stakeholder engagement and insights: Continue to identify and create
opportunities to engage with the Company’s broader stakeholder groups
(internal and external) and receive insights on their views and expectations
of the Company
The Board strategy session in October allowed time for deep dives on various
parts of the strategy including AI plans and simplification of the business
including the creation of VML and GroupM restructuring.
The Board appointed a sub-committee to allow greater focus on particular
elements of the Company’s transformation programme, where dedicated time
was spent on finance ERP and HR transformation in particular.
The Regional Review held in India provided insights into this key market for WPP.
Investor engagement included meetings with key shareholders during financial
results, the Capital Markets Day, and ad hoc roadshow events.
During the Regional Review in India, the Board took the opportunity to meet
with ‘rising stars’ in the market, conducted a town hall and met with broader
industry leaders and key clients and partners.
Succession planning and talent development: As well as continuing to review
the optimal composition and skills of the Board, greater focus and time to be
spent on WPP’s senior leadership succession and talent development,
reviewing key criteria and skillsets required for senior leadership positions to
support the longer-term prospects of the Company, as well as engaging with
the talent bench and hearing their views on key strengths, weaknesses,
opportunities and threats for the organisation
The Board continued to focus on getting to know the top talent and ensuring
current and future agency leaders have the skills and behaviours to define
WPP’s future. Investment in creative and technology talent and training and
support remained a key focus to help drive innovation and further develop
leadership skills.
The Regional Review in India provided an opportunity to meet with the senior
leadership team and the talent bench in that market.
Longer-term strategy and performance: Continue to focus on long-term
strategy and organic and inorganic opportunities for margin enhancement
and oversee key deliverables under the transformation programme
The Board strategy session focused on the opportunity ahead and the
strategic imperatives for growth and margin enhancement, including the
application of technology and scale, which would continue to be a focus for
discussion in 2024.
Subsequently at the Capital Markets Day earlier this year, the executive team
laid out WPP’s plans for the next phase of the strategy to capture the
opportunities offered by AI, maximise the potential of creative transformation
and deliver faster growth, higher margins and improved cash generation.
The output of the evaluation was that the
Board is operating effectively, with strong
Board dynamics and contribution, and
a strong culture – driven by values and
simplification with improving governance
under a new Senior Independent Director and
Audit Committee Chair. The Board’s support
on the strategic priorities and transformation
programme also remains strong.
Key areas to progress in 2024 were
identified as part of this process:
– Strategy: create more time and opportunity for
the Board to: review assumptions on future
growth (organic and inorganic) and operational
execution in more depth; deep dive into the new
business pipeline and AI strategy roadmap as
well as key markets
– Focused agenda time: ensure greater time is
spent on operational execution matters and
emphasise focus on discussion vs presentation.
Consider use of committee time to support this
and offline deep-dives
– Cyber: continue to focus on cyber preparedness
and consider further opportunities to enhance
Board domain knowledge and build resilience
to help strengthen oversight of reputational,
financial and operational impacts
– Board and leadership succession: continue to
focus on leadership succession for key positions
and review pipeline of talent in more depth,
aided by appraisals and other feedback
mechanisms and engagement opportunities.
While a medium-term priority, consideration
should be given to future Board composition
and skills required to support the next phase
of WPP’s strategy
WPP ANNUAL REPORT 2023
127
CORPORATE GOVERNANCE
NOMINATION AND GOVERNANCE
COMMITTEE REPORT CONTINUED
COMMITTEE EVALUATION
The performance of the Committee was
considered as part of the evaluation process,
which concluded that the Committee was
operating effectively and continued to
successfully plan for and ensure Board
composition and committee structures
were aligned to priorities and governance
requirements, and reflected the greater
diversity and an enhanced mix of skills and
expertise needed to deliver on the next
phase of the strategy.
BOARD AND COMMITTEE CHANGES
As mentioned in last year’s report, Nicole
Seligman and Tarek Farahat did not stand
for re-election at the 2023 AGM, and Joanne
Wilson succeeded John Rogers following the
announcement of the Company’s 2023 First
Quarter Trading Update. It was announced
on 7 September 2023 that Andrew Scott had
been appointed as an Executive Director to
the Board with immediate effect.
As also mentioned in last year’s report,
Cindy Rose stepped down as a member of
the Compensation Committee and joined the
Nomination and Governance Committee with
effect from the conclusion of the 2023 AGM.
Andrew Scott will stand for election at the
AGM for the first time. All other Directors,
will stand for re-election with the support
of the Board.
SUCCESSION PLANNING
Given the maintained size of the Board,
the Committee continues to recommend
that future appointments should be made
on a needs basis. Succession planning is
considered regularly and the Committee
will continue to make appropriate
recommendations to the Board as necessary.
The Committee will continue to review
succession planning at Executive Committee
and senior management levels to promote
effective and diverse leadership succession,
and ensure that it is fully aligned to the
Group’s strategy.
DIRECTORS’ INDEPENDENCE AND
EXTERNAL APPOINTMENTS
The Committee assessed the independence
of all the Non-Executive Directors pursuant
to the Code and concluded that all are
considered independent and continue
to make independent contributions and
effectively challenge management.
See page 126 for details of the Chairman’s
independence assessment.
The assessment covered each Director’s
time commitment, with full consideration
given to the number of external positions
held by the Executive and Non-Executive
Directors, including the time commitment
required for each. The Committee did not
identify any instances of overboarding and
confirmed that all individual Directors
have sufficient time to commit to their
appointment as Directors of the Company.
The full list of key external appointments
held by our Directors can be found on
pages 112 to 114.
The Committee also reviewed the Company’s
guidance on Directors’ external appointments
against applicable shareholder advisory
groups’ individual policies on overboarding.
GOVERNANCE REVIEWS
The Committee has responsibility for
overseeing the effective governance of the
Board and its committees and for making
recommendations to the Board to ensure
arrangements are consistent with emerging
best practice.
Further to the Committee’s review of the
operation and remit of the Sustainability
Committee during the year, as mentioned
on page 125, the Committee reviewed action
taken to comply with the Code and other
legal, governance and regulatory obligations.
See page 111 for further details of the
Company’s compliance with the Code. From
a regulatory perspective, the Committee and
the Audit Committee paid significant attention
to UK Corporate Governance Reforms.
WORKFORCE ENGAGEMENT
As WPP’s designated Non-Executive Director
for UK Workforce Advisory Panel (WAP),
Cindy Rose regularly attends the WAP
meetings to further engagement with the
Company’s global employee base. During
the Board’s 2023 Regional Review in India,
Non-Executive Directors joined WPP’s India
People Forum to hear from employees
directly on subjects that matter to them,
including cross-agency collaboration, the
integration of WPP’s offer, and learning
and development.
Agendas for the WAP meetings are set by
WAP members, views and insights from the
various forums are shared directly with the
Board, and the Board’s feedback on how the
insights have informed decision making is
presented back.
CONFLICTS OF INTEREST
In line with their statutory duties, our
Directors must: report any changes to their
commitments to the Committee; immediately
notify the Company of actual or potential
conflicts or a change in circumstances
relating to an existing authorisation; and
complete an annual conflicts questionnaire.
Any conflicts or potential conflicts identified
are considered and, as appropriate,
authorised by the Board in accordance
with the Company’s Articles of Association.
A Conflicts of Interest Register is also
reviewed periodically, which sets out any
actual or potential conflict of interest
situations which a Director has disclosed
to the Board and any practical steps to be
taken to avoid conflict situations. When
reviewing conflict authorisations, the Board
considers any other appointments held by
the Director as well as the findings of the
Board evaluation. During the year, no actual
conflicts were identified.
The Committee and the Board are satisfied
that the external commitments of the
Non-Executive Directors and of me, your
Chairman, do not conflict with our duties and
commitments as Directors of the Company.
TERMS OF REFERENCE
The Committee’s terms of reference are
reviewed annually by the Committee and
adopted by the Board, most recently on
31 January 2024. A copy of the Committee’s
terms of reference is available on the
Company’s website at wpp.com/investors/
corporate-governance.
128
WPP ANNUAL REPORT 2023
NOMINATION AND GOVERNANCE COMMITTEE REPORT
CORPORATE GOVERNANCE
BOARD DIVERSITY POLICY
In January 2024, the Committee reviewed the
Board Diversity Policy and associated targets.
The 2024 review recommended updates to
the policy to reference how the Company
aims to address wider diversity characteristics
in respect of the Board committees, which
is required to be considered under the FCA’s
disclosure and transparency rules. As part of
Board discussions, recognition was given
to the importance and benefits of greater
diversity throughout the organisation, and
the recommended updates from the 2024
review were approved by the Board on
31 January 2024.
The targets of the policy and an update
against meeting each of them are set
out below. The Company aims to maintain
the balance set out in the targets of the
policy as a minimum and our wider ambition
is to reach parity on Board gender diversity
and maintain ethnic diversity. A copy of the
Board Diversity Policy is available on the
Company’s website at wpp.com/investors/
corporate-governance.
BOARD DIVERSITY TARGETS, AS AT 21 MARCH 2024
BOARD DIVERSITY POLICY TARGET
DIVERSITY POSITION1
TARGET STATUS
To maintain a minimum of 40% female share of Board Directors
As at the date of this report, women represent 42%
of the Board
To maintain a minimum of 10% share of Board Directors from
an ethnic minority background (according to categories
recommended by the Office for National Statistics)
As at the date of this report, there continues to be two Board
Directors from an ethnic minority background, equating to a
16% share
To maintain at least one female in the senior Board positions
of Chair, Senior Independent Director, Chief Executive Officer
or Chief Financial Officer
As at the date of this report, two senior Board members
are women
1 Further information on Board composition and diversity can be found on pages 123-124
TABLES PRESENTED WITH REFERENCE TO LISTING RULE 9.8.6, AS AT 31 DECEMBER 20232
GENDER IDENTITY
Men
Women
Not specified/prefer not to say
ETHNIC BACKGROUND
White British or other white (including minority-white groups)
Mixed/multiple ethnic groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic group, including Arab
Not specified/prefer not to say
Our Board
Executive Committee
Number of
Board members
7
5
–
Percentage
of the Board
58%
42%
–
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
2
2
–
Number in
executive
management
12
8
–
Percentage of
executive
management
60%
40%
–
Our Board
Executive Committee
Number of
Board members
10
1
1
–
–
–
Percentage
of the Board
84%
8%
8%
–
–
–
Number of senior
positions on the
Board (CEO, CFO,
SID and Chair)
4
–
–
–
–
–
Number in
executive
management
16
2
1
–
–
1
Percentage of
executive
management
80%
10%
5%
–
–
5%
2 Disclosure data concerning gender and ethnicity representation is collected directly from all individual Board and Executive Committee members through surveys that are issued for completion
annually. The surveys ask individuals to disclose their gender and ethnicity using the options shown in the left-hand columns of the above tables, and therefore include the option not to specify
an answer. This data is collated by the group secretariat team and held securely and in accordance with the WPP Fair Processing Notice and the WPP Privacy & Security Charter
WPP ANNUAL REPORT 2023
129
CORPORATE GOVERNANCE
AUDIT COMMITTEE
REPORT
Committee members
– Sandrine Dufour (Chair)
– Cindy Rose OBE
– Tom Ilube CBE
– Simon Dingemans
The Company Secretary is Secretary to the
Committee and attends all meetings.
Regular attendees at the invitation of the
Committee include the Chairman, Senior
Independent Director, Chief Executive Officer,
Chief Financial Officer, Chief Operating Officer,
Group Chief Counsel, Group Finance Director,
General Counsel Corporate Risk, Director of
Internal Audit, and the external auditor.
The Board has determined that Sandrine Dufour
is the Audit Committee financial expert as
defined by the Sarbanes-Oxley Act 2002 and,
together with Simon Dingemans, has recent and
relevant financial experience for the purposes
of the 2018 UK Corporate Governance Code
(‘the Code’). The members of the Committee
have been determined to be independent within
the meaning of the applicable NYSE listing
standards and rules of the Securities Exchange
Act 1934, as amended. The Committee has, as
a whole, competence relevant to the sectors
in which the Company operates.
Key responsibilities
– Monitoring and critically assessing the
integrity of financial information provided
to shareholders, including the review of
significant accounting policies and financial
reporting judgements
– Overseeing the appointment, remuneration
and independence of the external auditor
and the effectiveness of the audit process
as a whole
– Reviewing the integrity, adequacy and
effectiveness of the Company’s internal
financial controls and the internal control
and risk management systems, including
the risk management framework and related
compliance activities
– Monitoring the integrity of the Company’s
ESG disclosures and related assurance
– Assessing and monitoring principal and
emerging risks facing the Company
– Monitoring and reviewing the Company’s
internal audit function effectiveness
and activities
Attendance at Committee meetings during
the year can be found on page 123.
130
WPP ANNUAL REPORT 2023
At each Committee meeting, the
identification and review of emerging risks
have been considered by the Committee.
Following a review by the Nomination and
Governance Committee and to ensure more
effective governance and oversight of key
sustainability issues and risks and assurance
thereof, certain meetings of the Committee
have been partially combined with
Sustainability Committee meetings from
2024. This change will streamline the review
and assurance processes associated with
sustainability reporting across the two
committees. The Committee also paid
careful attention during the year to
regulatory developments, including the
implementation of ESG reporting frameworks
and the UK Government’s corporate
reporting and audit reform initiatives.
SANDRINE DUFOUR
CHAIR OF THE AUDIT COMMITTEE
DEAR SHAREHOLDER
As Chair of the Audit Committee, I am
pleased to present this report, which intends
to give shareholders a clear overview of the
Committee’s work in 2023, including on
discharging its important oversight role to
monitor and critically assess the integrity of
the Company’s financial reporting and the
effectiveness of internal control and risk
management systems on which it has
reported to the Board.
Overseeing audit transition activities formed
a significant focus for the Committee during
the year, following the Board’s decision,
subject to shareholder approval, to appoint
PricewaterhouseCoopers LLP (PwC) as
external auditor from the Company’s 2024
financial year onwards. The Committee’s
monitoring for continuous improvement
in the control framework formed a key
consideration in the context of the audit
transition process. Further details on this
process throughout the year are provided
in the following pages of this report.
AUDIT COMMITTEE REPORT
CORPORATE GOVERNANCE
The annual Board effectiveness evaluation
assessed the performance of the Committee
and I am pleased that this concluded that
the Committee operates effectively, whilst
also highlighting minor areas for development
in 2024. The Board takes reassurance from
the quality of the Committee’s work and is
satisfied that the Committee members bring
a wide range and depth of financial and
commercial experience and, in addition to
those members designated to have recent
and relevant financial experience for the
purposes of the 2018 UK Corporate
Governance Code (the ‘Code’), Tom Ilube
and Cindy Rose bring extensive subject
matter and process expertise including on
emerging technologies, IT transformation
and cyber security to the Committee’s
membership.
Joanne Wilson succeeded John Rogers as
Chief Financial Officer in April 2023 and
the Committee spent time with Joanne
throughout the transition period to provide
support and oversight, including in respect of
transformation programme responsibilities.
As mentioned in last year’s report, the
Board has established a Transformation
Board Sub-committee to oversee programme
aspects in greater depth. The Chief Financial
Officer, Chief Information Officer and Group
Transformation Director continued to provide
regular updates to both the Transformation
Board Sub-committee and directly to the
Board during the year on the IT, finance and
HR components of the transformation
programme. I also met privately with the
lead audit partners for Deloitte and PwC,
in addition to the Director of Internal Audit,
to provide opportunities to discuss potential
issues and as part of the ongoing assessment
of their effectiveness.
The sections that follow provide a more
detailed explanation of the Committee’s
work in 2023.
Sandrine Dufour
Chair of the Audit Committee
21 March 2024
Key considerations in 2023 included:
– Continuing to provide oversight of
the financial reporting process and
integrity of the financial statements
– Considering the judgement applied
in calculating headline measures,
to present an alternative measure
of performance by excluding
significant, non-recurring or volatile
items otherwise included in
reportable figures
– Regularly reviewing headline cyber
security risks and vulnerability
management capabilities, including
the associated uses of generative AI
– Monitoring the role, performance and
outcomes of the Risk and Controls
Group against its objectives, including
for the continuous improvement of
the control environment
– Considering the identification and
review of emerging risks
– Overseeing audit transition activities
and managing the 2023 statutory
audit, including the key audit risks
and level of materiality applied
by Deloitte
– Overseeing the integrity of the
Company’s ESG disclosures
– Ongoing monitoring of the business
integrity programme, including
oversight of whistleblower reports
– Monitoring progress against the
internal audit plan and reviewing
the effectiveness of the internal
audit function
Other reviews undertaken in
2023 included:
– Reports on any actual or potential
material litigation
– Group treasury funding strategy,
performance and risk management,
including supply chain finance
– Group tax strategy, performance
and drivers of the Group effective
tax rate
– Reports on data protection and
data privacy
– Implementation reports on the UK
Government’s corporate reporting
and audit reform initiatives
– Assessment of fraud risk
WPP ANNUAL REPORT 2023
131
CORPORATE GOVERNANCE
AUDIT COMMITTEE
REPORT CONTINUED
FINANCIAL REPORTING
The Committee is responsible for reviewing
the quarterly, half yearly and annual financial
results, including the Annual Report, with
management, focusing on the integrity of
the financial reporting process, compliance
with relevant legal and financial reporting
standards and application of accounting
policies and judgements.
During the year, the Committee considered
management’s application of key accounting
policies, compliance with disclosure
requirements and relevant information
presented on significant matters of
judgement to ensure the adequacy, clarity
and completeness of half yearly and annual
financial results announcements. The
Committee undertook a detailed review
before recommending to the Board that
the Company continues to adopt the going
concern basis in preparing the annual
financial statements.
The Committee also reviewed various
materials to support the statements in the
Annual Report on risk management and
internal control and the assessment of the
Company’s long-term viability – see page 97
for more details.
FAIR, BALANCED AND
UNDERSTANDABLE
To support the Board’s confirmation that
the Annual Report and Accounts, taken as
a whole, is considered to be fair, balanced
and understandable, and provides the
information necessary for shareholders to
assess the Company’s position, performance,
business model and strategy, the Committee
oversaw the process by which the Annual
Report and Accounts was prepared, which
runs in parallel with the process followed
by the external auditor.
The Committee received a summary of
the approach taken by management in
the preparation of the Annual Report
and Accounts to ensure that it met the
requirements of the Code, and considered
in particular: the accuracy, integrity and
consistency of the messages conveyed in
the Annual Report; the appropriateness of
the level of detail in the narrative reporting;
and that a balance had been sought
between describing potential challenges
and opportunities.
The Committee therefore recommended
to the Board (which the Board subsequently
approved) that, taken as a whole, the
2023 Annual Report and Accounts is fair,
balanced and understandable and provides
the necessary information for shareholders
to assess the Company’s position and
performance, business model and strategy.
132
WPP ANNUAL REPORT 2023
INTERNAL AUDIT
The internal audit team, which reports
functionally to the Audit Committee,
provides independent assurance over the
Company’s risk management and internal
controls processes via internal audits and the
testing programme for the Sarbanes-Oxley
Act. The internal audit team has unrestricted
access to all Group documentation,
premises, functions, and employees to
enable it to perform its work.
The Committee Chair met regularly with
the Director of Internal Audit during the year
without executive management present to
discuss risk matters and the nature of internal
audit findings in more depth. The Director
of Internal Audit formally reports to each
Committee meeting on the key internal
audit findings, together with the status
of management’s implementation of
recommendations. Twice a year this includes
key themes from internal audit’s work.
This year, those themes included issues
relating to access management,
procurement, business continuity, and
contract and regulatory compliance.
Significant issues identified were discussed
in detail by the Committee along with the
remediation plans to resolve them.
The annual internal audit plan includes
assurance over the Group’s transformation
activities, other key projects and initiatives,
and audits of key business risks and operating
companies. It was approved by the
Committee and progress against the plan
was monitored throughout the year with any
changes to the plan noted and approved by
the Committee. The internal audit team
continue to successfully deliver through a
hybrid model of remote auditing supported
by international travel where appropriate.
The Committee assesses the work of internal
audit on a regular basis and monitors the
resourcing and experience within the team.
We are satisfied that the scope, extent and
effectiveness of internal audit work is
appropriate for the Group and that there is
an appropriate plan in place to sustain and
continually improve this.
AUDIT COMMITTEE REPORT
CORPORATE GOVERNANCE
RISK MANAGEMENT AND
INTERNAL CONTROL
The Board has overall responsibility for
setting the Company’s risk appetite and for
ensuring there is effective risk management.
The Committee supports the Board in the
management of risk and, in 2023, was
responsible for monitoring and reviewing
the effectiveness of the Company’s
approach to risk management and the
internal control framework.
Under the overall supervision of the
Committee, the WPP Risk Committee, an
executive committee which reports into the
Audit Committee and is supported by Risk
committees in each network, identifies and
assesses emerging and principal risks and
oversees and manages day-to-day risk in the
business. The General Counsel, Corporate
Risk provides regular updates to the
Committee on risk matters including
emerging risks, adherence to the Company’s
business integrity programme (including
mitigating and remediation actions) and the
monitoring and evolution of the Company’s
four risk modules: governance, culture,
appetite and management.
An overview of how our risks are assessed
and managed and how these were reviewed
to assess the Company’s viability can be
found on pages 93 to 97, together with
an assessment of the principal risks and
uncertainties facing the Company on
pages 98 to 105.
In fulfilling its responsibilities, the Committee
received reports from the Risk and Controls
Group throughout 2023 to enable evaluation
of the control environment and risk
management framework. Any necessary
matters are highlighted in the Audit
Committee Chair’s update to Directors at
the relevant Board meeting and discussed
by the Board.
INTERNAL CONTROLS OVER
FINANCIAL REPORTING
The Committee carried out in-depth reviews
of the Group’s internal controls over financial
reporting, with a focus on monitoring and
compliance with Section 404 of the
Sarbanes-Oxley Act.
During 2023, the Committee monitored the
effectiveness of the internal financial controls
and internal control system of the Group.
This primarily consisted of reviewing
assurance reports from internal audit on
the effectiveness of the internal controls
and being provided frequent updates of the
status of, and reviewing the conclusions of,
management’s assessment of internal control
over financial reporting. Management’s
assessment was based on the internal audit
testing plan reviewed by the Committee in
early 2023, which used the criteria for
effective internal control reflected in the
Internal Control – Integrated Framework
(2013) issued by the Committee of
Sponsoring Organizations of the Treadway
Commission (COSO). Management evaluated
all internal control deficiencies identified
throughout the Group both individually and
in the aggregate, to conclude on the
effectiveness of the Group’s internal control
framework and reported these conclusions
to the Committee.
BUSINESS INTEGRITY
During the year, the Committee reviewed
the adherence to, and evolution of, the
business integrity programme. The Company
has established procedures by which all
employees may, in confidence (and, if they
wish, anonymously) report any concerns
and more information on this can be found
on page 97. The Committee received regular
updates on the Company’s systems and
controls for ethical behaviour, which
included matters reported on the Company’s
Right to Speak helpline and investigations
and actions undertaken in response. The
Committee received regular reports on the
total number and nature of reports from
whistleblowers and investigations by region
and by network both for substantiated and
unsubstantiated cases. During the year, the
Committee was satisfied that the Company’s
whistleblower and investigations protocols,
and the Right to Speak helpline
arrangements, are effective and facilitate
the proportionate and independent
investigation of reported matters and
allow appropriate follow-up action.
TERMS OF REFERENCE
The Committee’s terms of reference are
reviewed annually by the Committee and
adopted by the Board, most recently on
13 March 2024. A copy of the Committee’s
terms of reference is available on the
Company’s website at wpp.com/investors/
corporate-governance.
FRC MINIMUM STANDARD
The Committee considered the FRC’s External
Audit: Minimum Standard, as issued in May
2023, as part of the Committee’s activities
in relation to oversight of external audit.
WPP ANNUAL REPORT 2023
133
CORPORATE GOVERNANCE
AUDIT COMMITTEE
REPORT CONTINUED
EXTERNAL AUDITOR
The Committee has primary responsibility
for overseeing the relationship with the
external auditor, including assessing its
performance, effectiveness and
independence annually prior to making a
recommendation to the Board in respect
of its reappointment or removal.
The Company has complied with the
Competition and Markets Authority’s
Statutory Audit Services Order 2014 for
the financial year under review in respect
to audit tendering and the provision of
non-audit services, with James Bates
holding the role of lead audit partner
for Deloitte since the 2021 audit.
AUDITOR TRANSITION
As previously reported, after the conclusion
of a competitive audit contract tender for
the purposes of compliance with applicable
auditor rotation rules, the Board has
appointed, upon the Committee’s
recommendation, PricewaterhouseCoopers
LLP (PwC) as the Company’s new
independent auditor commencing with the
audit of the Company’s 2024 financial year.
PwC’s appointment remains subject to
shareholder approval to be obtained at
the Company’s 2024 AGM. Deloitte was
re-elected at our 2023 AGM in respect of
the Company’s 2023 financial year.
and onboard local PwC teams. PwC also
engaged extensively with the Company’s
transformation programme in order to
evaluate the impact of management’s
decisions about process and control design
on audit scoping from 2024.
The transition governance group
(Governance Group) which includes
representation from WPP, PwC and Deloitte,
met seven times since PwC achieved
independence in April 2023 and has
continued to ensure all aspects of the
transition are proactively managed and
provide regular updates to the Committee.
A significant initial focus of the Committee in
the first quarter of 2023 was on the process
and controls to monitor independence by
PwC and by the Company, together with
overseeing the termination of non-audit
services with effect from April 2023, which
would be prohibited following appointment.
During the second half of the year and
following independence being achieved in
April 2023, the prospective lead audit partner
and his team were invited to attend all
Committee meetings, with transition
updates being provided at all routine
meetings. Based on the process walkthroughs
performed during the second half of the year,
PwC’s first impressions of the Group’s
control environment were presented to the
Committee in December 2023. During this
time, PwC has also been formally observing
Deloitte’s 2023 audit at the Group level and in
key markets and the Committee Chair has held
a number of meetings with PwC’s prospective
lead audit partner and the PwC team.
PwC has held collaborative workshops
throughout the year to ensure close
cooperation and knowledge sharing with
management, launch audit technology tools,
The below timeline further illustrates the
key stages of the transition process during
the period.
2023 EXTERNAL AUDIT TRANSITION PROCESS MILESTONES
MILESTONES
PRE-INDEPENDENCE FAMILIARISATION
POST-INDEPENDENCE TRANSITION
January 2023
March 2023
March 2024
FUNDAMENTAL STEPS
FUNDAMENTAL STEPS
– Meeting auditor independence requirements
– Agreeing effective ways of working between PwC and Deloitte
– Building understanding of WPP’s structure and transformation
programme
– Reviewing historical accounting judgements
– Shadowing Deloitte’s half-year review and year-end audit procedures
– Launching audit technology tools
– Onboarding of local audit teams and transition plans
– Determining provisional audit scoping for 2024
134
WPP ANNUAL REPORT 2023
AUDIT COMMITTEE REPORT
CORPORATE GOVERNANCE
APPOINTMENT OF EXTERNAL AUDITOR
AT ANNUAL GENERAL MEETING
Deloitte will resign following the completion
of the audit for the financial year ending
31 December 2023 and the Committee has
recommended to the Board that PwC be
appointed to fill the casual vacancy.
Shareholders will be invited to appoint PwC
as the Company’s new independent auditor
at the 2024 AGM and to authorise the Audit
Committee to determine the auditor’s
remuneration. Deloitte’s lead audit partner
will make himself available at the AGM to
answer shareholder questions on the 2023
Annual Report.
EFFECTIVENESS AND INDEPENDENCE
OF THE EXTERNAL AUDITOR
The Committee is determined to ensure that
the Company receives an effective external
audit. In 2023, the Committee evaluated the
performance of the external audit through its
ongoing review of the external audit process
against a backdrop of the audit firm transition
from Deloitte to PwC. The Committee also
considered feedback on the 2023 audit,
through discussions with Committee
members and key members of the Company’s
finance team, which covered:
– overall quality of the audit
– independence and objectivity*
– effectiveness of the auditor’s challenge
The Committee also considered:
AUDIT/NON-AUDIT FEES
(£m)
– a report from Deloitte confirming it
maintains appropriate internal safeguards
in line with applicable professional
standards to remain independent
– the Audit Quality Review’s 2022/23 Audit
Quality Inspection Report on Deloitte and
the actions taken by Deloitte to address
the findings in that report
2023
2022
2021
39.9
2.2
42.1
36.9
1.1
38.0
31.9
1.8
33.7
Deloitte attended all Committee meetings in
2023, met the Committee without executive
management present and the Committee
Chair regularly meets independently with
the audit partners.
Overall, the Committee concluded that:
– it continues to be satisfied with the
performance of the external auditor and
with the policies and procedures in place to
maintain its objectivity and independence
– Deloitte possesses the skills, experience
and resources required to fulfil its duties,
there was constructive challenge and
appropriate scepticism where necessary,
such as in challenging management’s
assumptions. The Committee appreciates
in particular the clarity of the auditor’s
communications and ways of working to
provide effective transition support to PwC
– the audit for the year ended 31 December
Audit fees
Audit fees
Non-audit fees
Non-audit fees
Total fee
Total fee
All fees are summarised periodically for the
Committee to assess the aggregate value of
non-audit fees against audit fees. During the
year, Deloitte received £39.9 million in fees
for work relating to the audit services it
provides to the Company. Non-audit related
work undertaken by Deloitte amounted to
fees of £2.2 million this year, which equated
to 6% of the total audit fees paid.
There were no material non-audit services
provided by Deloitte during 2023. The
Committee considered the level of non-audit
services incurred as part of its annual review
of Deloitte’s independence set out above and
was satisfied that the auditor continued to
exercise objectivity and remain independent
throughout the period.
and level of scepticism
2023 was effective
– integrity of the firm
– transparency of reporting to management
and the Committee
– quality of the audit team’s leadership
– skills and experience of the audit team
NON-AUDIT SERVICES
In line with the Company’s Non-Audit
Services Policy, the Committee ensures that
auditor objectivity and independence are
safeguarded by reviewing and pre-approving
the external auditor’s provision of certain
non-audit services (including audit-related
and other assurance services). The Committee
is mindful of the 70% non-audit services fee
cap in determining whether to pre-approve
such services.
* Deloitte’s length of tenure was not taken into consideration
when assessing independence and objectivity due to its
resignation following the 2023 audit
WPP ANNUAL REPORT 2023
135
2022202139.936.931.942.12023Audit feesNon-audit feesTotal fee CORPORATE GOVERNANCE
AUDIT COMMITTEE
REPORT CONTINUED
FINANCIAL REPORTING AND KEY ACCOUNTING JUDGEMENTS
Key accounting judgements made by management were reported to and examined by the Committee and discussed with management
and the external auditor, Deloitte. The Committee considered the following key financial reporting judgements in relation to the
financial statements:
AREA OF FOCUS
CRITICAL JUDGEMENTS AND ESTIMATES
ACTIONS TAKEN/CONCLUSION
Goodwill impairments
Estimates and judgements in relation to goodwill
impairment testing
The Committee assessed the appropriateness of the assumptions used by management in the goodwill
impairment assessment model, with a particular focus on discount rates and operating margin key
assumptions, and agreed that these are reasonable
OTHER AREAS
Headline profit
Judgements relating to headline profit measures
The Committee considered the judgement applied by management in calculating headline profit, in order
to present an alternative measure of performance by excluding significant, non-recurring or volatile items
otherwise included in the reportable figures. The Committee reviewed management’s judgements
relating to restructuring and transformation costs, with particular focus on the continued rollout of the
Group’s ERP system and other ongoing transformation projects, including IT transformation, shared
service centres and campus co-locations; and assessed right-of-use asset impairments as part of the
property review conducted in 2023. The Committee was satisfied that excluding these amounts from
headline profit measures was reasonable and that it had been disclosed appropriately
Going concern
The going concern assessment and
viability statement
The Committee reviewed the scenarios modelled by management and assessed management’s view that
the likelihood of declines of over 31% of revenue less pass-through costs compared to 2023 was remote.
The Committee has considered and concurs with management’s going concern, viability and forecasting
assumptions, as set out on page 97
Liabilities in respect of put options and earnouts
The accuracy of the calculation of the measurement
of liabilities in respect of put options and earnouts
The Committee considered management’s calculations of the measurement of liabilities in respect of put
option agreements and payments due to vendors (earnout agreements), including the forecasts, growth
rates and discount rates used in these calculations. The Committee was satisfied that liabilities for
potential future earnout payments had been accounted for appropriately
Investments
The valuations of non-controlled investments
The Committee examined management’s valuations, based on input from external advisors, forecasts,
recent third-party investment, external transactions and/or other available information such as industry
valuation multiples. The Committee considered the valuations and agreed that these were appropriate
based on the information available to the Group
Remuneration
Accounting for elements of remuneration where
estimates and judgements are required
The Committee reviewed the assumptions applied by management in relation to judgemental elements
of remuneration, including pensions, bonus accruals and share-based payments, and agreed that these
are reasonable
Taxation
The estimates and judgements made in respect
of tax
The Committee considered management’s assumptions, in particular in relation to the level of tax
provisions and contingent liability disclosures, and believes that the level of tax provisions and the
disclosures are reasonable
136
WPP ANNUAL REPORT 2023
SUSTAINABILITY
COMMITTEE REPORT
Committee members
– Keith Weed CBE (Chair)
– Angela Ahrendts DBE
– Jasmine Whitbread
– Dr. Ya-Qin Zhang
Regular attendees include the Chief Executive
Officer, Chief Financial Officer, Group Chief
Counsel, Chief People Officer, Chief
Sustainability Officer and Director of
Communications and Corporate Affairs.
The Company Secretary is Secretary to the
Committee and attends all meetings.
Key responsibilities:
– Understanding the sustainability risks and
opportunities for WPP
– Assisting the Board in its oversight of
corporate responsibility, sustainability,
health and safety and associated reputation
matters, taking into account WPP’s purpose,
strategy and culture
– Assessing the Company’s current
sustainability footprint, reviewing
sustainability targets and commitments
and materiality
– Reviewing and considering WPP’s Net Zero
Transition Plan, Modern Slavery Statement
and sustainability-related policies, including
the Environment Policy, for approval by
the Board
Attendance at Committee meetings during
the year can be found on page 123.
CORPORATE GOVERNANCE
KEITH WEED CBE
CHAIR OF THE
SUSTAINABILITY COMMITTEE
DEAR SHAREHOLDER
As the Chair of the Committee, I am pleased
to present the Committee’s 2023 report.
In 2023, we continued to place increased
focus on sustainability for the Board and
the Company, monitoring sustainability
performance as we strive to meet the
expectations of our stakeholders while
also ensuring we manage our risks and
take advantage of opportunities.
Our committee members bring with them
a wide range of sustainability expertise,
including marketing, technology, sustainable
business and international development,
from senior positions in business and
non-governmental organisations. Several
are also active members of Chapter Zero,
an online community that aims to empower
non-executive directors to lead crucial UK
boardroom discussions on the impacts of
climate change.
The effects of inflation, social inequality,
climate-related disasters, geopolitical
instability, political division and rising
polarisation continue to drive a focus on
environmental, social and governance (ESG)
matters. Businesses face rising pressure to
drive down emissions, transform market
demand for low-emissions goods and
services, and inspire consumer behaviour
change. This presents significant risks and
opportunities for our business and our clients.
The Committee received updates on a
wide range of topics throughout the year,
ranging from the launch of a client version
of our Green Claims Guide and continued
work to equip our people to make effective
environmental claims that are not misleading
(see page 27), to regular updates on progress
against our commitment to phase out
single-use plastics across our offices
(see page 61).
During the year the Committee, along with
the Audit Committee, paid careful attention
to developing ESG regulation, including the
implementation of ESG reporting frameworks.
In 2024, we will receive regular updates as
WPP conducts a formal double materiality
assessment in line with the requirements
of the European Corporate Sustainability
Reporting Directive, and reviews ESG metrics
and disclosures. As referenced in the Audit
Committee Report (see page 130), certain
meetings of the Committee have been
partially combined with Audit Committee
meetings from 2024 in order to streamline
review and assurance processes.
CLIMATE CRISIS
We received regular in-depth progress
reviews on WPP’s ambitious near-term
carbon reduction targets. The Planet section
on pages 60 and 61 of this report sets out
the Company’s net zero commitments and
performance. In March, we received an
update on GroupM’s media decarbonisation
programme (see page 60) and in July the
Committee discussed supply chain
decarbonisation as part of a review of
WPP’s responsible procurement strategy
(see page 71). In December the Committee
conducted its annual review of climate-
related risks and opportunities.
Throughout the year, we supported
management in the development of WPP’s
first formal Transition Plan, which outlines
decarbonisation roadmaps across the six
most material emissions hotspots, detailed
on pages 60 and 61, and explores the
contribution WPP can make towards an
orderly and just transition. Monitoring
progress and continued improvement in
data quality and disclosures remain a firm
priority for us.
WPP ANNUAL REPORT 2023
137
CORPORATE GOVERNANCE
SUSTAINABILITY
COMMITTEE REPORT CONTINUED
HEALTH, SAFETY AND WELLBEING
We assist the Board in oversight of health
and safety-related matters. The annual All
In employee survey showed that mental
health and wellbeing is a priority for our
people. During the year, we received
updates on the Company’s continued
investment in initiatives including our Mental
Health Allies programme, which encourages
open conversations about mental health in
the workplace and guides people to help
and resources (see page 39). Mental health
and wellbeing will continue to be prioritised
by management in 2024.
We continue to monitor how well prepared
WPP agencies and people are to recognise
and respond to existing and emerging
disruptive events, including the social and
economic impacts of climate change. In
2023, this included an update on WPP’s Crisis
Management & Business Resilience (CMBR)
unit. CMBR provides training and support to
the business on topics from threat analysis
to business continuity management to
critical incident response. We welcomed
the increased focus on analysing and
understanding the potential for disruption
as a result of climate, geopolitical, health
and crime impacts on business services.
Throughout the year, the Committee,
alongside the Board, received updates on
WPP’s response to disasters including the
devastating earthquakes in Turkey and Syria
in February and in Morocco in September.
In each case, WPP provided support for
employees directly or indirectly impacted,
including through the Employee Assistance
Programme (see page 39). Employees also
gave generously to disaster relief appeals,
which WPP matched. Further details can
be found on page 59.
ENGAGEMENT
We continue to support management’s
engagement strategy on sustainability.
Employee engagement remains a high
priority and this report highlights a number
of initiatives, from building ESG capability
and encouraging volunteering (see page 59)
to Employee Community Groups, which
provide a system of support for our people
with a shared identity or experience (see
page 38). In January 2023, a sustainability-
focused CEO townhall attracted an
audience of over 8,500.
On a personal note, during the year, I enjoyed
attending our India People Forum and
visiting a school supported by the WPP
India Foundation, as well as engaging with
investors on ESG topics. I look forward to
continued dialogue in 2024.
TRANSPARENCY
Measuring and monitoring sustainability
KPIs is critical to delivering against our
sustainability strategy and targets.
Progress against our strategy also relies on
accountability. Diversity, equity and inclusion
goals are included in our incentive plans for
senior executives, and we have also included
carbon-reduction targets in incentive plans
for Executive Directors from 2021.
Throughout this report, selected content
highlighted with the symbol
subject to independent limited assurance
procedures by PwC for the year ended
31 December 2023.
was
For the details and results of the
limited assurance, see wpp.com/
sustainabilityreport2023
In May 2023 PwC presented its second
management report to the Committee. The
Sustainability Governance and Management
section of this report on pages 54 and 55
outlines work undertaken during the year
to strengthen data quality, including new
ESG data controls, training and work to
centralise data. Management provides
regular progress updates to the Committee
throughout the year.
The Committee will continue to monitor
sustainability KPIs to ensure that the
Company is making progress against its
external commitments and effectively
managing sustainability risks and
opportunities.
TERMS OF REFERENCE
The Committee’s terms of reference are
reviewed annually by the Committee and
adopted by the Board, most recently on
31 January 2024.
A copy of the Committee’s terms of reference
is available at wpp.com/investors/corporate-
governance
I would like to thank the members of the
Committee and the management team for
their commitment throughout the year, and
look forward to continuing our work in 2024.
Keith Weed
Chair of the
Sustainability Committee
21 March 2024
138
WPP ANNUAL REPORT 2023
CORPORATE GOVERNANCE
EXECUTIVE DIRECTOR CHANGES
As announced last year, Joanne Wilson was
appointed as Chief Financial Officer (CFO)
designate on 19 April 2023, succeeding John
Rogers as CFO on 27 April 2023 following
the announcement of our first quarter results,
at which point John stepped down as CFO.
He subsequently ceased employment with
WPP at the expiry of his notice period in
November 2023.
On 7 September 2023, it was announced
that Andrew Scott, Chief Operating Officer
(COO), would be appointed as an Executive
Director to the Board.
Full details of both Joanne’s and Andrew’s
compensation arrangements are set out
in this report. For Joanne, this also includes
the share awards made to compensate her
for incentives forfeited at her previous
employer. As previously reported, these
awards were agreed by the Committee
in accordance with the Policy and were
informed by the structure and value of
those entitlements forfeited.
We also include details of the compensation
received by the former CFO, John Rogers.
He received the fixed elements of his
compensation until his departure. He was
not eligible for a STIP or EPSP for the 2023
financial year. Any outstanding ESA awards
will vest on a prorata basis and unvested
EPSP awards lapsed on his departure.
COMPENSATION
COMMITTEE REPORT
Committee members
– Jasmine Whitbread (Chair)
– Sandrine Dufour
– Tom Ilube CBE
– Roberto Quarta
Attendees
Regular attendees also include the Chief
Executive Officer, the Chief Financial Officer, the
Chief People Officer, the Global Reward Director
and the Committee advisor (WTW).
The Chief Executive Officer, Chief Financial
Officer and Chief People Officer are not present
when matters relating to their own
compensation or contracts are discussed
and decided.
The Company Secretary is Secretary to the
Committee and attends all meetings.
Key responsibilities
– Setting the Compensation Policy and the
terms and conditions for the Chairman of
the Board, Executive Committee and
Company Secretary
– Designing and monitoring incentive
arrangements including setting targets
and assessing performance
– Maintaining an active dialogue with
shareholders and ensuring WPP practice
aligns with corporate governance standards
THE COMPENSATION
OUTCOMES REFLECT THE
CHALLENGES EXPERIENCED
DURING THE YEAR, WHILST
RECOGNISING THE
ACHIEVEMENT OF BUILDING
A STRONG FOUNDATION TO
ACCELERATE GROWTH AND
RETURNS IN THE FUTURE”
Jasmine Whitbread
Chair of the Compensation Committee
Learn more at wpp.com/about/
corporate-governance
JASMINE WHITBREAD
CHAIR OF THE
COMPENSATION COMMITTEE
DEAR SHAREHOLDER
On behalf of the WPP Board, I am pleased
to present the Compensation Committee
report for the financial year ended
31 December 2023.
In this report, I include my introductory
letter, an 'At a Glance' summary of
compensation, an overview of the Directors’
Compensation Policy (‘the Policy’) approved
by shareholders at the 2023 AGM and the
Annual Report on Compensation setting out
the implementation of the existing Policy in
2023. The report also sets out the proposed
implementation for 2024.
STRONG POSITIONING
FOR THE FUTURE
WPP's leadership team have had to navigate
a challenging environment in 2023, resulting
in slower growth than in prior years. However,
the actions taken and decisions made during
the year in respect of our agency brands and
focus on AI, data and technology strongly
position WPP to move into the next phase
of the strategy, Innovating to Lead. Our
leadership team is well placed to execute
this strategy and deliver future growth
through innovation.
The Committee believes that the decisions
made in respect of fixed compensation,
the annual incentive (STIP) and long-term
incentive (EPSP) fairly reflect our pay-for-
performance philosophy, whilst recognising
the importance of maintaining a strong
and motivated leadership team to guide
WPP through the next phase of innovation,
growth and sustained returns for our
shareholders, as well as our people, our
clients and our communities.
WPP ANNUAL REPORT 2023
139
CORPORATE GOVERNANCE
COMPENSATION COMMITTEE REPORT CONTINUED
COMPENSATION IN 2023
STIP 2023
Mark Read, Joanne Wilson and Andrew Scott
participated in the 2023 STIP. The STIP was
based on a combination of financial and
non-financial measures aligned to the
delivery of the Company strategy and
purpose. The financial measures, which
determined 75% of the award, were
like-for-like headline operating profit growth,
headline operating margin improvement and
like-for-like revenue less pass-through costs
growth. Following a challenging year, this
has resulted in an outcome of 23.85% of the
75% maximum in respect of the financial
element of the STIP. See page 151 for further
detail on performance against targets.
The Committee felt this was an accurate
reflection of financial performance and has
made no adjustments to the outcome.
A scorecard continues to be used to assess
performance against non-financial measures,
which determined the remaining 25% of the
award. The scorecard is based on four
categories: client; people and diversity,
equity and inclusion (DE&I); purpose and
reputation; and strategic priorities.
The Committee considers performance
against these categories to be strong.
From a strategic perspective, the focus on
targeted acquisitions, development of WPP
Open, our AI-powered marketing operating
system, and strengthening our brands
through the creation of VML and Burson,
and simplification of GroupM, ensure WPP
is well placed to execute our Innovating
to Lead strategy.
Client satisfaction levels remain strong, with
high Likelihood to Recommend (LTR) scores
maintained and improvements in our client
net promoter scores. From a people and
DE&I perspective, we continue to develop
initiatives which support a diverse and
inclusive workforce. In relation to purpose
and reputation, we have made progress on
our carbon reduction targets and remain
committed to the transition to net zero.
The Committee considered the non-
financial performance under each of the
four categories for the CEO, CFO and COO.
An overall assessment of 22% for Mark Read,
22% for Joanne Wilson and 19% for
Andrew Scott out of a maximum of 25%
was determined by the Committee,
resulting in a total bonus (as a percentage
of the maximum) of 45.85% for Mark Read,
45.85% for Joanne Wilson and 42.85% for
Andrew Scott.
Full details of non-financial performance
for each Director are included on pages 152
and 153
EPSP
In 2020, the structure of the EPSP was
amended for future grants from a
performance period spanning five years
to a three-year plan with a two-year holding
period. As a result, there have been
overlapping award cycles for two financial
years. Both the 2019 EPSP and the 2021 EPSP
completed their performance periods on
31 December 2023.
The 2019 EPSP was the final award made
under the legacy five-year structure.
The award is based solely on relative total
shareholder return (TSR) with a return on
invested capital (ROIC) underpin. Relative
TSR performance over the five-year period
fell below threshold levels resulting in no
vesting in respect of the 2019 EPSP awards.
The 2021 EPSP has a three-year performance
period with performance assessed against
three measures: ROIC, adjusted free cash
flow (AFCF) and TSR. Performance was
above maximum for both ROIC and AFCF
but below the threshold required for TSR
resulting in a formulaic vesting of 66.67%.
The Committee considered an adjusted ROIC
performance for accelerated amortisation
charges made during the year (see page 88
for further information). ROIC remained
above maximum on both an adjusted and
unadjusted basis, therefore there was no
impact on vesting.
DIRECTORS’ COMPENSATION
POLICY UPDATE
We were pleased to receive strong
shareholder support for our updated
Directors' Compensation Policy at the
2023 AGM. The Policy did not include any
significant changes and the Committee
continue to keep this under review as the
compensation landscape evolves.
CONCLUSION
Cindy Rose and Nicole Seligman both
retired from the Compensation Committee
at the conclusion of the 2023 AGM with
Nicole also stepping down from the Board
at that time. On behalf of the Committee,
I would like to thank them both for their
invaluable insights and contributions whilst
members of the Committee. I also express
my appreciation to the rest of the
Committee for their continuing dedication
and active participation.
I thank the leadership team for its positivity,
impact and innovation in preparing WPP for
the next phase of the strategy.
Jasmine Whitbread
Chair of the
Compensation Committee
21 March 2024
140
WPP ANNUAL REPORT 2023
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
COMPENSATION AT A GLANCE
2023 COMPENSATION OUTCOMES
The information below summarises the 2023 total compensation received by the CEO, CFO and COO. The CFO, Joanne Wilson, and COO,
Andrew Scott, were both appointed during 2023; as a result the fixed pay and short-term incentives in the single figure table and charts below
are from their respective dates of appointment. To allow comparability, the 2023 Policy Target and Policy Maximum amounts for both their
fixed pay and short-term incentive elements have also been prorated in the charts below. The buy-out awards granted to the CFO in 2023 to
compensate for loss of incentive opportunity at her previous employer are shown separately. The EPSP award which vested for the COO was
granted in 2021 before his appointment to the Board and is based on his full annual salary at that time. The EPSP vesting for the CFO relates to
a buy-out award subject to the same performance conditions as the 2021 EPSP award. Further information is set out on page 158. Full details
of the performance outcomes are set out on pages 151 to 155.
John Rogers stepped down as CFO and an Executive Director on 27 April 2023. He was not eligible for 2023 STIP and all unvested EPSP awards
lapsed in full when his employment ceased in November 2023.
2023 TOTAL COMPENSATION COMPARED WITH POLICY
(£000)
Mark Read
CEO
2023
Actual Total
Compensation
2023 Policy
Compensation
at Target
2023 Policy
Compensation
at Maximum
£0
£1,000
£2,000
£3,000 £4,000 £5,000 £6,000 £7,000 £8,000 £9,000
4,498
5,191
8,284
Joanne Wilson
CFO, appointed 19 April 2023
Andrew Scott
COO, appointed 7 September 2023
£0
£500
£1,000
£1,500 £2,000 £2,500 £3,000 £3,500 £4,000
£0
£500
£1,000
£1,500
£2,000
£2,500
£3,000
£3,500
2023
Actual Total
Compensation1
2023 Policy
Compensation
at Target2
2023 Policy
Compensation
at Maximum2
1,623
2,441
2023
Actual Total
Compensation1
2023 Policy
Compensation
at Target2
2023 Policy
Compensation
at Maximum2
3,845
1,606
1,797
2,895
Fixed compensation, consisting of base salary, benefits and pension
(as set out in the single figure on page 149)
Short-term incentives (STIP)
Long-term incentives (EPSP)
Buy out awards
Target: 50% of maximum STIP, 60% of maximum EPSP
1
2
Actual total compensation is from the date of appointment
To allow comparability with Policy for appointments in the year; the Policy Target and Maximum
amounts for fixed and short-term elements have been prorated
WPP ANNUAL REPORT 2023
141
8,2845,1914,4983,8452,4411,6232,8951,7971,606
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
COMPENSATION AT A GLANCE CONTINUED
2023 TOTAL COMPENSATION OUTCOMES SUMMARY
2023 FIXED COMPENSATION
Base salary
Pension
Benefits
Prorata from date of appointment to the Board for CFO and COO
Contributions aligned at a maximum of 10% of base salary for all executive directors
Prorata from date of appointment to the Board for CFO and COO
2023 STIP PERFORMANCE
Like-for-like headline
operating profit growth
Headline operating
margin improvement
Like-for-like revenue less
pass-through costs growth
Total financial performance
Non-financial performance
Total (%) of maximum
Total (%) of base salary
Total amount (£000)
Delivery
Actual STIP performance
WEIGHTING
Threshold
(0% payable)
Target
(50% payable)
Maximum
(100% payable)
25%
25%
25%
75%
25%
100%
0.0%
2.9%
6.0%
0.0%
0.2%
0.24%
0.0%
0.9%
4.0%
12.0%
0.4%
8.0%
See pages 152 and 153 for performance against
non-financial measures
60% is delivered in cash; 40% as a share award (ESA)
with a two-year deferral period
Mark
Read
(CEO)
£000
1,103
110
40
Joanne
Wilson
(CFO)
£000
516
52
25
Andrew
Scott
(COO)
£000
229
23
11
OUTCOME
ACHIEVED
6.04%
15.00%
2.81%
23.85%
Mark
Read
Joanne
Wilson
Andrew
Scott
22.00% 22.00% 19.00%
45.85% 45.85% 42.85%
114.63%
91.70% 85.70%
1,289
478
197
2023 STIP bonus delivery
60%
cash
40%
shares
142
WPP ANNUAL REPORT 2023
COMPENSATION AT A GLANCE
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
2019 EPSP PERFORMANCE
The performance measure for the 2019 EPSP grant was relative TSR (based on both common and local currency). Performance over the
five-year performance period was below threshold resulting in no vesting. For further details see page 154.
2021 EPSP PERFORMANCE
WEIGHTING
OUTCOME ACHIEVED
Average return on
invested capital (ROIC)
Cumulative adjusted
free cash flow (AFCF)
Relative TSR
(common currency)
Relative TSR
(local currency)
1/3
1/3
1/3
Total
100%
Below
threshold
Below
threshold
Threshold
(20% vesting)
14.1%
£2,100m
Median
Median
Maximum
(100% vesting)
15.9%
18.2%
£2,900m
£3,339m
Upper
decile
Upper
decile
1/3
1/3
0
66.67%
Mark
Read
1,956
Joanne
Wilson1
Andrew
Scott
193
1,146
Total amount (£000)
Delivery
The vested awards were delivered in shares (net of withholdings for tax and social security) in March 2024
These shares must be retained for a further two years
1 The award vesting shown for Joanne Wilson is an on-hire buyout award made in May 2023, the vesting of which was linked to the 2021 EPSP performance metrics
Actual EPSP performance
Indicates a scale break
SHAREHOLDING REQUIREMENT
Mark
Read
Appointed
3 September 2018
Joanne
Wilson
Appointed
19 April 2023
Andrew
Scott
Appointed
7 September 2023
Executive Directors are required to build and maintain their shareholding requirements within seven years of appointment. Expectation that shares received on
the vesting of share awards (eg EPSP and ESA) will be retained (other than those required to settle tax obligations) until holding requirement met, as was the case
in 2023.
Target levels (% of base salary)
Actual levels (% of base salary) at 31 December 20231
Actual levels (% of base salary) at 31 December 20221
600%
476%
439%
300%
4%
n/a
300%
736%
n/a
1 The share price used for the calculation is the average share price for the last two months of the relevant financial year
WPP ANNUAL REPORT 2023
143
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
DIRECTORS’ COMPENSATION POLICY
The Directors’ Compensation Policy (‘the Policy’) was approved by shareholders at the AGM on 17 May 2023. The table on pages 145 and 146
summarises the policy and how it will be implemented for 2024. Full details of the Policy can be found at pages 134-142 of the 2022 Annual
Report and Accounts.
ALIGNING COMPENSATION WITH STRATEGY
Performance measures are selected to align to our business strategy and include a range of financial and non-financial measures. Non-financial
measures are set out in a scorecard based on the role and accountabilities of the Executive Director. There are four categories: client – relating
to new business and client satisfaction; people and DE&I – this will include improvements in relation to diversity as well as the delivery of our
broader people strategy; purpose and reputation – aligned to the Company’s sustainability strategy, the management of governance and
controls as well as industry achievements and awards; and strategic priorities in relation to the execution of the next phase of our strategy,
Innovating to Lead, and the continuing transformation of the Group. The Committee regularly considers the measures to be used in the
incentives to ensure continued alignment to the business strategy. The metrics to be used for the 2024 financial year and their alignment with
the different elements of the strategy are summarised in the table below.
STRATEGIC ELEMENTS
Lead through AI,
data & technology
Accelerate growth
through the
power of creative
transformation
Build world-class,
market-leading
brands
Execute efficiently
to drive strong
financial returns
Short-term
incentive plan
(STIP)
Financial measures
Like-for-like headline
operating profit growth
Headline operating profit
margin improvement
Like-for-like revenue less
pass-through costs growth
Non-financial scorecard
Client
People and DE&I
Purpose and reputation
Strategic priorities
Long-term
incentive plan
(EPSP)
Return on invested capital
Adjusted free cash flow
Relative TSR
HOW WE WILL IMPLEMENT OUR PROPOSED COMPENSATION POLICY IN 2024
The tables below and overleaf set out how we plan to implement the Policy specifically for 2024.
TIMELINE OF COMPENSATION ELEMENTS
2024
2025
2026
2027
2028
Base salary
Benefits
Pension
STIP
EPSP
Cash
Deferred shares (Executive Share Award)
Performance period
Holding period
144
WPP ANNUAL REPORT 2023
DIRECTORS’ COMPENSATION POLICY
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
FIXED ELEMENTS OF COMPENSATION
Component
Base salary
Purpose and
link to strategy
To maintain
package
competitiveness.
Benefits
Pension
Provide an annual
fixed and
non-itemised
allowance to enable
the Executive to
ensure their
wellbeing and
security.
To enable provision
for retirement
benefits.
Operation
Opportunity
Base salary is typically reviewed annually
to align with the wider workforce.
Increases for Executives will
usually be aligned to the wider
workforce which will reflect
the performance of the
Company, the individual and
local economic factors.
Implementation
for 2024
Mark Read: £1,124,864
Joanne Wilson: £740,000
Andrew Scott: £725,000
Salary levels will be reviewed
in 2024 and any increases
effective 1 July 2024.
Reviewed periodically by the
Committee. Set with reference to the
individual concerned and the role they
undertake.
The maximum fixed annual
benefit allowance payable is
£50,000 (excluding relocation
benefits).
Mark Read: £35,000
Joanne Wilson: £30,000
Andrew Scott: £30,000
Plus taxable expenses related
directly to attendance at Board
meetings.
Provided by way of contribution to
a defined contribution retirement
arrangement, cash allowance or
combination of the two.
Maximum contribution of 10%
of base salary.
Mark Read: 10%
Joanne Wilson: 10%
Andrew Scott: 10%
VARIABLE ELEMENTS OF COMPENSATION
SHORT TERM INCENTIVE PLAN (STIP)
Purpose and
link to strategy
To drive the
achievement of
strategic priorities
for the financial year
and to motivate,
retain and reward
executives over the
short and medium
term. The ESA
element of the
incentive aligns
executives with
shareholder
interests.
Operation
Opportunity
Performance
Targets are set early in the year.
The Committee determines the extent to
which these targets have been achieved
following the end of the year based
on performance and has discretion
to adjust the formulaic outcome both
upwards and downwards (including
to zero) to ensure the performance
outcome reflects underlying Company
performance and value creation for
shareholders.
At least 40% of the STIP award is
delivered in the form of conditional
deferred shares (ESA) which will be
released after a period of two years.
STIP awards are subject to the malus
and clawback policy as may be
amended from time to time.
Maximum opportunity
of 250% of base salary.
Dividends will accrue on
the ESA during the deferral
period.
Performance measures and
targets are reviewed and
set annually to ensure
continued strategic
alignment.
Financial measures
represent a minimum
of 75% of the award;
Individual strategic or
non-financial objectives
may represent up to 25%
of the award. These might
include Company-wide
priorities tied to ESG,
individual performance
goals and/or other
individual or Company-
wide non-financial
objectives.
Implementation
for 2024
Mark Read: 0-250%
Joanne Wilson: 0-200%
Andrew Scott: 0-200%
The financial measures for
2024 are headline operating
profit growth, headline
operating profit margin
improvement and revenue less
pass-through costs growth.
Non-financial performance
will be measured based
on a scorecard including the
following metrics: client;
people and DE&I; purpose
and reputation; and strategic
priorities.
WPP ANNUAL REPORT 2023
145
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
DIRECTORS’ COMPENSATION POLICY CONTINUED
Implementation
for 2024
2024 EPSP awards (% of base
salary):
Mark Read: 390%
Joanne Wilson: 300%
Andrew Scott: 300%
Performance measures for
2024 are ROIC, AFCF and
relative TSR.
Implementation
for 2024
Mark Read: 600%
Joanne Wilson: 300%
Andrew Scott: 300%
LONG TERM INCENTIVE PLAN – EXECUTIVE PERFORMANCE SHARE PLAN (EPSP)
Purpose and
link to strategy
To drive the
achievement of
long-term strategic
priorities, to aid
retention and to
align Executive
Director and
shareholder
interests over
the long term.
Operation
Opportunity
Performance
Maximum opportunity:
400% of base salary.
Less than the maximum
opportunity may
be applied to Executive
Directors.
Dividends will accrue
on awards during the
performance period.
The EPSP comprises a grant of
performance share awards which will
vest subject to the achievement of
performance conditions. The Committee
has the discretion to adjust the formulaic
outcome of the award to ensure that
vesting reflects underlying Company
performance and value creation for
shareholders.
The EPSP has a performance period
of three years, followed by a two-year
holding period of the vested shares.
EPSP is subject to the malus and
clawback policy as may be amended
from time to time.
Vesting of the EPSP is
subject to the achievement
of stretching performance
targets.
Performance measures and
targets are reviewed and
set annually by the
Committee to ensure
continued strategic
alignment. These may be a
mix of market, financial and
non-financial measures.
Threshold performance
will produce an award of
20% of the award granted
and increase on a sliding
scale to 100% for maximum
performance achievement.
SHAREHOLDING REQUIREMENTS
Purpose and
link to strategy
To align the
interests of
Executive Directors
with shareholders.
Operation
Requirement
Chief Executive Officer: 600% of base salary; Chief
Financial Officer: 300% of base salary; minimum for any
other new Executive Director appointed to the Board:
200% of base salary.
Executive Directors will be permitted a period of seven
years from the date of their appointment to achieve the
required level.
Executive Directors and other members
of the senior management team are
subject to share ownership requirements
which seek to reinforce the WPP
principle of alignment of management’s
interests with those of shareholders.
Executive Directors are required to hold
100% of their shareholding requirement,
or their shareholding at the date of
departure, for a period of one year
following cessation of employment,
reducing to 50% for a second year.
If an Executive Director fails to achieve
the required level of share ownership,
the Committee will decide what
remedial action or penalty is
appropriate. This may involve a
reduction in future share awards or
requiring the Executive Director to
purchase shares in the market to meet
the ownership requirements.
If an Executive Director fails to maintain
their shareholding requirement
post-employment, this may result
in a reduction of outstanding awards.
146
WPP ANNUAL REPORT 2023
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
ANNUAL REPORT
ON COMPENSATION
This section of the report sets out details
of how the Directors’ Compensation Policy
was implemented in 2023.
Payments have been made in accordance
with the current Directors’ Compensation
Policy, approved by shareholders at the 2023
AGM. The information included in this section
has been audited where stated.
GOVERNANCE IN RELATION
TO COMPENSATION
During 2023, there were four scheduled
and three unscheduled Compensation
Committee meetings. A table of Board and
Committee attendance can be found on
page 123 and the detail of key activities
discussed is set out below.
The Committee members have no
personal financial interest (other than as a
shareholder as disclosed on page 163) in the
matters to be decided by the Committee,
potential conflicts of interest arising from
cross-directorships, or day-to-day
involvement in running the Company’s
businesses. The terms of reference for the
Compensation Committee are available
on the Company’s website.
ADVISORS TO THE COMPENSATION
COMMITTEE
The Committee invites certain individuals
to attend meetings, including the Chief
Executive Officer, Chief Financial Officer,
the Company Secretary, the Chief People
Officer (who are not present when matters
relating to their own compensation or
contracts are discussed and decided) and
the Global Reward Director. The latter two
individuals provide a perspective on
information reviewed by the Committee
and are a conduit for requests for information
and analysis from the Committee’s
external advisors.
EXTERNAL ADVISORS
The Committee retains WTW to act as
independent advisor. WTW provides advice
to the Compensation Committee and works
with management on matters related to our
compensation policy and practices. WTW
is a member of the Remuneration Consultants
Group and has signed the code of conduct
relating to the provision of advice in the UK.
Considering this, and the level and nature of
the service received, the Committee remains
satisfied that the advice is objective and
independent. WTW provides limited other
services at a Group level and some of our
operating companies engage WTW as
advisor at a local level. In 2023, WTW
received fees of £115,604 in relation to
the provision of advice to the Committee.
The fees charged are based on the time and
expenses incurred. The Committee receives
external legal advice, where required,
to assist it in carrying out its duties.
EXECUTIVE DIRECTOR CHANGES
DURING THE YEAR
As referenced in the Committee Chair’s
letter, Joanne Wilson joined WPP as CFO
designate on 19 April 2023 and was
appointed CFO on 27 April 2023. John Rogers
stepped down as CFO and an Executive
Director on this date and his employment
with WPP ceased on 7 November 2023.
On 7 September 2023, Andrew Scott, WPP’s
COO, was appointed to the Board as an
Executive Director. Their compensation
packages have been determined in
accordance with the current shareholder
approved Directors' Compensation Policy
and are detailed below.
JOANNE WILSON AND ANDREW SCOTT’S COMPENSATION PACKAGES
Base salary
Benefits allowance
Pension
Joanne Wilson (appointed 19 April 2023)
Andrew Scott (appointed 7 September 2023)
£740,000
£725,000
£30,000 per annum
Company pension contribution or cash allowance in lieu of pension contribution of 10% of base salary
Short term incentive plan (STIP) opportunity
Up to 200% of base salary; with mandatory deferral into shares (ESA) of at least 40% of total award
Long term incentive opportunity – Executive
Performance Share Plan (EPSP)
EPSP awards of up to 300% of base salary
WPP ANNUAL REPORT 2023
147
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
ANNUAL REPORT ON
COMPENSATION CONTINUED
JOANNE WILSON
Joanne Wilson also received buy-out awards
to compensate for the forfeiture of incentive
awards from her previous employer. These
awards were determined according to the
Policy, such that the structure and value of
the awards made were informed by the
structure and value of those entitlements
forfeited, and the performance targets, time
horizon and method of payment was set in
an appropriate manner by the Committee:
– Three restricted stock awards, totalling
£358,830
– Two performance share awards made
under the EPSP of £362,550 and £849,097
vesting in March 2024 and March 2025
subject to the same performance
conditions as the 2021 and 2022 EPSP
awards respectively. The performance
conditions relate to ROIC, AFCF and
relative TSR
Further detail on the buy-out share awards
made is provided on page 158
JOHN ROGERS
In line with the Directors’ Compensation
Policy in place at the time, John continued
to receive the fixed elements of his
compensation package (base salary, benefits
allowance and pension allowance) until his
employment ceased on 7 November 2023.
He was not eligible to receive a 2023 STIP
or EPSP award. Outstanding ESAs will vest
on a prorata basis on the normal vesting
date. All unvested EPSP awards lapsed when
his employment ceased.
ACTIVITY DURING THE YEAR
The key activities of the Compensation Committee are set out below. In addition to the specific items outlined, the Committee reviews any
compensation matters relating to the Executive Directors and the Executive Committee, as well as all compensation governance matters.
2023
Q1
Q3
– Determined performance outcomes for 2018 and 2020 EPSP awards,
– Received an update on the wider workforce providing an overview of the
including whether adjustments would be appropriate
diversity demographics and compensation of employees at WPP
– Considered 2022 STIP in the context of performance during the year
– Set targets for 2023 STIP and EPSP
– Reviewed and approved 2022 Compensation Committee Report
– Received a corporate governance update
– Agreement of terms for COO appointment
Q2
Q4
– Reviewed the CEO’s salary
– Reviewed and approved proposed changes to Executive Committee
– Considered performance metrics for 2024 STIP and EPSP awards
– Reviewed and approved compensation arrangements for executives taking
compensation
– Received an update on Executive Compensation market practice and
landscape
up new roles on the Executive Committee effective January 2024
– Considered and approved changes to share ownership requirements for the
Executive Committee and other senior employees to align approach with
those of the Executive Directors
– Reviewed the effectiveness of the operation of the current Directors’
Compensation Policy
To learn more, see wpp.com/about/corporate-governance
148
WPP ANNUAL REPORT 2023
ANNUAL REPORT ON COMPENSATION
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
STATEMENT OF SHAREHOLDER VOTING
The result of the shareholder vote at the Company’s 2023 AGM in respect of both the 2022 Compensation Committee Report and the
Directors’ Compensation Policy is set out below:
Voting outcome for 2022 Compensation Committee Report
Votes for
Number
Votes against
%
Number
847,942,111
93.89
55,150,578
%
6.11
Votes cast
Number
903,092,689
Votes withheld
Number
175,793
Resolution
To approve the
Compensation
Committee Report
Voting outcome for 2023 Directors' Compensation Policy
Resolution
To approve the
Compensation Policy
Votes for
Number
Votes against
%
Number
%
Votes cast
Number
827,195,868
91.60
75,887,013
8.40%
903,082,881
Votes withheld
Number
185,601
2023 COMPENSATION
The decisions made with respect to 2023 compensation were made in line with the 2023 Directors’ Compensation Policy, approved by
shareholders at the AGM in 2023.
EXECUTIVE DIRECTORS’ TOTAL COMPENSATION RECEIVED (AUDITED)
Single total figure of compensation.
Mark Read
Joanne Wilson1
Andrew Scott1
John Rogers2
2023
2022
2023
2023
2023
2022
Base
salary
£000
1,103
1,061
516
229
258
762
Benefits
£000
40
36
25
11
12
32
Pension
£000
110
125
52
23
26
76
Total
fixed
£000
1,253
1,222
593
263
296
870
Short-term incentive
Cash
£000
774
1,437
287
118
–
917
Deferred
£000
515
958
191
79
–
611
Long-term
incentive
£000
1,956
3,065
193
1,146
–
1,994
Total
variable
£000
3,245
5,460
671
1,343
–
3,522
Other
£000
3593
Total annual
compensation
£000
4,498
6,682
1,623
1,606
296
4,392
1 Joanne Wilson joined the Company on 19 April 2023. Andrew Scott was appointed an Executive Director on 7 September 2023. Their base salary, other fixed elements of compensation and short-term
incentive amounts reflect their time in office during the year
2 John Rogers stepped down as CFO on 27 April 2023, and left employment on 7 November 2023 at the end of his notice period. His base salary and other fixed elements of compensation shown above
reflect the period to 27 April 2023, whilst he was CFO. Details of the payments he received in the period 28 April to 7 November 2023 are reported under Payments to past directors on page 161
3 Joanne Wilson received buy-out awards to compensate for the loss of incentive awards at her previous employer. 'Other' includes £358,830 of restricted stock awards granted in the year to compensate
for lost incentive opportunity. An EPSP granted as part of the buyout awards (with performance conditions the same as those of the 2021 EPSP awards) which vested in March 2024 with a value of
£193,253 is included under 'Long-term incentive'
WPP ANNUAL REPORT 2023
149
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
ANNUAL REPORT ON
COMPENSATION CONTINUED
FIXED ELEMENTS OF COMPENSATION (AUDITED)
BASE SALARY
Mark Read
Joanne Wilson
Andrew Scott
John Rogers
Effective date
1 July 2023
19 April 2023
7 September 2023
1 July 2022
Annual base
salary
£000
1,125
740
725
784
Base salary
received in
20231
£000
1,103
516
229
258
1 Base salary received has been prorated to reflect the period in office during 2023 (Joanne Wilson from 19 April; Andrew Scott from 7 September; John Rogers to 27 April)
Mark Read’s salary was reviewed in 2023 in line with a salary review which took place throughout the organisation. When reviewing executive
salaries in 2023, the Committee took into consideration the external market in the UK as well as the global advertising and media sector;
performance in role; time since previous review; and budgeted salary increases across the wider workforce for 2023. The Committee agreed
an increase of 4.0% to £1,124,864. This was in line with the UK annual salary increase budget.
Joanne Wilson’s salary (£740,000) was agreed on appointment; Andrew Scott’s salary (£725,000) was last reviewed in July 2023 and was not
changed on his appointment to the Board. John Rogers' salary (£784,400) remained unchanged.
BENEFITS
In addition to the allowance received, the values
disclosed include the gross value of taxable expenses
related directly to attendance at Board meetings.
The expenses for Mark Read, Joanne Wilson,
Andrew Scott and John Rogers were £5,010, £4,222,
£1,939 and £1,958 respectively (2022: Mark Read
£1,347; John Rogers £2,169).
Mark Read
Joanne Wilson
Andrew Scott
John Rogers
PENSION
Executive Directors’ pension provisions are aligned
with the wider workforce at 10% of base salary.
1
Includes benefits allowance which has been prorated to reflect the period in office during 2023
Mark Read
Joanne Wilson
Andrew Scott
John Rogers
Contractual
pension
(% of base salary)
10
10
10
10
1 Pension contributions have been prorated to reflect the period in office during 2023
2023
Benefits1
£000
40
25
11
12
2023
Pension1
£000
110
52
23
26
150
WPP ANNUAL REPORT 2023
ANNUAL REPORT ON COMPENSATION
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
SHORT-TERM INCENTIVE (AUDITED)
2023 STIP OUTCOME
2023 STIP
Financial
Actual
outcome (%)
(out of 75%)
23.85
23.85
23.85
2023 STIP
Individual
strategy
Actual
outcome (%)
(out of 25%)
22.00
22.00
19.00
2023 STIP Total
2023 STIP Award
Actual
outcome (%)
(out of 100%)
45.85
45.85
42.85
Maximum
bonus
(% of base
salary)
250
200
200
Actual
2023 STIP
(% of base
salary)
114.63
91.70
85.70
Total
£000
1,289
478
197
Cash element
(60%)2
£000
774
287
118
Deferred (ESA)
element
(40%)2
£000
515
191
79
Mark Read
Joanne Wilson1
Andrew Scott1
1 Joanne Wilson’s and Andrew Scott’s STIP outcomes are determined by applying the percentage of base salary to the prorated base salary received from their respective dates of appointment during
2023 (19 April 2023 for Joanne Wilson; 7 September 2023 for Andrew Scott)
2 ESAs are made over WPP shares and are expected to be granted in early May 2024. They will vest subject to continued employment in March 2026
Andrew Scott’s 2023 STIP in the table above relates to his performance following his appointment to the Board on 7 September 2023 prorated
for his time in office. In addition, he received a STIP award of £401,018 (comprised of cash £240,611 plus deferred ESA element £160,407) for the
period prior to his Board appointment.
PERFORMANCE AGAINST 2023 FINANCIAL OBJECTIVES (75% OF AWARD)
The financial bonus targets and outcomes for the year are set out in the table below. Performance against all financial objectives is calculated
on a ‘like-for-like’ basis other than headline operating margin, which is calculated on a constant currency basis.
Measure
Like-for-like headline operating profit growth
Headline operating margin improvement
Like-for-like revenue less pass-through costs growth
Total achieved (out of 75% maximum)
Weighting
(as portion of
financial element)
1/3
1/3
1/3
Threshold
(0% payable)
0.0%
0.0%
0.0%
Target
(50% payable)
6.0%
0.2%
4.0%
Maximum
(100% payable)
12.0%
0.4%
8.0%
Actual
performance
2.9%
0.24%
0.9%
% of award
achieved
6.04%
15.00%
2.81%
23.85%
WPP ANNUAL REPORT 2023
151
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
ANNUAL REPORT ON
COMPENSATION CONTINUED
PERFORMANCE AGAINST 2023 INDIVIDUAL STRATEGIC OBJECTIVES (25% OF AWARD)
Non-financial performance is assessed using a scorecard of measures with four categories: client; people and DE&I; purpose and reputation;
and strategic priorities. The Committee has assessed performance against these targets holistically to inform its decision on each Executive
Director’s non-financial performance and determined an award of 22% for Mark Read, 22% for Joanne Wilson and 19% for Andrew Scott out
of a maximum of 25%.
MARK READ – NON-FINANCIAL PERFORMANCE
Category
Area
2023 performance
Purpose and reputation
Progress on
sustainability targets
– We have reduced our total scope 1 & 2 market based emissions by 18% from 2022 and 76% from our
2019 baseline, largely driven by an increase in electricity purchased from renewable sources as well as
improved energy efficiency in our buildings
– During the year GroupM launched a new omnichannel media carbon calculator for clients, enabling
them to factor channel-level carbon emissions data into their media planning. In 2023 we measured the
footprint of around 2,800 campaigns
– Continued development of our first formal Transition Plan which will be published in 2024, an
important milestone as we progress to net zero
– See pages 60 and 61 for further detail on our progress against our sustainability goals
Creative reputation
– Our agencies across the world won in total 165 Cannes Lions: one Titanium, five Grands Prix, 24 Gold,
57 Silver and 78 Bronze Mindshare was named Media Network of the Year
– We were also proud to achieve the WARC ratings triple, taking the number one spot in the Creative,
Effective and Media 100 lists
– We were named most effective communications company in the world at the 2023 Effies
Client
Client satisfaction
– Maintained a high score of 8 out of 10 for Likelihood to Recommend from clients in 2023. Our client net
promoter score improved to 27.5 from 24.5 in 2022 (see pages 25 and 26 for further detail on clients)
People and DE&I
Inclusive culture
Strategic priorities
Employee
engagement
Focus on
high-growth
areas
Transformation
programme
– Maintained high levels of female representation at the executive and senior management level with
females representing 41% at the Board and executive level and 53% at the senior manager level (see
page 39 for further detail)
– Continued to develop initiatives to support a diverse and inclusive workforce. Additional details on the
diversity of our leadership and our inclusion initiatives are included on pages 38 and 39
– A record number of employees took part in our annual All In staff engagement survey (an increase of
14% on 2022) providing valuable insight into what our people care most about (see pages 38 and 39 for
further detail)
– Targeted acquisitions and partnerships in specific high-growth areas (see page 23 for further details)
– Continued development of WPP Open, our AI-powered marketing operating system, and introduction
of Brains, WPP's bespoke AI models trained in specific competencies to help provide highly targeted
solutions to clients (see page 34 for further detail)
– Continued simplification of WPP including: the merger of Wunderman Thompson and VMLY&R, to form
VML, the industry's largest creative company, combining world-class commerce, customer experience
and marketing technology capabilities; preparation for the merger of BCW and Hill & Knowlton,
announced in January 2024, to create Burson, a leading global strategic communications firm
– Further integration of GroupM, with plans developed to create common media products, a single
technology platform, streamlined operations and shared back-office functions across finance, IT and HR
– Continued progress on our campus programme, adding eight new campuses during the year, taking
the total to 41, accommodating around half our people
Total achieved (out of 25% maximum)
22%
152
WPP ANNUAL REPORT 2023
ANNUAL REPORT ON COMPENSATION
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
JOANNE WILSON – NON-FINANCIAL PERFORMANCE
Category
Area
2023 performance
Purpose and reputation Governance and
controls
– Effective SOX testing provider transition
– External auditor transition on track
– Development of responsible procurement strategy with a focus on supplier diversity, net zero and
mitigating risks
Progress on
sustainability targets
– Progress on renewing the revolving five-year revolving credit facility of $2.5 billion which matures
in March 2026, completed post year-end. WPP will continue to include ESG KPIs in the new facility,
building on those included in the previous facility
Client
Engagement on trade
working capital and
cash conversion
– Year-on-year improvement of £113m from trade working capital
– 73% operating cash conversion (vs 38% in 2022)
– 36% free cash flow conversion (vs 3% in 2022)
People and DE&I
Inclusive culture
– Continuing to build an effective and diverse finance team
– Increased engagement and communications across the finance and IT communities
Strategic priorities
Transformation
programme
– Progressed enterprise IT roadmap, including our migration to the cloud, enhanced cybersecurity
and investment in digital workplace (see page 82 for further detail)
– Business benefits beginning to be realised from the deployment of Workday in North
America following the ERP consolidation exercise (see page 82 for further detail)
– Target cost savings for IT ahead of plan
Total achieved (out of 25% maximum)
22%
ANDREW SCOTT – NON-FINANCIAL PERFORMANCE
Category
Area
2023 performance
Purpose and reputation Creative reputation
– Implementation of cross-agency Creative Councils in ten country leader markets to drive focus on
creative excellence
– Acquisition of stake in Majority, creative agency that combines a multicultural talent model with
award-winning creative capabilities
Client
Client satisfaction
– Country leader model continues to be effective with higher new business win rates and average
Likelihood to Recommend scores in the majority of country leader markets above 8
– Creation of FGS Global, the leading strategic advisor for clients
People and DE&I
Inclusive culture
– Continuing to build a diverse global country leadership group. Currently 40% female representation
and 35% ethnically diverse
– Roll out of Inclusion Councils in country leader markets to help build inclusive workspace environments
around the world
Strategic priorities
Transformation
programme
– Simplification of WPP through a number of disposals, business combinations and purchases of
minority interests
– Targeted acquisitions and partnerships in specific high-growth areas (see page 23 for further details)
Total achieved (out of 25% maximum)
19%
WPP ANNUAL REPORT 2023
153
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
ANNUAL REPORT ON
COMPENSATION CONTINUED
SHORT-TERM INCENTIVE WEIGHTINGS AND MEASURES FOR 2024
The Committee has reviewed the performance objectives for 2024 to ensure continued alignment with Company strategy. The Group
financial measures, in line with the Policy, will continue to have a 75% weighting and will remain headline operating profit growth, headline
operating profit margin improvement and revenue less pass-through costs growth. Non-financial performance (25% weighting) continues to
be measured based on a scorecard including the following metrics: client – relating to new business and client satisfaction; people and DE&I
– this will include improvements in relation to diversity as well as the delivery of our people strategy; purpose and reputation – aligned to the
Company’s sustainability strategy, the management of governance and controls as well as industry achievements and awards; and strategic
priorities – aligned to the transformation and the next phase of our strategy, Innovating to Lead.
The Committee is of the view that the specific targets for the STIP are commercially sensitive, and it would be detrimental to the Company
to disclose them in advance of, or during, the relevant performance period. To the extent targets are no longer commercially sensitive, they
will be disclosed at the end of the relevant performance period in that year’s Annual Report, as has been done in previous years.
LONG-TERM INCENTIVES (AUDITED)
VESTING OF 2019-2023 EPSP AWARD
The 2019 EPSP award was the final award made under the legacy EPSP structure. Vesting of the award was dependent on relative TSR
performance measured over a five-year period to 31 December 2023, with a ROIC underpin to ensure alignment to the underlying financial
performance of the Company.
WPP’s relative TSR was measured on a common and local currency basis, against a custom group of WPP’s comparators (Dentsu, Interpublic,
Ipsos, Nielsen, Omnicom and Publicis) weighted by their respective market capitalisation.
Relative TSR performance was below the threshold required for vesting.
Performance measure
Relative TSR (common currency)
Relative TSR (local currency)
Payout
Underpin
Total vesting (% of maximum)
Threshold
Maximum
Actual
Weighting
100%
%
50% of
weighted peer
group
outperformed
%
90% of
weighted peer
group
outperformed
%
41%
39%
% of maximum
achieved
For performance below threshold there is nil vesting. 15% vesting occurs at
threshold performance, 100% vesting at maximum performance and straight-line
vesting between threshold and maximum
Vesting is subject to the achievement of a financial underpin; of average annual
ROIC of 7.5% over the performance period.
0%
0%
Mark Read
Andrew Scott1
1 Andrew Scott’s 2019 EPSP award was granted prior to his appointment to the Board
Number of
shares awarded
340,059
161,933
Additional
shares in respect
of dividend
accrual
0
0
Number of
shares vesting
0
0
Share price
on vesting
n/a
n/a
Value of vested
2019-2023
EPSP awards
£000
0
0
154
WPP ANNUAL REPORT 2023
ANNUAL REPORT ON COMPENSATION
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
VESTING OF 2021-2023 EPSP AWARDS
Vesting of the 2021 EPSP award was dependent on performance against three measures, all assessed over a three-year period:
– Average ROIC
– Cumulative AFCF
– WPP’s relative TSR, measured in common and local currency, against a custom group of WPP’s comparators (Dentsu, Interpublic, Omnicom,
Publicis and the FTSE 100 index). Each comparator carries an equal weighting
The performance against ROIC and AFCF was above maximum for the performance period, resulting in maximum vesting for those elements
of the award. The Committee considered an adjustment to ROIC for accelerated amortisation charges made during the year. ROIC remained
above maximum on both an adjusted and unadjusted basis, therefore there was no impact on vesting. The relative TSR was below threshold
on both a local and common currency basis resulting in zero vesting for the TSR element and a total formulaic vesting of 66.67% for the award.
Performance measure
ROIC
AFCF
Relative TSR (common currency)
Relative TSR (local currency)
Total vesting (% of maximum)
Mark Read
Andrew Scott2
1 None of the value of the vested awards is attributable to share price appreciation
2 Andrew Scott’s 2021 EPSP Award was granted prior to his appointment to the Board
Weighting
1/3
1/3
1/3
Threshold
14.1%
£2,100m
Maximum
15.9%
£2,900m
Median
Upper decile
Actual
18.2%
£3,339m
Below median
Below median
Number of
shares awarded
369,278
217,508
Additional
shares in respect
of dividend
accrual
30,723
17,292
Number of
shares vesting
276,920
162,304
Share price
on vesting1
£7.0629
£7.0629
% of maximum
achieved
100%
100%
0%
66.67%
Value of vested
2021-2023
EPSP awards
£000
1,956
1,146
WPP ANNUAL REPORT 2023
155
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
ANNUAL REPORT ON
COMPENSATION CONTINUED
GRANTING OF 2023-2025 AWARDS
In 2023, the Executive Directors were granted awards under the EPSP as approved by shareholders in 2020. The Committee considered the
performance measures to be used prior to grant and concluded that ROIC, AFCF and relative TSR continue to be appropriate and well aligned
to strategy. The Committee made the decision to change the structure of the TSR element of the award to ensure it accurately reflects the
interests of local and international investors and the markets in which WPP operates. Proposed targets were developed based on detailed
medium-term financial plans and robust modelling, with reference to analyst consensus estimates.
An average of the year end ROIC for each of the three years in the performance period calculated as:
Headline operating profit/Invested capital
Where invested capital =
(Opening net assets + closing net assets)/2
+ average net debt
+ average lease liabilities (opening lease liabilities + closing lease liabilities)/2
A cumulative AFCF for each of the three years in the performance period. Adjusted free cash flow is
calculated as cash generated by operations plus dividends received from associates, interest received,
investment income received, and proceeds from the issue of shares, less interest and similar charges
paid, dividends paid to non-controlling interests in subsidiary undertakings, repayment of lease liabilities
(including interest), and purchases of property, plant and equipment and purchases of other intangible
assets over the course of the performance period.
TSR performance will be calculated, both on a common and local currency basis, by reference to two peer
groups each carrying equal weighting, as illustrated below:
Sector peer group
50% weighting
FTSE 100 peer group
50% weighting
Dentsu, IPG, Omnicom, Publicis (all peers equally
weighted)
Constituents of the FTSE 100 at the start of the
performance period, excluding financial services,
natural resources and utilities
Definition of measure
ROIC
(Return on invested capital)
AFCF
(Adjusted free cash flow)
Relative TSR
(Total shareholder return)
156
WPP ANNUAL REPORT 2023
ANNUAL REPORT ON COMPENSATION
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
The table below summarises the awards granted and the performance conditions against which participants will be measured.
Awards granted in 2023
Mark Read2
Joanne Wilson3
Andrew Scott2,4
Basis and level of award
(% of salary)
390
300
300
Number of
shares awarded
450,628
240,645
224,339
Face value at date of grant1
£000
4,218
2,220
2,100
1 Face value is calculated based on the five-day average share price preceding the date of award
2 Mark Read and Andrew Scott’s awards were granted on 23 March 2023; the five-day average share price preceding the date of award was £9.3608
3 Joanne Wilson’s 2023 award was granted on 4 May 2023 following the commencement of her employment; the five-day average share price preceding the date of grant was £9.2252
4 Andrew Scott’s 2023 award was made prior to his appointment to the Board, whilst he was a member of the Executive Committee
Performance measure
Weight
Nature
Performance zone (threshold to maximum)
Payout
Performance period
Holding period
AFCF
ROIC
One-third
One-third
Cumulative
Average
17.5%-19.5%
£3,500m-£4,500m
For performance below threshold there is nil vesting. 20% vesting occurs at threshold performance
and increases on a sliding scale basis to 100% vesting at maximum
1 January 2023 to 31 December 2025
1 January 2026 to 31 December 2027
Relative TSR
One-third
Relative to peers
Median to upper decile
A 2023 EPSP award was not made to John Rogers.
WPP ANNUAL REPORT 2023
157
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
ANNUAL REPORT ON
COMPENSATION CONTINUED
ADDITIONAL SHARE AWARDS – BUY-OUT AWARDS
Joanne Wilson received buy-out awards to compensate for the forfeiture of incentive awards from her previous employer. These awards were
determined in accordance with the Policy and comprise restricted stock and performance shares. The table below summarises the awards
granted by way of restricted stock and performance shares.
Restricted stock award1
Restricted stock award1
Restricted stock award2
Number of
shares awarded
7,950
16,901
18,540
Face value at date
of grant £000
72
152
135
Vesting date
12 May 2023
2 December 2024
2 December 2025
Subject to performance Performance conditions
No
No
No
EPSP award3
EPSP award3
39,300
92,041
363
849
10 March 2024
10 March 2025
Yes
Yes
–
–
–
The same performance conditions apply as for
the 2021 EPSP awards granted in March 20214
The same performance conditions apply as for
the 2022 EPSP awards granted in March 20225
1 Granted on 4 May 2023. Face value at grant based on the closing share price on the day preceding date of grant of £9.014
2 Granted on 7 December 2023. Face value at grant based on closing share price on the day preceding the date of grant of £7.272
3 Granted on 4 May 2023. Face value at grant based on average closing share price for the five dealing days immediately preceding the date of grant of £9.2252
4 The performance conditions for the 2021 EPSP award are set out on page 155
5 The performance conditions for the 2022 EPSP award comprise ROIC, AFCF and relative TSR equally weighted, all measured over the three-year period to 31 December 2024
The first of the EPSP awards granted to Joanne Wilson has vested following the achievement of performance conditions aligned to the 2021
EPSP award. The outcomes are shown on page 155.
Joanne Wilson
1 None of the value of the vested award is attributable to share price appreciation
Number of
shares awarded
39,300
Additional
shares in respect
of dividend
accrual
1,328
Number of
shares vesting
27,529
Share price
on vesting1
£7.0200
Value of
vested shares
£000
193
EPSP MEASURES AND TARGETS FOR 2024
The table below shows the targets against which performance will be measured for the awards granted in 2024. The Committee considers
the measures and targets set to be appropriate and challenging.
ROIC
One-third
Average
17.5%-20.0%
For performance below threshold there is nil vesting. 20% vesting occurs at threshold performance and
increases on a sliding scale basis to 100% vesting at maximum
1 January 2024 to 31 December 2026
1 January 2027 to 31 December 2028
Relative TSR
One-third
Relative to peers
Median to upper decile
AFCF
One-third
Cumulative
£3,500m-£4,500m
Performance measure
Weight
Nature
Performance zone (threshold to maximum)
Payout
Performance period
Holding period
158
WPP ANNUAL REPORT 2023
ANNUAL REPORT ON COMPENSATION
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
ALIGNING PAY AND PERFORMANCE
As set out in the Directors’ Compensation Policy, the Committee’s objective is to align variable compensation with the key strategic priorities
of WPP, maximising the link between pay and performance.
The following graph and table demonstrate the relationship between pay and performance over the last ten years for the CEO. The graph
shows WPP’s performance against the performance of the FTSE 100 over the ten-year period to 31 December 2023. TSR is rebased to £100
from 1 January 2014 to show the value of a hypothetical £100 holding. The FTSE 100 has been chosen as a comparator as the Company has
been a constituent member throughout the period. With respect to 2018, the pay for both the current and previous CEO is included separately.
HISTORICAL TSR PERFORMANCE1
(£)
180
160
140
120
100
80
60
40
20
0
£170
£80
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
WPP
FTSE 100
Source: S&P Capital IQ
CEO total compensation (£000)2
Short-term incentive award
against maximum (%)
Long-term incentive award
against maximum (%)
2014
42,704
2015
70,409
2016
48,148
2017
13,930
72
100
86
100
60
100
0
73
2018
MSS3
3,085
0
33
2018
MR3
965
30
33
2019
2,594
2020
1,136
2021
3,799
2022
6,682
2023
4,498
55
15
0
5
100
0
89
2018: 0
2020: 67
46
2019: 0
2021: 67
1 Growth in the value of a hypothetical £100 holding over ten years versus the FTSE 100 (the broad market equity index of which WPP is a constituent) based on one month average of trading day values
2 Calculated based on the methodology used for disclosing compensation in the single figure of compensation table
3 Sir Martin Sorrell (MSS) left the company on 14 April 2018; Mark Read (MR) was appointed as Chief Executive Officer from 3 September 2018
WPP ANNUAL REPORT 2023
159
£170(£)£802023
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
ANNUAL REPORT ON
COMPENSATION CONTINUED
NON-EXECUTIVE DIRECTORS’ FEES
The fees due to Non-Executive Directors were reviewed in 2023 and no changes were made. The current fees are shown in the table below.
2023
Chairman
Non-Executive Director
Senior Independent Director
Chair of Audit or Compensation Committee
Chair of Nomination and Governance Committee1
Chair of Sustainability Committee
Member of Audit or Compensation Committee
Member of Nomination and Governance Committee
Member of Sustainability Committee
£000
525
85
40
40
15
40
20
10
10
1 The Nomination and Governance Committee is chaired by Roberto Quarta as part of his role as Chairman; no additional fee is paid
NON-EXECUTIVE DIRECTORS’ TOTAL COMPENSATION RECEIVED (AUDITED)
The single figure table below details the value of fees and taxable benefits received by the Non-Executive Directors during 2023 while they
held a position on the Board.
Roberto Quarta
Angela Ahrendts1
Simon Dingemans, appointed 31 January 2022
Sandrine Dufour
Tarek Farahat, retired 17 May 2023
Tom Ilube
Cindy Rose2
Nicole Seligman, retired 17 May 20231
Keith Weed
Jasmine Whitbread
Dr. Ya-Qin Zhang
Fees
£000
Benefits3
£000
Total
£000
2023
525
130
105
145
44
135
119
59
125
135
95
2022
525
103
97
140
105
135
125
155
125
135
93
2023
45
17
8
3
12
14
9
12
21
20
5
2022
32
42
6
6
18
7
5
24
7
5
20
2023
570
147
113
148
56
149
128
71
146
155
100
2022
557
145
103
146
123
142
130
179
132
140
113
1 Angela Ahrendts succeeded Nicole Seligman as the Senior Independent Director on 17 May 2023 following the latter’s retirement
2 Cindy Rose stepped down as a member of the Compensation Committee on 17 May 2023 and became a member of the Nomination and Governance Committee on the same date
3 Benefits include expense reimbursements for travel, accommodation and subsistence for attendance at Board meetings during the year and include the grossed-up cost of UK tax and national insurance
paid by the Company on behalf of the directors where applicable
160
WPP ANNUAL REPORT 2023
ANNUAL REPORT ON COMPENSATION
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
PAYMENTS TO PAST DIRECTORS (AUDITED)
The payments made to John Rogers in the period from the time he ceased to be an Executive Director on 27 April 2023 to his cessation
of employment on 7 November 2023 are summarised below:
Base salary: There was no change to John’s annual base salary in this period. He received a total of £410,553.
Pension: An amount of 10% of base salary of cash in lieu of pension contribution continued to be paid in this period. This amounted to £41,055.
Benefits allowance: The annual benefits allowance continued to be paid. In addition, he had the benefit of access to consultancy services.
The total value of benefits received in the period was £67,452.
No other payments were made to any other past directors during the financial year.
PAYMENTS FOR LOSS OF OFFICE (AUDITED)
No payments were made to directors in connection with loss of office in the financial year.
EXECUTIVE DIRECTORS’ INTERESTS (AUDITED)
Executive Directors’ interests in the Company’s ordinary share capital are shown in the following table. Other than as disclosed in this table,
no Executive Director had any interest in any contract of significance with the Group during the year. Each Executive Director has a technical
interest as an employee and potential beneficiary in shares in the Company held under the Employee Share Ownership Plan Trusts (ESOPs).
More specifically, the Executive Directors have potential interests in shares related to the outstanding awards under the EPSP and outstanding
ESAs. As at 31 December 2023, the Company’s ESOPs (which are entirely independent of the Company and have waived their rights to receive
dividends) held in total 490,646 shares in the Company (1,211,974 at 31 December 2022).
Director
Mark Read
Joanne Wilson
Andrew Scott
John Rogers
At 31 December 2023
At 15 March 20244,5
At 31 December 2023
At 15 March 20244,5
At 31 December 2023
At 15 March 20244,5
At 27 April 20236
Total
beneficial
interest1
739,923
949,752
4,206
18,769
736,974
849,765
391,715
Shares without
performance
conditions
(unvested)2
215,484
106,264
35,441
35,441
92,246
45,807
69,943
Shares with
performance
conditions
(unvested)3
1,544,711
1,453,083
371,986
645,274
794,445
721,255
450,819
Total
unvested
shares
1,760,195
1,559,347
407,427
680,715
886,691
767,062
520,762
Shareholding requirements
% of
base salary
Achieved/
On track
600%
On track
300%
On track
300%
300%
Achieved
Achieved
1 Beneficial interests in shares include, where relevant, interests of connected persons (as defined in s.96B(2) of the Financial Services and Markets Act 2000)
2 For Mark Read, Andrew Scott and John Rogers these relate to the 2021 and 2022 Executive Share Awards under the deferred element of the STIP. For Joanne Wilson, these relate to buy-out awards made
in the form of Restricted Stock awards. See page 158. Additional dividend shares will be due on vesting
3 These relate to the maximum number of shares due on vesting pursuant to outstanding EPSP awards, full details of which can be found on page 162. For Joanne Wilson, these also include unvested
buy-out awards. In all cases additional dividend shares will be due on vesting
4 Movements to 15 March 2024 reflect the grant of the 2024 EPSP awards, the lapse of the 2019 EPSP awards and vesting of the 2021 EPSP awards (full details can be found on pages 154 and 155) and 2021
ESA, for Joanne Wilson the buy-out award which vested in March 2024 is also reflected, details can be found on page 158
5 Total beneficial interests calculated at the last practicable date for this Annual Report
6 For John Rogers, total beneficial interest is shown at 27 April 2023, the date he stepped down as a Director
WPP ANNUAL REPORT 2023
161
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
ANNUAL REPORT ON
COMPENSATION CONTINUED
SHAREHOLDING REQUIREMENTS
As detailed in the Directors’ Compensation Policy, the Executive Directors are required to achieve a minimum level of shareholding of WPP
shares. The CEO is required to hold shares to the value of 600% and the CFO and COO 300% of base salary. All Executive Directors have seven
years from the date they were appointed to their respective roles in which to reach the required level.
As at 31 December 2023, the CEO held shares to the value of 476% of his base salary. At the same date, the CFO held shares to the value of 4%
of her base salary; and the COO held shares to the value of 736% of his base salary. This was calculated based on the average share price for
the last two months of the year. The CFO joined WPP in April 2023 and no EPSP awards had vested at 31 December 2023. The COO joined
WPP in 1999 and has built up his holding of WPP shares over his career.
As set out in the Policy, the former CFO, John Rogers, is required to maintain a holding of shares equal to 300% of his base salary at the date
his employment ceased (7 November 2023) for 12 months; reducing to 150% for the year to 7 November 2025.
OUTSTANDING SHARE-BASED AWARDS
The table below shows outstanding shares as at 31 December 2023 (or date stepped down as a Director). ESAs (Executive Share Awards) are
granted under the WPP Stock Plan 2018. This is the share component of the annual short-term incentive plan and granted subject to the
achievement of performance measures prior to grant. EPSP awards (Executive Performance Share Plan) are subject to performance measures
over the period stated below. Dividend shares will accrue on these awards. Joanne Wilson received buy-out awards to compensate for the
forfeiture of incentive awards from her previous employer, see page 158 for further details.
Mark Read
Award type
ESA
EPSP
Joanne Wilson
EPSP
Contractual awards1
Andrew Scott2
John Rogers3
ESA
EPSP
ESA
EPSP
Grant date
Performance period
Share price on
grant date
No. of shares
granted
10.05.22
04.05.23
24.09.19
28.03.21
25.03.22
23.03.23
04.05.23
04.05.23
07.12.23
04.05.23
04.05.23
10.05.22
04.05.23
24.09.19
28.03.21
25.11.21
25.03.22
23.03.23
10.05.22
28.03.21
25.03.22
n/a
n/a
01.01.19–31.12.23
01.01.21–31.12.23
01.01.22–31.12.24
01.01.23–31.12.25
01.01.23–31.12.25
n/a
n/a
01.01.21–31.12.23
01.01.22–31.12.24
n/a
n/a
01.01.19–31.12.23
01.01.21–31.12.23
01.01.21–31.12.23
01.01.22–31.12.24
01.01.23–31.12.25
n/a
01.01.21–31.12.23
01.01.22–31.12.24
£9.522
£9.014
£10.035
£9.241
£10.542
£9.3608
£9.2252
£9.014
£7.272
£9.2252
£9.2252
£9.522
£9.014
£10.035
£9.241
£11.066
£10.542
£9.3608
£9.522
£9.241
£10.542
109,220
106,264
340,059
369,278
384,746
450,628
240,645
16,901
18,540
39,300
92,041
46,439
45,807
161,933
175,846
41,662
190,665
224,339
69,943
240,233
210,586
Vesting date
10.03.2024
10.03.2025
15.03.2024
15.03.2024
15.03.2025
15.03.2026
15.03.2026
02.12.2024
02.12.2025
10.03.2024
10.03.2025
10.03.2024
10.03.2025
15.03.2024
15.03.2024
15.03.2024
15.03.2025
15.03.2026
10.03.2024
15.03.2024
15.03.2025
1 For contractual awards with no performance conditions the share price on date of grant is closing share price on the immediately preceding dealing day (consistent with that used for ESA awards).
For contractual awards with performance conditions the share price at the date of grant is the average closing price for the five immediately preceding dealing days, consistent with that used for
EPSP awards
2 Andrew Scott’s outstanding ESA and EPSP awards at 31 December 2023 were granted prior to his appointment as an Executive Director and as such are subject to the terms and conditions in place
at that time
3 John Rogers' outstanding share-based awards are shown as at 27 April 2023, the date he stepped down as a Director. On cessation of his employment on 7 November 2023 his outstanding EPSP awards
lapsed. The unvested ESA award relates to the STIP deferred share element earned in the 2021 financial year and will vest on its usual vesting date in accordance with the Policy
162
WPP ANNUAL REPORT 2023
ANNUAL REPORT ON COMPENSATION
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
NON-EXECUTIVE DIRECTORS’ INTERESTS (AUDITED)
Non-Executive Directors’ interests in the Company’s ordinary share capital are shown in the following table. Except as disclosed in this table,
no Non-Executive Director had any interest in any contract of significance with the Group during the year.
Non-Executive Director
Roberto Quarta
Angela Ahrendts
Simon Dingemans
Sandrine Dufour
Tarek Farahat, retired 17 May 2023
Tom Ilube
Cindy Rose
Nicole Seligman, retired 17 May 2023
Keith Weed
Jasmine Whitbread
Dr. Ya-Qin Zhang
Total interests at
31 December 20231
87,500
12,571
10,000
15,000
3,775
8,335
8,000
8,750
8,424
8,735
10,000
Total interests at
15 March 20242
87,500
12,571
10,000
15,000
n/a
8,335
8,000
n/a
8,424
8,735
10,000
1 Or at date of retirement if retired during the year
2 Total beneficial interests calculated at the last practicable date for this Annual Report
COMPENSATION IN THE WIDER CONTEXT
When setting the Directors’ Compensation Policy and making decisions in relation to executive compensation, the Compensation Committee
considers the wider workforce and the broader compensation context. The Committee is also regularly updated on employee compensation
matters for the broader workforce and uses this to inform decisions it makes in relation to Executive Director and Executive Committee
compensation.
The Committee continues to be mindful of the challenges faced by employees as a result of increased inflation in many parts of the world, and
the resulting actions taken include making more funds available for annual salary review budgets and a focus on the importance of wider
programmes to support our people in areas such as financial education and mental wellbeing.
WPP ANNUAL REPORT 2023
163
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
ANNUAL REPORT ON
COMPENSATION CONTINUED
The table below illustrates how our compensation principles cascade through the organisation.
FIXED
Element of reward
Executive Directors
Executive Committee
Number of people
3
c.20
Senior management
& key leaders
c.1,100
Other employees
c.114,000
Base salary
Benefits
WPP aims to provide market-competitive base salaries throughout the organisation which help support the recruitment
and retention of individual employees. Salaries are generally reviewed annually.
Market-competitive levels of benefits are provided to employees typically including health and wellness programmes and life
assurance. The benefits offering within countries continues to be harmonised across WPP. Benefits vary country to country and
are informed by local market practice and requirements.
Pension
WPP operates globally and provides the opportunity to save for retirement where feasible and market appropriate.
VARIABLE – SHORT-TERM INCENTIVE PLAN (STIP)
Element of reward
Executive Directors
Executive Committee
Number of people
3
c.20
Senior management
& key leaders
c.1,100
Other employees
c.114,000
Short-term incentive
plan (STIP)
(Annual Group-wide
incentive plan designed
to reward performance
over the financial year)
The STIP arrangements in which the Executive Directors participate cascade through the organisation as set out below.
It is designed to be market-competitive and incentivise participants over the short term.
All STIP awards are subject to target and maximum amounts (generally as percentage of base salary). Amounts awarded
are discretionary and based on performance in the financial year.
Based on corporate and individual performance over the one-year performance period (financial year).
The Executive Directors’ STIP
outcomes for a financial year
are dependent on the
achievement of:
– WPP financial performance
conditions (75%); and
– Non-financial individual
strategic objectives (25%)
– 40% of any STIP award is
automatically deferred into
an ESA for two years
The Executive Committee
share the same WPP financial
performance conditions
as the Executive Directors
as well as non-financial
individual objectives.
Individual agency financial
metrics are included where
appropriate.
As for Executive Directors,
a proportion of the STIP
award (typically 40%) is
automatically deferred into
an ESA for two years.
Most individuals at these
levels are eligible to
participate in the STIP.
Different financial metrics
may apply which may be
tailored to agency or
function. The overall level
of award against target is
typically more weighted
towards individual
performance and
contribution.
At the most senior levels,
a proportion of the total STIP
award (typically 40%) will be
automatically deferred into
an ESA for two years.
Other employees may be eligible
to participate in the STIP; this
is generally dependent on their
position and level and market
practice. The overall level of
award against target is generally
based on individual performance
and contribution during the
financial year.
STIP awards made at this level
are delivered in cash.
Employees in the wider
workforce not eligible for STIP
may participate in other
discretionary local cash-based
bonus arrangements.
164
WPP ANNUAL REPORT 2023
ANNUAL REPORT ON COMPENSATION
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
VARIABLE – LONG-TERM INCENTIVE PLANS
Element of reward
Executive Directors
Executive Committee
Number of people
3
c.20
Senior management
& key leaders
c.1,100
Other employees
c.114,000
Executive Performance
Share Plan (EPSP)
(A performance-related
conditional share plan
where awards are
typically made annually
and vest subject to
performance and
employment three
years later)
Leadership Award Plan
(A conditional share
plan where awards vest
subject to continued
employment three
years following grant)
WPP Share Option Plan
(A market value share
option plan where
options may be
exercised three
years after grant
subject to continued
employment)
The EPSP in which the Executive Directors participate cascades through the organisation as set out below and is designed to
attract, retain and incentivise key senior executives over the longer term and align their interests with shareholders. A total of c.80
individuals received EPSP awards in 2023. The corporate performance conditions, performance period and performance targets
are consistent for all participants in the EPSP. Levels of award are discretionary and based on role responsibilities.
Level of vesting based on actual corporate performance against targets at the end of the three-year performance period.
Eligible for EPSP
Eligible for EPSP. For
Executive Directors, a
further two-year holding
period applies after the
vesting date.
Not eligible
Certain senior management
and key leaders are eligible
for EPSP. Typically, such
employees are not eligible to
participate in any other
discretionary share plans
operated by WPP.
To attract and retain key executives over the longer term and align their interests with shareholders. Leadership Awards are made
as set out below. During 2023 awards were made to c.1,900 executives. Levels of award are based on role responsibilities and are
discretionary. Leadership awards are granted under the WPP Stock Plan 2018 (WSP); the WSP is also used to grant the deferred
share element (ESA) of the STIP (see above), and on-hire and buy-out awards.
Ineligible
Ineligible
Certain senior management
and key leaders may be
eligible to receive Leadership
Awards under this plan if they
are not eligible for EPSP.
Certain key employees within the
wider workforce are also eligible
to receive Leadership Awards.
To provide all employees not eligible for EPSP or Leadership Awards with a risk-free opportunity to share in the success of WPP.
Options are granted under the WPP Share Option Plan 2015.
Ineligible
Ineligible
Ineligible
Most employees not eligible
to receive EPSP or Leadership
Awards are eligible for option
grants. Grants are made to all
eligible employees; typically
over 40,000 employees annually
receive an option grant. Individual
awards are over 100 or 125 shares
dependent on location. During
2023, options were granted to
c.46,500 employees.
WPP ANNUAL REPORT 2023
165
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
ANNUAL REPORT ON
COMPENSATION CONTINUED
RELATIVE IMPORTANCE OF SPEND ON PAY
The following table sets out the percentage change in total staff costs, headcount and dividends, share repurchases and buybacks.
Total staff costs (continuing operations)
Headcount – average over year
Dividends, share repurchases and buybacks
2023
£8,137.6m
114,732
£476.7m
2022
£8,165.8m
114,129
£1,228.1m
% change
(0.3)
0.5
(61.2)
ANNUAL PERCENTAGE CHANGE IN COMPENSATION OF DIRECTORS AND EMPLOYEES
The table on page 167 shows the annual change in each individual Director’s pay for 2023 compared to 2022. Since WPP plc, the statutory
entity for which this disclosure is required, does not have any employees, the table includes a voluntary disclosure of the annual average
change for employees of the UK head office.
Mark Read received a salary increase of 4% effective 1 July 2023 (see page 150 for further detail). Joanne Wilson joined the Company
on 19 April 2023 and Andrew Scott was appointed to the Board on 7 September 2023; they will both be eligible for a salary review in 2024.
The outgoing CFO, John Rogers, was not eligible for a salary review in 2023.
Directors' benefits include the gross value of taxable expenses that directly relate to attendance at Board meetings, some of which are held
in WPP key locations outside the UK. Variations in the locations of Board meetings year-to-year can lead to changes in Directors' benefit
amounts. For most Non-Executive Directors, the absolute amounts of benefits provided are relatively modest and small changes in amounts
year-to-year can lead to significant percentage change movements (see page 160 for further detail).
166
WPP ANNUAL REPORT 2023
ANNUAL REPORT ON COMPENSATION
COMPENSATION COMMITTEE REPORT CORPORATE GOVERNANCE
2022-2023
2021-2022
2020-2021
2019-2020
Base
salary/
Fees
% change
Benefits
% change
Annual
bonus
% change1
Base
salary/
Fees
% change
Benefits
% change
Annual
bonus
% change1
Base
salary/
Fees
% change
Benefits
% change
Annual
bonus
% change2
Base
salary/
Fees
% change
Benefits
% change
Annual
bonus
% change
Year-on-year change in pay
Executive Directors
Mark Read3
Joanne Wilson4
Andrew Scott4
John Rogers5
Non-Executive
Directors
Roberto Quarta
Angela Ahrendts6
Simon Dingemans6
Sandrine Dufour6
Tarek Farahat6
Tom Ilube6
Cindy Rose
Nicole Seligman6
Keith Weed
Jasmine Whitbread
Dr. Ya-Qin Zhang6
Average UK head
office employees7
(46.2)
n/a
n/a
(100.0)
Non-
Executive
Directors
do not
receive
variable
compen-
sation
4.0
n/a
n/a
(66.1)
0.0
26.2
8.2
3.6
(58.1)
0.0
(4.8)
(61.9)
0.0
0.0
2.1
11.1
n/a
n/a
(62.5)
40.6
(59.5)
33.3
(50.0)
(33.3)
100.0
80.0
(50.0)
200.0
300.0
(75.0)
(7.9)
n/a
n/a
(8.2)
Non-
Executive
Directors
do not
receive
variable
compen-
sation
4.7
n/a
n/a
3.0
0.0
8.4
n/a
12.0
0.0
1.5
1.6
5.4
9.6
0.0
9.4
(2.9)
n/a
n/a
(0.8)
(3.0)
4,100.0
n/a
–
–
40.0
(16.7)
–
(12.5)
(16.7)
–
11.3
n/a
n/a
15.1
7.1
131.2
n/a
40.1
7.1
554.5
25.6
8.7
22.2
14.5
n/a
–
n/a
n/a
–
Non-
Executive
Directors
do not
receive
variable
compen-
sation
4.0
n/a
n/a
8.1
19.6
n/a
n/a
(48.4)
(65.0)
429.6
21.5
(78.6)
40.2
21.6
n/a
(100)
n/a
n/a
n/a
Non-
Executive
Directors
do not
receive
variable
compen-
sation
(6.7)
n/a
n/a
n/a
(2.0)
n/a
n/a
n/a
(6.7)
n/a
24.1
(6.9)
447.1
218.9
n/a
0.0
n/a
n/a
n/a
(51.9)
n/a
n/a
n/a
(57.2)
n/a
113.8
47.2
820.9
1,318.1
n/a
4.0%
0%
(21.8%)
6.0%
0.0%
316.3%
2.5%
0.0%
(49.5)%
1.2%
0.0%
23.6%
1 The annual percentage change in bonus is calculated by reference to the bonus payable in respect of that financial year compared to the immediately preceding financial year for Executive Directors,
and by reference to cash bonus payments received during that financial year in comparison to those received in the immediately preceding financial year for the UK head office employees.
Non-Executive Directors do not receive variable compensation
2 As the Executives did not receive a bonus in respect of the financial year ended 31 December 2020, it is not possible to calculate a percentage change between 2020 and 2021
3 Mark Read took a voluntary 20% salary reduction for a period of four months in 2020 as part of cost-reduction targets implemented during Covid-19; this, together with a salary increase after three years,
explains the changes shown between 2020 and 2021. In both 2022 and 2023 Mark Read received an annual salary increase of 4% (see page 150)
4 Joanne Wilson and Andrew Scott were appointed to the Board on 19 April 2023 and 7 September 2023 respectively
5 John Rogers joined the Company on 27 January 2020 and ceased to be a director of the Company on 27 April 2023. His salary and benefits in 2020 and 2023 were prorated accordingly. Changes
between 2020 and 2021 were a result of a prorated salary in 2020 and a voluntary 20% salary reduction for a period of four months in 2020 as part of cost-reduction targets implemented during Covid-19.
John Rogers received no salary increase in 2023 (2022: 6.0%) (see page 150)
6 Tarek Farahat and Nicole Seligman retired from the Board on 17 May 2023. Angela Ahrendts, Sandrine Dufour, Tom Ilube, Dr. Ya-Qin Zhang and Simon Dingemans were appointed to the Board
on 1 July 2020, 3 February 2020, 5 October 2020, 1 January 2021 and 31 January 2022 respectively
7 Based on full-time equivalent comparisons. Average is calculated by reference to the median percentage change. Due to the timing of annual bonus payments, the change in average employee annual
bonus of -21.8% reflects the change between the bonus paid in respect of 2022 performance (paid in 2023) and 2021 performance (paid in 2022) and is therefore not directly comparable to Executive
Director bonus awards made in respect of 2023 performance (paid in 2024) and 2022 performance (paid in 2023)
WPP ANNUAL REPORT 2023
167
CORPORATE GOVERNANCE COMPENSATION COMMITTEE REPORT
ANNUAL REPORT ON
COMPENSATION CONTINUED
CEO PAY RATIO
The ratios shown in the table below compare the total compensation of the CEO (as shown in the single figure table on page 149) to the
compensation of the median UK employee and those at the lower and upper quartile.
Year
2023
2022
2021
2020
2019
Total compensation
Total compensation
Total compensation
Total compensation
Total compensation
Methodology used 25th percentile pay ratio 50th percentile pay ratio
70:1
Option B
108:1
Option B
Option B
Option B
Option B
154:1
101:1
36:1
79:1
118:1
79:1
24:1
55:1
75th percentile pay ratio
49:1
81:1
55:1
15:1
34:1
The pay ratio reflects how the structure and approach to compensation changes with increased seniority and accountability within the Group
and is therefore consistent with reward and progression policies. The CEO’s pay is significantly weighted towards performance-related pay
with a focus on aligning with long-term performance and the interests of shareholders. Movements in the pay ratio year-on-year reflect WPP’s
pay-for-performance philosophy and are linked to the overall performance of the Company. At the 25th, 50th and 75th percentile employee
level, variable compensation carries a much smaller weighting.
The salary and total pay and benefits for the 25th, 50th and 75th percentile employees are shown in the table below:
Year
2023
2022
2021
2020
2019
Salary
Methodology used
Option B
25th percentile pay
£39,233
50th percentile pay
£58,053
75th percentile pay
£82,667
Total pay and benefits
Salary
Total pay and benefits
Salary
Total pay and benefits
Salary
Total pay and benefits
Salary
Total pay and benefits
Option B
Option B
Option B
Option B
Option B
Option B
Option B
Option B
Option B
£41,587
£39,292
£43,417
£32,067
£37,606
£30,000
£31,800
£31,000
£32,636
£64,234
£51,985
£56,460
£44,250
£48,293
£45,000
£46,800
£44,739
£46,975
£92,627
£74,250
£82,551
£61,500
£68,583
£71,000
£73,840
£70,000
£77,416
Given the number of payrolls used across the UK Group, Option B (using the gender pay gap information to identify three employees as the
best equivalents of the 25th, 50th and 75th percentile employees) was the most appropriate methodology to use to determine the CEO pay
ratio. We believe this approach provides accurate information and representation of the ratios. The latest data collected as part of gender pay
reporting was used, with a snapshot date of 5 April 2023. The ratio has been computed taking into account the pay and benefits of over 11,500
UK employees, other than the role of the CEO. Where an employee works part-time, fixed pay, benefits, and any variable pay were adjusted,
where appropriate, to reflect full-time equivalent compensation. The 25th, 50th and 75th percentile employees were determined based on this
adjusted data and are considered to be representative. Total compensation for 2023 was calculated using single-figure table methodology for
these employees in order to provide a meaningful comparison with the CEO. We are satisfied that the median pay ratio is consistent with the
compensation policies for our UK workforce taken as a whole and our objective of delivering market-competitive pay for each role.
SHARE INCENTIVE DILUTION FOR 2014 TO 2023
The share incentive dilution level, measured on a ten-year rolling basis, was at 3.6% at 31 December 2023 (2022: 3.2%). It is intended that
awards under all plans, other than share options, will all be satisfied with purchased shares held either in the ESOPs or in treasury.
Jasmine Whitbread
Chair of the Compensation Committee
on behalf of the Board of Directors of WPP plc
21 March 2024
168
WPP ANNUAL REPORT 2023
CORPORATE GOVERNANCE
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT
OF THE PREPARATION OF FINANCIAL STATEMENTS
The Directors are responsible for preparing the financial statements
in accordance with applicable law and regulations. The Directors
have elected to prepare financial statements for the Group in
accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board
(IASB) as they apply to the financial statements of the Group for the
year ended 31 December 2023. Under company law the Directors
must not approve the accounts unless they are satisfied that they
give a true and fair view of the state of affairs of the Company and
of the profit or loss of the Company for that period.
International Accounting Standard 1 requires that financial statements
present fairly for each financial year the Company’s financial position,
financial performance and cash flows. This requires the faithful
representation of the effects of transactions, other events and
conditions in accordance with the definitions and recognition criteria
for assets, liabilities, income and expenses set out in the International
Accounting Standards Board’s ‘Framework for the Preparation and
Presentation of Financial Statements’.
In virtually all circumstances, a fair presentation will be achieved by
compliance with all applicable IFRS. Directors are also required to:
– Properly select and apply accounting policies
– Present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information
– Provide additional disclosures, when compliance with the specific
requirements in IFRS is insufficient to enable users to understand
the impact of particular transactions, other events and conditions
on the entity’s financial position and financial performance
– Make an assessment of the Company’s ability to continue as
a going concern
The Directors are responsible for keeping proper accounting records,
which disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial
statements comply with the Companies (Jersey) Law 1991. They are
also responsible for safeguarding the assets, for taking reasonable
steps for the prevention and detection of fraud and other
irregularities and for the preparation of a Directors’ report and
Directors’ Compensation Report.
The Directors are responsible for the maintenance and integrity of
the Company website. Jersey legislation and UK regulation governing
the preparation and dissemination of financial statements differs from
legislation in other jurisdictions.
The Directors confirm that so far as they are aware, there is no
relevant audit information of which the Company’s auditors are
unaware. Each Director has taken all the steps that he or she ought
to have taken, as a Director, in order to make himself or herself aware
of any relevant audit information and to establish that the Company’s
auditors are aware of that information.
In accordance with the principles of the UK Corporate Governance
Code, the Board has established arrangements to evaluate whether
the information presented in the Annual Report is fair, balanced and
understandable; these are described on page 132.
The Board considers the Annual Report and financial statements,
taken as a whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess the Company’s
position, performance, business model and strategy.
The letters from the Chairs of the Sustainability, Nomination and
Governance, Audit and Compensation committees, the statements
regarding Directors’ responsibilities and statement of going
concern set out above and the Directors’ remuneration and interests
in the share capital of the Company are included in the Directors’
report, which also includes the Strategic Report and Corporate
Governance sections.
By Order of the Board
Balbir Kelly-Bisla
Company Secretary
21 March 2024
WPP ANNUAL REPORT 2023
169
FINANCIAL
STATEMENTS
In this section
Accounting policies
Consolidated financial statements
172
178
Notes to the consolidated financial statements 183
Independent auditor’s report
Reconciliation to non-GAAP
measures of performance
215
223
170
WPP ANNUAL REPORT 2023
FINANCIAL STATEMENTS
WPP ANNUAL REPORT 2023
171
FINANCIAL STATEMENTS
ACCOUNTING POLICIES
The consolidated financial statements of WPP plc and its subsidiaries
(the Group) for the year ended 31 December 2023 have been prepared in
accordance with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB) as they apply to the
financial statements of the Group for the year ended 31 December 2023.
The separate financial statements of WPP plc (the Company), a company
registered in Jersey, for the year ending 31 December 2023 are filed with the
Company’s registrar in Jersey.
BASIS OF PREPARATION
The Group consolidated financial statements have been prepared on a going
concern basis, under the historical cost convention, except for the revaluation
of certain financial instruments. In performing its going concern assessment,
management's forecasts and projections, taking account of (i) reasonably
possible declines in revenue less pass-through costs and (ii) remotely possible
declines in revenue less pass-through costs for stress-testing purposes
compared to 2023, considering the Group’s liquidity headroom taking into
account the suspension of share buybacks, dividends and acquisitions, and
cost-mitigation actions which could be implemented, show that the Company
and the Group would be able to operate with appropriate liquidity and be
able to meet its liabilities as they fall due, considering that the Group was in a
£2.3 billion net current liability position as at 31 December 2023. The Company
modelled a range of revenue less pass-through cost declines up to 31%
compared with the year ended 31 December 2023. The Directors therefore
have a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the foreseeable
future. Thus, they continue to adopt the going concern basis of accounting
in preparing the financial statements.
The principal accounting policies are set out below.
BASIS OF CONSOLIDATION
The consolidated financial statements include the results of the Company
and all its subsidiary undertakings made up to the same accounting date.
All intra-Group balances, transactions, income and expenses are eliminated
in full on consolidation. Subsidiary undertakings are those entities controlled
by the Group. Control exists where the Group is exposed to, or has the rights
to variable returns from its involvement with, the investee and has the ability
to use its power over the investee to affect its returns. The results of subsidiary
undertakings acquired or disposed of during the period are included or
excluded from the consolidated income statement from the effective date
of acquisition or disposal. Non-controlling interests represent the share of
earnings or equity in subsidiaries that is not attributable, directly or indirectly,
to shareholders of the Group.
NEW IFRS ACCOUNTING PRONOUNCEMENTS
The Group has applied the following standards and amendments for the first
time for their annual reporting period commencing on or after 1 January 2023:
– IFRS 17 Insurance Contracts
– Definition of Accounting Estimates – Amendments to IAS 8
– Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice
Statement 2
– Deferred Tax related to Assets and Liabilities arising from a Single
Transaction – Amendments to IAS 12
– International Tax Reform – Pillar Two Model Rules – Amendments to IAS 12
The standards and amendments listed above did not have any impact on
the amounts recognised in prior periods, did not have a significant impact
on the amounts recognised in the current period, and are not expected to
significantly affect the future periods.
At the date of authorisation of these financial statements, there were a
number of standards or amendments to standards, which have not been
applied in these financial statements, that were in issue but not yet effective.
The Group does not consider that any of these standards or amendments to
standards in issue but not yet effective will have a significant impact on the
financial statements.
172
WPP ANNUAL REPORT 2023
GOODWILL AND OTHER INTANGIBLE ASSETS
Intangible assets comprise goodwill, certain acquired separable corporate
brand names, acquired customer relationships, acquired proprietary tools
and capitalised computer software not integral to a related item of hardware.
Goodwill represents the excess of fair value attributed to investments in
businesses over the fair value of the underlying net assets where relevant,
including intangible assets, at the date of their acquisition.
Goodwill impairment reviews are undertaken annually or more frequently
if events or changes in circumstances indicate a potential impairment.
The carrying value of goodwill is compared to the recoverable amount,
defined as the higher of fair value less costs of disposal and value in use.
The net present value of future cash flows, to determine value in use, is
derived from the underlying assets using a projection period of up to five
years for each cash-generating unit. After the projection period, a steady
growth rate representing an appropriate long-term growth rate for the
industry is applied. Any goodwill impairment is recognised immediately
as an expense and is not subsequently reversed.
Corporate brand names, customer relationships and proprietary tools
acquired as part of acquisitions of businesses are capitalised separately from
goodwill as intangible assets if their value can be measured reliably on initial
recognition and it is probable that the expected future economic benefits
that are attributable to the asset will flow to the Group.
Certain corporate brands of the Group are considered to have an indefinite
economic life because of the institutional nature of the corporate brand
names, their proven ability to maintain market leadership and profitable
operations over long periods of time and the Group’s commitment to develop
and enhance their value. The carrying value of these intangible assets is
reviewed at least annually for impairment and adjusted to the recoverable
amount if required.
Amortisation is provided at rates calculated to write off the cost less estimated
residual value of each asset on a straight-line basis over its estimated useful life
as follows:
– brand names (with finite lives) – 10-20 years
– customer-related intangibles – 3-10 years
– other proprietary tools – 3-10 years
– other (including capitalised computer software) – 3-5 years
CONTINGENT CONSIDERATION
Contingent consideration is accounted for in accordance with IFRS 3 Business
Combinations. Contingent consideration only applies to situations where
contingent payments are not dependent on future employment of vendors
and any such payments are expensed when they relate to future employment.
Future anticipated payments to vendors in respect of contingent consideration
(earnout agreements) are initially recorded at fair value which is the present
value of the expected cash outflows of the obligations. The obligations are
dependent on the future financial performance of the interests acquired
(typically over a four- to five-year period following the year of acquisition)
and assume the operating companies improve profits in line with Directors’
estimates. The Directors derive their estimates from internal business plans
together with financial due diligence performed in connection with
the acquisition.
Subsequent adjustments to the fair value are recorded in the consolidated
income statement within revaluation and retranslation of financial instruments.
The effect of any revisions to fair value adjustments that had been determined
provisionally at the immediately preceding balance sheet date are accounted
for as revisions to goodwill, as permitted by IFRS 3 Business Combinations.
ACCOUNTING POLICIES
FINANCIAL STATEMENTS
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are shown at cost less accumulated
depreciation and any provision for impairment with the exception of freehold
land which is not depreciated. The Group assesses the carrying value of its
property, plant and equipment to determine if any impairment indicators exist.
Where this indicates that an asset may be impaired, the Group applies the
requirements of IAS 36 Impairment of Assets in assessing the carrying amount
of the asset. This process includes comparing its recoverable amount with its
carrying value, where the recoverable amount is the higher of an asset's fair
value less costs of disposal and value in use. Property, plant and equipment
impairment charges also form part of the property-related restructuring costs
described in note 3; and are derived applying the method described in the
Leases accounting policy. Depreciation is provided at rates calculated to write
off the cost less estimated residual value of each asset on a straight-line basis
over its estimated useful life, as follows:
– freehold buildings – 50 years
– leasehold land and buildings – over the term of the lease or life of the asset,
if shorter
– fixtures, fittings and equipment – 3-10 years
– computer equipment – 3-5 years
INTERESTS IN ASSOCIATES AND JOINT VENTURES
An associate is an entity over which the Group has significant influence. In
certain circumstances, significant influence may be represented by factors
other than ownership and voting rights, such as representation on the Board
of Directors.
The Group’s share of the profits less losses of associate undertakings net
of tax, interest and non-controlling interests is included in the consolidated
income statement and the Group’s share of net assets is shown within interests
in associates and joint ventures in the consolidated balance sheet. The Group’s
share of the profits less losses and net assets is based on current information
produced by the undertakings, adjusted to conform with the accounting
policies of the Group. The Group discontinues recognising its share of net
assets or its share of net results from an associate if the value of the investment
has reduced to nil. Any additional losses are provided for, and a liability is
recognised, only to the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of the associate. If the associate
subsequently reports a positive equity, the Group resumes recognising its
share of net assets, net result and other comprehensive income.
The Group assesses the carrying value of its associate undertakings to
determine if any impairment has occurred. Where this indicates that an
investment may be impaired, the Group applies the requirements of IAS 36
in assessing the carrying amount of the investment. This process includes
comparing its recoverable amount with its carrying value. The recoverable
amount is defined as the higher of fair value less costs of disposal and value
in use.
ACCRUED AND DEFERRED INCOME
Accrued income is a receivable within the scope of IFRS 9 Financial
Instruments, and is recognised when a performance obligation has been
satisfied but has not yet been billed. Accrued income is transferred to trade
receivables once the right to consideration is billed per the terms of the
contractual agreement.
In certain cases, payments are received from customers or amounts are billed
with an unconditional right to receive consideration prior to satisfaction of
performance obligations and recognised as deferred income. These balances
are considered contract liabilities and are typically related to prepayments for
third-party expenses that are incurred shortly after billing.
TRADE RECEIVABLES AND UNBILLED COSTS
Trade receivables are stated net of expected credit loss.
Unbilled costs (previously named Work in progress) includes outlays incurred
on behalf of clients, including production costs, and other third-party costs
that have not yet been billed and are considered receivables under IFRS 15
Revenue from Contracts with Customers.
EXPECTED CREDIT LOSSES
The Group has applied the simplified approach to measuring expected credit
losses, as permitted by IFRS 9 Financial Instruments. This has been applied to
trade receivables, contract assets and lease receivables. Under this approach,
the Group utilises a provision matrix based on the age of the trade receivables
and historical loss rates to determine the expected credit losses. The Group
also considers forward-looking information. Therefore, the Group does not
track changes in credit risk, but recognises a loss allowance based on the
financial asset's lifetime expected credit loss. For all other assets, the general
approach has been applied and a loss allowance for 12-month expected credit
losses is recognised.
Under IFRS 9, the expected credit losses are measured as the difference
between the asset’s gross carrying amount and the present value of estimated
future cash flows discounted at the financial asset’s original effective interest
rate. Given the short-term nature of the Group’s trade receivables, unbilled
costs and accrued income, which are mainly due from large national or
multinational companies, the Group's assessment of expected credit losses
includes provisions for specific clients and receivables where the contractual
cash flow is deemed at risk.
The Group considers that the credit risk increased significantly since
initial recognition when the credit rating changes adversely, the debtor
has significant financial difficulty or if there was a breach of contract.
Financial assets are written off when there is evidence indicating that the
debtor is in severe financial difficulty and the Group has no realistic prospect
of recovery. Receivables written off are still subject to enforcement activity
and pursued by the Group.
The Group accounts for joint venture investments under the equity method
which is consistent with the Group’s treatment of associates.
Further details on expected credit losses are provided in note 17.
OTHER INVESTMENTS
Certain equity investments are designated as either fair value through other
comprehensive income or fair value through profit or loss. Movements in fair
value through profit or loss are recorded in the consolidated income
statement within revaluation and retranslation of financial instruments.
The Group generally elects to classify equity investments as fair value through
other comprehensive income where the Group forms a strategic partnership
with the investee.
WPP ANNUAL REPORT 2023
173
FINANCIAL STATEMENTS ACCOUNTING POLICIES
FOREIGN CURRENCY AND INTEREST RATE HEDGING
The Group’s policy on interest rate and foreign exchange rate management
sets out the instruments and methods available to hedge interest and currency
risk exposures and the control procedures in place to ensure effectiveness.
DERECOGNITION OF FINANCIAL LIABILITIES
In accordance with IFRS 9 Financial Instruments, a financial liability of the
Group is only removed from the statement of financial position when the
underlying legal obligation is extinguished.
The Group uses derivative financial instruments to reduce exposure to foreign
exchange risk and interest rate movements. The Group does not hold or issue
derivative financial instruments for speculative purposes.
DEBT
Interest-bearing debt is recorded at the proceeds received, net of direct
issue costs.
Derivatives are initially recognised at fair value at the date a derivative
contract is entered into and are subsequently remeasured to their fair value
at each balance sheet date. The resulting gain or loss is recognised in profit or
loss immediately unless the derivative is designated and effective as a hedging
instrument, in which event the timing of the recognition in profit or loss
depends on the nature of the hedge relationship.
At inception of the hedge relationship, the Group documents the relationship
between hedging instruments and hedged items, including whether changes
in the cash flows of the hedging instruments are expected to offset changes
in the fair values or cash flows of hedged items. Furthermore the Group
documents its risk management objectives and its strategy for undertaking
various hedge transactions.
Note 25 contains details of the fair values of the derivative instruments used
for hedging purposes.
Changes in the fair value of derivatives that are designated and qualify as fair
value hedges are recorded in profit or loss immediately, together with any
changes in the fair value of the hedged items that are attributable to the
hedged risk.
The effective portion of changes in the fair value of derivatives that are
designated and qualify as cash flow or net investment hedges is recognised
in other comprehensive income and deferred in equity. The gain or loss
relating to the ineffective portion is recognised immediately in profit or loss.
Amounts deferred in equity are recycled in profit or loss in the periods when
the hedged item is recognised in profit or loss. However, when the forecast
transaction that is hedged results in the recognition of a non-financial asset or
a non-financial liability, the gains and losses previously deferred in equity are
transferred from equity and included in the initial measurement of the cost of
the asset or liability.
Hedge accounting is discontinued when the hedging instrument expires or
is sold, terminated, exercised, or no longer qualifies for hedge accounting.
At that time, any cumulative gain or loss on the hedging instrument recognised
in equity is retained in equity until the forecast transaction occurs. If a hedged
transaction is no longer expected to occur, the net cumulative gain or loss
recognised in equity is transferred to profit or loss for the period.
Derivatives embedded in other financial liabilities or other host contracts
are treated as separate derivatives when their risks and characteristics are
not closely related to those of host contracts and the host contracts are not
carried at fair value with unrealised gains or losses reported in the
consolidated income statement.
LIABILITIES IN RESPECT OF OPTION AGREEMENTS
Option agreements that allow the Group’s equity partners to require the
Group to purchase a non-controlling interest are recorded in the consolidated
balance sheet initially at the present value of the redemption amount in
accordance with IAS 32 Financial Instruments: Presentation and subsequently,
the financial liability is measured at amortised cost in accordance with IFRS 9
Financial Instruments. On initial recognition, the corresponding amount is
recognised against the equity reserve, which is subsequently reversed on
derecognition, either through exercise or non-exercise of the option agreement.
Changes in the measurement of the financial liability due to the unwinding of
the discount or changes in the amount that the Group could be required to
pay are recognised in profit or loss within revaluation and retranslation of
financial instruments in the consolidated income statement.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash at bank and in hand and short-term
highly liquid investments which are readily convertible to known amounts of
cash and are subject to insignificant risk of changes in value, including bank
deposits and money market funds. For Cash Flow Statement presentation
purposes, the Group's overdrafts are included in cash and cash equivalents
where they are repayable on demand, are components of the Group's
centralised treasury strategy employed across the Group and form an integral
part of the Group's cash management, in accordance with IAS 7 Statement
of Cash Flows.
BORROWING COSTS
Finance costs of borrowing are recognised in the consolidated income
statement over the term of those borrowings.
REVENUE RECOGNITION
The Group is a leading worldwide creative transformation organisation
offering national and multinational clients a comprehensive range of
communications, experience, commerce and technology services. Contracts
often involve multiple agencies offering different services in different
countries. As such, the terms of local, regional and global contracts can
vary to meet client needs and regulatory requirements. Consistent with
the industry, contracts are typically short-term in nature and tend to be
cancellable by either party with 90 days' notice. The Group is generally
entitled to payment for work performed to date.
The Group is generally paid in arrears for its services. Invoices are typically
payable within 30 to 60 days. Revenue comprises commissions and fees
earned in respect of amounts billed and is stated exclusive of VAT, sales
taxes and trade discounts. Pass-through costs comprise fees paid to external
suppliers when they are engaged to perform part or all of a specific project
and are charged directly to clients. This includes media costs where the Group
is buying digital media for its own account on a transparent opt-in basis and,
as a result, the subsequent media pass-through costs are recorded as Group
revenue. As the contracts are generally short-term in nature, the Group has
applied the practical expedient permitted by IFRS 15 to expense costs to
obtain a contract as incurred, where applicable.
In most instances, promised services in a contract are not considered distinct
or represent a series of services that are substantially the same with the same
pattern of transfer to the customer and, as such, are accounted for as a single
performance obligation. However, where there are contracts with services
that are capable of being distinct, are distinct within the context of the contract,
and are accounted for as separate performance obligations, revenue is
allocated to each of the performance obligations based on relative stand-alone
selling prices.
Revenue is recognised when a performance obligation is satisfied in
accordance with the terms of the contractual arrangement. Typically,
performance obligations are satisfied over time as services are rendered.
Revenue recognised over time is based on the proportion of the level of
service performed. Either an input method or an output method, depending
on the particular arrangement, is used to measure progress for each
performance obligation. For most fee arrangements, costs incurred are
used as an objective input measure of performance. The primary input of
substantially all work performed under these arrangements is labour. There
is normally a direct relationship between costs incurred and the proportion
of the contract performed to date. In other circumstances relevant output
measures, such as the achievement of any project milestones stipulated
in the contract, are used to assess proportional performance.
174
WPP ANNUAL REPORT 2023
ACCOUNTING POLICIES
FINANCIAL STATEMENTS
REVENUE RECOGNITION CONTINUED
For our retainer arrangements, we have a stand-ready obligation to perform
services on an ongoing basis over the life of the contract. The scope of these
arrangements is broad and generally not reconcilable to another input or
output criteria. In these instances, revenue is recognised using a time-based
method resulting in straight-line revenue recognition.
The amount of revenue recognised depends on whether we act as an
agent or as a principal. Certain arrangements with our clients are such that
our responsibility is to arrange for a third party to provide a specified good
or service to the client. In these cases we are acting as an agent as we do
not control the relevant good or service before it is transferred to the client.
When we act as an agent, the revenue recorded is the net amount retained.
Costs incurred with external suppliers (such as production costs and media
suppliers) are excluded from revenue and recorded as unbilled costs
until billed.
The Group acts as principal when we control the specified good or service
prior to transfer. When the Group acts as a principal (such as when supplying
in-house production services, events and branding), the revenue recorded is
the gross amount billed. Billings related to out-of-pocket costs such as travel
are also recognised at the gross amount billed with a corresponding amount
recorded as an expense.
Further details on revenue recognition are detailed by sector below.
GLOBAL INTEGRATED AGENCIES
Revenue is typically derived from integrated product offerings including
media placements and creative services. Revenue may consist of various
arrangements involving commissions, fees, incentive-based revenue or a
combination of the three, as agreed upon with each client. Revenue for
commissions on purchased media is typically recognised at the point in
time the media is run.
The Group receives volume rebates from certain suppliers for transactions
entered into on behalf of clients that, based on the terms of the relevant
contracts and local law, are either remitted to clients or retained by the Group.
If amounts are passed on to clients they are recorded as liabilities until settled
or, if retained by the Group, are recorded as revenue when earned.
Variable incentive-based revenue typically comprises both quantitative and
qualitative elements. Incentive compensation is estimated using the most
likely amount and is included in revenue up to the amount that is highly
probable not to result in a significant reversal of cumulative revenue
recognised once the related uncertainty is resolved. The Group recognises
incentive revenue as the related performance obligation or obligations are
satisfied depending on the specific contractual terms.
PUBLIC RELATIONS AND SPECIALIST AGENCIES
Revenue for these services is typically derived from retainer fees and fees for
services to be performed subject to specific agreement. Most revenue under
these arrangements is earned over time, in accordance with the terms of the
contractual arrangement.
TAXATION
Corporate taxes are payable on taxable profits at current rates. The tax
expense represents the sum of the tax currently payable and deferred tax.
The Group is subject to corporate taxes in a number of different jurisdictions
and judgement is required in determining the appropriate provision for
transactions where the ultimate tax determination is uncertain. In such
circumstances, the Group recognises liabilities for anticipated taxes based
on the best information available and where the anticipated liability is both
probable and able to be estimated, liabilities are classified as current. Any
interest and penalties accrued are included in corporate income taxes both
in the consolidated income statement and balance sheet. Where the final
outcome of such matters differs from the amount recorded, any differences
may impact the income tax and deferred tax provisions in the period in which
the final determination is made.
The tax laws that apply to the Group’s subsidiaries may be amended by the
relevant tax authorities. Such potential amendments are regularly monitored
and adjustments are made to the Group’s tax liabilities and deferred tax assets
and liabilities where necessary.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the consolidated income statement
because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or deductible.
The Group’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of
taxable profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are recognised for all taxable temporary differences
unless specifically excepted by IAS 12 Income Taxes. Deferred tax is charged
or credited in the consolidated income statement, except when it relates to
items charged or credited to other comprehensive income or directly to
equity, in which case the deferred tax is also recognised within other
comprehensive income or equity. Deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised, which can require the use
of accounting estimation and the exercise of judgement. Such assets and
liabilities are not recognised if the temporary difference arises from the initial
recognition of goodwill or other assets and liabilities (other than in a business
combination) in a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset to
be recovered.
Deferred tax liabilities are recognised for taxable temporary differences arising
on investments in subsidiaries and associates, and interests in joint ventures,
except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable
right to set off current tax assets against current tax liabilities and when they
relate to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised based on enacted
or substantively enacted legislation.
WPP ANNUAL REPORT 2023
175
FINANCIAL STATEMENTS ACCOUNTING POLICIES
RETIREMENT BENEFIT COSTS
The Group accounts for retirement benefit costs in accordance with IAS 19
Employee Benefits.
LEASES
The Group leases most of its offices in cities where it operates. Other lease
contracts include office equipment and motor vehicles.
For defined contribution plans, contributions are charged to the consolidated
income statement as payable in respect of the accounting period.
For defined benefit plans the amounts charged to operating profit are the
current service costs, past service costs, administrative expenses and gains
and losses on settlements and curtailments. They are included as part of
staff costs. Past service costs are recognised immediately in the consolidated
income statement when the related plan amendment occurs. Net interest
expense is calculated by applying the discount rate to the recognised overall
surplus or deficit in the plan.
Actuarial gains and losses are recognised immediately in other
comprehensive income.
At inception of a contract, the Group assesses whether a contract is, or
contains, a lease based on whether the contract conveys the right to
control the use of an identified asset for a period of time in exchange
for consideration.
The Group recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured based on
the initial amount of the lease liability adjusted for any lease payments made
at or before the commencement date, plus any initial direct costs incurred,
less any lease incentives received. The assets are depreciated over the term
of the lease using the straight-line method. The lease term includes periods
covered by an option to extend if the Group is reasonably certain to exercise
that option.
Where defined benefit plans are funded, the assets of the plan are held
separately from those of the Group, in separate independently managed
funds. Pension plan assets are measured at fair value and liabilities are
measured on an actuarial basis using the projected unit method and
discounted at a rate equivalent to the current rate of return on a high-quality
corporate bond of equivalent currency and term to the plan liabilities. The
actuarial valuations are obtained at least triennially and are updated at each
balance sheet date.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined,
the Group’s incremental borrowing rate for the same term as the underlying
lease. Lease payments included in the measurement of lease liabilities
comprise fixed payments less any lease incentives receivable and variable
lease payments that depend on an index or a rate as at the commencement
date. Lease modifications result in remeasurement of the lease liability.
Recognition of a surplus in a defined benefit plan is limited based on the
economic gain the Group is expected to benefit from in the future by means
of a refund or reduction in future contributions to the plan, in accordance
with IAS 19.
PROVISIONS FOR LIABILITIES AND CHARGES
Provisions comprise liabilities where there is uncertainty about the timing of
settlement, but where a reliable estimate can be made of the amount using
either the most likely or expected value, depending on which method best
estimates the uncertainty. These include provisions for other property-related
liabilities such as onerous contracts and dilapidations. The timing of utilisation
or release of such provisions are typically dependent on the term of the
underlying lease. The eventual settling of such property-related provisions
will be dependent on negotiations with the relevant landlord. Also included
are other provisions, primarily long-term employee benefits such as deferred
compensation plans, and legal claims, where the likelihood of settlement is
considered probable. The timing of release and utilisation of the deferred
compensation plans are dependent on applicable plan rules while the timing
of settlement of legal claims are dependent on the status of any relevant legal
proceedings. While we have factored in all known facts and circumstances,
it is likely certain legal settlements will vary from the provisioned amount.
CONTINGENT LIABILITIES
Contingent liabilities are possible obligations whose existence will only be
confirmed by future events not wholly within the control of the group, or
present obligations where it is not probable that an outflow of resources will
be required or the amount of the obligation cannot be measured with
sufficient reliability. Contingent liabilities are not recognised in the
consolidated financial statements but are disclosed, if material, unless the
possibility of an outflow of economic resources is considered remote.
Depreciation is recognised in both costs of services and general and
administrative costs and interest expense is recognised under finance costs
in the consolidated income statement.
The Group has elected to use the exemption not to recognise right-of-use
assets and lease liabilities for short-term leases that have a lease term of 12
months or less and leases of low-value assets (under $5,000). The payments
associated with these leases are recognised as cost of services and general
and administrative costs within the consolidated income statement on a
straight-line basis over the lease term.
The Group assesses at the reporting date whether there are any indicators of
impairment and performs an impairment test when an impairment indicator
exists. The Group tests a right-of use asset as a stand-alone asset for
impairment when it either meets the definition of investment property which
generates independent cash flows or it is vacant with minimal to no continued
utility for the Group. When a right-of-use asset is tested as a stand-alone asset,
an impairment loss is recognised when the carrying amount of the right-of-use
asset exceeds its recoverable amount. The recoverable amount of a right-of-
use asset is estimated mainly based on the present value of the estimated
sublease income, discounted using the property yield rates.
The property held by the Group as right-of-use assets to earn rentals is
classified as investment property. The Group measures its investment
property applying the cost model.
176
WPP ANNUAL REPORT 2023
ACCOUNTING POLICIES
FINANCIAL STATEMENTS
TRANSLATION OF FOREIGN CURRENCIES
Foreign currency transactions arising from normal trading activities are
recorded at the rates in effect at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies at the year-end are translated
at the year-end exchange rate. Foreign currency gains and losses are credited
or charged to the consolidated income statement as they arise.
The income statements of foreign subsidiary undertakings, with functional
currencies other than pounds sterling, are translated into pounds sterling at
average exchange rates and the year-end net assets of these companies are
translated at year-end exchange rates.
Exchange differences arising from retranslation of the opening net assets and
on foreign currency borrowings (to the extent that they hedge the Group’s
investment in such operations) are reported in the consolidated statement
of comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and translated
at the closing rate.
HYPERINFLATION IN ARGENTINA AND TURKEY
During 2023, 2022 and 2021, Argentina was designated as a hyperinflationary
economy. During 2023 and 2022, Turkey was designated as a hyperinflationary
economy. The financial statements of the Group’s subsidiaries in Argentina and
Turkey have been adjusted for the effects of inflation in accordance with IAS 29
Financial Reporting in Hyperinflationary Economies.
IAS 29 requires that the income statement is adjusted for inflation in the period
and translated at the year-end foreign exchange rate and that non-monetary
assets and liabilities on the balance sheet are restated to reflect the change
in purchasing power caused by inflation from the date of initial recognition.
The impact on other non-monetary assets and liabilities and the impact on
the Group’s income statement in the year were immaterial.
SHARE-BASED PAYMENTS
The Group issues equity-settled share-based payments (including share
options) to certain employees and accounts for these awards in accordance
with IFRS 2 Share-based Payment. Equity-settled share-based payments are
measured at fair value (excluding the effect of non-market-based vesting
conditions) at the date of grant. Details regarding the fair value of equity
settled share-based transactions are set out in note 22.
The fair value determined at the grant date is recognised in the consolidated
income statement as an expense on a straight-line basis over the relevant
vesting period, based on the Group’s estimate of the number of shares
that will ultimately vest and adjusted for the effect of non-market-based
vesting conditions.
GOVERNMENT SUPPORT
In reaction to the Covid-19 pandemic, certain governments introduced
measures to assist companies. A reduction to operating costs is recorded in
relation to government subsidies/schemes where these amounts will never
have to be repaid. In other cases, this involves the deferral of certain tax
payments in order to stimulate the economy. The deferral of payments does
not impact the income statement and these are charged as normal in the
period they are incurred.
NON-CONTROLLING INTERESTS
Non-controlling interests in acquired companies are measured at the
non-controlling interests’ proportionate share of the acquiree’s identifiable net
assets. The acquisition of a non-controlling interest in a subsidiary, and the sale
of an interest while retaining control, is accounted for within equity, and the
cash cost of such purchases is included within 'Financing activities' in the cash
flow statement.
CLIMATE CHANGE CONSIDERATIONS
In preparing these consolidated financial statements, the potential impacts
of climate change risks, particularly in the context of the TCFD Statement on
pages 62-68 and the Strategic Report on pages 53-71, have been considered.
This primarily focused on the impairment assessments for goodwill and
intangible assets with indefinite useful lives; the carrying value and estimated
useful life of intangible assets, property, plant and equipment and right-of-use
assets; the measurement of deferred tax assets and provisions, including
post-employment benefits; and the going concern period and viability of
the Group over the next three years. There has been no material impact on
the financial statements for the years ending 31 December 2023 and 2022.
The potential implications of climate change risks on the financial statements
will continue to be monitored and assessed in future periods.
CRITICAL JUDGEMENTS AND ESTIMATION UNCERTAINTY
IN APPLYING ACCOUNTING POLICIES
Management is required to make key decisions and judgements whilst
acknowledging there is estimation uncertainty in the process of applying the
Group’s accounting policies. These estimates and judgements are reviewed
on an ongoing basis. Where judgement has been applied or estimation
uncertainty exists, the key factors taken into consideration are disclosed in
the accounting policies and the appropriate note in these financial statements.
The most significant area of estimation uncertainty is:
– Goodwill: the discounted cash flow methodology applied by the Group
when testing for goodwill impairment requires key estimates regarding
operating margins and discount rates. Further details of the methodology
and key estimates used in relation to the goodwill impairment assessment,
and the approach to sensitivities to these estimates, are set out in note 13.
WPP ANNUAL REPORT 2023
177
FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Revenue
Costs of services
Gross profit
General and administrative costs
Operating profit
Earnings/(loss) from associates – after interest and tax
Profit before interest and taxation
Finance and investment income
Finance costs
Revaluation and retranslation of financial instruments
Profit before taxation
Taxation
Profit for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Earnings per share:
Basic earnings per ordinary share
Diluted earnings per ordinary share
Note
The accompanying notes form an integral part of this consolidated income statement
Notes
2
3
3
4
6
6
6
7
9
9
2023
£m
14,844.8
(12,325.8)
2,519.0
(1,988.0)
531.0
70.2
601.2
127.3
(389.0)
6.8
346.3
(149.1)
197.2
2022
£m
14,428.7
(11,890.1)
2,538.6
(1,180.4)
1,358.2
(60.4)
1,297.8
145.4
(359.4)
76.0
1,159.8
(384.4)
775.4
2021
£m
12,801.1
(10,597.5)
2,203.6
(974.6)
1,229.0
23.8
1,252.8
69.4
(283.6)
(87.8)
950.8
(230.1)
720.7
110.4
86.8
197.2
682.7
92.7
775.4
637.7
83.0
720.7
10.3p
10.1p
62.2p
61.2p
53.4p
52.5p
178
WPP ANNUAL REPORT 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Profit for the year
Items that may be reclassified subsequently to profit or loss
Foreign exchange differences on translation of foreign operations
Gain/(loss) on net investment hedges
Cash flow hedges:
Fair value (loss)/gain arising on hedging instruments
Less: gain/(loss) reclassified to profit or loss
Share of other comprehensive (loss)/income of associate undertakings
Items that will not be reclassified subsequently to profit or loss
Movements on equity investments held at fair value through other comprehensive income
Actuarial (loss)/gain on defined benefit pension plans
Deferred tax on defined benefit pension plans
Other comprehensive (loss)/income for the year
Total comprehensive (loss)/income for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Note
The accompanying notes form an integral part of this consolidated statement of comprehensive income
2023
£m
197.2
(427.1)
108.2
(43.3)
44.2
(0.9)
(318.9)
(3.0)
(9.1)
1.7
(10.4)
(329.3)
(132.1)
2022
£m
775.4
424.2
(141.5)
38.5
(38.5)
51.2
333.9
(22.3)
16.6
(7.4)
(13.1)
320.8
1,096.2
(195.8)
63.7
(132.1)
988.3
107.9
1,096.2
2021
£m
720.7
(143.0)
45.5
(38.0)
38.0
13.5
(84.0)
(35.5)
14.3
(3.0)
(24.2)
(108.2)
612.5
539.8
72.7
612.5
WPP ANNUAL REPORT 2023
179
FINANCIAL STATEMENTS
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
Net cash inflow from operating activities1
Investing activities
Acquisitions1
Disposal of investments and subsidiaries
Purchases of property, plant and equipment
Purchases of other intangible assets (including capitalised computer software)
Proceeds on disposal of property, plant and equipment
Net cash outflow from investing activities
Financing activities
Repayment of lease liabilities
Share option proceeds
Cash consideration received from non-controlling interests
Cash consideration for purchase of non-controlling interests
Share repurchases and buybacks
Proceeds from issue of bonds
Repayment of borrowings
Financing and share issue costs
Equity dividends paid
Dividends paid to non-controlling interests in subsidiary undertakings
Net cash outflow from financing activities
Net decrease in cash and cash equivalents
Translation of cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Notes
The accompanying notes form an integral part of this consolidated cash flow statement
1 Earnout payments in excess of the amount determined at acquisition are recorded as operating activities
Notes
11
11
11
11
11
11
11
11
11
2023
£m
1,238.2
(266.8)
98.8
(177.2)
(40.0)
4.8
(380.4)
(258.7)
0.7
46.1
(16.4)
(53.9)
1,052.6
(1,147.5)
(3.5)
(422.8)
(101.3)
(904.7)
(46.9)
(79.6)
1,985.8
1,859.3
2022
£m
700.9
(236.2)
37.7
(208.4)
(14.9)
12.9
(408.9)
(309.6)
1.2
–
(84.2)
(862.7)
–
(220.6)
(0.2)
(365.4)
(69.5)
(1,911.0)
(1,619.0)
64.2
3,540.6
1,985.8
2021
£m
2,029.0
(382.3)
28.3
(263.2)
(29.9)
8.7
(638.4)
(320.7)
4.4
39.5
(135.0)
(818.5)
–
(397.1)
(0.4)
(314.7)
(114.5)
(2,057.0)
(666.4)
(130.1)
4,337.1
3,540.6
180
WPP ANNUAL REPORT 2023
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2023
Non-current assets
Intangible assets:
Goodwill
Other
Property, plant and equipment
Right-of-use assets
Interests in associates
Other investments
Deferred tax assets
Corporate income tax recoverable
Trade and other receivables
Current assets
Corporate income tax recoverable
Trade and other receivables
Accrued income1
Cash and short-term deposits
Current liabilities
Trade and other payables
Deferred income1
Corporate income tax payable
Short-term lease liabilities
Bank overdrafts and bonds
Net current liabilities
Non-current liabilities
Bonds
Trade and other payables
Deferred tax liabilities
Employee benefit obligations
Provisions for liabilities and charges
Long-term lease liabilities
Net assets
Equity
Called-up share capital
Share premium account
Other reserves
Own shares
Retained earnings
Equity shareholders’ funds
Non-controlling interests
Total equity
FINANCIAL STATEMENTS
Notes
2023
£m
2022
£m
13
13
14
12
15
15
16
17
17
17
11
18
12
20
20
19
16
23
21
12
26
27
8,388.9
849.9
828.5
1,382.2
286.5
332.7
324.4
76.5
209.2
12,678.8
114.9
8,460.6
3,150.6
2,217.5
13,943.6
8,453.4
1,451.9
1,000.7
1,528.5
305.1
369.8
322.1
74.1
218.6
13,724.2
107.1
9,031.4
3,468.3
2,491.5
15,098.3
(13,323.1)
(1,318.9)
(370.2)
(292.3)
(946.3)
(16,250.8)
(2,307.2)
(14,235.9)
(1,599.0)
(422.0)
(282.4)
(1,169.0)
(17,708.3)
(2,610.0)
(3,775.0)
(282.8)
(178.5)
(135.9)
(304.5)
(1,862.2)
(6,538.9)
3,832.7
114.1
576.6
186.6
(990.1)
3,488.4
3,375.6
457.1
3,832.7
(3,801.8)
(490.9)
(350.8)
(137.5)
(244.6)
(1,928.2)
(6,953.8)
4,160.4
114.1
575.9
285.2
(1,054.1)
3,759.7
3,680.8
479.6
4,160.4
Notes
The accompanying notes form an integral part of this consolidated balance sheet
1 Accrued income and Deferred income were previously presented in Trade and other receivables and Trade and other payables respectively
The financial statements were approved by the Board of Directors and authorised for issue on 21 March 2024.
Signed on behalf of the Board:
Mark Read
Chief Executive Officer
Joanne Wilson
Chief Financial Officer
WPP ANNUAL REPORT 2023
181
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Balance at 1 January 2022
Ordinary shares issued
Share cancellations
Treasury shares used for share option schemes
Profit for the year
Foreign exchange differences on translation of foreign operations
Loss on net investment hedges
Cash flow hedges:
Fair value gain arising on hedging instruments
Less: loss reclassified to profit or loss
Share of other comprehensive income of associate undertakings
Movements on equity investments held at fair value through other
comprehensive income
Actuarial gain on defined benefit pension plans
Deferred tax on defined benefit pension plans
Other comprehensive income
Total comprehensive income
Dividends paid
Non-cash share-based incentive plans (including share options)
Tax adjustment on share-based payments
Net movement in own shares held by ESOP Trusts
Recognition/derecognition of liabilities in respect of put options
Share purchases – close period commitments2
Net movement in non-controlling interests3
Balance at 31 December 2022
Ordinary shares issued
Share cancellations
Treasury shares used for share option schemes
Profit for the year
Foreign exchange differences on translation of foreign operations
Gain on net investment hedges
Cash flow hedges:
Fair value loss arising on hedging instruments
Less: gain reclassified to profit or loss
Share of other comprehensive loss of associate undertakings
Movements on equity investments held at fair value through other
comprehensive income
Actuarial loss on defined benefit pension plans
Deferred tax on defined benefit pension plans
Other comprehensive loss
Total comprehensive (loss)/income
Dividends paid
Non-cash share-based incentive plans (including share options)
Tax adjustment on share-based payments
Net movement in own shares held by ESOP Trusts
Recognition/derecognition of liabilities in respect of put options4
Share purchases – close period commitments
Net movement in non-controlling interests3
Balance at 31 December 2023
Called-up
share
capital
£m
122.4
−
(8.3)
−
−
−
−
Share
premium
account
£m
574.7
1.2
−
−
–
–
–
Other
reserves
£m
(335.9)
−
8.3
−
–
409.0
(141.5)
Own
shares
£m
(1,112.1)
−
−
−
–
–
–
Retained
earnings1
£m
4,367.3
−
(807.4)
−
682.7
–
–
Total
equity
shareholders'
funds
£m
3,616.4
1.2
(807.4)
−
682.7
409.0
(141.5)
Non-
controlling
interests
£m
452.6
−
−
−
92.7
15.2
–
−
−
−
−
−
−
–
–
–
–
–
–
–
–
–
114.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
114.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
575.9
0.7
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
576.6
38.5
(38.5)
31.9
–
–
–
299.4
299.4
–
–
–
–
101.7
211.7
–
285.2
–
–
–
–
(404.0)
108.2
(43.3)
44.2
(0.9)
–
–
–
(295.8)
(295.8)
–
–
–
–
197.2
–
–
186.6
–
–
–
–
–
19.3
–
–
–
–
–
–
–
–
58.0
–
–
–
(1,054.1)
–
–
55.2
–
–
–
–
–
–
(22.3)
16.6
(7.4)
6.2
688.9
(365.4)
122.0
(9.2)
(113.3)
(40.3)
–
(82.9)
3,759.7
–
–
(55.2)
110.4
–
–
–
–
–
–
–
–
–
–
–
–
–
8.8
–
–
–
(3.0)
(9.1)
1.7
(10.4)
100.0
(422.8)
140.1
1.9
(62.7)
30.5
–
(3.1)
(990.1) 3,488.4
38.5
(38.5)
51.2
(22.3)
16.6
(7.4)
305.6
988.3
(365.4)
122.0
(9.2)
(55.3)
61.4
211.7
(82.9)
3,680.8
0.7
–
–
110.4
(404.0)
108.2
(43.3)
44.2
(0.9)
(3.0)
(9.1)
1.7
(306.2)
(195.8)
(422.8)
140.1
1.9
(53.9)
227.7
–
(3.1)
3,375.6
–
–
–
–
–
–
15.2
107.9
(69.5)
–
–
–
–
–
(11.4)
479.6
–
–
–
86.8
(23.1)
–
–
–
–
–
–
–
(23.1)
63.7
(101.3)
–
–
–
–
–
15.1
457.1
Total
£m
4,069.0
1.2
(807.4)
−
775.4
424.2
(141.5)
38.5
(38.5)
51.2
(22.3)
16.6
(7.4)
320.8
1,096.2
(434.9)
122.0
(9.2)
(55.3)
61.4
211.7
(94.3)
4,160.4
0.7
–
–
197.2
(427.1)
108.2
(43.3)
44.2
(0.9)
(3.0)
(9.1)
1.7
(329.3)
(132.1)
(524.1)
140.1
1.9
(53.9)
227.7
–
12.0
3,832.7
Notes
The accompanying notes form an integral part of this consolidated statement of changes in equity
1 Accumulated losses on existing equity investments held at fair value through other comprehensive income are £346.5 million at 31 December 2023 (2022: £343.7 million)
2 During 2021, the Company entered into an arrangement with a third party to conduct share buybacks on its behalf in the close period commencing on 16 December 2021 and ending on 18 February
2022, in accordance with UK listing rules. The commitment resulting from this agreement constituted a liability at 31 December 2021 and was recognised as a movement in other reserves in the year
ended 31 December 2021. After the close period ended on 18 February 2022, the liability was settled and the amount in other reserves was reclassified to retained earnings
3 Net movement in non-controlling interests 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
4 During 2023, WPP sold a portion of its ownership of FGS to KKR. As part of this transaction, the previous put option granted to management shareholders was derecognised
182
WPP ANNUAL REPORT 2023
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1. GENERAL INFORMATION
WPP plc is a company incorporated in Jersey. The address of the registered office is 22 Grenville Street, St Helier, Jersey, JE4 8PX and the address of the principal
executive office is Sea Containers, 18 Upper Ground, London, United Kingdom, SE1 9GL. The nature of the Group’s operations and its principal activities are set
out in note 2. These consolidated financial statements are presented in pounds sterling.
2. SEGMENT INFORMATION
The Group is a leading worldwide creative transformation organisation offering national and multinational clients a comprehensive range of communications,
experience, commerce and technology services. Substantially all of the Group’s revenue is from contracts with customers.
Reportable segments
The Group is organised into three reportable segments – Global Integrated Agencies, Public Relations and Specialist Agencies.
IFRS 8 Operating Segments requires operating segments to be identified on the same basis as is used internally for the review of performance and allocation of
resources by the Group’s Chief Executive Officer (the Chief Operating Decision Maker). Provided certain quantitative and qualitative criteria are fulfilled, IFRS 8
permits aggregation of these components into reportable segments for the purposes of disclosure in the Group’s financial statements. In assessing the Group’s
reportable segments, which includes the aggregation of certain operating segments, the Directors have had regard to the similar economic characteristics of
certain operating segments, their shared client bases, the similar nature of their products or services and their long-term margins, amongst other factors.
Reported contributions were as follows:
Income statement
2023
Global Integrated Agencies
Public Relations
Specialist Agencies
20221
Global Integrated Agencies
Public Relations
Specialist Agencies
20211
Global Integrated Agencies
Public Relations
Specialist Agencies
Revenue less
pass-through
costs3
£m
Headline
operating
profit4
£m
Revenue2
£m
12,594.9
1,262.2
987.7
14,844.8
12,191.9
1,232.4
1,004.4
14,428.7
10,887.6
963.5
950.0
12,801.1
9,808.2
1,180.0
871.5
11,859.7
9,743.6
1,161.2
894.5
11,799.3
8,680.4
914.2
802.6
10,397.2
1,474.3
191.1
84.8
1,750.2
1,433.4
191.9
116.5
1,741.8
1,221.2
144.6
127.7
1,493.5
Notes
1 Prior year figures have been re-presented to reflect the reallocation of a number of businesses between Global Integrated Agencies, Specialist Agencies and Public Relations
2
3 Revenue less pass-through costs is defined on page 233
4 A reconciliation from profit before taxation to headline operating profit is provided on page 223
Intersegment sales have not been separately disclosed as they are not material
WPP ANNUAL REPORT 2023
183
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. SEGMENT INFORMATION CONTINUED
Other information
2023
Global Integrated Agencies
Public Relations
Specialist Agencies
20221
Global Integrated Agencies
Public Relations
Specialist Agencies
20211
Global Integrated Agencies
Public Relations
Specialist Agencies
Share-based
payments
£m
Capital
additions2
£m
Depreciation
and
amortisation3
£m
Goodwill
impairment
£m
Earnings/(loss)
from
associates
£m
Interests in
associates and
joint ventures
£m
118.9
14.3
6.9
140.1
100.7
14.4
6.9
122.0
92.5
4.8
2.3
99.6
180.4
15.4
21.4
217.2
193.8
11.1
18.4
223.3
253.1
18.0
22.0
293.1
362.8
40.0
43.9
446.7
373.0
36.7
41.3
451.0
374.7
28.2
41.1
444.0
40.3
–
23.3
63.6
–
3.7
34.2
37.9
–
–
1.8
1.8
56.4
0.2
13.6
70.2
10.8
0.5
(71.7)
(60.4)
22.7
1.7
(0.6)
23.8
93.1
–
193.4
286.5
80.1
0.1
224.9
305.1
115.2
8.0
289.7
412.9
Notes
1 Prior year figures have been re-presented to reflect the reallocation of a number of businesses between Global Integrated Agencies, Specialist Agencies and Public Relations
2 Capital additions include purchases of property, plant and equipment and other intangible assets (including capitalised computer software)
3 Depreciation of property, plant and equipment, depreciation of right-of-use assets and amortisation of other intangible assets
Non-current assets1
North America2
United Kingdom
Western Continental Europe
Asia Pacific, Latin America, Africa & Middle East
and Central & Eastern Europe
2023
£m
2022
£m
5,217.6
1,669.7
2,695.5
5,896.4
1,556.2
2,797.9
2,739.3
12,322.1
3,151.0
13,401.5
Notes
1 Non-current assets excluding financial instruments and deferred tax
2 North America includes the US with non-current assets of £5,113.9 million (2022: £5,379.5 million)
Contributions by geographical area were as follows:
Revenue1
North America2
United Kingdom
Western Continental Europe
Asia Pacific, Latin America, Africa & Middle
East and Central & Eastern Europe
Revenue less pass-through costs3
North America2
United Kingdom
Western Continental Europe
Asia Pacific, Latin America, Africa & Middle
East and Central & Eastern Europe
Headline operating profit4
North America2
United Kingdom
Western Continental Europe
Asia Pacific, Latin America, Africa & Middle
East and Central & Eastern Europe
2023
£m
2022
£m
2021
£m
5,527.6
2,155.4
3,037.2
5,549.5
2,003.8
2,876.2
4,494.2
1,866.9
2,786.3
4,124.6
3,999.2
14,844.8 14,428.7
3,653.7
12,801.1
4,556.3
1,626.3
2,410.5
4,688.1
1,537.2
2,318.5
3,849.2
1,414.3
2,225.4
3,266.6
11,859.7
3,255.5
11,799.3
2,908.3
10,397.2
834.3
214.5
258.4
770.4
187.1
301.3
655.7
180.9
288.6
443.0
1,750.2
483.0
1,741.8
368.3
1,493.5
Notes
1
2 North America includes the US with revenue of £5,187.1 million (2022: £5,230.9 million,
Intersegment sales have not been separately disclosed as they are not material
2021: £4,220.8 million), revenue less pass-through costs of £4,270.6 million (2022: £4,402.0 million,
2021: £3,597.4 million) and headline operating profit of £785.4 million (2022: £727.6 million,
2021: £615.2 million)
3 Revenue less pass-through costs and headline operating profit are defined on page 233
4 A reconciliation from reported profit before tax to headline operating profit is provided
on page 223
184
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
3. COSTS OF SERVICES AND GENERAL
AND ADMINISTRATIVE COSTS
Costs of services
General and administrative costs
2022
2023
£m
£m
11,890.1
12,325.8
1,180.4
1,988.0
14,313.8 13,070.5
2021
£m
10,597.5
974.6
11,572.1
Costs of services and general and administrative costs include:
Staff costs (note 5)
Establishment costs
Media pass-through costs
Other costs of services and general and
administrative costs1
2023
£m
8,137.6
515.8
2,173.6
2022
£m
8,165.8
536.0
1,905.7
2021
£m
7,166.7
529.0
1,865.3
2,463.0
3,486.8
14,313.8 13,070.5
2,011.1
11,572.1
Note
1 Other costs of services and general and administrative costs include £811.5 million
(2022: £723.7 million, 2021: £538.6 million) of other pass-through costs
Included within costs of services and general administrative costs are
the following:
Goodwill impairment (note 13)
Amortisation and impairment of acquired
intangible assets
Investment and other impairment charges/
(reversals)
Restructuring and transformation costs
Property-related restructuring costs
(Gains)/losses on disposal of investments
and subsidiaries
Gains on remeasurement of equity interests
arising from a change in scope of ownership
Litigation settlement
Amortisation of other intangible assets
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Losses/(gains) on sale of property, plant
and equipment
Net foreign exchange (gains)/losses
Short-term lease expense
Low-value lease expense
2023
£m
63.6
2022
£m
37.9
727.9
62.1
17.8
195.5
232.5
77.0
218.8
18.0
(7.1)
36.3
–
(11.0)
24.8
165.1
256.8
0.4
(14.5)
22.2
2.8
(66.5)
–
21.9
166.9
262.2
(6.4)
(8.7)
20.2
1.9
2021
£m
1.8
97.8
(42.4)
175.4
–
10.6
–
21.3
19.9
151.2
272.9
(1.3)
4.4
18.0
2.3
In 2023, operating profit includes credits totalling £16.9 million (2022:
£29.3 million, 2021: £19.3 million) relating to the release of provisions and
other balances established in respect of acquisitions completed prior to 2022.
Further details of the Group’s approach to acquisition provisions, as required
by IFRS 3 Business Combinations, are given in note 28.
The goodwill impairment charge of £63.6 million in 2023 (2022: £37.9 million,
2021: £1.8 million) relates to businesses in the Group that have closed or where
the impact of current macroeconomic conditions and trading circumstances
indicate impairment to the carrying value.
Amortisation and impairment of acquired intangible assets of £727.9 million
(2022: £62.1 million including £0.2 million relating to associates, 2021: £97.8
million) includes a charge of £650.1 million (2022: £1.4 million, 2021: £47.9
million) predominantly in relation to certain brands that no longer have any
useful life. This includes accelerated amortisation charges of £430.8 million
and £202.3 million for Wunderman Thompson and Y&R brands respectively,
due to the creation of VML in the fourth quarter of 2023.
The investment and other impairment charges/(reversals) of £17.8 million
(2022: £77.0 million, 2021: reversal of £42.4 million) relate to the same
macroeconomic factors noted above. The 2022 charge of £77.0 million
consisted of £48.0 million related to impairments due also to macroeconomic
factors and a £29.0 million impairment of capitalised configuration and
customisation costs related to software development projects.
Restructuring and transformation costs of £195.5 million (2022: £218.8 million,
2021: £175.4 million) include £113.4 million (2022: £134.5 million, 2021: £94.2 million)
in relation to the Group’s IT-transformation programme. These IT costs include
costs of £52.3 million (2022: £96.8 million, 2021: £62.2 million) in relation to the
rollout of new ERP systems in order to drive efficiency and collaboration
throughout the Group; and £38.3 million (2022: nil, 2021: nil) related to an
IT-transition programme to move to a multi-vendor environment.
Also included within restructuring and transformation costs is £9.8 million
(2022: £15.1 million, 2021: £29.9 million) of ongoing property costs, related
to impairments the Group recognised in prior years in response to the
Covid-19 pandemic. The remaining restructuring and transformation costs of
£72.3 million (2022: £69.2 million, 2021: £51.3 million) relates to the continuing
restructuring plan, including the creation of VML and simplification of GroupM.
This includes restructuring actions at under-performing businesses, aiming to
reduce ongoing costs and simplify operational structures.
Property-related restructuring costs of £232.5 million (2022: £18.0 million,
2021: nil) have been incurred related to a review of the Group’s property
requirements in 2023, following the stabilisation of return-to-work practices
post the Covid-19 pandemic and campus strategy. This identified a number
of properties that are surplus to requirements and opportunities to further
consolidate Agencies within the existing Campus portfolio. The impairment
charges included within property-related restructuring costs include
£128.8 million (2022: £18.0 million, 2021: nil) in relation to right-of-use assets
and £55.8 million (2022: nil, 2021: nil) of related property, plant and equipment.
Gains on disposal of investments and subsidiaries of £7.1 million in 2023
includes a gain of £18.1 million related to net receipts from the prior disposal
of Kantar, offset primarily by losses on disposals of £11.0 million including
disposal of the Group’s investment in Astus Australia. Losses on disposal of
investments and subsidiaries of £36.3 million in 2022 primarily included a loss
of £63.1 million on the divestment of the Group's Russian interests which
completed in May 2022. This was partially offset by gains on other disposals
during the period including Res Publica for £17.7 million and Mutual Mobile for
£9.4 million with the remaining gains/losses due to individually insignificant
transactions. Losses on disposal of investments and subsidiaries of
£10.6 million in 2021 included a loss of £4.9 million on the disposal of XMKT
in China, which completed in September 2021.
There were no remeasurements of equity interests in 2023. In 2022, gains
on remeasurement of equity interests arising from a change in scope of
ownership of £66.5 million (2021: nil) comprises a gain in relation to the
reclassification of the Group's interest in Imagina in Spain from interests
in associates to other investments.
In 2023, £11.0 million (2022: nil) has been received by the Group (net of legal
costs) related to a previous litigation matter that settled in 2023.
Auditors’ remuneration:
Fees payable to the Company’s auditors for
the audit of the Company and Group's annual
accounts
Fees payable for the audit of the Company’s
subsidiaries
Fees payable to the auditors pursuant to
legislation1
Audit-related services2
Other services3
Tax compliance services
Total other fees
Total fees
2023
£m
2022
£m
10.0
29.9
39.9
0.5
1.7
–
2.2
42.1
8.4
28.5
36.9
0.4
0.6
0.1
1.1
38.0
2021
£m
7.1
24.8
31.9
0.4
1.4
–
1.8
33.7
Includes fees in respect of the audit of internal control over financial reporting
Notes
1
2 Audit-related assurance services are in respect of the review of the interim financial information
3 Other services include audits for earnout purposes, non-statutory audits and other agreed
upon procedures
WPP ANNUAL REPORT 2023
185
6. FINANCE AND INVESTMENT INCOME, FINANCE COSTS AND
REVALUATION AND RETRANSLATION OF FINANCIAL INSTRUMENTS
Finance and investment income includes:
Income from equity investments
Interest income
Finance costs include:
Net interest expense on pension plans
Interest on other long-term employee benefits
Interest expense and similar charges1
Interest expense related to lease liabilities
2023
£m
12.9
114.4
127.3
2023
£m
4.3
6.0
272.4
106.3
389.0
2022
£m
24.5
120.9
145.4
2022
£m
2.2
3.7
257.8
95.7
359.4
2021
£m
17.9
51.5
69.4
2021
£m
1.8
2.4
188.5
90.9
283.6
Note
1
Interest expense and similar charges are payable on bank overdrafts, bonds and bank loans held
at amortised cost
Revaluation and retranslation of financial instruments include:
Movements in fair value of treasury instruments
Premium on the early repayment of bonds
Revaluation of investments and other assets
held at fair value through profit or loss
Remeasurement of put options over
non-controlling interests
Revaluation of payments due to vendors
(earnout agreements)
Retranslation of financial instruments
2023
£m
(3.1)
–
(20.9)
(1.5)
50.8
(18.5)
6.8
2022
£m
0.5
–
23.1
27.9
26.2
(1.7)
76.0
2021
£m
9.1
(13.0)
(7.5)
(40.6)
(58.7)
22.9
(87.8)
The majority of the Group’s long-term debt is represented by $1,063 million
of US dollar bonds at an average interest rate of 4.26%, €3,350 million of
Eurobonds at an average interest rate of 2.46% and £650 million of Sterling
bonds at an average interest rate of 3.21%.
Average borrowings in 2023 under the US Dollar Revolving Credit Facilities
(note 10) amounted to $41 million at an average interest rate of 4.54%
(2022: nil).
Average borrowings under the US Commercial Paper Programme for 2023
amounted to $433 million at an average interest rate of 5.45% inclusive of
margin (2022: $195 million at an average interest rate of 2.56% inclusive
of margin).
Average borrowings under the Euro Commercial Paper Programme for 2023
amounted to £45 million at an average interest rate of 4.90% inclusive of
currency swaps (2022: £34 million at an average interest rate of 1.95% inclusive
of currency swaps).
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4. EARNINGS/(LOSS) FROM ASSOCIATES – AFTER INTEREST
AND TAX
Earnings/(loss) from associates – after interest and tax was earnings of
£70.2 million in 2023, a loss of £60.4 million in 2022 and earnings of £23.8 million
in 2021. In 2023 this included £45.1 million of non-refundable distributions
received from Kantar, which are recorded in the income statement (non
headline) given the Group's balance sheet investment in Kantar is nil (2022: nil,
2021: £61.2 million). The loss in 2022 included £75.8 million (2021: £38.8 million)
of amortisation and impairment of acquired intangible assets as well as
restructuring and one-off transaction costs of £54.8 million (2021: £18.8 million)
within Kantar.
5. OUR PEOPLE
Our staff numbers averaged 114,732 for the year ended 31 December 2023
against 114,129 in 2022 and 104,808 in 2021. Their geographical distribution
was as follows:
North America
United Kingdom
Western Continental Europe
Asia Pacific, Latin America, Africa & Middle
East and Central & Eastern Europe
2023
23,562
12,457
23,580
2022
23,740
12,490
22,717
2021
21,764
10,995
21,514
55,133
114,732
55,182
114,129
50,535
104,808
Their reportable segment distribution was as follows:
Global Integrated Agencies
Public Relations
Specialist Agencies
2023
97,838
8,377
8,517
114,732
2022
97,288
8,125
8,716
114,129
2021
89,701
7,121
7,986
104,808
At the end of 2023, staff numbers were 114,173 (2022: 115,473, 2021: 109,382).
Staff costs include:
Wages and salaries
Cash-based incentive plans
Share-based incentive plans (note 22)
Social security costs
Pension costs (note 23)
Severance
Other staff costs1
2023
£m
5,878.8
232.9
140.1
715.1
213.1
78.2
879.4
8,137.6
2022
£m
5,721.0
292.6
122.0
689.4
204.8
44.2
1,091.8
8,165.8
2021
£m
4,797.2
455.2
99.6
630.1
177.7
41.8
965.1
7,166.7
Note
1 Freelance and temporary staff costs are included in other staff costs
Compensation for key management personnel includes:
Short-term employee benefits
Pensions and other post-retirement benefits
Share-based payments
2023
£m
28.1
1.3
30.1
59.5
2022
£m
29.7
1.1
29.8
60.6
2021
£m
28.0
0.9
14.6
43.5
Key management personnel comprises the Board and the Executive
Committee. Further details of compensation for the Board are disclosed on
pages 139 to 168.
186
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
7. TAXATION
In 2023, the effective tax rate on reported profit before taxation was 43.1%
(2022: 33.1%, 2021: 24.2%).
The tax charge comprises:
Corporation tax
Current year
Prior years
Deferred tax
Current year
Prior years
Tax charge
2023
£m
2022
£m
2021
£m
432.8
(85.6)
347.2
(197.1)
(1.0)
(198.1)
149.1
425.8
(55.5)
370.3
9.4
4.7
14.1
384.4
404.0
(41.4)
362.6
(131.0)
(1.5)
(132.5)
230.1
The corporation tax credit for prior years in 2023, 2022 and 2021 primarily
comprises the release of a number of provisions following the resolution of tax
matters in various countries.
The current year deferred tax credit of £197.1 million (2022: debit of £9.4 million,
2021: credit of £131.0 million) reflects the tax impact of accelerated
amortisation of intangible assets as a result of the creation of VML.
The tax charge for the year can be reconciled to profit before taxation in the
consolidated income statement as follows:
Profit before taxation
Tax at the corporation tax rate of 23.5%1
Tax effect of (earnings)/losses from associates
Irrecoverable withholding taxes
Tax effect of items that are not deductible
in determining taxable profits
Tax effect of non-deductible goodwill
impairment
Effect of different tax rates in subsidiaries
operating in other jurisdictions
Origination and reversal of unrecognised
temporary differences
Tax losses not recognised or utilised in the year
Utilisation of tax losses not previously
recognised
Net release of prior year provisions in relation
to acquired businesses
Other prior year adjustments
Impact of deferred tax rate change
Tax charge
Effective tax rate on profit before tax
2021
£m
950.8
180.7
(13.3)
52.3
29.3
0.6
81.2
2023
£m
346.3
81.4
(15.0)
34.8
2022
£m
1,159.8
220.4
17.4
25.9
39.0
66.7
7.2
94.3
16.2
41.8
8.8
44.0
(1.1)
9.8
(36.3)
7.4
(15.3)
(5.4)
(5.1)
(3.9)
(82.7)
–
149.1
43.1%
(2.8)
(48.0)
–
384.4
33.1%
(1.1)
(41.8)
(23.8)
230.1
24.2%
Note
1 As the Group is subject to the tax rates of more than one country, it has chosen to present
its reconciliation of the tax charge using the UK corporation tax rate of 23.5% (2022: 19.0%,
2021: 19.0%)
FACTORS AFFECTING THE TAX CHARGE IN FUTURE YEARS
The tax charge may be affected by the impact of acquisitions, disposals and
other corporate restructurings, the resolution of open tax issues, and the
ability to use brought forward tax losses. Changes in local or international tax
rules, and changes arising from the application of existing rules, new demands
and assessments or challenges by tax authorities, may expose the Group to
additional tax liabilities or impact the carrying value of deferred tax assets,
which could affect the future tax charge.
Legislation in respect of the UK adoption of OECD Pillar Two Multinational
top-up tax was substantively enacted in the UK in 2023 and is to apply for
periods commencing 1 January 2024. The Group is currently monitoring the
potential impact, which is expected to be insignificant on the Group’s tax
charge, including assessing the applicability of legislative safe harbours. The
IAS 12 exception to recognise and disclose information about deferred tax
assets and liabilities related to Pillar Two income taxes has been applied.
Liabilities relating to open and judgemental matters are based upon an
assessment of whether the tax authorities will accept the position taken,
after considering external advice where appropriate. Where the final tax
outcome of these matters is different from the amounts which were initially
recorded, such differences will impact the current and deferred income tax
assets and liabilities in the period in which such determination is made. The
Group does not currently consider that judgements made in assessing tax
liabilities have a significant risk of resulting in any material additional charges
or credits in respect of these matters, within the next financial year, beyond
the amounts already provided.
Following the enactment in 2021 of an increase in the UK corporation tax rate
from 19% to 25% from 1 April 2023, the Group remeasured UK deferred tax
balances accordingly and recognised a tax credit of £23.8 million in 2021.
TAX RISK MANAGEMENT
We look to maintain open and transparent relationships with the tax
authorities and relevant government representatives in the jurisdictions in
which we operate. We maintain active engagement with a wide range of
international companies and business organisations with similar issues. We
engage advisors and legal counsel to obtain opinions on tax legislation and
principles. We have a Tax Risk Management Strategy in place which sets out
the controls established and our assessment procedures for decision making
and how we monitor tax risk. We monitor proposed changes in taxation
legislation and ensure these are taken into account when we consider our
future business plans. Our Directors are informed by management of any
significant tax law changes, the nature and status of any significant ongoing
tax audits, and other developments that could materially affect the Group's
tax position.
8. ORDINARY DIVIDENDS
Amounts recognised as distributions to equity holders in the year:
Per share
Final dividend in
respect of the
prior year (2022)
Interim dividend
in respect of the
current year (2023)
Per ADR1
Final dividend in
respect of the
prior year (2022)
Interim dividend
in respect of the
current year (2023)
2023
2022
2021
Pence per share
2023
£m
2022
£m
2021
£m
24.40p
18.70p
14.00p
261.8
203.5
167.7
15.00p
39.40p
15.00p
33.70p
12.50p
26.50p
161.0
422.8
161.9
365.4
147.0
314.7
2023
2022
2021
Cents per ADR
2023
$m
2022
$m
2021
$m
150.83¢
128.63¢
89.85¢
323.7
280.0
215.3
93.29¢
244.12¢
92.72¢
221.35¢
85.98¢
175.83¢
200.3
524.0
200.1
480.1
202.2
417.5
Proposed final dividend for the year ended 31 December 2023:
Per share
Final dividend
Per ADR1
Final dividend
2023
2022
2021
Pence per share
24.40p
24.40p
18.70p
2023
2022
2021
Cents per share
151.74¢
150.83¢
128.63¢
Note
1 These figures have been translated for convenience purposes only, using the approximate
average rate for the year of US$1.2438 (2022: US$1.2363, 2021: US$1.3757). This conversion should
not be construed as a representation that the pound sterling amounts actually represent, or
could be converted into, US dollars at the rates indicated
The payment of dividends will not have any tax consequences for the Group.
Final dividends are paid in the subsequent year to which they relate.
At 31 December 2023 the WPP plc (the parent Company) distributable
reserves amounted to £4,797.7 million (2022: £5,465.0 million) which, under
the Companies (Jersey) Law 1991, is total reserves excluding share capital and
capital redemption reserve. Further details of the Company’s share capital are
shown in note 26.
WPP ANNUAL REPORT 2023
187
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. EARNINGS PER SHARE
BASIC EPS
The calculation of basic EPS is as follows:
Earnings1 (£m)
Weighted average shares used in basic EPS
calculation (m)
EPS
2023
110.4
2022
682.7
1,072.1
10.3p
1,097.9
62.2p
2021
637.7
1,194.1
53.4p
Note
1 Earnings is equivalent to profit for the year attributable to equity holders of the parent
DILUTED EPS
The calculation of diluted EPS is as follows:
The table above excludes bank overdrafts which fall within cash and cash
equivalents for the purposes of the consolidated cash flow statement. Other
liabilities from financing activities, including lease liabilities and derivatives
used for hedging debts, are disclosed in note 12 and note 25, respectively.
SHARES
At 31 December 2023, the Company's share base was entirely composed
of ordinary equity share capital and share premium of £690.7 million
(2022: £690.0 million, 2021: £697.1 million), further details of which are
disclosed in note 26.
DEBT AS AT 31 DECEMBER 2023
US$ bonds The Group had in issue $750 million of 3.75% bonds due September
2024, $93 million of 5.125% bonds due September 2042 and $220 million of
5.625% bonds due November 2043.
Earnings1 (£m)
Weighted average shares used in reported
diluted EPS calculation (m)
Diluted EPS
2023
110.4
2022
682.7
2021
637.7
1,094.0
10.1p
1,116.4
61.2p
1,215.3
52.5p
Eurobonds During the year, the Group issued €750 million of 4.125% bonds
due May 2028. The Group also had in issue €500 million of 1.375% bonds due
March 2025, €750 million of 2.25% bonds due September 2026, €750 million
of 2.375% bonds due May 2027, and €600 million of 1.625% bonds due
March 2030. In November 2023, €750 million of 3.0% bonds were repaid.
Sterling bonds The Group had in issue £250 million of 3.750% bonds due
May 2032 and £400 million of 2.875% bonds due September 2046.
Revolving Credit Facility The Group had a five-year Revolving Credit Facility of
$2.5 billion due March 2026, signed in November 2021. The Group’s borrowings
under these facilities, which are drawn down predominantly in pounds
sterling, averaged $41 million in 2023 (2022: nil, 2021: nil).
In May 2021, the Group's subsidiary, WPP AUNZ, repaid in full its A$150 million
Revolving Credit Facility due August 2021, and its A$270 million Revolving
Credit Facility due August 2023. The Group's borrowings under the Australian
dollar facilities, which were drawn down in Australian dollars and New Zealand
dollars, averaged the equivalent of nil in 2023 (2022: nil, 2021: A$52 million).
The Group had available undrawn committed credit facilities of £1,963.7 million
at 31 December 2023 (2022: £2,069.0 million, 2021: £1,847.5 million).
Borrowings under the $2.5 billion Revolving Credit Facility were governed by
certain financial covenants based on the results and financial position of the
Group. During 2023, and until 20 February 2024 when the Revolving Credit Facility
was refinanced with no financial covenants (see note 30 for further details),
all covenants have been complied with.
The $2.5 billion Revolving Credit Facility, due March 2026, included terms
which required the consent of the majority of the lenders if a proposed merger
or consolidation of the Company would alter its legal personality or identity.
COMMERCIAL PAPER PROGRAMMES
The Group operates commercial paper programmes using its Revolving Credit
Facility as a backstop. The average US commercial paper in issue in 2023 was
$433 million (2022: $195 million, 2021: nil). The average Euro commercial paper
in issue in 2023 was £45 million (2022: £34 million, 2021: nil) inclusive of the
effect of currency swaps, where applicable. There was no US or Euro
commercial paper outstanding at 31 December 2023.
Note
1 Earnings is equivalent to profit for the year attributable to equity holders of the parent
Diluted EPS has been calculated based on the earnings amounts above.
At 31 December 2023, options to purchase 25.2 million ordinary shares
(2022: 19.7 million, 2021: 7.2 million) were outstanding, but were excluded
from the computation of diluted earnings per share because the exercise
prices of these options were greater than the average market price of the
Group’s shares and, therefore, their inclusion would have been accretive.
A reconciliation between the shares used in calculating basic and diluted EPS
is as follows:
Weighted average shares used in basic
EPS calculation
Dilutive share options outstanding
Other potentially issuable shares
Weighted average shares used in diluted
EPS calculation
2023
m
2022
m
2021
m
1,072.1
0.6
21.3
1,097.9
0.7
17.8
1,194.1
1.3
19.9
1,094.0
1,116.4
1,215.3
At 31 December 2023 there were 1,141,513,196 (2022: 1,141,427,296, 2021:
1,224,459,550) ordinary shares in issue, including 66,675,497 treasury shares
(2022: 70,489,953, 2021: 70,489,953).
10. SOURCES OF FINANCE
The following table summarises the equity and debt financing of the Group,
and changes during the year:
Analysis of changes
in financing
Beginning of year
Ordinary shares
issued
Share cancellations
Net decrease in
drawings on bank
loans and bonds
Amortisation of
financing costs
included in debt
Acquisition of
subsidiaries
Changes in fair value
due to hedging
arrangements
Other movements
Exchange
adjustments
End of year
2023
£m
690.0
0.7
–
–
–
–
–
–
Shares
2022
£m
697.1
Debt
2021
£m
2022
£m
699.9 4,465.1 4,441.7
2023
£m
2021
£m
5,032.7
1.2
(8.3)
4.4
(7.2)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(48.9)
(220.6)
(397.1)
0.2
48.9
7.0
–
8.1
–
–
(3.5)
–
(0.2)
(2.5)
(0.4)
–
690.7
–
690.0
–
697.1
(98.7)
237.2
4,363.1 4,465.1
(199.1)
4,441.7
188
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
10. SOURCES OF FINANCE CONTINUED
The following table is an analysis of future anticipated cash flows in relation to
the Group’s debt, on an undiscounted basis which, therefore, differs from the
fair value and carrying value:
The following table is an analysis of future undiscounted anticipated cash flows
in relation to the Group’s financial derivatives, which include interest rate
swaps, forward contracts and other foreign exchange swaps assuming interest
rates and foreign exchange rates as at 31 December:
Financial liabilities
Payable
£m
682.2
Receivable
£m
681.3
Financial assets
Payable
£m
335.3
Receivable
£m
310.7
15.9
15.0
14.7
3.7
731.5
15.7
14.6
14.2
3.5
729.3
487.4
479.6
37.5
37.1
32.3
32.5
646.6
1,543.9
714.8
1,569.9
Financial liabilities
Payable
£m
1,186.3
Receivable
£m
1,126.2
Financial assets
Payable
£m
347.1
Receivable
£m
345.7
–
–
–
1,186.3
–
1,126.2
11.6
449.8
808.5
6.2
461.8
813.7
Financial liabilities
Payable
£m
185.8
Receivable
£m
173.7
Financial assets
Payable
£m
581.1
Receivable
£m
582.5
551.4
11.6
449.8
1,198.6
521.1
6.0
445.6
1,146.4
30.0
–
–
611.1
30.4
–
–
612.9
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
Over five years
Debt financing (including interest) under the
Revolving Credit Facility and in relation to
unsecured loan notes
Short-term overdrafts – within one year
Future anticipated cash flows
Effect of discounting/financing rates
Debt financing
Cash and short-term deposits
Adjusted net debt
2023
£m
(711.3)
(534.6)
(746.2)
(726.2)
(704.1)
(1,858.8)
2022
£m
(791.6)
(724.3)
(524.2)
(740.3)
(719.9)
(1,963.7)
2021
£m
(326.8)
(745.4)
(646.5)
(492.8)
(698.0)
(2,546.3)
(5,281.2)
(358.2)
(5,639.4)
918.1
(4,721.3)
2,217.5
(2,503.8)
(5,464.0)
(505.7)
(5,969.7)
998.9
(4,970.8)
2,491.5
(2,479.3)
(5,455.8)
(342.3)
(5,798.1)
1,014.1
(4,784.0)
3,882.9
(901.1)
Analysis of fixed and floating rate debt by currency including the effect of
cross-currency swaps:
2023
Within one year
Between one and
two years
Between two and
three years
Between three and four
years
Between four and five
years
2022
Within one year
Between one and
two years
Between two and
three years
2023
Currency
$
£
€
– fixed
– fixed
– fixed
– floating
Other
2022
Currency
$
£
€
– fixed
– fixed
– fixed
– floating
Other
2021
Currency
$
£
€
– fixed
– fixed
– fixed
– floating
Other
Note
1 Weighted average
£m
Fixed
rate1
Floating
basis
Period
profit1
1,471.7
1,094.1
1,820.5
–
(23.2)
4,363.1
4.62
2.97
2.12
n/a
n/a
n/a
n/a
n/a
EURIBOR
n/a
66
130
48
–
n/a
£m
Fixed
rate1
Floating
basis
Period
profit1
2021
Within one year
Between one and
two years
Between two and
three years
Between three and
four years
1,379.5
1,094.1
2,080.6
–
(89.1)
4,465.1
£m
1,231.8
1,094.1
1,976.0
210.2
(70.4)
4,441.7
4.18
2.97
2.21
n/a
n/a
n/a
n/a
n/a
EURIBOR
n/a
60
143
55
–
n/a
Fixed
rate1
Floating
basis
Period
profit1
4.18
2.97
2.04
n/a
n/a
n/a
n/a
n/a
EURIBOR
n/a
72
155
69
3
n/a
WPP ANNUAL REPORT 2023
189
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. SOURCES OF FINANCE CONTINUED
ANALYSIS OF CHANGE IN FINANCING ACTIVITIES (INCLUSIVE OF LEASES)
The table below details changes arising from financing activities, including both cash and non-cash changes.
2023
Borrowings (excluding lease liabilities) (note 11, 20 and 25)1
Derivatives (note 11, 17, 18 and 19)
Lease liabilities (note 12)2
Liabilities from financing activities
Cash and short-term deposits (note 11 and 25)
Bank overdrafts
2022
Borrowings (excluding lease liabilities) (note 11, 20 and 25)1
Derivatives (note 11, 17, 18 and 19)
Lease liabilities (note 12)2
Share repurchase commitments
Liabilities from financing activities
Cash and short-term deposits (note 11 and 25)
Bank overdrafts
Opening
balance
£m
4,465.1
52.3
2,210.6
6,728.0
(2,491.5)
505.7
4,742.2
4,441.7
50.6
2,041.8
211.7
6,745.8
(3,882.9)
342.3
3,205.2
Cash flow
£m
(48.9)
(46.0)
(361.6)
(456.5)
216.9
(147.5)
Acquisition of
subsidiaries
£m
48.9
–
1.9
50.8
(22.5)
–
Foreign
exchange
£m
(98.7)
(50.8)
(75.6)
(225.1)
79.6
–
Interest and
other
£m
(3.3)
13.6
379.2
389.5
–
–
Closing
balance
£m
4,363.1
(30.9)
2,154.5
6,486.7
(2,217.5)
358.2
(387.1)
28.3
(145.5)
389.5
4,627.4
(220.6)
–
(402.0)
(211.7)
(834.3)
1,494.4
163.4
823.5
–
–
0.1
–
0.1
(38.8)
–
(38.7)
237.2
6.4
145.8
–
389.4
(64.2)
–
325.2
6.8
(4.7)
424.9
–
427.0
–
–
427.0
4,465.1
52.3
2,210.6
–
6,728.0
(2,491.5)
505.7
4,742.2
Notes
1 Borrowings includes: bonds and bank loans. The interest and other amounts within borrowings comprises amortisation of capitalised borrowing costs
2 Repayment of lease liabilities includes £102.9 million (2022: £92.4 million) of interest paid on lease liabilities recognised within net cash inflow from operating activities (note 11). Interest and other within
lease liabilities comprises interest on leases as well as the lease liability additions and disposals as disclosed in note 12
190
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
11. ANALYSIS OF CASH FLOWS
The following tables analyse the items included within the main cash flow
headings on page 180.
Acquisitions and disposals:
Net cash from operating activities:
Profit for the year
Taxation
Revaluation and retranslation of financial
instruments
Finance costs
Finance and investment income
(Earnings)/loss from associates – after interest
and tax
Operating profit of continuing and
discontinued operations
Adjustments for
Non-cash share-based incentive plans
(including share options)
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Impairment charges included within
restructuring costs1
Goodwill impairment
Amortisation and impairment of acquired
intangible assets
Amortisation of other intangible assets
Investment and other impairment charges/
(reversals)
(Gains)/losses on disposal of investments
and subsidiaries
Gains on remeasurement of equity interests
arising from a change in scope of ownership
Losses/(gains) on sale of property, plant
and equipment
Operating cash flow before movements
in working capital and provisions
Decrease/(increase) in trade receivables
and accrued income
(Decrease)/increase in trade payables and
deferred income
Decrease/(increase) in other receivables
(Decrease)/increase in other payables –
short-term
Increase/(decrease) in other payables –
long-term
Increase/(decrease) in provisions
Cash generated by operations
Corporation and overseas tax paid
Payment on early settlement of bonds
Interest paid on lease liabilities
Other interest and similar charges paid
Interest received
Investment income
Dividends from associates
Earnout payments recognised in operating
activities2
Net cash inflow from operating activities
2023
£m
197.2
149.1
(6.8)
389.0
(127.3)
2022
£m
775.4
384.4
(76.0)
359.4
(145.4)
2021
£m
720.7
230.1
87.8
283.6
(69.4)
(70.2)
60.4
(23.8)
531.0
1,358.2
1,229.0
140.1
165.1
256.8
184.6
63.6
727.9
24.8
122.0
166.9
262.2
43.3
37.9
62.1
21.9
99.6
151.2
272.9
39.2
1.8
97.8
19.9
17.8
77.0
(42.4)
(7.1)
36.3
10.6
–
(66.5)
−
0.4
(6.4)
(1.3)
231.8
(498.6)
(458.9)
(238.0)
125.0
170.6
(154.1)
777.8
(120.0)
(563.5)
(259.6)
547.0
118.8
65.7
1,844.8
(395.3)
–
(102.9)
(274.5)
115.8
12.9
43.4
(67.0)
(38.0)
1,268.2
(390.9)
–
(92.4)
(210.2)
88.9
24.5
37.6
(11.0)
(32.9)
2,580.3
(391.1)
(13.0)
(88.4)
(173.7)
47.5
17.8
53.4
(6.0)
1,238.2
(24.8)
700.9
(3.8)
2,029.0
Notes
1
Impairment charges included within restructuring costs includes impairments for right-of-use
assets, property, plant and equipment and other intangible assets
2 Earnout payments in excess of the amount determined at acquisition are recorded as
operating activities
Initial cash consideration
Cash and cash equivalents acquired
Earnout payments recognised in investing
activities1
Purchase of other investments
(including associates)
Acquisitions
Proceeds on disposal of investments
and subsidiaries2
Cash and cash equivalents disposed
Disposals of investments and subsidiaries
Cash consideration received from
non-controlling interests
Cash consideration for purchase of
non-controlling interests
Cash consideration for
non-controlling interests
Net acquisition payments and
disposal proceeds
2023
£m
(227.0)
22.5
2022
£m
(218.3)
38.8
2021
£m
(227.6)
(2.3)
(52.5)
(46.6)
(53.2)
(9.8)
(266.8)
(10.1)
(236.2)
(99.2)
(382.3)
99.5
(0.7)
98.8
46.1
50.1
(12.4)
37.7
51.9
(23.6)
28.3
–
39.5
(16.4)
(84.2)
(135.0)
29.7
(84.2)
(95.5)
(138.3)
(282.7)
(449.5)
Notes
1 Earnout payments in excess of the amount determined at acquisition are recorded as
operating activities
2 Proceeds on disposal of investments and subsidiaries includes return of capital from investments
in associates
Share repurchases and buybacks:
Purchase of own shares by ESOP Trusts
Shares purchased into treasury for cancellation
Net cash outflow
2023
£m
(53.9)
–
(53.9)
2022
£m
(55.3)
(807.4)
(862.7)
2021
£m
(89.2)
(729.3)
(818.5)
Proceeds from issue of €750 million bonds
Drawdown of revolving credit facility
Net cash inflow
Repayment of borrowings:
Decrease in drawings on bank loans
Repayment of borrowing-related derivatives
Repayment of revolving credit facility
Net repayment of debt assumed on acquisition
Repayment of €750 million bonds
Repayment of $500 million bonds
Repayment of €250 million bonds
Net cash outflow
Cash and cash equivalents:
Cash at bank and in hand
Short-term bank deposits
Overdrafts1
2023
£m
652.6
400.0
1,052.6
2023
£m
–
(46.0)
(400.0)
(48.9)
(652.6)
–
–
(1,147.5)
2022
£m
–
–
–
2021
£m
–
–
–
2022
£m
(11.3)
−
−
−
−
−
(209.3)
(220.6)
2021
£m
(36.3)
−
−
−
−
(360.8)
−
(397.1)
2023
£m
2,036.8
180.7
(358.2)
1,859.3
2022
£m
2,271.6
219.9
(505.7)
1,985.8
2021
£m
2,776.6
1,106.3
(342.3)
3,540.6
Note
1 Bank overdrafts are included in cash and cash equivalents because they form an integral part of
the Group’s cash management
The Group considers that the carrying amount of cash and cash equivalents
approximates their fair value.
2,105.0
2,114.9
1,878.3
Proceeds from issue of bonds:
WPP ANNUAL REPORT 2023
191
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. LEASES
The movements in 2023 and 2022 were as follows:
The following table shows the breakdown of the lease expense between
amounts charged to operating profit and amounts charged to finance costs:
Right-of-use assets
1 January 2022
Additions
Transfers to net investment in subleases
Disposals
Depreciation of right-of-use assets
Impairment charges included within
restructuring costs
Exchange adjustments
31 December 2022
Additions
Transfers to net investment in subleases
Disposals
Depreciation of right-of-use assets
Impairment charges included within
restructuring costs
Exchange adjustments
31 December 2023
Land and
buildings1
£m
1,357.0
363.8
(7.0)
(42.2)
(245.3)
Plant and
machinery
£m
38.1
23.8
–
(0.8)
(16.9)
(33.3)
89.2
1,482.2
255.0
(4.6)
(9.2)
(235.9)
(128.8)
(49.1)
1,309.6
(0.2)
2.3
46.3
49.6
–
(1.1)
(20.9)
–
(1.3)
72.6
Total
£m
1,395.1
387.6
(7.0)
(43.0)
(262.2)
(33.5)
91.5
1,528.5
304.6
(4.6)
(10.3)
(256.8)
(128.8)
(50.4)
1,382.2
Note
1 For the year ended 31 December 2023, the Company has £20.8 million (2022: £18.5 million) of
right-of-use assets that are classified as investment property
Lease liabilities
1 January 2022
Additions
Interest expense related to lease liabilities
Disposals
Repayment of lease liabilities (including
interest)
Exchange adjustments
31 December 2022
Additions
Interest expense related to lease liabilities
Disposals
Repayment of lease liabilities (including
interest)
Exchange adjustments
31 December 2023
Land and
buildings
£m
2,002.5
353.6
94.2
(46.1)
Plant and
machinery
£m
39.3
23.7
1.5
(1.9)
(385.6)
143.6
2,162.2
237.7
103.4
(11.4)
(340.0)
(74.1)
2,077.8
(16.4)
2.2
48.4
50.2
2.9
(1.7)
(21.6)
(1.5)
76.7
Total
£m
2,041.8
377.3
95.7
(48.0)
(402.0)
145.8
2,210.6
287.9
106.3
(13.1)
(361.6)
(75.6)
2,154.5
Depreciation of right-of-use assets:
Land and buildings
Plant and machinery
Impairment charges
Short-term lease expense
Low-value lease expense
Variable lease expense
Sublease income
Charge to operating profit
Interest expense related to lease liabilities
Charge to profit before taxation for leases
2023
£m
2022
£m
2021
£m
(235.9)
(20.9)
(128.8)
(22.2)
(2.8)
(45.5)
17.3
(438.8)
(106.3)
(545.1)
(245.3)
(16.9)
(33.5)
(20.2)
(1.9)
(57.3)
18.6
(356.5)
(95.7)
(452.2)
(254.7)
(18.2)
(12.5)
(18.0)
(2.3)
(56.2)
17.3
(344.6)
(90.9)
(435.5)
Variable lease payments primarily include real estate taxes and insurance costs.
The maturity of lease liabilities at 31 December 2023 and 2022 were as follows:
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
Over five years
Effect of discounting
Lease liability at end of year
Short-term lease liability
Long-term lease liability
2023
£m
405.9
326.9
282.1
261.0
231.1
1,265.2
2,772.2
(617.7)
2,154.5
292.3
1,862.2
2022
£m
379.1
337.7
293.0
252.3
234.8
1,328.5
2,825.4
(614.8)
2,210.6
282.4
1,928.2
The total committed future cash flows for leases not yet commenced at
31 December 2023 is £280.0 million (2022: £440.0 million).
The Group does not face a significant liquidity risk with regard to its lease
liabilities. Refer to note 24 for management of liquidity risk.
192
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
13. INTANGIBLE ASSETS
GOODWILL
The movements in 2023 and 2022 were as follows:
Cost
1 January 2022
Additions1
Disposals
Exchange adjustments
31 December 2022
Additions1
Disposals
Exchange adjustments
31 December 2023
Accumulated impairment losses and write-downs
1 January 2022
Impairment losses for the year
Exchange adjustments
31 December 2022
Impairment losses for the year
Exchange adjustments
31 December 2023
Net book value
31 December 2023
31 December 2022
1 January 2022
Brands
with an
indefinite
useful life
£m
Amortisation and impairment
1 January 20221
Charge for the year
Impairment charges
included within
restructuring costs3
Disposals and
derecognition1
Exchange adjustments1
31 December 20221
Charge for the year
Other movements2
Disposals and
derecognition
Exchange adjustments
31 December 2023
56.8
−
−
−
5.8
62.6
–
−
−
(2.8)
59.8
Acquired
intangibles
£m
648.0
61.9
Other
£m
212.5
21.9
Total
£m
917.3
83.8
−
29.0
29.0
(33.6)
108.2
784.5
727.9
−
(15.1)
(27.0)
1,470.3
(59.4)
16.7
220.7
24.8
(0.7)
(51.5)
(7.4)
185.9
(93.0)
130.7
1,067.8
752.7
(0.7)
(66.6)
(37.2)
1,716.0
Net book value
31 December 2023
31 December 2022
1 January 2022
412.4
1,103.4
1,010.5
344.2
288.7
273.4
93.3
59.8
75.6
849.9
1,451.9
1,359.5
Notes
1 The acquired intangibles balances within these line items have been re-presented to reflect
the derecognition of previously fully amortised assets that had no future economic benefit in
prior periods
£m
10,991.0
262.6
–
891.0
12,144.6
319.1
–
(484.5)
11,979.2
3,378.7
37.9
274.6
3,691.2
63.6
(164.5)
3,590.3
8,388.9
8,453.4
7,612.3
2 Other movements in acquired intangibles include reclassifications of items previously recorded
in trade and other receivables; and revisions to fair value adjustments arising on the acquisition
of subsidiary undertakings that had been determined provisionally at the immediately preceding
balance sheet date, as permitted by IFRS 3 Business Combinations
3 Refer to note 3 for further explanation in relation to the impairment charges included within
restructuring costs
Note
1 Additions represent goodwill arising on the acquisition of subsidiary undertakings including
the effect of any revisions to fair value adjustments that had been determined provisionally at
the immediately preceding balance sheet date, as permitted by IFRS 3 Business Combinations.
The effect of such revisions was not material in either year presented
OTHER INTANGIBLE ASSETS
The movements in 2023 and 2022 were as follows:
Brands
with an
indefinite
useful life
£m
Acquired
intangibles
£m
1,067.3
−
−
−
−
98.7
1,166.0
−
−
(665.4)
−
−
(28.4)
472.2
921.4
−
(33.8)
46.5
9.3
129.8
1,073.2
−
(15.1)
665.4
138.5
−
(47.5)
1,814.5
Other
£m
288.1
14.9
(59.2)
1.2
0.8
34.7
280.5
40.0
(51.8)
–
2.9
17.0
(9.4)
279.2
Total
£m
2,276.8
14.9
(93.0)
47.7
10.1
263.2
2,519.7
40.0
(66.9)
–
141.4
17.0
(85.3)
2,565.9
Cost
1 January 20221
Additions
Disposals and
derecognition1
New acquisitions
Other movements2
Exchange adjustments1
31 December 20221
Additions
Disposals and
derecognition
Reclassifications
New acquisitions
Other movements2
Exchange adjustments
31 December 2023
Cash-generating units (CGUs) with significant goodwill and brands with an
indefinite useful life as at 31 December are:
GroupM
Wunderman Thompson
VMLY&R
Ogilvy
BCW
AKQA Group
FGS Global
Hill & Knowlton
Landor Group
Other
Goodwill
Brands with an
indefinite useful life
2023
£m
3,254.9
1,165.0
814.6
809.3
618.8
600.1
452.1
141.7
115.0
417.4
8,388.9
2022
£m
3,178.3
1,210.8
776.0
849.8
646.0
628.7
451.8
145.7
106.5
459.8
8,453.4
2023
£m
−
−
−
213.2
112.7
−
−
33.2
53.3
−
412.4
2022
£m
−
442.0
207.6
222.8
140.5
−
−
34.8
55.7
−
1,103.4
WPP ANNUAL REPORT 2023
193
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13. INTANGIBLE ASSETS CONTINUED
Other goodwill represents goodwill on a large number of CGUs, none of which
is individually significant in comparison to the total carrying value of goodwill.
Separately identifiable brands with an indefinite useful life are carried at
historical cost in accordance with the Group’s accounting policy for intangible
assets. The carrying values of the other brands with an indefinite useful life
are not individually significant in comparison with the total carrying value of
brands with an indefinite useful life.
Acquired intangible assets at net book value at 31 December 2023 include
brand names of £134.6 million (2022: £142.3 million), customer-related
intangibles of £108.2 million (2022: £120.3 million) and other assets
(including proprietary tools) of £101.4 million (2022: £26.1 million).
AMORTISATION AND IMPAIRMENT
The total amortisation and impairment of acquired intangible assets of
£727.9 million (2022: £61.9 million) includes a charge of £650.1 million (2022:
£1.4 million) predominantly in regard to certain brands that no longer have
any useful life. This includes accelerated amortisation charges of £430.8 million
and £202.3 million for Wunderman Thompson and Y&R brands respectively,
due to the creation of VML in the fourth quarter of 2023.
In accordance with the Group’s accounting policy, the carrying values of
goodwill and intangible assets with indefinite useful lives are reviewed for
impairment annually or more frequently if events or changes in circumstances
indicate that the asset might be impaired. The impairment review is undertaken
annually on 30 September. The goodwill impairment charge of £63.6 million
(2022: £37.9 million) recognised during the year relates to businesses in the
Group that have closed or where the impact of current macroeconomic
conditions and trading circumstances indicate impairment to the carrying value.
This year, £40.3 million of the impairment charge related to the Global
Integrated Agencies segment and £23.3 million related to the Specialist
Agencies segment.
IMPAIRMENT ASSESSMENT PROCESS
Under IFRS, an impairment charge is required for both goodwill and other
indefinite life assets when the carrying amount exceeds the 'recoverable
amount', defined as the higher of fair value less costs of disposal and value
in use. The review assessed whether the carrying value of goodwill and
intangible assets with indefinite useful lives was supported by the value
in use determined as the net present value of future cash flows.
RECOVERABLE AMOUNT ASSESSMENT
Due to the significant number of CGUs, the impairment test was performed
in two steps. In the first step, the recoverable amount was calculated for each
CGU using the latest available forecasts for 2023 and/or 2024, nil growth rate
thereafter (2022: nil) and a conservative pre-tax discount rate of 14.7% (2022:
15.5%). The pre-tax discount rate of 14.7% was above the rate calculated for the
global networks of 13.7% (2022: 14.5%). For smaller CGUs that operate primarily
in a particular region subject to higher risk, the higher of 14.7% or 100 basis
points above the regional discount rate was used in the first step.
The recoverable amount was then compared to the carrying amount, which
includes goodwill, intangible assets and other assets. CGUs where the
recoverable amount exceeded the carrying amount were not considered
to be impaired. Those CGUs where the recoverable amount did not exceed
the carrying amount were then further reviewed in the second step.
In the second step, these CGUs were retested for impairment using more
refined assumptions. This included using a CGU-specific pre-tax discount rate
and management forecasts for a projection period of up to five years, followed
by an assumed long-term growth rate of 2.0% (2022: 2.0%). If the recoverable
amount using the more specific assumptions did not exceed the carrying value
of a CGU, an impairment charge was recorded.
The long-term growth rate is derived from management’s best estimate of
the likely long-term trading performance with reference to external industry
reports and other relevant market trends. As at 31 December 2023, we have
assessed long-term industry trends based on recent historical data and
assumed a long-term growth rate of 2.0% (2022: 2.0%). Management has made
the judgement that the long-term growth rate does not exceed the long-term
average growth rate for the industry.
194
WPP ANNUAL REPORT 2023
DISCOUNT RATES
The discount rate uses the capital asset pricing model (CAPM) to derive the
cost of equity along with an estimated cost of debt that is weighted by an
appropriate capital structure to derive an indication of a weighted average
cost of capital, which is then adjusted for relevant market and asset-specific
risk where they are not already adjusted for within the underlying cash flow
estimates. The cost of equity is calculated based on long-term government
bond yield, an estimate of the required premium for investment in equity
relative to government securities and further considers the volatility associated
with peer public companies relative to the market. The cost of debt reflects
an estimated market yield for long-term debt financing after taking into
account the credit profile of public peer companies in the industry. The capital
structure used to weight the cost of equity and cost of debt has been derived
from the observed capital structure of public peer companies.
The pre-tax discount rate applied to the cash flow projections for the CGUs
that operate globally was 13.7% (2022: 14.5%). We developed a global discount
rate that takes into account the diverse nature of the operations, as these CGUs
operate with a diverse range of clients in a range of industries throughout the
world, hence are subject to similar levels of market risks. The pre-tax discount
rates applied to the CGUs that have more regional specific operations ranged
from 12.6% (2022: 14.0%) to 28.4% (2022: 22.6%).
DISCOUNTED CASH FLOW ASSESSMENT
Our approach in determining the recoverable amount utilises a discounted
cash flow methodology, which necessarily involves making numerous estimates
and assumptions regarding revenue less pass-through costs growth, operating
margins, appropriate discount rates and working capital requirements. The
key assumptions used for estimating cash flow projections in the Group’s
impairment testing are those relating to operating margins and discount rates.
The key assumptions take account of the business’s expectations for the
projection period. These expectations consider the macroeconomic
environment, industry and market conditions, the CGU’s historical
performance and any other circumstances particular to the unit, such as
business strategy and client mix.
These estimates will likely differ from future actual results of operations and
cash flows, and it is possible that these differences could be material. In
addition, judgements are applied in determining the level of CGU identified for
impairment testing and the criteria used to determine which assets should be
aggregated. A difference in testing levels could affect whether an impairment
is recorded and the extent of impairment loss. Changes in our business activities
or structure may also result in additional changes to the level of testing in
future periods. Further, future events could cause the Group to conclude that
impairment indicators exist and that the asset values associated with a given
operation have become impaired.
Historically, the Group's impairment losses have resulted from a specific
event, condition or circumstance in one or more of our companies, such as
the impact of Covid-19 or the loss of a significant client. As a result, changes
in the assumptions used in our impairment model have generally not had
a significant effect on the impairment charges recognised. Following the
£650.1 million amortisation charge recorded in the fourth quarter of 2023,
described further above and in note 3, for certain brands that no longer have
any useful life, as at 31 December 2023 there are no CGUs for which a
reasonably possible change in key assumptions would lead to a significant
impairment. The carrying value of goodwill and other intangible assets will
continue to be reviewed at least annually for impairment and adjusted down
to the recoverable amount, if required.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
14. PROPERTY, PLANT AND EQUIPMENT
The movements in 2023 and 2022 were as follows:
15. INTERESTS IN ASSOCIATES AND OTHER INVESTMENTS
The movements in 2023 and 2022 were as follows:
Freehold
buildings
£m
Leasehold
buildings
£m
Land
£m
Fixtures,
fittings and
equipment
£m
Computer
equipment
£m
Total
£m
43.2
13.8
–
(0.1)
(16.9)
40.0
3.5
–
–
(31.6)
11.9
61.4
0.1
–
(8.3)
39.3
92.5
3.3
–
–
1,075.0
75.8
0.5
(62.1)
89.7
1,178.9
88.3
0.8
(155.9)
(61.5)
34.3
(51.0)
1,061.1
149.5
32.1
0.2
(40.0)
23.0
164.8
17.1
–
(51.0)
(11.5)
119.4
391.8 1,720.9
208.4
86.6
1.3
0.6
(182.6)
(72.1)
39.8
174.9
446.7 1,922.9
177.2
65.0
0.8
–
(302.5)
(95.6)
(181.9)
(26.3)
389.8 1,616.5
Cost
1 January 2022
Additions
New acquisitions
Disposals
Exchange
adjustments
31 December 2022
Additions
New acquisitions
Disposals
Exchange
adjustments
31 December 2023
–
–
–
–
Depreciation and impairment
1 January 2022
Charge for the year
Impairment charges
included within
restructuring costs
Disposals
Exchange
adjustments
31 December 2022
Charge for the year
Impairment charges
included within
restructuring costs
Disposals
Exchange
adjustments
31 December 2023
–
–
–
–
–
–
–
2.7
0.7
–
(1.7)
0.3
2.0
1.0
–
(0.2)
(0.2)
2.6
469.6
74.0
71.9
26.5
280.3
65.7
824.5
166.9
9.1
(63.5)
0.6
(36.7)
0.1
(71.1)
9.8
(173.0)
43.2
532.4
70.5
52.2
(144.9)
(29.0)
481.2
17.5
79.8
24.9
33.0
308.0
68.7
94.0
922.2
165.1
2.7
(48.4)
(14.2)
44.8
0.9
(94.1)
55.8
(287.6)
(24.1)
259.4
(67.5)
788.0
Net book value
31 December 2023
31 December 2022
1 January 2022
11.9
40.0
43.2
31.7
90.5
58.7
579.9
646.5
605.4
74.6
85.0
77.6
130.4
828.5
138.7 1,000.7
896.4
111.5
At 31 December 2023, capital commitments contracted, but not provided
for in respect of property, plant and equipment, were £38.4 million
(2022: £128.2 million).
1 January 2022
Additions
Loss from associates – after interest and tax
Share of other comprehensive income
of associate undertakings
Dividends
Other movements
Exchange adjustments
Disposals
Reclassification from subsidiaries
Reclassification from associates to other
investments
Revaluation of other investments through
profit or loss
Revaluation of other investments through
other comprehensive income
Amortisation of other intangible assets
Impairment charges
31 December 2022
Additions
Gain from associates – after interest and tax
Share of other comprehensive loss
of associate undertakings
Dividends
Other movements
Exchange adjustments
Disposals
Reclassification to subsidiaries
Reclassification from associates to
other investments
Revaluation of other investments through
profit or loss
Revaluation of other investments through
other comprehensive income
Amortisation of other intangible assets
Impairment charges
31 December 2023
Interests in
associates
£m
412.9
4.4
(60.4)
Other
investments
£m
318.3
5.1
−
51.2
(37.6)
2.9
17.1
(9.6)
(5.9)
(22.5)
−
−
(0.2)
(47.2)
305.1
39.4
25.1
(0.9)
(30.4)
(12.5)
(19.3)
(5.4)
–
–
–
–
–
(14.6)
286.5
−
−
−
−
(16.0)
−
61.6
23.1
(22.3)
−
−
369.8
2.5
–
–
–
-
-
(10.4)
–
–
(26.2)
(3.0)
–
–
332.7
Interests in joint ventures are immaterial and none of the Group's associates
are individually material at 31 December 2023.
The investments included above as 'Other investments' represent investments
in equity securities that present the Group with the opportunity for return
through dividend income and trading gains. They have no fixed maturity or
coupon rate. The fair values of the listed securities are based on quoted market
prices at the balance sheet date. For unlisted securities, where market value is
not available, the Group has estimated relevant fair values on the basis of
information from outside sources at the balance sheet date.
The carrying values of the Group’s associates are reviewed for impairment in
accordance with the Group’s accounting policies.
WPP ANNUAL REPORT 2023
195
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. INTERESTS IN ASSOCIATES AND OTHER INVESTMENTS
CONTINUED
AGGREGATE INFORMATION OF ASSOCIATES THAT ARE NOT
INDIVIDUALLY MATERIAL
The following table presents a summary of the aggregate financial
performance of the Group’s associate undertakings.
Earnings/(loss) from associates – after interest
and tax (note 4)
Share of other comprehensive (loss)/earnings
of associate undertakings
Share of total comprehensive earnings/(loss)
of associate undertakings
2023
£m
2022
£m
2021
£m
70.2
(60.4)
23.8
(0.9)
51.2
69.3
(9.2)
13.5
37.3
The application of equity accounting is ordinarily discontinued when the
investment is reduced to zero and additional losses are not provided for unless
the Group has guaranteed obligations of the investee or is otherwise
committed to provide further financial support for the investee.
As at 31 December 2023, share of losses of £30.1 million (2022: £29.5 million) for
the US and £137.9 million (2022: £33.8 million) for the Rest of World have not
been recognised in relation to Kantar as the investment was previously
reduced to zero.
As at 31 December 2021, the cumulative share of unrecognised losses in relation
to Imagina, an associate in Spain with the investment carrying value reduced
to zero, were £23.0 million. In 2022, the Group partially disposed of its
investment in Imagina in Spain resulting in its reclassification from interests in
associates to other investments (within the scope of IFRS 9) designated as fair
value through other comprehensive income. Refer to note 25 for further details
on financial instruments held at fair value though other comprehensive income.
At 31 December 2023, capital commitments contracted, but not provided for,
in respect of interests in associates and other investments were £2.2 million
(2022: £3.2 million).
16. DEFERRED TAX
The Group's deferred tax assets and liabilities are measured at the end of each
period in accordance with IAS 12 Income Taxes. The recognition of deferred
tax assets is determined by reference to the Group's estimate of recoverability,
using models, where appropriate, to forecast future taxable profits.
Deferred tax assets have only been recognised for territories where the Group
considers that it is probable that all or a portion of the deferred tax assets will
be realised. The main factors that we consider include:
– The future earnings potential determined through the use of internal forecasts
– The cumulative losses in recent years
– The various jurisdictions in which the potential deferred tax assets arise
– The history of losses carried forward and other tax assets expiring
– The timing of future reversal of taxable temporary differences
– The expiry period associated with the deferred tax assets
– The nature of the income that can be used to realise the deferred tax asset
If it is probable that some portion of these assets will not be realised, no asset
is recognised in relation to that portion.
If market conditions improve and future results of operations exceed our
current expectations, our existing recognised deferred tax assets may be
adjusted, resulting in future tax benefits. Alternatively, if market conditions
deteriorate further or future results of operations are less than expected,
future assessments may result in a determination that some or all of the
deferred tax assets are not realisable. As a result, all or a portion of the
deferred tax assets may need to be reversed.
The following is the analysis of the deferred tax balances for financial reporting purposes:
Deferred tax assets
Deferred tax liabilities
Deferred tax assets
Deferred tax liabilities
Offset of
balances arising
from a single
transaction1
2023
£m
Gross balances
before offset
within countries
2023
£m
(94.0)
94.0
–
590.9
(445.0)
145.9
Offset of
balances arising
from a single
transaction1
2022
£m
Gross balances
before offset
within countries
2022
£m
(145.4)
145.4
–
588.8
(617.5)
(28.7)
Gross
2023
£m
684.9
(539.0)
145.9
Gross
2022
£m
734.2
(762.9)
(28.7)
Offset within
countries
2023
£m
(266.5)
266.5
–
Offset within
countries
2022
£m
(266.7)
266.7
–
As
reported
2023
£m
324.4
(178.5)
145.9
As
reported
2022
£m
322.1
(350.8)
(28.7)
Note
1 The Group has applied Deferred tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12). Transactions which give rise to the recognition of an asset and a liability
on the Group’s balance sheet, including leases for which the Group recognises a right-of-use asset and a lease liability, lead to taxable and deductible temporary differences in certain jurisdictions.
The resulting deferred tax assets and deferred tax liabilities arising from these temporary differences have been offset and reported net on the Group’s balance sheet
196
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
16. DEFERRED TAX CONTINUED
The following are the major gross deferred tax assets before offset within countries recognised by the Group and movements thereon in 2023 and 2022:
1 January 2022
Acquisition of subsidiaries
(Charge)/credit to income
Charge to other comprehensive income
Charge to equity
Exchange differences and other movements
31 December 2022
Acquisition of subsidiaries
(Charge)/credit to income
Credit to other comprehensive income
Charge to equity
Exchange differences and other movements
31 December 2023
Deferred
compensation
£m
108.5
–
(38.7)
–
–
4.5
74.3
–
(6.0)
–
–
(3.2)
65.1
Accounting
provisions
and accruals
£m
106.2
–
3.3
–
–
10.6
120.1
–
13.8
–
–
(2.2)
131.7
Retirement
benefit
obligations
£m
53.4
–
(2.9)
(7.0)
–
4.5
48.0
–
2.8
1.5
–
(2.6)
49.7
Plant and
equipment
£m
15.0
–
(1.0)
–
–
33.9
47.9
–
(11.8)
–
–
(0.3)
35.8
Property
£m
53.0
–
(9.0)
–
–
9.7
53.7
–
(5.7)
–
–
8.4
56.4
Tax losses
and credits
£m
110.5
–
5.0
–
–
7.0
122.5
–
(11.5)
–
–
(6.8)
104.2
Share-based
payments
£m
43.5
–
1.3
–
(15.5)
3.0
32.3
–
3.7
–
(0.3)
(0.7)
35.0
Restructuring
provisions
£m
61.1
–
21.2
–
–
2.3
84.6
–
38.7
–
–
(15.7)
107.6
Other
temporary
differences
£m
13.8
1.1
(14.2)
–
–
4.7
5.4
–
1.8
–
–
(1.8)
5.4
Total
£m
565.0
1.1
(35.0)
(7.0)
(15.5)
80.2
588.8
–
25.8
1.5
(0.3)
(24.9)
590.9
Other temporary differences comprise a number of items, none of which is individually significant to the Group's consolidated balance sheet. At 31 December 2023
the balance related to temporary differences in relation to revenue adjustments, tax deductible goodwill, fair value adjustments and other temporary differences.
In addition the Group has recognised the following gross deferred tax liabilities before offset within countries and movements thereon in 2023 and 2022:
1 January 2022
Acquisition of subsidiaries
(Credit)/charge to income
Charge to other comprehensive income
Exchange differences and other movements
31 December 2022
Acquisition of subsidiaries
(Credit)/charge to income
Credit to other comprehensive income
Exchange differences and other movements
31 December 2023
Brands
and other
intangibles
£m
325.1
15.1
(12.4)
–
24.8
352.6
35.0
(173.7)
–
(21.2)
192.7
Associate
earnings
£m
36.8
–
(3.5)
–
3.2
36.5
–
(15.6)
–
(1.1)
19.8
Goodwill
£m
133.2
–
19.7
–
20.5
173.4
–
18.4
–
(10.8)
181.0
Plant and
equipment
£m
–
–
(14.2)
–
37.2
23.0
–
0.3
–
(1.1)
22.2
Other
temporary
differences
£m
40.9
–
(10.5)
0.4
1.2
32.0
–
(1.7)
(0.2)
(0.8)
29.3
Total
£m
536.0
15.1
(20.9)
0.4
86.9
617.5
35.0
(172.3)
(0.2)
(35.0)
445.0
Other temporary differences comprise a number of items none of which is individually significant to the Group's consolidated balance sheet. At 31 December
2023 the balance related to temporary differences in relation to unremitted earnings of subsidiaries and other temporary differences.
At the balance sheet date, the Group has gross tax losses and other temporary
differences of £10,321.0 million (2022: £7,667.4 million) available for offset
against future profits. Deferred tax assets have been recognised in respect
of the tax benefit of £2,399.4 million (2022: £2,259.7 million) of such tax losses
and other temporary differences. No deferred tax asset has been recognised
in respect of the remaining £7,921.6 million (2022: £5,407.7 million) of losses and
other temporary differences as the Group considers that there will not be
enough taxable profits in the entities concerned such that any additional asset
could be considered recoverable. Included in the total unrecognised temporary
differences are losses of £92.0 million (2022: £60.3 million) that will expire
within one to ten years, and £7,712.8 million (2022: £5,138.1 million) of losses
that may be carried forward indefinitely. The increase in losses primarily arose
in Luxembourg as a result of steps that were part of the Group's continuing
structural simplification programme.
At the balance sheet date, the aggregate amount of the temporary differences
in relation to the investment in subsidiaries for which deferred tax liabilities
have not been recognised was £1,355.1 million (2022: £1,346.1 million). No
liability has been recognised in respect of these differences because the
Group is in a position to control the timing of the reversal of the temporary
differences and the Group considers that it is probable that such differences
will not reverse in the foreseeable future.
WPP ANNUAL REPORT 2023
197
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. TRADE AND OTHER RECEIVABLES
The following are included in trade and other receivables1:
Other financial assets are included in other debtors.
Amounts to be realised after more than one year
Prepayments
Fair value of derivatives
Other debtors
2023
£m
2022
£m
2.0
32.3
174.9
209.2
3.9
0.6
214.1
218.6
The Group has applied the practical expedient permitted by IFRS 15 to not
disclose the transaction price allocated to performance obligations unsatisfied
(or partially unsatisfied) as of the end of the reporting period as contracts
typically have an original expected duration of a year or less.
Other debtors falling due after more than one year at 31 December 2023
includes £13.7 million in relation to pension plans in surplus (2022: £15.4 million).
Expected credit losses
At beginning of year
New acquisitions
Charged to the income statement
Released to the income statement
Exchange adjustments
Utilisations and other movements
At end of year
2023
£m
2022
£m
71.5
0.6
14.9
(22.2)
(5.3)
(15.6)
43.9
70.5
−
29.1
(8.4)
5.1
(24.8)
71.5
The expected credit loss is equivalent to 0.6% (2022: 1.0%) of gross
trade receivables.
Expected credit losses on unbilled costs, and other debtors were immaterial
for the years presented.
The Group considers that the carrying amount of trade and other receivables
approximates their fair value.
EXPECTED CREDIT LOSSES
Given the short-term nature of the Group’s trade receivables, unbilled costs,
and accrued income, which are mainly due from large national or multinational
companies, the Group's assessment of expected credit losses includes
provisions for specific clients and receivables where the contractual cash flow
is deemed at risk. Considerations include the current economic environment,
and the level of credit insurance the Group has along with historical loss rates
for each category of customers adjusted for forward-looking information.
Additional provisions are made based on the assessment of recoverability
of aged receivables over one year where sufficient evidence of recoverability
is not evident.
Amounts to be realised within one year
Trade receivables (net of loss allowance)
Unbilled costs2
VAT and sales taxes recoverable
Prepayments
Fair value of derivatives
Other debtors3
2023
£m
2022
£m
7,055.0
273.6
370.7
239.0
1.6
520.7
8,460.6
7,403.9
352.4
448.1
236.6
5.1
585.3
9,031.4
Notes
1 Accrued income was previously presented in Trade and other receivables
2 Previously named 'Work in progress'
3 This balance includes campus related enhancement prepayments and other individually not
material items
The ageing of trade receivables and other financial assets by due date is
as follows:
Days past due
Carrying
amount at
31 December
2023
£m
Not past
due
£m
0-30
days
£m
31-90
days
£m
91-180
days
£m
181
days-
1 year
£m
Greater
than
1 year
£m
7,098.9 6,173.0
612.7
183.0
52.7
30.6
46.9
(43.9)
(1.4)
7,055.0 6,171.6
(1.1)
611.6
(0.9)
182.1
(2.6)
50.1
(10.3)
20.3
(27.6)
19.3
0.6%
0.0%
0.2%
0.5%
4.9% 33.7% 58.8%
3,165.6 2,022.1
548.3
336.7
244.5
14.0
(15.0)
(0.3)
3,150.6 2,021.8
(0.5)
547.8
(1.3)
335.4
(12.8)
231.7
(0.1)
13.9
–
–
–
0.5%
0.0%
0.1%
0.4%
5.2%
0.7%
n/a
514.1
33.8
10,719.7 8,606.6 1,193.2
413.2
14.4
531.9
6.4
288.2
17.2
51.4
29.1
48.4
Days past due
Carrying
amount at
31 December
2022
£m
Not past
due
£m
0-30
days
£m
31-90
days
£m
91-180
days
£m
181
days-
1 year
£m
Greater
than
1 year
£m
7,475.4 6,386.5
706.4
247.1
66.8
23.5
45.1
(71.5)
(1.6)
(5.8)
(6.6)
(6.6)
(13.3)
(37.6)
7,403.9 6,384.9
700.6
240.5
60.2
10.2
7.5
1.0%
0.0%
0.8%
2.7%
9.9% 56.6% 83.4%
3,485.6 2,027.0
603.8
450.5
376.8
27.5
(17.3)
(0.1)
(0.2)
(0.1)
(16.9)
–
–
–
0.5%
0.0%
0.0%
0.0%
4.5%
0.0%
n/a
3,468.3 2,026.9
603.6
450.4
359.9
27.5
–
612.0
31.2
538.8
11,484.2 8,950.6 1,335.4
6.1
697.0
1.0
421.1
6.2
43.9
28.7
36.2
2023
Gross trade
receivables
Expected
credit losses
Expected
credit loss
rate
Gross
accrued
income
Expected
credit losses
Expected
credit loss
rate
Other
financial
assets
2022
Gross trade
receivables
Expected
credit losses
Expected
credit loss
rate
Gross
accrued
income
Expected
credit losses
Expected
credit loss
rate
Expected
credit loss
rate
Other
financial
assets
198
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
The following table is an analysis of future anticipated cash flows in relation to
liabilities in respect of put option agreements with vendors at 31 December:
18. TRADE AND OTHER PAYABLES: AMOUNTS FALLING
DUE WITHIN ONE YEAR
The following are included in trade and other payables falling due within
one year1:
Trade payables
Payments due to vendors (earnout agreements)
Liabilities in respect of put option agreements
with vendors
Fair value of derivatives
Other creditors and accruals2
2023
£m
10,825.7
73.3
2022
£m
11,182.3
62.0
13.6
1.8
2,408.7
13,323.1
18.8
58.0
2,914.8
14,235.9
Note
1 Deferred income was previously presented in Trade and other payables
2 This balance includes staff costs, indirect taxes payable and other individually not material items
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
Over five years
20. BANK OVERDRAFTS AND BONDS
Amounts falling due within one year:
The Group considers that the carrying amount of trade and other payables
approximates their fair value, except for liabilities in respect of put option
agreements with vendors for which the fair value is £12.3 million (this is level 3
fair value that is derived using a discounted cash flow approach).
Bank overdrafts
Bonds
2023
£m
13.6
24.0
38.6
9.8
6.2
11.4
103.6
2022
£m
18.8
5.2
76.6
99.2
74.8
67.5
342.1
2023
£m
358.2
588.1
946.3
2022
£m
505.7
663.3
1,169.0
In all material respects, deferred income at 31 December 2022 was recognised
as revenue during the year. Other than business-as-usual movements, and
deferred income acquired on the acquisition of subsidiaries, there were no
other significant changes in contract liability balances during the year.
The Group considers that the carrying amount of bank overdrafts approximates
their fair value.
Amounts falling due after more than one year:
19. TRADE AND OTHER PAYABLES: AMOUNTS FALLING
DUE AFTER MORE THAN ONE YEAR
The following are included in trade and other payables falling due after more
than one year:
Bonds
2023
£m
3,775.0
2022
£m
3,801.8
The Group estimates that the fair value of bonds is £4,119.5 million at
31 December 2023 (2022: £4,049.1 million). The fair values of the bonds are based
on quoted market prices and are within Level 1 of the fair value hierarchy.
The bonds and bank overdrafts included within liabilities fall due for
repayment as follows:
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
Over five years
2023
£m
946.3
432.9
647.2
648.0
647.5
1,399.4
4,721.3
2022
£m
1,169.0
618.0
441.5
658.8
661.1
1,422.4
4,970.8
Payments due to vendors (earnout agreements)
Liabilities in respect of put option agreements
with vendors
Fair value of derivatives
Other creditors and accruals
2023
£m
125.4
90.0
1.2
66.2
282.8
2022
£m
98.1
323.3
–
69.5
490.9
The Group considers that the carrying amount of trade and other payables
approximates their fair value, except for liabilities in respect of put option
agreements with vendors for which the fair value is approximately £82.4 million
(this is level 3 fair value that is derived using a discounted cash flow approach).
Liabilities in respect of put option agreements with vendors are initially
recorded at the present value of the redemption amount in accordance with
IAS 32 and subsequently measured at amortised cost in accordance with
IFRS 9. The cash flows of put options, which are discounted using the original
effective interest rate, are dependent on future earnings and are remeasured
each reporting period via the income statement.
The Group's approach to payments due to vendors (earnouts) is further
described in note 25. The following table sets out payments due to vendors
(earnouts), comprising contingent consideration and the Directors’ best
estimates of future earnout-related obligations:
Within one year
Between one and two years
Between two and three years
Between three and four years
Between four and five years
2023
£m
73.3
54.1
70.9
0.4
–
198.7
2022
£m
62.0
19.5
27.6
28.6
22.4
160.1
WPP ANNUAL REPORT 2023
199
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21. PROVISIONS FOR LIABILITIES AND CHARGES
The movements in 2023 and 2022 were as follows:
22. SHARE-BASED PAYMENTS
Charges for share-based incentive plans were as follows:
1 January 2022
Charged to the income statement
Acquisitions1
Utilised
Released to the income statement
Other movements
Exchange adjustments
31 December 2022
Charged to the income statement
Acquisitions1
Utilised
Released to the income statement
Other movements
Exchange adjustments
31 December 2023
Employee
benefits
£m
140.3
4.3
–
(32.5)
–
14.6
16.4
143.1
3.1
–
(21.8)
(2.3)
38.1
(7.4)
152.8
Property
£m
70.6
8.1
–
(12.8)
(3.2)
(4.8)
4.9
62.8
64.2
–
(18.7)
(4.0)
(2.9)
(2.7)
98.7
Other
£m
57.6
2.1
1.3
(4.7)
(22.2)
3.2
1.4
38.7
24.9
0.6
(0.7)
(8.5)
(0.2)
(1.8)
53.0
Total
£m
268.5
14.5
1.3
(50.0)
(25.4)
13.0
22.7
244.6
92.2
0.6
(41.2)
(14.8)
35.0
(11.9)
304.5
Note
1 Acquisitions include £0.6 million (2022: £1.3 million) of provisions arising from fair value
adjustments related to the acquisition of subsidiary undertakings as required by IFRS 3 Business
Combinations
Employee benefits relate to statutory or contractual employee entitlements
where there is uncertainty over the timing or amount of the settlement.
The majority of this provision relates to various employee defined contribution
and deferred compensation plans in the USA. It is anticipated that these costs
will be incurred when employees choose to take their benefits or depart from
the Company.
The property provision balance relates primarily to onerous property
contracts and decommissioning where the Group has the obligation to
make-good its leased properties. Where the Group has made a decision to
exit a leased property, onerous property contract provisions do not include
rent in accordance with IFRS 16 Leases, however, do include unavoidable
costs related to the lease such as ongoing service charges. Utilisation of
the recognised provisions is expected to be incurred in conjunction with
the profile of the leases to which they relate.
Other provisions primarily relate to legal provisions as well as various items
that do not fall within the Group’s categories of provisions above. The
Company and various of its subsidiaries are, from time to time, parties to
legal proceedings and claims which arise in the ordinary course of business.
The Directors do not anticipate that the outcome of these proceedings and
claims will have a material adverse effect on the Group’s financial position
or on the results of its operations.
CONTINGENT LIABILITIES
The Group operates in a large number of markets with complex tax and
legislative regimes that are open to subjective interpretation, and for which
tax audits can take several years to resolve. The Group has received a number
of demands and assessments from different states in India that have been or will
be appealed to the courts, none of which are individually material. However,
as permitted by IAS 37, the provision of any further information within this
disclosure is expected to seriously prejudice the Group’s position in the dispute,
given that appeals are ongoing. The Group believes that we will be successful
in our appeals, however any appeal process is intrinsically uncertain.
Share-based payments
2023
£m
140.1
2022
£m
122.0
2021
£m
99.6
Share-based payments comprise charges for stock options and restricted
stock awards to employees of the Group.
As of 31 December 2023, there was £179.9 million (2022: £200.7 million) of total
unrecognised compensation cost related to the Group’s restricted stock plans.
RESTRICTED STOCK PLANS
The Group operates a number of equity-settled share incentive schemes,
in most cases satisfied by the delivery of stock from one of the Group’s
ESOP Trusts. The most significant current schemes are as follows:
EXECUTIVE PERFORMANCE SHARE PLAN (EPSP)
This scheme is intended to reward and incentivise the most senior executives
of the Group. The performance period is three or five complete financial years,
commencing with the financial year in which the award is granted. The vest
date will usually be in the March following the end of the performance period.
Vesting is conditional on continued employment throughout the vesting period.
The 2020, 2021, 2022 and 2023 EPSP awards are subject to three equally
weighted performance conditions: three-year average Return on Invested
Capital (ROIC), cumulative Adjusted Free Cash Flow (AFCF), and relative Total
Shareholder Return (TSR). Achieving the threshold performance requirement
will result in a vesting opportunity of 20% for that element. The vesting
opportunity will increase on a straight-line basis to 100% of the award for
maximum performance. The Compensation Committee has an overriding
discretion to determine the extent to which the award will vest.
PERFORMANCE SHARE AWARDS (PSA)
Conditional stock awards made under the PSA are dependent upon annual
performance targets, typically based on one or more of: operating profit,
profit before taxation and operating margin. Grants are made in the year
following the year of performance measurement, and vest two years after
grant date provided the individual concerned is continually employed by
the Group throughout this time.
LEADERSHIP SHARE AWARDS
WPP Leadership Awards are conditional stock awards made to around 1,900
of our key executives. Awards vest three years after grant, provided the
participant is still employed within the Group.
VALUATION METHODOLOGY
For all of these schemes, the valuation methodology is based upon fair value
on grant date, which is determined by the market price on that date or the
application of a Black-Scholes model, depending upon the characteristics of
the scheme concerned. The assumptions underlying the Black-Scholes model
are detailed below including details of assumed dividend yields. Market price
on any given day is obtained from external, publicly available sources.
MARKET/NON-MARKET CONDITIONS
Most share-based plans are subject to non-market performance conditions,
such as margin or growth targets, as well as continued employment.
EPSP is subject to a number of performance conditions, including TSR,
a market-based condition.
For schemes without market-based performance conditions, the valuation
methodology above is applied and, at each year-end, the relevant charge
for each grant is revised, if appropriate, to take account of any changes
in estimate of the likely number of shares expected to vest.
For schemes with market-based performance conditions, the probability
of satisfying these conditions is assessed at grant date through a statistical
model (such as the Monte Carlo model) and applied to the fair value. This initial
valuation remains fixed throughout the life of the relevant plan, irrespective
of the actual outcome in terms of performance. Where a lapse occurs due to
cessation of employment, the cumulative charge taken to date is reversed.
200
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
22. SHARE-BASED PAYMENTS CONTINUED
Movement on ordinary shares granted for significant restricted stock plans:
The Group grants stock options with a life of ten years, including the
vesting period.
WPP WORLDWIDE SHARE OWNERSHIP PROGRAMME (WWOP)
As at 31 December 2023, unexercised options over ordinary shares of 650,825
and unexercised options over ADRs of 72,695 have been granted under the
WPP Worldwide Share Ownership Programme as follows:
Number of ordinary shares
under option
647,575
3,250
Number of ADRs
under option
72,695
Exercise price
per share (£)
13.145
13.145
Exercise
dates
2017-2024
2018-2024
Exercise price
per share (£)
102.670
Exercise
dates
2017-2024
WPP SHARE OPTION PLAN 2015 (WSOP)
As at 31 December 2023, unexercised options over ordinary shares of
15,369,025 and unexercised options over ADRs of 1,772,400 have been granted
under the WPP Share Option Plan as follows:
Number of ordinary shares
under option
3,524,700
1,806,625
9,500
849,350
7,000
125,125
2,682,975
1,466,100
8,875
2,237,900
1,040,350
7,625
4,000
739,850
859,050
Number of ADRs
under option
409,115
198,380
318,125
120,995
169,790
255,510
117,650
100,960
81,875
Exercise price
per share (£)
7.064
7.344
7.344
8.372
8.372
8.684
8.684
9.600
9.600
11.065
13.085
13.085
15.150
15.150
17.055
Exercise price
per ADR ($)
44.120
48.950
52.600
53.140
62.590
73.780
88.260
105.490
115.940
Exercise
dates
2025-2032
2023-2030
2023-2027
2021-2028
2021-2025
2025-2029
2025-2032
2022-2029
2022-2026
2023-2030
2020-2027
2020-2024
2019-2025
2018-2025
2019-2026
Exercise
dates
2025-2032
2023-2030
2025-2032
2021-2028
2022-2029
2023-2030
2020-2027
2020-2026
2018-2025
Non-
vested
1 January
2023
number
m
20.4
4.1
11.3
Granted
number
m
Forfeited
number
m
Vested
number
m
Non-
vested
31 December
2023
number
m
7.8
2.3
5.9
(1.4)
(3.9)
(0.5)
(0.4)
(1.0)
(3.8)
22.9
5.5
12.4
924p
919p
947p
752p
950p
952p
857p
939p
926p
915p
899p
654p
934p
673p
848p
Non-
vested
1 January
2022
number
m
16.7
3.1
10.4
Granted
number
m
Forfeited
number
m
Vested
number
m
Non-
vested
31 December
2022
number
m
6.1
4.0
4.9
(2.2)
(0.2)
20.4
(0.2)
(2.8)
(1.2)
(2.8)
4.1
11.3
900p
1,025p
1,055p
613p
604p
911p
798p
519p
922p
787p
881p
795p
924p
952p
899p
Executive Performance
Share Plan (EPSP)
Performance Share
Awards (PSA)
Leadership Share
Awards
Weighted average fair
value (pence per share)
Executive Performance
Share Plan (EPSP)
Performance Share
Awards (PSA)
Leadership Share
Awards
Executive Performance
Share Plan (EPSP)
Performance Share
Awards (PSA)
Leadership Share
Awards
Weighted average fair
value (pence per share)
Executive Performance
Share Plan (EPSP)
Performance Share
Awards (PSA)
Leadership Share
Awards
The total fair value of shares vested for all the Group’s restricted stock plans
during the year ended 31 December 2023 was £81.6 million (2022: £65.4 million,
2021: £64.1 million).
SHARE OPTIONS
TERMS OF SHARE OPTION PLANS
In 2015, the Group introduced the Share Option Plan 2015 to replace both
the 'all-employee' Worldwide Share Ownership Plan and the discretionary
Executive Stock Option Plan. Two kinds of options over ordinary shares can
be granted, both with a market value exercise price. Firstly, options can be
granted to employees who have worked at a company owned by WPP plc for
at least two years which are not subject to performance conditions. Secondly,
options may be granted on a discretionary basis subject to the satisfaction
of performance conditions.
The Worldwide Share Ownership Programme was open for participation
to employees with at least two years’ employment in the Group. It was not
available to those participating in other share-based incentive programmes
or to Executive Directors. The vesting period for each grant is three years
and there are no performance conditions other than continued employment
with the Group.
The Executive Stock Option Plan has historically been open for participation
to WPP Group Leaders, Partners and High Potential Group. It is not currently
offered to Parent Company Executive Directors. The vesting period is three
years and performance conditions include achievement of various TSR
(Total Shareholder Return) and EPS (Earnings Per Share) objectives, as well
as continued employment. The terms of these stock options are such that if,
after nine years and eight months, the performance conditions have not
been met, the stock option will lapse automatically.
WPP ANNUAL REPORT 2023
201
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. SHARE-BASED PAYMENTS CONTINUED
The aggregate status of the WPP Share Option Plans during 2023 was as follows:
MOVEMENTS ON OPTIONS GRANTED (REPRESENTED IN ORDINARY SHARES)
WPP
WWOP
WSOP
WPP
WWOP
WSOP
WEIGHTED AVERAGE EXERCISE PRICE FOR OPTIONS OVER
Ordinary shares (£)
WPP
WWOP
WSOP
ADRs ($)
WWOP
WSOP
Ordinary shares (£)
WPP
WWOP
WSOP
ADRs ($)
WWOP
WSOP
1 January
2023
–
1,639,025
21,299,025
22,938,050
1 January
2022
6,741
2,049,299
19,608,150
21,664,190
Granted
–
–
5,586,650
5,586,650
Granted
–
–
5,224,050
5,224,050
Exercised
–
–
(85,900)
(85,900)
Forfeited
–
(624,725)
(2,568,750)
(3,193,475)
Exercised
–
(2,575)
(123,125)
(125,700)
Forfeited
(6,741)
(407,699)
(3,410,050)
(3,824,490)
Outstanding
31 December
2023
–
1,014,300
24,231,025
25,245,325
Outstanding
31 December
2022
–
1,639,025
21,299,025
22,938,050
Exercisable
31 December
2023
-
-
7,386,400
7,386,400
Exercisable
31 December
2022
–
–
3,188,675
3,188,675
1 January
2023
–
13.224
10.356
106.379
67.910
1 January
2022
9.355
12.923
10.854
Granted
Exercised
Forfeited
Outstanding
31 December
2023
Exercisable
31 December
2023
–
–
–
–
–
–
–
8.350
–
13.432
9.959
–
13.145
9.652
–
–
–
–
48.950
109.949
66.181
102.670
62.587
–
44.120
Granted
Exercised
Forfeited
Outstanding
31 December
2022
Exercisable
31 December
2022
–
–
8.684
–
8.458
8.357
9.355
11.565
10.530
–
13.224
10.356
–
−
7.344
101.693
72.228
–
52.600
–
53.270
85.706
71.674
106.379
67.910
−
48.950
202
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
22. SHARE-BASED PAYMENTS CONTINUED
OPTIONS OVER ORDINARY SHARES
23. EMPLOYEE BENEFIT OBLIGATIONS
Companies within the Group operate a large number of pension plans,
the forms and benefits of which vary with conditions and practices in the
countries concerned. The Group’s pension costs are analysed as follows:
Defined contribution plans
Defined benefit plans charge to operating profit
Pension costs (note 5)
Net interest expense on pension plans (note 6)
2023
£m
198.1
15.0
213.1
4.3
217.4
2022
£m
191.3
13.5
204.8
2.2
207.0
2021
£m
162.8
14.9
177.7
1.8
179.5
DEFINED BENEFIT PLANS
The pension costs are assessed in accordance with the advice of local
independent qualified actuaries. The latest full actuarial valuations for the
various pension plans were carried out at various dates in the last three years.
These valuations have been updated by the local actuaries to 31 December 2023.
The majority of plans provide final salary benefits, with plan benefits
typically based either on mandatory plans under local legislation, termination
indemnity benefits, or on the rules of WPP-sponsored supplementary plans.
The implications of IFRIC 14 have been allowed for where relevant, in particular
with regard to the asset ceiling/irrecoverable surplus.
The Group’s policy is to close existing defined benefit plans to new members.
This has been implemented across a significant number of the pension plans.
Contributions to funded plans are determined in line with local conditions and
practices. Contributions in respect of unfunded plans are paid as they fall due.
The total contributions (for funded plans) and benefit payments (for unfunded
plans) paid for 2023 amounted to £19.8 million (2022: £24.0 million, 2021: £16.7
million). Employer contributions and benefit payments in 2024 are expected
to be approximately £17.0 million.
Outstanding
OPTIONS OVER ADRs
Outstanding
Range of
exercise prices
£
7.344-17.055
Weighted
average
exercise price
£
10.455
Weighted
average
contractual life
Months
70
Range of
exercise prices
$
44.120-115.940
Weighted
average
exercise price
$
64.166
Weighted
average
contractual life
Months
80
As at 31 December 2023 there was £10.1 million (2022: £11.1 million) of total
unrecognised compensation costs related to share options. The cost is
expected to be recognised over a weighted average period of 19 months
(2022: 20 months).
Share options are satisfied out of newly issued shares.
The weighted average fair value of options granted in the year calculated
using the Black-Scholes model was as follows:
Outstanding
Fair value of UK options
(shares)
Fair value of US options
(ADRs)
Weighted average
assumptions
UK risk-free interest rate
US risk-free interest rate
Expected life (months)
Expected volatility
Dividend yield
2023
131.0p
$8.59
4.00%
4.53%
48
33%
5.6%
2022
177.0p
$11.48
2.92%
4.09%
48
32%
3.9%
2021
220.0p
$14.89
0.63%
1.16%
48
34%
3.4%
Options are issued at an exercise price equal to market value on the date
of grant.
The average share price of the Group for the year ended 31 December 2023
was £8.41 (2022: £9.13, 2021: £9.64) and the average ADR price for the same
period was $52.31 (2022: $56.80, 2021: $66.44). The average share price of the
Group for year ended 31 December 2023 approximates the weighted average
share price during the periods of exercise throughout the year.
Expected volatility is sourced from external market data and represents the
historical volatility in the Company’s share price over a period equivalent to
the expected option life.
Expected life is based on a review of historical exercise behaviour in the
context of the contractual terms of the options, as described in more detail
on page 201.
WPP ANNUAL REPORT 2023
203
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. EMPLOYEE BENEFIT OBLIGATIONS CONTINUED
(A) ASSETS AND LIABILITIES
At 31 December, the fair value of the assets in the pension plans and the
assessed present value of the liabilities in the pension plans are shown
in the following table:
Equities
Bonds
Insured annuities
Property
Cash
Other
Total fair value of assets
Present value of liabilities
Deficit in the plans
Irrecoverable surplus
Net liability1
Plans in surplus2
Plans in deficit
%
5.8
47.0
40.3
0.2
2.8
3.9
100.0
%
9.3
65.7
1.2
0.5
7.1
16.2
100.0
2023
£m
24.2
170.2
3.0
1.3
18.3
42.0
259.0
(381.2)
(122.2)
–
(122.2)
13.7
(135.9)
2022
£m
26.7
208.8
149.2
1.4
18.1
26.3
430.5
(552.6)
(122.1)
–
(122.1)
15.4
(137.5)
%
6.2
48.5
34.7
0.3
4.2
6.1
100.0
2021
£m
31.8
259.7
222.5
1.0
15.3
21.8
552.1
(688.5)
(136.4)
(0.2)
(136.6)
30.1
(166.7)
Notes
1 The related deferred tax asset is discussed in note 16
2 The net asset related to plans in surplus of £13.7 million for 31 December 2023 (2022: £15.4 million)
is recorded in the consolidated balance sheet within other debtors. The corresponding figures
for 31 December 2021 are recorded in provision for post-employment benefits
All plan assets have quoted prices in active markets with the exception of
other assets.
Surplus/(deficit) in plans by region
UK
North America
Western Continental Europe
Asia Pacific, Latin America, Africa & Middle
East and Central & Eastern Europe
Deficit in the plans
2023
£m
0.7
(29.7)
(60.1)
2022
£m
2.3
(37.1)
(52.6)
2021
£m
0.4
(28.1)
(74.0)
(33.1)
(122.2)
(34.7)
(122.1)
(34.7)
(136.4)
Some of the Group’s defined benefit plans are unfunded (or largely unfunded)
by common custom and practice in certain jurisdictions. In the case of these
unfunded plans, the benefit payments are made as and when they fall due.
Pre-funding of these plans would not be typical business practice.
The following table shows the split of the deficit at 31 December between
funded and unfunded pension plans.
2023
Surplus/
(deficit)
£m
2023
Present
value of
liabilities
£m
2022
Surplus/
(deficit)
£m
2022
Present
value of
liabilities
£m
2021
Surplus/
(deficit)
£m
2021
Present
value of
liabilities
£m
0.7
7.4
(9.2)
(182.9)
2.3
4.1
(155.5)
(208.5)
0.4
20.1
(231.9)
(237.9)
(34.1)
(70.6)
(29.1)
(67.9)
(45.1)
(87.6)
(5.4)
(27.6)
(4.1)
(25.4)
(6.4)
(25.7)
(31.4)
(290.3)
(26.8)
(457.3)
(31.0)
(583.1)
(37.1)
(37.1)
(41.2)
(41.2)
(48.2)
(48.2)
(26.0)
(26.0)
(23.5)
(23.5)
(28.9)
(28.9)
(27.7)
(27.8)
(30.6)
(30.6)
(28.3)
(28.3)
(90.8)
(90.9)
(95.3)
(95.3)
(105.4)
(105.4)
(122.2)
(381.2)
(122.1)
(552.6)
(136.4)
(688.5)
Funded plans
by region
UK
North America
Western
Continental
Europe
Asia Pacific,
Latin America,
Africa & Middle
East and
Central &
Eastern Europe
Deficit/
liabilities in
the funded
plans
Unfunded
plans by
region
North America
Western
Continental
Europe
Asia Pacific,
Latin America,
Africa & Middle
East and
Central &
Eastern Europe
Deficit/
liabilities in
the unfunded
plans
Deficit/
liabilities in
the plans
In accordance with IAS 19, plans that are wholly or partially funded are
considered funded plans.
204
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
For the Group’s pension plans, the plans’ assets are invested with the objective
of being able to meet current and future benefit payment needs, while
controlling balance sheet volatility and future contributions. Pension plan
assets are invested with a number of investment managers, and assets are
diversified among equities, bonds, insured annuities, property and cash or
other liquid investments. The primary use of bonds as an investment class is to
match the anticipated cash flows from the plans to pay pensions. The Group is
invested in high-quality corporate and government bonds which share similar
risk characteristics and are of equivalent currency and term to the plan liabilities.
Various insurance policies have also been bought historically to provide a more
exact match for the cash flows, including a match for the actual mortality of
specific plan members. These insurance policies effectively provide protection
against both investment fluctuations and longevity risks. The strategic target
allocation varies among the individual plans.
Management considers the types of investment classes in which the pension
plan assets are invested. The types of investment classes are determined by
economic and market conditions and in consideration of specific asset-class risk.
The investment strategy of the Group varies by country, albeit there was a
general directive by the Group in recent years to de-risk the larger funded
plans (mainly in the US and UK) and move towards a liability driven
investment strategy.
Management periodically commissions detailed asset and liability studies
performed by third-party professional investment advisors and actuaries
that generate probability-adjusted expected future returns on those assets.
These studies also project the estimated future pension payments and
evaluate the efficiency of the allocation of the pension plan assets into various
investment categories.
23. EMPLOYEE BENEFIT OBLIGATIONS CONTINUED
(B) ASSUMPTIONS
There are a number of areas in pension accounting that involve estimates
made by management based on advice of qualified advisors. These include
establishing the discount rates, rates of increase in salaries and pensions in
payment, inflation, and mortality assumptions. The main weighted average
assumptions used for the actuarial valuations at 31 December are shown in
the following table:
UK
Discount rate1
Rate of increase in
pensions in payment
Inflation
North America
Discount rate1
Rate of increase in
salaries2
Western Continental
Europe
Discount rate1
Rate of increase in
salaries
Rate of increase in
pensions in payment
Inflation
Asia Pacific, Latin
America, Africa & Middle
East and Central &
Eastern Europe
Discount rate1
Rate of increase
in salaries
Inflation
2023
% pa
4.7
2.5
3.1
4.9
n/a
3.4
2.5
2.0
2.0
6.5
6.2
3.4
2022
% pa
5.1
4.4
3.0
5.2
n/a
4.1
2.5
2.0
2.0
6.4
5.7
3.4
2021
% pa
1.8
4.5
3.2
2.6
n/a
1.2
2.3
1.8
1.7
5.3
5.6
3.7
2020
% pa
1.3
4.4
2.8
2.0
3.0
0.9
2.2
1.8
1.7
4.2
5.2
3.7
Notes
1 Discount rates are based on high-quality corporate bond yields. In countries where there is
no deep market in corporate bonds, the discount rate assumption has been set with regard
to the yield on long-term government bonds
2 The salary assumptions are no longer applicable to the US as all plans were frozen.
Active participants will not accrue additional benefits for future services under these plans
WPP ANNUAL REPORT 2023
205
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. EMPLOYEE BENEFIT OBLIGATIONS CONTINUED
At 31 December 2023, the life expectancies underlying the value of the
accrued liabilities for the main defined benefit pension plans operated
by the Group were as follows:
Years life expectancy
after age 65
Current pensioners
(at age 65) – male
Current pensioners
(at age 65) – female
Future pensioners
(current age 45)
– male
Future pensioners
(current age 45)
– female
All
plan
21.8
23.6
North
America
22.0
23.4
UK
23.4
24.9
Western
Continental
Europe
Other1
21.1
20.3
23.5
23.4
25.4
23.4
20.3
25.2
24.8
27.0
26.0
25.1
Note
1
Includes Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe
The life expectancies after age 65 at 31 December 2022 were 22.3 years and
24.0 years for male and female current pensioners (at age 65) respectively,
and 24.0 years and 25.7 years for male and female future pensioners (current
age 45), respectively.
In the determination of mortality assumptions, management uses the most
up-to-date mortality tables available in each country.
The following table provides information on the weighted average duration
of the defined benefit pension obligations and the distribution of the timing
of benefit payments for the next ten years. The duration corresponds to the
weighted average length of the underlying cash flows.
Weighted average
duration of the defined
benefit obligation (years)
Expected benefit
payments over the
next ten years (£m)
Within 12 months
In 2025
In 2026
In 2027
In 2028
In the next five years
All
plan
North
America
Western
Continental
Europe
UK
Other1
8.0
7.4
6.3
10.2
5.9
30.2
28.3
29.2
29.0
27.6
144.4
18.5
18.1
17.8
18.7
15.7
83.7
0.7
0.6
0.6
0.5
0.5
1.6
6.0
6.0
6.2
6.2
7.0
33.2
5.0
3.6
4.6
3.6
4.4
25.9
Note
1
Includes Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe
The following table presents a sensitivity analysis for each significant actuarial
assumption showing how the defined benefit obligation would have been
affected by changes in the relevant actuarial assumption that were reasonably
possible at the balance sheet date. This sensitivity analysis applies to the
defined benefit obligation only and not to the net defined benefit pension
liability in its entirety, the measurement of which is driven by a number of
factors including, in addition to the assumptions below, the fair value of
plan assets.
The sensitivity analyses are based on a change in one assumption while
holding all other assumptions constant so that interdependencies between
the assumptions are excluded. The methodology applied is consistent with
that used to determine the recognised defined benefit obligation. The
sensitivity analysis for inflation is not shown as it is an underlying assumption
to build the pension and salary increase assumptions. Changing the inflation
assumption on its own without changing the salary or pension assumptions
will not result in a significant change in pension liabilities.
206
WPP ANNUAL REPORT 2023
24.2
25.1
Decrease by 25 basis points:
Sensitivity analysis of significant actuarial assumptions
Discount rate
Increase by 25 basis points:
UK
North America
Western Continental Europe
Other1
UK
North America
Western Continental Europe
Other1
Rate of increase in salaries
Increase by 25 basis points:
Western Continental Europe
Other1
Decrease by 25 basis points:
Western Continental Europe
Other1
Rate of increase in pensions in payment
Increase by 25 basis points:
UK
Western Continental Europe
Decrease by 25 basis points:
UK
Western Continental Europe
Life expectancy
Increase in longevity by one additional year:
UK
North America
Western Continental Europe
(Decrease)/increase
in benefit obligation
2022
£m
2023
£m
(0.1)
(3.8)
(2.3)
(0.5)
0.2
3.9
2.4
0.5
0.6
0.4
(3.6)
(4.4)
(2.0)
(0.5)
3.8
4.6
2.1
0.6
0.5
0.5
(0.6)
(0.5)
(0.5)
(0.5)
0.2
1.2
–
(1.2)
0.7
3.3
3.0
0.7
1.1
(0.6)
(1.0)
6.8
4.2
2.6
Note
1
Includes Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe
(C) PENSION EXPENSE
The following tables show the breakdown of the pension expense between
amounts charged to operating profit and amounts charged to finance costs:
Service cost1
Administrative expenses
Charge to operating profit
Net interest expense on pension plans
Charge to profit before taxation
for defined benefit plans
2023
£m
12.2
2.8
15.0
4.3
19.3
2022
£m
10.4
3.1
13.5
2.2
15.7
2021
£m
12.6
2.3
14.9
1.8
16.7
Note
1
Includes current service cost, past service costs related to plan amendments and (gain)/loss on
settlements and curtailments
The following table shows the breakdown of amounts recognised in other
comprehensive income (OCI):
Return on plan assets (excluding interest income)
Changes in demographic assumptions underlying
the present value of the plan liabilities
Changes in financial assumptions underlying the
present value of the plan liabilities
Experience (loss)/gain arising on the plan liabilities
Change in irrecoverable surplus
Actuarial (loss)/gain recognised in OCI
2023
£m
6.5
2022
£m
(127.6)
2021
£m
(29.3)
(0.5)
0.6
(3.6)
(13.8)
(1.3)
–
(9.1)
143.5
(0.1)
0.2
16.6
31.1
15.7
0.4
14.3
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
23. EMPLOYEE BENEFIT OBLIGATIONS CONTINUED
(D) MOVEMENT IN PLAN LIABILITIES
The following table shows an analysis of the movement in the pension plan
liabilities for each accounting period:
Plan liabilities at beginning of year
Service cost1
Interest cost
Actuarial loss/(gain):
Effect of changes in demographic assumptions
Effect of changes in financial assumptions
Effect of experience adjustments
Benefits paid
(Gain)/loss due to exchange rate movements
Settlement payments2
Other3
Plan liabilities at end of year
2023
£m
552.6
12.2
20.5
0.5
13.8
1.3
(37.5)
(16.7)
(163.2)
(2.3)
381.2
2022
£m
688.5
10.4
15.5
(0.6)
(143.5)
0.1
(52.0)
40.4
(8.7)
2.5
552.6
2021
£m
772.7
12.6
12.0
3.6
(31.1)
(15.7)
(59.5)
(6.1)
(0.3)
0.3
688.5
Notes
1
Includes current service cost, past service costs related to plan amendments and (gain)/loss on
settlements and curtailments
2 During the year ended 31 December 2023, the Group completed the winding-up of two defined
benefit pension plans: The Ogilvy & Mather Group Pension and Life Assurance Plan and the JWT
Pension and Life Assurance Scheme, constituting settlements under IAS 19. The settlements led
to the full elimination of associated plan assets and plan liabilities of £145.0 million, the fair value
of plan assets equalled the underlying liabilities upon settlement such that there is no impact on
2023 net assets or the income statement
3 Other includes acquisitions, disposals, plan participants’ contributions and reclassifications. The
reclassifications represent certain of the Group’s defined benefit plans which are included in this
note for the first time in the periods presented
(E) MOVEMENT IN PLAN ASSETS
The following table shows an analysis of the movement in the pension plan
assets for each accounting period:
Fair value of plan assets at beginning of year
Interest income on plan assets
Return on plan assets (excluding interest income)
Employer contributions
Benefits paid
(Loss)/gain due to exchange rate movements
Settlement payments1
Administrative expenses
Other2
Fair value of plan assets at end of year
Actual return/(loss) on plan assets
2023
£m
430.5
16.2
6.5
19.8
(37.5)
(12.4)
(163.2)
(2.8)
1.9
259.0
22.7
2022
£m
552.1
13.3
(127.6)
24.0
(52.0)
31.5
(8.7)
(3.1)
1.0
430.5
(114.3)
2021
£m
616.6
10.2
(29.3)
16.7
(59.5)
(0.6)
(0.3)
(1.8)
0.1
552.1
(19.1)
Notes
1 During the year ended 31 December 2023, the Group completed the winding-up of two defined
benefit pension plans: The Ogilvy & Mather Group Pension and Life Assurance Plan and the JWT
Pension and Life Assurance Scheme, constituting settlements under IAS 19. The settlements led
to the full elimination of associated plan assets and plan liabilities of £145.0 million, the fair value
of plan assets equaled the underlying liabilities upon settlement such that there is no impact on
2023 net assets or the income statement
2 Other includes acquisitions, disposals, plan participants’ contributions and reclassifications. The
reclassifications represent certain of the Group’s defined benefit plans which are included in this
note for the first time in the periods presented
24. RISK MANAGEMENT POLICIES
FOREIGN CURRENCY RISK
The Group’s results in pounds sterling are subject to fluctuation as a result
of exchange rate movements. The Group does not hedge this translation
exposure to its earnings but does partially hedge the currency element
of its net assets using foreign currency borrowings, cross-currency swaps,
forward foreign exchange contracts and non-deliverable forward contracts.
The Group effects these currency net asset hedges by borrowing in the same
currencies as the operating (or "functional") currencies of its main operating
units. The majority of the Group’s debt is therefore denominated in US dollars,
pounds sterling and euros. The Group’s borrowings (including cross currency
swaps) at 31 December 2023 were primarily made up of $1,874 million,
£1,094 million and €2,100 million (2022: $1,667 million, £1,094 million and
€2,350 million). The Group’s average gross debt during the course of 2023
was $2,511 million, £1,173 million and €2,321 million (2022: $1,667 million,
£1,094 million and €2,404 million).
The Group’s operations conduct the majority of their activities in their own
local currency and consequently the Group has no significant transactional
foreign exchange exposures arising from its operations. Any significant
cross-border trading exposures are hedged by the use of forward foreign-
exchange contracts. No speculative foreign exchange trading is undertaken.
INTEREST RATE RISK
The Group is exposed to interest rate risk on both interest-bearing assets and
interest-bearing liabilities. The Group has a policy of actively managing its
interest rate risk exposure while recognising that fixing rates on all its debt
eliminates the possibility of benefiting from rate reductions and, similarly, having
all its debt at floating rates unduly exposes the Group to increases in rates.
Including the effect of interest rate and cross-currency swaps, 100% of the
year-end US dollar debt is at fixed rates averaging 4.62% for an average period
of 66 months; 100% of the sterling debt is at a fixed rate of 2.97% for an
average period of 130 months; and 100% of the euro debt is at fixed rates
averaging 2.12% for an average period of 48 months.
GOING CONCERN AND LIQUIDITY RISK
In considering going concern and liquidity risk, the Directors have reviewed
the Group’s future cash requirements and earnings projections. The Directors
believe these forecasts have been prepared on a prudent basis and have also
considered the impact of a range of potential changes to trading performance.
The Company modelled a range of revenue less pass-through costs compared
with the year ended 31 December 2023 and a number of mitigating cost actions
that are available to the Company. Considering the Group’s liquidity headroom
and cost mitigation actions which could be implemented, the Group would be
able to operate with appropriate liquidity and be able to meet its liabilities as
they fall due. The Company modelled a range of revenue less pass-through cost
declines up to 31% compared with the year ended 31 December 2023. The
likelihood of such a decline is considered remote as compared to Company
expectations and external benchmarks. The modelling in this extreme scenario
includes cost mitigations of 70% of the decline in revenue less pass-through
costs and the suspension of the share buyback programme and dividend.
Further measures that were not included in the modelling, should the Company
face such an extreme scenario, include the reduction of capital expenditure and
acquisitions. Based on the outcome of the above assessments, the Directors
have concluded that it is reasonable to expect that the Group will be able to
operate within its current facilities for the period of assessment and are
therefore comfortable that the Company will be a going concern for at least
12 months from the date of signing the Group's consolidated financial
statements. As such, it is appropriate to prepare the financial statements
of the Group on a going concern basis.
WPP ANNUAL REPORT 2023
207
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. RISK MANAGEMENT POLICIES CONTINUED
At 31 December 2023, the Group has access to £6.4 billion of committed facilities with maturity dates spread over the years 2024 to 2046 as illustrated below:
£ bonds £400m (2.875% 2046)
US bond $220m (5.625% 2043)
US bond $93m (5.125% 2042)
£ bonds £250m (3.75% 2032)
Eurobonds €600m (1.625% 2030)
Eurobonds €750m (4.125% 2028)
Eurobonds €750m (2.375% 2027)
Eurobonds €750m (2.25% 2026)
Bank revolver ($2,500m 2026)
Eurobonds €500m (1.375% 2025)
US bond $750m (3.75% 2024)
Total committed facilities available
Drawn down facilities at 31 December 2023
Undrawn committed credit facilities
Drawn down facilities at 31 December 2023
Net cash at 31 December 2023
Other adjustments
Adjusted net debt at 31 December 2023
2024
£m
2025
£m
2026
£m
2027
£m
2028+
£m
400.0
172.7
72.9
250.0
520.2
650.2
650.2
650.2
1,963.7
589.1
589.1
589.1
433.5
433.5
433.5
2,613.9
650.2
650.2
650.2
2,066.0
2,066.0
400.0
172.7
72.9
250.0
520.2
650.2
650.2
650.2
1,963.7
433.5
589.1
6,352.7
4,389.0
1,963.7
4,389.0
(1,859.3)
(25.9)
2,503.8
Given its debt maturity profile and available facilities, the Directors believe
the Group has sufficient liquidity to match its requirements for the
foreseeable future.
TREASURY ACTIVITIES
Treasury activity is managed centrally from London, New York and Hong Kong,
and is principally concerned with the monitoring of working capital,
managing external and internal funding requirements and the monitoring
and management of financial market risks, in particular interest rate and
foreign exchange exposures.
The credit risk on liquid funds and derivative financial instruments is limited
because the counterparties are high-rated (AAA) funds, banks with high
credit ratings assigned by international credit-rating agencies or banks
that have been financed by their government.
EFFECTS OF HEDGE ACCOUNTING ON THE FINANCIAL
POSITION AND PERFORMANCE
The effects of the hedging instruments on the Group's financial position
and performance are as follows:
The treasury operation is not a profit centre and its activities are carried out
in accordance with policies approved by the Board of Directors and subject
to regular review and audit.
The Group manages liquidity risk by ensuring continuity and flexibility of
funding even in difficult market conditions. Undrawn committed borrowing
facilities are maintained in excess of peak net-borrowing levels and debt
maturities are closely monitored. Targets for average adjusted net debt are
set on an annual basis and, to assist in meeting this, working capital targets
are set for all the Group’s major operations.
CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that entities in the Group will be able
to continue as a going concern while maximising the return to stakeholders
through the optimisation of the debt and equity balance. The capital structure
of the Group consists of debt, which includes the borrowings disclosed in note
10, cash and cash equivalents and equity attributable to equity holders of the
parent, comprising issued capital, reserves and retained earnings as disclosed
in the consolidated statement of changes in equity and in notes 26 and 27.
CREDIT RISK
The Group’s principal financial assets are cash and short-term deposits,
trade and other receivables and other investments, the carrying values of
which represent the Group’s maximum exposure to credit risk in relation to
financial assets, as shown in note 25.
The Group’s credit risk is primarily attributable to its trade receivables.
The majority of the Group’s trade receivables are due from large national
or multinational companies where the risk of default is considered low.
The amounts presented in the consolidated balance sheet are net of
expected credit losses, estimated by the Group’s management based
on expected losses, prior experience and their assessment of the current
economic environment. A relatively small number of clients make up a
significant percentage of the Group’s debtors, but no single client
represents more than 6% of total trade receivables as at 31 December 2023
or 31 December 2022.
(i) Cash flow hedges of foreign currency risk1
Carrying amount of derivative hedging instruments2
Notional amount of hedged items
Notional amount of hedging instruments
Maturity date
Hedge ratio
Change in value of hedged item used to
determine hedge effectiveness for outstanding
hedging instruments
Change in value of hedging instrument
used to determine hedge effectiveness for
outstanding hedging instruments
Hedge ineffectiveness (revaluation and
retranslation of financial instruments)
Weighted average hedged rate for outstanding
hedging instruments
(ii) Net investment hedges of foreign currency risk
Carrying amount of derivative hedging instruments2
Carrying amount of non-derivative hedging
instruments (bonds and bank loans)
Notional amount of hedging instruments
Notional amount of hedged net assets
Hedge ratio
Change in value of hedged item used
to determine hedge effectiveness
Change in value of hedging instrument
used to determine effectiveness
Hedge ineffectiveness (revaluation and
retranslation of financial instruments)
Weighted average hedged rate for the year
(USD/GBP)
2023
2022
(£16.5m)
(£6.6m)
€1,250.0m €1,000.0m
€1,250.0m €1,000.0m
2023-2025
2025-2028
1:1
1:1
(£32.4m)
£38.5m
£29.6m
(£41.4m)
£2.7m
£2.9m
4.4%
3.2%
£48.2m
(£46.9m)
(£879.5m)
(£835.0m)
$1,873.9m $1,666.8m
$1,873.9m $1,666.8m
1:1
1:1
£108.2m
(£141.5m)
(£110.1m)
£141.5m
£1.9m
−
1.2731
1.2083
Notes
1 Relates to cross currency swaps designated as cash flow hedges
2 This amount is presented in trade and other receivables, and trade and other payables. The use
of derivatives may entail a derivative transaction qualifying for more than one hedge type
designation under IFRS 9. Therefore, the carrying amounts are grossed up by hedge type,
whereas they are presented at an instrument level in the balance sheet
208
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
24. RISK MANAGEMENT POLICIES CONTINUED
SENSITIVITY ANALYSIS
The following sensitivity analysis addresses the effect of currency and interest
rate risks on the Group’s financial instruments. The analysis assumes that all
hedges are highly effective.
CURRENCY RISK
A 10% weakening of sterling against the Group’s major currencies would
result in the following impacts on the income statement and equity, which
would arise on the retranslation of foreign currency-denominated monetary
items. A 10% strengthening of sterling would have an equal and opposite
effect.
US dollar
Euro
Impact on income statement
2022
£m
(179.6)
78.9
2023
£m
(41.0)
(185.8)
Impact on equity
2023
£m
(18.0)
–
2022
£m
34.6
(11.3)
INTEREST RATE RISK
A one percentage point increase in market interest rates for all currencies
in which the Group had cash and borrowings at 31 December 2023 would
increase profit before tax by approximately £18.6 million (2022: £19.9 million).
A one percentage point decrease in market interest rates would have an
equal and opposite effect. This has been calculated by applying the interest
rate change to the Group’s variable rate cash and borrowings. Note that
in practice, the Group has a cyclical cash profile throughout the year.
25. FINANCIAL INSTRUMENTS
CURRENCY DERIVATIVES
The Group utilises currency derivatives to hedge significant future transactions
and cash flows and the exchange risk arising on translation of the Group’s
investments in foreign operations. The Group is a party to a variety of foreign
currency derivatives in the management of its exchange rate exposures.
The instruments purchased are primarily denominated in the currencies of the
Group’s principal markets. The Group designates foreign currency-denominated
debt as hedging instruments against the exposure to movements in the spot
translation rates associated with the translation of its foreign operations.
The Group also designates certain cross currency swaps as hedging
instruments in cash flow hedges to manage its exposure to foreign exchange
risk and interest rate risk on its borrowings. During the year, the Group
entered into cross currency swap contracts due in May 2028 with receipts of
€750.0 million and payments of $810.9 million. In November 2023, the Group's
contracts for receipts of €500.0 million and payments of $604.2 million
matured. Contracts due in March 2025 have receipts of €500.0 million and
payments of £444.1 million.
In March 2023, the Group designated £80.6 million of non-deliverable forward
foreign exchange contracts as hedging instruments in cash flow hedges to
manage its exposure to foreign exchange risk on highly probable forecast
foreign currency transactions (primarily INR and USD). The contracts have
maturity dates between 2024 and 2028.
Critical terms of hedging instruments and hedged items are transacted
to match on a 1:1 ratio by notional values. Hedge ineffectiveness can
nonetheless arise from inherent differences between derivatives and
non-derivative instruments and other market factors including credit,
correlations, supply and demand, and market volatilities. In addition, hedge
ineffectiveness can arise as a result of the currency basis being included in
the hedge designation. Hedge accounting is discontinued when a hedging
relationship no longer qualifies for hedge accounting.
At 31 December 2023, the fair value of the Group’s currency derivatives in
designated hedging relationships is estimated to be a net asset of
approximately £31.7 million (2022: net liability of £52.7 million). These amounts
are based on market values of equivalent instruments at the balance sheet
date, comprising £31.7 million (2022: £0.6 million) assets included in trade and
other receivables and nil (2022: £53.3 million) liabilities included in trade and
other payables. The fair value of currency derivatives is based on the present
value of contractual cash flows using foreign currency and interest rate
forward market curves at the balance sheet date. The amounts taken to and
deferred in equity during the year for currency derivatives that are designated
as hedges and considered effective was a credit of £108.2 million (2022: debit of
£141.5 million) for net investment hedges.
For cash flow hedge arrangements, amounts of a debit of £43.3 million (2022:
credit of £38.5 million) representing the effective portion of the gain or loss
on the hedging instrument were taken to equity, and £44.2 million was
reclassified to profit or loss in the same period when the related foreign
exchange impact on the associated hedged item affected profit or loss. During
the year the hedges of the €750.0 million Eurobond were discontinued as the
hedging item and hedging instrument matured which resulted in a debit of
£11.8 million taken to equity and recycled to profit and loss.
Changes in the fair value relating to the ineffective portion of the currency
derivatives that are designated hedges amounted to £5.0 million (2022:
£2.7 million) which is included within revaluation and retranslation of financial
instruments in the income statement. At the balance sheet date, the total
nominal amount of outstanding forward foreign exchange contracts not
designated as hedges was £955.2 million (2022: £1,004.8 million). The Group
estimates the fair value of these contracts to be a net liability of £0.8 million
(2022: net asset of £0.4 million).
As at 31 December 2023, the Group had designated its $93.0 million bond,
$750.0 million bond, $220.0 million bond, and $810.9 million leg of its cross
currency swap, as the hedging instruments in a net investment hedge
relationship. The Group has designated the €500.0 million leg of its March 2025
cross currency swap and €750.0 million of its May 2028 cross currency swap
as hedging instruments in cash flow hedges. £80.6 million of non-deliverable
forward foreign exchange contracts has also been designated as the hedging
instrument in a cash flow hedge. Possible sources of ineffectiveness include
any impairments to the Group's net investment in US dollars. The hedges are
documented and are assessed for effectiveness on an ongoing basis. All hedge
relationships were effective during the year.
These arrangements are designed to address significant foreign exchange
exposure and are renewed on a revolving basis as required.
WPP ANNUAL REPORT 2023
209
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25. FINANCIAL INSTRUMENTS CONTINUED
An analysis of the Group’s financial assets and liabilities by accounting classification is set out below:
2023
Other investments
Cash and short-term deposits
Bank overdrafts and bonds: amounts falling due within one year
Bonds: amounts falling due after more than one year
Trade and other receivables: amounts falling due within one year
Trade and other receivables: amounts falling due after more than one year
Trade and other payables: amounts falling due within one year
Trade and other payables: amounts falling due after more than one year
Derivative assets
Derivative liabilities
Payments due to vendors (earnout agreements)
Liabilities in respect of put options
2022
Other investments
Cash and short-term deposits1
Bank overdrafts and bonds: amounts falling due within one year
Bonds: amounts falling due after more than one year
Trade and other receivables: amounts falling due within one year
Trade and other receivables: amounts falling due after more than one year
Trade and other payables: amounts falling due within one year
Trade and other payables: amounts falling due after more than one year
Derivative assets
Derivative liabilities
Payments due to vendors (earnout agreements)
Liabilities in respect of put options2
Derivatives in
designated
hedge
relationships
£m
Held at fair
value through
profit or loss
£m
Held at
fair value
through other
comprehensive
income
£m
–
–
–
–
–
–
–
–
31.7
–
–
–
31.7
257.2
180.7
–
–
–
–
–
–
2.2
(3.0)
(198.7)
–
238.4
75.5
–
–
–
–
–
–
–
–
–
–
–
75.5
Derivatives in
designated
hedge
relationships
£m
Held at fair
value through
profit or loss
£m
Held at
fair value
through other
comprehensive
income
£m
–
–
–
–
–
–
–
–
0.6
(53.3)
–
–
(52.7)
255.7
219.9
–
–
–
–
–
–
5.1
(4.7)
(160.1)
–
315.9
114.1
–
–
–
–
–
–
–
–
–
–
–
114.1
Amortised
cost
£m
Carrying
value
£m
–
2,036.8
(946.3)
(3,775.0)
10,601.4
118.3
(10,917.4)
(1.5)
–
–
–
(103.6)
(2,987.3)
332.7
2,217.5
(946.3)
(3,775.0)
10,601.4
118.3
(10,917.4)
(1.5)
33.9
(3.0)
(198.7)
(103.6)
(2,641.7)
Amortised
cost
£m
Carrying
value
£m
–
2,271.6
(1,169.0)
(3,801.8)
11,338.0
146.2
(11,283.0)
(0.9)
–
–
–
(342.1)
(2,841.0)
369.8
2,491.5
(1,169.0)
(3,801.8)
11,338.0
146.2
(11,283.0)
(0.9)
5.7
(58.0)
(160.1)
(342.1)
(2,463.7)
Notes
1 Certain money market funds included within cash and short-term deposits for the year ended 31 December 2022 have been re-presented given they are measured at held at fair value through profit
or loss in accordance with IFRS 9. Prior year balances were presented as amortised cost
2 Liabilities in respect of put option balances for the year ended 31 December 2022 have been re-presented given they are measured at amortised cost in accordance with IFRS 9. Prior year balances
were presented as held at fair value through profit or loss
210
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Reconciliation of level 3 fair value measurements:
1 January 2022
Gains recognised in the income statement
Losses recognised in other comprehensive income
Exchange adjustments
Additions
Disposals
Cancellations
Settlements
31 December 2022
Gains/(losses) recognised in the income statement
Gains recognised in other comprehensive income
Exchange adjustments
Additions
Disposals
Settlements
31 December 2023
Payments due
to vendors
(earnout
agreements)
£m
(196.7)
26.2
–
(14.3)
(46.7)
–
–
71.4
(160.1)
50.8
–
1.8
(149.7)
–
58.5
(198.7)
Other
investments
£m
290.0
23.1
(5.3)
–
66.7
(16.0)
–
–
358.5
(26.7)
0.7
–
2.6
(10.4)
–
324.7
The fair values of financial assets and liabilities are based on quoted market
prices where available. Where the market value is not available, the Group has
estimated relevant fair values on the basis of available information from outside
sources. There have been no movements between level 3 and other levels.
25. FINANCIAL INSTRUMENTS CONTINUED
The following table provides an analysis of financial instruments that are
measured subsequent to initial recognition at fair value, grouped into levels
1 to 3 based on the degree to which the fair value is observable:
Level 1 fair value measurements are those derived from quoted prices
(unadjusted) in active markets for identical assets or liabilities;
Level 2 fair value measurements are those derived from inputs other than
quoted prices included within level 1 that are observable for the asset or
liability, either directly (ie as prices) or indirectly (ie derived from prices);
Level 3 fair value measurements are those derived from valuation techniques
that include inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
2023
Derivatives in designated hedge
relationships
Derivative assets
Derivative liabilities
Held at fair value through profit or loss
Other investments
Derivative assets
Derivative liabilities
Payments due to vendors
(earnout agreements)
Held at fair value through other
comprehensive income
Other investments
2022
Derivatives in designated hedge
relationships
Derivative assets
Derivative liabilities
Held at fair value through profit or loss
Other investments
Derivative assets
Derivative liabilities
Payments due to vendors
(earnout agreements)
Held at fair value through other
comprehensive income
Other investments
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
–
–
0.6
–
–
–
31.7
–
–
–
31.7
–
–
2.2
(3.0)
256.6
–
–
257.2
2.2
(3.0)
–
(198.7)
(198.7)
7.4
–
68.1
75.5
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
–
–
0.6
(53.3)
–
–
0.6
(53.3)
0.4
–
–
–
10.9
–
5.1
(4.7)
255.3
–
–
255.7
5.1
(4.7)
–
–
(160.1)
(160.1)
103.2
114.1
There have been no transfers between these levels in the years presented.
WPP ANNUAL REPORT 2023
211
26. AUTHORISED AND ISSUED SHARE CAPITAL
Authorised
1 January 2022
31 December 2022
31 December 2023
Issued and fully paid
1 January 2022
Exercise of share options
Share cancellations
At 31 December 2022
Exercise of share options
Share cancellations
At 31 December 2023
Equity
ordinary
shares
Nominal
value
£m
1,750,000,000
1,750,000,000
1,750,000,000
1,224,459,550
125,700
(83,157,954)
1,141,427,296
85,900
–
1,141,513,196
175.0
175.0
175.0
122.4
–
(8.3)
114.1
–
–
114.1
COMPANY’S OWN SHARES
The Company’s holdings of own shares are stated at cost and represent shares
held in treasury and purchases by the Employee Share Ownership Plan (ESOP)
trusts of shares in the Company for the purpose of funding certain of the
Group’s share-based incentive plans, details of which are disclosed in the
Compensation Committee report on pages 139 to 168.
The trustees of the ESOP purchase the Company’s ordinary shares in the
open market using funds provided by the Company. The Company also has
an obligation to make regular contributions to the ESOP to enable it to meet its
administrative costs. The number and market value of the ordinary shares of the
Company held by the ESOP at 31 December 2023 was 490,646 (2022: 1,211,974)
and £3.7 million (2022: £9.9 million) respectively. The number and market
value of ordinary shares held in treasury at 31 December 2023 was 66,675,497
(2022: 70,489,953) and £502.1 million (2022: £578.2 million) respectively.
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25. FINANCIAL INSTRUMENTS CONTINUED
PAYMENTS DUE TO VENDORS (EARNOUT AGREEMENTS) AND
LIABILITIES IN RESPECT OF PUT OPTIONS
Future anticipated payments due to vendors in respect of contingent
consideration (earnout agreements) are recorded at fair value, which is the
present value of the expected cash outflows of the obligations. Liabilities
in respect of put option agreements are initially recorded at the present
value of the redemption amount in accordance with IAS 32 and subsequently
measured at amortised cost in accordance with IFRS 9. Both types of
obligations are dependent on the future financial performance of the entity
and it is assumed that future profits are in line with Directors’ estimates.
The Directors derive their estimates from internal business plans together
with financial due diligence performed in connection with the acquisition.
As of 31 December 2023, the potential undiscounted amount of future
payments that could be required under the earnout agreements for
acquisitions completed in the current year and for all earnout agreements
ranges from nil to £326 million (2022: nil to £226 million) and nil to £753 million
(2022: nil to £695 million), respectively. The increase in the maximum potential
undiscounted amount of future payments for all earnout agreements is due to
current year acquisitions, which is partially offset by earnout arrangements
that have been completed and paid.
At 31 December 2023, the weighted average growth rate in estimating future
financial performance was 14.6% (2022: 12.4%). The weighted average of the
risk-adjusted discount rate applied to these obligations at 31 December 2023
was 7.0% (2022: 7.6%).
A one percentage point increase or decrease in the growth rate in estimated
future financial performance would increase or decrease the combined
liabilities due to earnout agreements and put options by approximately
£1.4 million (2022: £9.1 million) and £5.5 million (2022: £6.9 million), respectively.
A 0.5 percentage point increase or decrease in the risk adjusted discount
rate would decrease or increase the combined liabilities by approximately
£2.5 million (2022: £7.3 million) and £2.5 million (2022: £7.4 million), respectively.
An increase in the liability would result in a loss in the revaluation of financial
instruments, while a decrease would result in a gain.
OTHER INVESTMENTS
The fair value of other investments included in level 1 is based on quoted
market prices. Other investments included in level 3 are unlisted securities,
where market value is not readily available. The Group has estimated relevant
fair values on the basis of information from outside sources using the most
appropriate valuation technique, including all external funding rounds, revenue
and EBITDA multiples, discounted cash flows and the share of fund net asset
value. The sensitivity to changes in unobservable inputs is specific to each
individual investment. A change to one or more of these unobservable inputs
to reflect a reasonably possible alternative assumption would not result in a
significant change to the fair value.
During 2022, Imagina stepped down from interests in associates to other
investments and this investment was designated as fair value through other
comprehensive income. There were no step downs to other investments
which occurred in 2023.
212
WPP ANNUAL REPORT 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
27. OTHER RESERVES
Other reserves comprise the following:
Balance at 1 January 2022
Foreign exchange differences on translation of foreign operations
Loss on net investment hedges
Cash flow hedges:
Fair value gain arising on hedging instruments
Less: loss reclassified to profit or loss
Share of other comprehensive income of associate undertakings
Share cancellations
Recognition/derecognition of liabilities in respect of put options
Share purchases – close period commitments
Balance at 31 December 2022
Foreign exchange differences on translation of foreign operations
Gain on net investment hedges
Cash flow hedges:
Fair value loss arising on hedging instruments
Less: gain reclassified to profit or loss
Share of other comprehensive loss of associate undertakings
Share cancellations
Recognition/derecognition of liabilities in respect of put options
Share purchases – close period commitments
Balance at 31 December 2023
The capital redemption reserve relates entirely to share cancellations.
Capital
redemption
reserve
£m
13.6
–
–
–
–
–
8.3
–
–
21.9
–
–
–
–
–
–
–
–
21.9
Equity
reserve
£m
(576.7)
–
–
–
–
–
–
101.7
211.7
(263.3)
–
–
–
–
–
–
197.2
–
(66.1)
Hedging
reserve
£m
–
–
–
Translation
reserve
£m
227.2
409.0
(141.5)
38.5
(38.5)
–
–
–
–
–
–
–
(43.3)
44.2
–
–
–
–
0.9
–
–
31.9
–
–
–
526.6
(404.0)
108.2
–
–
(0.9)
–
–
–
229.9
Total
other
reserves
£m
(335.9)
409.0
(141.5)
38.5
(38.5)
31.9
8.3
101.7
211.7
285.2
(404.0)
108.2
(43.3)
44.2
(0.9)
–
197.2
–
186.6
The equity reserve primarily relates to the recognition/derecognition of liabilities in respect of put option agreements entered into by the Group as part of
a business combination that allows non-controlling shareholders to sell their shares to the Group in the future. During 2023, the Company sold a portion of
its ownership of FGS to KKR. As part of this transaction the previous put option granted to management shareholders was derecognised. During 2021, the
Company entered into an agreement with a third party to conduct share buybacks on its behalf in the close period commencing on 16 December 2021 and
ending on 18 February 2022, in accordance with UK listing rules. The commitment resulting from this agreement constituted a liability at 31 December 2021
and was also recognised as a movement in the equity reserve in the year ended 31 December 2021. After the close period ended on 18 February 2022,
the liability was settled and the amount in other reserves was reclassified to retained earnings.
The hedging reserve comprises the effective portion of the cumulative net change in fair value of cash flow hedges less amounts reclassified to profit or loss.
The translation reserve contains the accumulated gains/(losses) on currency translation of foreign operations arising on consolidation.
The translation reserve comprises:
Balance relating to continuing net investment hedges
Balance relating to discontinued net investment hedges
Balance relating to foreign exchange differences on translation of foreign operations
2023
£m
(53.1)
(67.5)
350.5
229.9
2022
£m
(143.8)
(85.0)
755.4
526.6
WPP ANNUAL REPORT 2023
213
29. RELATED PARTY TRANSACTIONS
The Group enters into transactions with its associate undertakings.
The Group has continuing transactions with Kantar, including sales,
purchases, the provision of IT services, subleases and property-related items.
In the year ended 31 December 2023, revenue of £233.0 million (2022:
£159.7 million1) was reported in relation to Compas, an associate in the USA,
and revenue of £20.9 million (2022: £42.7 million) was reported in relation
to Kantar. All other transactions in the years presented were immaterial.
The following amounts were outstanding at 31 December:
Amounts owed by related parties
Kantar
Other
Amounts owed to related parties
Kantar
Other
2023
£m
17.5
56.0
73.5
2022
£m
26.1
62.4
88.5
(4.7)
(70.4)
(75.1)
(10.5)
(65.2)
(75.7)
There are no material provisions for doubtful debts relating to these balances
and no material expense has been recognised in the income statement in
relation to bad or doubtful debts for 2023 or 2022.
Note
1 Revenue in relation to Compas for the period ended 31 December 2022 was restated from
£88.3 million to £159.7 million
30. EVENTS AFTER THE REPORTING PERIOD
On 20 February 2024, the Group refinanced its five-year Revolving Credit
Facility of $2.5 billion maturing March 2026. The new $2.5 billion facility runs
for five years with two one-year extension options maturing February 2029
(excluding options) and with no financial covenants.
On 12 March 2024, the Group refinanced its $750 million of 3.75% bonds due
September 2024 and €500 million of 1.375% bonds due March 2025 as planned,
issuing two bonds, €600 million of 3.625% bonds due September 2029 and
€650 million of 4.0% bonds due September 2033.
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
28. ACQUISITIONS
The Group accounts for acquisitions in accordance with IFRS 3 Business
Combinations. IFRS 3 requires the acquiree’s identifiable assets, liabilities and
contingent liabilities (other than non-current assets or disposal groups held for
sale) to be recognised at fair value at acquisition date. In assessing fair value at
acquisition date, management make their best estimate of the likely outcome
where the fair value of an asset or liability may be contingent on a future event.
In certain instances, the underlying transaction giving rise to an estimate may
not be resolved until some years after the acquisition date. IFRS 3 requires the
release to profit of any acquisition reserves which subsequently become
excess in the same way as any excess costs over those provided at acquisition
date are charged to profit. At each period end management assess provisions
and other balances established in respect of acquisitions for their continued
probability of occurrence and amend the relevant value accordingly through
the consolidated income statement or as an adjustment to goodwill as
appropriate under IFRS 3.
The Group acquired a number of subsidiaries in the year. Details of the purchase
consideration, the assets and liabilities recognised as a result of the acquisition
and the goodwill recognised has been outlined in the table below.
Intangible assets
Right-of-use assets
Property, plant and equipment
Cash and cash equivalents
Trade receivables due within
one year
Other current assets
Total assets
Short-term loans
Other current liabilities
Trade and other payables due
after one year
Deferred tax liabilities
Long-term lease liabilities
Provisions
Total liabilities
Net assets
Non-controlling interests
Goodwill
Consideration
Consideration satisfied by:
Cash
Payments due to vendors
Book value at
acquisition
£m
2.9
2.4
0.8
22.5
Fair value
adjustments
£m
138.5
–
–
–
Fair value
to Group
£m
141.4
2.4
0.8
22.5
12.6
4.9
46.1
(48.9)
(37.1)
(0.6)
1.5
(1.9)
(0.4)
(87.4)
(41.3)
–
–
138.5
–
–
(3.0)
(35.0)
–
(0.2)
(38.2)
100.3
12.6
4.9
184.6
(48.9)
(37.1)
(3.6)
(33.5)
(1.9)
(0.6)
(125.6)
59.0
(1.7)
297.8
355.1
227.4
127.7
Goodwill arising from acquisitions represents the value of synergies with our
existing portfolio of businesses and skilled staff to deliver services to our
clients. Goodwill that is expected to be deductible for tax purposes is
£61.9 million.
Non-controlling interests in acquired companies are measured at the
non-controlling interests’ proportionate share of the acquiree’s identifiable
net assets. There were no newly acquired subsidiaries with non-controlling
interests that are individually material to the Group.
The contribution to revenue and operating profit of acquisitions completed
in the year was not material. There were no material acquisitions completed
between 31 December 2023 and the date the financial statements have been
authorised for issue.
214
WPP ANNUAL REPORT 2023
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF WPP PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
1. OPINION
In our opinion the financial statements of WPP plc and its subsidiaries
(the ‘group’):
– give a true and fair view of the state of the group’s affairs as at 31 December
2023 and of the group’s profit for the year then ended;
– have been properly prepared in accordance with International Financial
Reporting Standards (IFRSs) as issued by the International Accounting
Standards Board (IASB); and
– have been properly prepared in accordance with Companies (Jersey)
Law, 1991
We have audited the financial statements which comprise:
– the accounting policies;
– the consolidated income statement;
– the consolidated statement of comprehensive income;
– the consolidated cash flow statement;
– the consolidated balance sheet;
– the consolidated statement of changes in equity; and
– the related notes 1 to 30 of the consolidated financial statements
The financial reporting framework that has been applied in their preparation
is applicable law and IFRSs as issued by the IASB.
2. BASIS FOR OPINION
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the auditor’s responsibilities for the audit of
the financial statements section of our report.
We are independent of the group in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the UK, including
the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to
listed public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. The non-audit services
provided to the group for the year are disclosed in note 3 to the financial
statements. We confirm that we have not provided any non-audit services
prohibited by the FRC’s Ethical Standard to the group.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
3. SUMMARY OF OUR AUDIT APPROACH
Key audit matter
The key audit matter we identified in the current year was valuation of goodwill, consistent with the 2022 audit.
Materiality
Group materiality has been determined as £65m (2022: £60m). Our selected materiality represents 5.4% of pre-tax profit, normalised for
property-related restructuring costs and accelerated amortisation of acquired intangible assets arising from the VML merger (see note 3).
Scoping
We identified 46 in scope operating units, only one of which is considered individually financially significant.
We performed audit procedures over 69% of the group’s consolidated revenue (2022: 68%), 81% of the group’s total assets (2022: 80%)
and 79% of the group’s total liabilities (2022: 74%). Procedures were performed either by a component auditor at an operating unit level
under the direction and supervision of the group auditor, or performed centrally by the group auditor.
Significant changes
in our approach
Change in materiality basis
We have determined group materiality on the basis of pre-tax profit normalised for property-related restructuring costs and
accelerated amortisation of acquired intangible assets arising from the VML merger, also considering Headline EBITDA as a relevant
metric. In 2022, we determined materiality based on pre-tax profit, considering Headline EBITDA and revenue as relevant metrics.
Identification of financially significant component
Following internal group reorganisation during the year, we assessed that one component, representing 13% of group consolidated
revenues was individually financially significant (2022: 0).
WPP ANNUAL REPORT 2023
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FINANCIAL STATEMENTS INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WPP PLC
4. CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the directors’
use of the going concern basis of accounting in the preparation of the financial
statements is appropriate.
Our evaluation of the directors’ assessment of the group’s ability to continue
to adopt the going concern basis of accounting included:
5. KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These matters
included those which had the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the efforts of the
engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
– testing controls over management’s going concern model, including the
review of the inputs and assumptions used in the model;
– identifying the key assumptions, including those relating to the current
macroeconomic uncertainty, and evaluating the appropriateness of these
assumptions and their consistency with management’s presentations to
the Board and Audit Committee;
– comparing the forecasts within the going concern model to recent
historical financial information;
– testing the mechanical accuracy of the going concern model;
– testing the covenant compliance calculation and headroom thereof at
the balance sheet date, both under the group's forecasts and in severe
downside scenarios, notwithstanding the subsequent refinancing of the
Group's Revolving Credit Facility in February 2024, which removed
financial covenants;
– confirming the existence and availability of financing facilities;
– evaluating the appropriateness of management’s sensitivity analysis
modelled under their most severe scenario, including an evaluation of
the mitigating actions available to management; and
– evaluating the disclosures on going concern
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or collectively,
may cast significant doubt on the group’s ability to continue as a going
concern for a period of at least twelve months from when the financial
statements are authorised for issue.
In relation to the reporting on how the group has applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in
relation to the directors’ statement in the financial statements about whether
the directors considered it appropriate to adopt the going concern basis
of accounting.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WPP PLC
FINANCIAL STATEMENTS
5.1. VALUATION OF GOODWILL (REFER TO THE ACCOUNTING POLICIES AND NOTE 13 (INTANGIBLE ASSETS) TO THE FINANCIAL STATEMENTS,
AND THE AUDIT COMMITTEE REPORT)
Key audit matter description
How the scope of our audit responded to the key audit matter
Key observations
VALUATION OF GOODWILL
(Refer to the Accounting Policies and Note 13 (Intangible assets) to the financial statements, and the Audit Committee Report)
Based on our
procedures, we
determined
management’s
assumptions used
in the valuation of
goodwill to be
reasonable.
The group’s assessment of goodwill for impairment involves the
comparison of the recoverable amount of goodwill, calculated as
the higher of fair value less costs of disposal and value in use, to
its carrying value at each measurement date. The group applied
the value in use approach, which uses a discounted cash flow
model to estimate the recoverable amount of each cash
generating unit or group of cash generating units and requires
management to make significant estimates and assumptions
related to discount rates, profit margins and long-term growth
rates. The net book value of goodwill was £8,389 million as at
31 December 2023 (31 December 2022: £8,453 million).
We identified goodwill valuation as a key audit matter because
of the significant judgements made by management, which
consider future impacts of the current economic uncertainty, to
estimate the value-in-use of goodwill and the increased auditor
judgement and level of audit effort required to obtain evidence
to test these significant judgements, including the use of
specialists. Estimates of future performance and market
conditions used to arrive at the net present value of future cash
flows at the relevant assessment date, which is used within the
goodwill impairment analysis, are subjective in nature, with
increased uncertainty due to inflationary pressures, rising
interest rates and global economic uncertainty. Through our risk
assessment procedures, we identified those inputs that were the
most sensitive in determining the value in use, which enabled us
to design our audit procedures to focus on those estimates that
are either complex, including the discount rate calculations, or
subjective in nature, including the profit margins and long-term
growth rates.
Our audit procedures focused on challenging and evaluating the
discount rates, profit margins and long-term growth rates used
in the discounted cash flow model to determine the value in use
and included the following audit procedures, among others:
– We tested the effectiveness of controls over management’s
estimations of the profit margins, discount rates and long-term
growth rates used to determine the value in use
– We assessed the appropriateness of forecasted profit margins
and growth rates by considering both corroboratory and
contradictory evidence. We performed procedures such as
comparing to external economic data, including peers, market
data and wider economic forecasts, specifically assessing the
impact of inflationary pressures and rising interest rates on
the forecasts
– We evaluated management’s ability to accurately forecast
future profit margins and long-term growth rates by
comparing actual results to management’s historical forecasts
– With the assistance of our valuation specialists, we assessed
the mechanical accuracy of the impairment model and the
methodology applied by management for consistency with
the requirements of IAS 36 Impairment of assets
– With the assistance of our valuation specialists, we evaluated
the appropriateness of the discount rates and long-term
growth rates used by:
– Testing the source information underlying the
determination of the discount rates and the mathematical
accuracy of the calculation;
– Assessing the methodology applied in the discount
rates calculations against market practice valuation
techniques; and
– Assessing the long-term growth rates against independent
market data and an independently derived weighted
average rate for each country, based on their GDP forecasts
– We evaluated the group’s disclosures on goodwill against the
requirements of IFRS.
WPP ANNUAL REPORT 2023
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FINANCIAL STATEMENTS INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WPP PLC
6. OUR APPLICATION OF MATERIALITY
6.1. MATERIALITY
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably
knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group Materiality
£65 million (2022: £60 million)
Basis for determining
materiality
We have considered a number of metrics when determining group materiality, including: pre-tax profit normalised for property-related
restructuring costs and accelerated amortisation of acquired intangible assets arising from the VML merger (see note 3) and Headline
EBITDA.1 Materiality represents 5.4% of normalised pre-tax profit; and 2.9% of Headline EBITDA.
In 2022, we determined materiality to be £60 million, which represented 5.2% of pre-tax profit, 0.4% of revenue and 2.7% of Headline EBITDA.
Rationale for the
benchmark applied
We have determined that the primary benchmark for the group was pre-tax profit normalised for property-related restructuring costs
and accelerated amortisation of acquired intangible assets arising from the VML merger (see note 3) because we consider this measure
to be the primary focus of users of the financial statements. Pre-tax profit was normalised to remove the effects of non-recurring costs
which would otherwise distort the earnings of the group when considering the performance of the underlying business.
We also considered headline EBITDA as a relevant metric to the users of the financial statements.
1 The calculation of headline EBITDA is set out on page 223
Group materiality
£65m
Component materiality
range £4m-£21m
Audit Committee
reporting threshold
£3m
Normalised
PBT
£1,212m
PBT
Group materiality
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WPP PLC
FINANCIAL STATEMENTS
6.2. PERFORMANCE MATERIALITY
We set performance materiality at a level lower than materiality to reduce the
probability that, in aggregate, uncorrected and undetected misstatements
exceed the materiality for the financial statements as a whole. Group
performance materiality was set at 65% of group materiality for the 2023
audit (2022: 65%). In determining performance materiality, we considered
the following factors:
We identified 46 operating units as in scope components in the current year
(2022: 64 operating units). The reduction in number of operating units in
scope is a result of internal reorganisation of operating units during the period.
Operating units are defined as business locations operating under a common
control environment. Following the reorganisation, we assessed that one
operating unit, representing 13% of group consolidated revenues, was
individually financially significant (2022: 0).
Audit procedures were performed over 69% of the group’s consolidated
revenue (2022: 68%), 81% of the group’s total assets (2022: 80%) and 79%
of the group’s total liabilities (2022: 74%). Audit procedures included testing
at a component level performed by a component auditor under the direction
and supervision of the group auditor, and further testing, including
substantive analytical procedures, performed centrally by the group auditor.
The substantive analytical procedures were based on our current knowledge
of the group, our historical experience and the wider market.
All our audit work on components is executed at levels of reduced materiality
according to the size of the component; many of which are local statutory
materiality levels which in all instances are no higher than 50% of group
performance materiality.
In order to support our conclusion that there were no significant risks of
material misstatement of the aggregated financial information of the remaining
operating units, we tested the consolidation process and performed further
group level analytical procedures.
– our risk assessment and assessment of the group’s overall control
environment, financial processes and systems in the majority of areas
of the audit; and
– our past experience of the audit, including the nature, volume and size
of historic misstatements.
6.3. ERROR REPORTING THRESHOLD
We agreed with the Audit Committee that we would report to the Committee
all audit differences in excess of £3.0 million (2022: £2.5 million), as well as
differences below that threshold that, in our view, warranted reporting on
qualitative grounds. We also report to the Audit Committee on disclosure
matters that we identified when assessing the overall presentation of the
financial statements.
7. AN OVERVIEW OF THE SCOPE OF OUR AUDIT
7.1. IDENTIFICATION AND SCOPING OF COMPONENTS
As a result of the disaggregated structure and diversity of the group, a
significant portion of our audit planning effort was ensuring that the scope of
work is appropriate in addressing the identified risks of material misstatement.
In selecting the components that are in scope each year, we refresh and
update our understanding of the group and its environment, including
obtaining an understanding of the group’s system of internal controls, and
assessing the risks of material misstatement at the group level, in order to
ensure that the components selected for audit provide an appropriate basis
on which to undertake audit work to address the identified risks of material
misstatement. Such audit work represents a combination of procedures, all
of which are designed to target identified risks of material misstatement over
the group’s consolidated financial statements.
31%
19%
21%
Revenue
Total Assets
Total Liabilities
69%
81%
79%
Subject to audit procedures
Subject to audit procedures
Subject to audit procedures
Analytical procedures at group level
Analytical procedures at group level
Analytical procedures at group level
WPP ANNUAL REPORT 2023
219
FINANCIAL STATEMENTS INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WPP PLC
7.2. OUR CONSIDERATION OF THE CONTROL ENVIRONMENT
Our audit plan is designed to understand key internal controls in our audit
so that we can design effective procedures. We tested the effectiveness of
internal controls, including the general IT controls, over financial reporting
in all areas of the audit across all in-scope entities.
8. OTHER INFORMATION
The other information comprises the information included in the annual report,
other than the financial statements and our auditor’s report thereon. The
directors are responsible for the other information contained within the
annual report.
7.3. OUR CONSIDERATION OF CLIMATE-RELATED RISKS
The group identified climate-related risks such as the increased frequency of
extreme weather and climate-related natural disasters, increased reputational
risk associated with working on environmentally detrimental client briefs,
and/or misrepresenting environmental claims and changes in regulation and
reporting standards which could result in climate-related litigation and claims.
The risks are disclosed within the Task force on climate-related financial
disclosures (“TCFD”) statement of the Annual Report.
Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated.
Our risk assessment procedures in relation to the impact of climate-related
risks involved obtaining an understanding of management’s relevant processes
and controls. We further reviewed management’s paper assessing these risks.
We evaluated these risks to assess whether they were complete and
consistent with our understanding of the entity and our wider risk
assessment procedures.
If we identify such material inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
9. RESPONSIBILITIES OF DIRECTORS
As explained more fully in the statement of directors’ responsibilities, the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group’s ability to continue as a going concern, disclosing as
applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the group
or to cease operations, or have no realistic alternative but to do so.
10. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial
statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditor’s report.
Our procedures to address our identified risks involved considering the impact
of the risks on the financial statements overall, including in the application of
individual accounting standards and within the procedures to address our key
audit matter, valuation of goodwill. Such considerations included the impact of
the group’s net zero carbon emission commitments, and changes in regulation
and reporting standards. We further reconciled the disclosures made to
underlying supporting evidence. With the assistance of internal specialists,
we assessed the TCFD recommended disclosures within the Annual Report
and considered whether they are materially consistent with the financial
statements and our knowledge obtained in the audit. We also assessed the
disclosures made in respect of climate change within the accounting policies
of the annual report and for consistency with our audit procedures performed.
These areas include valuation of intangible assets, property, plant and
equipment and leases, measurement of deferred tax assets, provisions,
including employee benefit obligations, and going concern.
7.4. WORKING WITH OTHER AUDITORS
The group audit team exercises its oversight of component auditors using a
carefully designed programme, which considers a variety of factors including
the size and complexity of the entity. The group audit team directs, supervises
and evaluates the audit work performed by component audit teams by:
– speaking regularly with teams about the status of their work;
– reviewing reporting and underlying workpapers where determined to be
necessary; and
– attending key meetings including close meetings
In order to drive consistency and comparability over the audit work performed
by the component auditors, the group engagement team directly leads the
risk assessment process in all areas of the audit. This process involves
workshops with our local audit teams to enhance and confirm the group
team’s understanding of local processes and risks. After consideration of how
the nature and extent of those operating unit level risks contribute to risk of
material misstatement at a group level the group engagement team, in
consultation with the local team, confirms the specific audit procedures that
component auditors are instructed to perform.
– In years when the group engagement team elects to not visit a component,
either physically or virtually, the group engagement team:
– includes the component audit partner in our team planning meeting;
– discusses the results of the group-led risk assessment; and
– reviews the documentation of the findings from their work and discusses
with them as needed
These procedures are designed so that the Senior Statutory Auditor or a senior
member of the group audit team can have oversight of the work of our
component auditors on a regular basis. In addition, the group engagement
team assesses the competence of each of our component auditors.
The group engagement team also holds quarterly meetings with management
at a regional and global level in order to update our understanding of the
group and its environment on an ongoing basis.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WPP PLC
FINANCIAL STATEMENTS
11.2. AUDIT RESPONSE TO RISKS IDENTIFIED
As a result of performing the above, we did not identify any key audit
matters related to the potential risk of fraud or non-compliance with laws
and regulations.
Our procedures to respond to risks identified included the following:
– reviewing the financial statement disclosures and testing to supporting
documentation to assess compliance with provisions of relevant laws and
regulations described as having a direct effect on the financial statements;
– enquiring of management, the audit committee and external legal counsel
concerning actual and potential litigation and claims;
– performing analytical procedures to identify any unusual or unexpected
relationships that may indicate risks of material misstatement due to fraud;
– reading minutes of meetings of those charged with governance, reviewing
internal audit reports and reviewing correspondence with relevant tax
authorities; and
– in addressing the risk of fraud through management override of controls,
testing the appropriateness of journal entries and other adjustments,
including those made outside of local operational reporting; assessing
whether the judgements made in making accounting estimates are
indicative of a potential bias; and evaluating the business rationale of any
significant transactions that are unusual or outside the normal course
of business.
We also communicated relevant identified laws and regulations and potential
fraud risks to all engagement team members including internal specialists and
significant component audit teams and remained alert to any indications of
fraud or non-compliance with laws and regulations throughout the audit.
11. EXTENT TO WHICH THE AUDIT WAS CONSIDERED CAPABLE
OF DETECTING IRREGULARITIES, INCLUDING FRAUD
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
11.1. IDENTIFYING AND ASSESSING POTENTIAL RISKS
RELATED TO IRREGULARITIES
In identifying and assessing risks of material misstatement in respect of
irregularities, including fraud and non-compliance with laws and regulations,
we considered the following:
– the nature of the industry and sector, control environment and business
performance including the design of the group’s remuneration policies,
key drivers for directors’ remuneration, bonus levels and performance
targets, including consideration of the visibility of management incentive
schemes and how they could influence local, regional and global
management behaviour;
– the group’s own assessment of the risks that irregularities may occur either
as a result of fraud or error that was approved by the board;
– results of our enquiries of management, the group’s general counsel,
internal audit and the audit committee about their own identification and
assessment of the risks of irregularities, including consideration of the
nature and quantum of matters raised to the group’s Business
Integrity team;
– any matters we identified having obtained and reviewed the group’s
documentation of their policies and procedures relating to:
– identifying, evaluating and complying with laws and regulations and
whether they were aware of any instances of non-compliance;
– detecting and responding to the risks of fraud and whether they have
knowledge of any actual, suspected or alleged fraud;
– the internal controls established to mitigate risks of fraud or non-
compliance with laws and regulations; and
– the matters discussed among the audit engagement team including
significant component audit teams and relevant internal specialists,
including fraud, impairment, tax, valuations, financial instruments, real
estate, ESG, pensions and IT specialists regarding how and where fraud
might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and
incentives that may exist within the organisation for fraud. In common with all
audits under ISAs (UK), we are also required to perform specific procedures to
respond to the risk of management override, including adjustments made in
the financial reporting process outside of local operational reporting.
We also obtained an understanding of the legal and regulatory frameworks
that the group operates in, focusing on provisions of those laws and
regulations that had a direct effect on the determination of material amounts
and disclosures in the financial statements. The key laws and regulations we
considered in this context included the Securities and Exchange Commission
rules, Securities Law in the UK and US, the UK Listing Rules, Companies (Jersey)
Law, 1991 and tax legislation in the group’s various jurisdictions.
In addition, we considered provisions of other laws and regulations that do not
have a direct effect on the financial statements but compliance with which
may be fundamental to the group’s ability to operate or to avoid a material
penalty. These included the US Foreign Corrupt Practices Act and the UK
Bribery Act.
WPP ANNUAL REPORT 2023
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FINANCIAL STATEMENTS INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WPP PLC
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
12. OPINIONS ON OTHER MATTERS PRESCRIBED BY OUR
ENGAGEMENT LETTER
In our opinion the part of the directors’ remuneration report to be audited has
been properly prepared in accordance with the UK Companies Act 2006 as if
that Act had applied to the group.
14. MATTERS ON WHICH WE ARE REQUIRED TO REPORT
BY EXCEPTION
14.1. ADEQUACY OF EXPLANATIONS RECEIVED AND ACCOUNTING RECORDS
Under the Companies (Jersey) Law, 1991 we are required to report to you if,
in our opinion:
– we have not received all the information and explanations we require for our
In our opinion, based on the work undertaken in the course of the audit:
audit; or
– the information given in the strategic report and the directors’ report for
the financial year for which the financial statements are prepared is
consistent with the financial statements; and
– the strategic report and the directors’ report have been prepared in
accordance with applicable legal requirements
In the light of the knowledge and understanding of the group and their
environment obtained in the course of the audit, we have not identified any
material misstatements in the strategic report or the directors’ report.
13. CORPORATE GOVERNANCE STATEMENT
The Listing Rules require us to review the directors' statement in relation to
going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the group’s compliance with the provisions
of the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that
each of the following elements of the Corporate Governance Statement is
materially consistent with the financial statements and our knowledge
obtained during the audit:
– the directors’ statement with regards to the appropriateness of adopting
the going concern basis of accounting and any material uncertainties
identified set out on page 97
– the directors’ explanation as to its assessment of the group’s prospects,
the period this assessment covers and why the period is appropriate set
out on page 97;
– the directors' statement on fair, balanced and understandable set out on
page 169;
– the board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on pages 98-105;
– the section of the annual report that describes the review of effectiveness
of risk management and internal control systems set out on page 133; and
– the section describing the work of the audit committee set out on
pages 130-136
– proper accounting records have not been kept, or proper returns adequate
for our audit have not been received from branches not visited by us; or
– the financial statements are not in agreement with the accounting records
and returns
The parent company financial statements are not in agreement with the
accounting records and returns
We have nothing to report in respect of these matters.
14.2 DIRECTORS’ REMUNERATION
Under our engagement letter we are also required to report if in our opinion
certain disclosures of directors’ remuneration have not been made or the part
of the directors’ remuneration report to be audited is not in agreement with
the accounting records and returns.
We have nothing to report in respect of these matters.
15. OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS
15.1. AUDITOR TENURE
Following the recommendation of the audit committee, we were appointed by
the company at the Annual General Meeting on 20 May 2002 to audit the
financial statements for the year ending 31 December 2002 and subsequent
financial periods. The period of total uninterrupted engagement including
previous renewals and reappointments of the firm is 22 years, covering the
years ending 31 December 2002 to 31 December 2023.
15.2. CONSISTENCY OF THE AUDIT REPORT WITH THE ADDITIONAL REPORT
TO THE AUDIT COMMITTEE
Our audit opinion is consistent with the additional report to the audit
committee we are required to provide in accordance with ISAs (UK).
16. USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in
accordance with Article 113A of the Companies (Jersey) Law, 1991. Our audit
work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and those
matters we have expressly agreed to report to them on in our engagement
letter and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this report, or for the
opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and
Transparency Rule (DTR) 4.1.15R – DTR 4.1.18R, these financial statements will
form part of the Electronic Format Annual Financial Report filed on the National
Storage Mechanism of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R.
This auditor’s report provides no assurance over whether the Electronic
Format Annual Financial Report has been prepared in compliance with DTR
4.1.15R – DTR 4.1.18R.
We have reported separately on the parent company financial statements of
WPP plc for the year ended 31 December 2023. That report includes details of
the parent company key audit matters; how we applied the concept of
materiality in planning and performing our audit of the parent company; and
an overview of the scope of our audit of the parent company.
James Bates, FCA
For and on behalf of Deloitte LLP
London, United Kingdom
21 March 2024
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WPP ANNUAL REPORT 2023
RECONCILIATION TO NON-GAAP MEASURES OF PERFORMANCE
FINANCIAL STATEMENTS
The Group presents alternative performance measures, including headline
operating profit, headline operating profit margin, headline profit before
interest and tax, headline profit before tax, headline earnings, headline EPS,
diluted headline EPS, headline EBITDA, revenue less pass-through costs,
adjusted net debt and adjusted free cash flow. They are used by management
for internal performance analyses; the presentation of these measures
facilitates comparability with other companies, although management’s
measures may not be calculated in the same way as similarly titled measures
reported by other companies; and these measures are useful in connection
with discussions with the investment community.
In the calculation of headline profit, judgement is required by management
in determining which revenues and costs are considered to be significant,
non-recurring or volatile items that are to be excluded.
The exclusion of certain adjusting items may result in headline earnings being
materially higher or lower than reported earnings, for example when
significant impairments or restructuring charges are excluded but the related
benefits are included, headline earnings will be higher. Headline measures
should not be considered in isolation as they provide additional information
to aid the understanding of the Group’s financial performance.
Reconciliation of revenue to revenue less pass-through costs:
Revenue
Media pass-through costs
Other pass-through costs
Revenue less pass-through costs
2023
£m
2022
£m
14,844.8 14,428.7
(1,905.7)
(2,173.6)
(723.7)
(811.5)
11,799.3
11,859.7
2021
£m
12,801.1
(1,865.3)
(538.6)
10,397.2
Pass-through costs comprise fees paid to external suppliers when they are
engaged to perform part or all of a specific project and are charged directly
to clients. This includes the cost of media where the Group is buying digital
media for its own account on a transparent opt-in basis and, as a result, the
subsequent media pass-through costs have to be accounted for as revenue,
as well as billings. Therefore, management considers that revenue less
pass-through costs gives a helpful reflection of top-line growth.
Reconciliation of profit before taxation to headline operating profit:
Profit before taxation
Finance and investment income
Finance costs
Revaluation and retranslation
of financial instruments
Profit before interest and taxation
(Earnings)/loss from associates
– after interest and tax
Operating profit
Operating profit margin %
Goodwill impairment
Amortisation and impairment of
acquired intangible assets
Investment and other impairment
charges/(reversals)
Restructuring and transformation costs
Property-related restructuring costs
(Gains)/losses on disposal of investments
and subsidiaries
Gains on remeasurement of equity interests
arising from a change in scope of ownership
Litigation settlement
Headline operating profit
Headline operating profit margin %
2023
£m
346.3
(127.3)
389.0
2022
£m
1,159.8
(145.4)
359.4
2021
£m
950.8
(69.4)
283.6
(6.8)
601.2
(76.0)
1,297.8
87.8
1,252.8
(70.2)
531.0
4.5%
63.6
60.4
1,358.2
11.5%
37.9
(23.8)
1,229.0
11.8%
1.8
727.9
62.1
97.8
17.8
195.5
232.5
77.0
218.8
18.0
(42.4)
175.4
–
(7.1)
36.3
10.6
–
(11.0)
1,750.2
14.8%
(66.5)
−
1,741.8
14.8%
–
21.3
1,493.5
14.4%
Headline operating profit
Finance and investment income
Finance costs (excluding interest expense
related to lease liabilities)
Non-lease interest cover1 on headline
operating profit
2023
£m
1,750.2
127.3
(282.7)
(155.4)
11.3
times
2022
£m
1,741.8
145.4
(263.7)
(118.3)
14.7
times
2021
£m
1,493.5
69.4
(192.7)
(123.3)
12.1
times
Note
1
Interest expense related to lease liabilities is excluded from interest cover as lease liabilities are
excluded from the Group’s key leverage metrics
Headline operating profit and headline operating margin are metrics that
management uses to assess the performance of the business.
Headline operating profit margin before and after earnings from associates:
Revenue less
pass-through costs
Headline operating profit
Earnings from associates
(after interest and tax,
excluding adjusting items)
Headline PBIT
Margin
%
2023
£m
Margin
%
2022
£m
Margin
%
2021
£m
11,859.7
14.8 1,750.2
11,799.3
1,741.8
14.8
10,397.2
14.4 1,493.5
36.2
15.1 1,786.4
73.9
15.4 1,815.7
86.1
15.2 1,579.6
Headline PBIT is one of the metrics that management uses to assess the
performance of the business.
Calculation of headline EBITDA:
Headline PBIT (as above)
Depreciation of property, plant and equipment
Amortisation of other intangible assets
Headline EBITDA (including depreciation
of right-of-use assets)
Depreciation of right-of-use assets
Headline EBITDA
2023
£m
1,786.4
165.1
24.8
2022
£m
1,815.7
166.9
21.9
2021
£m
1,579.6
151.2
19.9
1,976.3
2,004.5
1,750.7
256.8
2,233.1
262.2
2,266.7
272.9
2,023.6
Headline EBITDA is a key metric used for valuing companies and is one of the
metrics that management uses to assess the performance of the business.
Headline EBITDA (including depreciation of right-of-use assets) is used in the
Group’s key leverage metric (average adjusted net debt/headline EBITDA
within the range of 1.5x-1.75x by year end 2024).
Reconciliation of profit before taxation to headline PBT and headline earnings:
Profit before taxation
Goodwill impairment
Amortisation and impairment
of acquired intangible assets
Investment and other impairment
charges/(reversals)
Restructuring and transformation costs
Property-related restructuring costs
(Gains)/losses on disposal of investments
and subsidiaries
Gains on remeasurement of equity interests
arising from a change in scope of ownership
Litigation settlement
Share of adjusting and other items for
associates
Revaluation and retranslation
of financial instruments
Headline PBT
Headline tax charge
Headline non-controlling interests
Headline earnings
2023
£m
346.3
63.6
2022
£m
1,159.8
37.9
2021
£m
950.8
1.8
727.9
62.1
97.8
17.8
195.5
232.5
77.0
218.8
18.0
(7.1)
36.3
–
(11.0)
(66.5)
−
(42.4)
175.4
−
10.6
–
21.3
(34.0)
134.3
62.3
(6.8)
1,524.7
(412.2)
(86.8)
1,025.7
(76.0)
1,601.7
(408.8)
(92.7)
1,100.2
87.8
1,365.4
(327.9)
(83.0)
954.5
Headline PBT and headline earnings are metrics that management uses to
assess the performance of the business.
WPP ANNUAL REPORT 2023
223
FINANCIAL STATEMENTS RECONCILIATION TO NON-GAAP MEASURES OF PERFORMANCE
Calculation of headline taxation:
Reconciliation of adjusted operating cash flow and adjusted free cash flow:
Headline PBT
Tax charge
Tax (charge)/credit relating to gains on
disposal of investments and subsidiaries
Tax credit relating to restructuring
and transformation costs and property-related
costs
Tax credit/(charge) relating
to litigation settlement
Deferred tax impact of the amortisation
of acquired intangible assets and other
goodwill items
Deferred tax relating to gains on disposal
of investments and subsidiaries
Headline tax charge
Headline tax rate
2023
£m
1,524.7
149.1
2022
£m
1,601.7
384.4
2021
£m
1,365.4
230.1
(9.3)
(9.0)
31.5
98.6
46.5
45.7
1.1
−
(5.4)
157.4
(15.4)
5.6
15.3
412.2
27.0%
2.3
408.8
25.5%
20.4
327.9
24.0%
The headline tax rate as a percentage of headline PBT (that includes the share
of headline results of associates) is 27.0% (2022: 25.5%, 2021: 24.0%). Given
the Group’s geographic mix of profits and the changing international tax
environment, the headline tax rate is expected to increase over the next
few years.
Cash generated by operations
Purchases of property, plant and equipment
Purchase of other intangible assets (including
capitalised computer software)
Repayment of lease liabilities
Interest paid on lease liabilities
Investment income
Share option proceeds
Adjusted operating cash flow
Corporation and overseas tax paid
Interest and similar charges paid
Interest received
Dividends from associates
Earnout payments1
Dividends paid to non-controlling interests in
subsidiary undertakings
Adjusted free cash flow
2023
£m
1,844.8
(177.2)
2022
£m
1,268.2
(208.4)
2021
£m
2,580.3
(263.2)
(40.0)
(258.7)
(102.9)
12.9
0.7
1,279.6
(395.3)
(274.5)
115.8
43.4
(30.5)
(14.9)
(309.6)
(92.4)
24.5
1.2
668.6
(390.9)
(210.2)
88.9
37.6
(71.4)
(29.9)
(320.7)
(88.4)
17.8
4.4
1,900.3
(391.1)
(173.7)
47.5
53.4
(57.0)
(101.3)
637.2
(69.5)
53.1
(114.5)
1,264.9
Note
1 Earnout payments in 2023 include a £28 million receipt connected with a previous earnout
arrangement, that was settled within the year
Calculation of basic headline EPS is as follows:
Headline earnings (£ million) (page 223)
Weighted average shares used in headline
basic EPS calculation (million) (note 9)
Headline EPS
Calculation of diluted headline EPS is as follows:
2023
£m
1,025.7
2022
£m
1,100.2
1,072.1
95.7p
1,097.9
100.2p
2021
£m
954.5
1,194.1
79.9p
The Group bases its internal cash flow objectives on adjusted operating cash
flow and adjusted free cash flow. Management believes adjusted operating
cash flow is a target that can be translated into targets for operating business
units that do not have direct control of items which influence adjusted free
cash flow, such as the Group effective tax rate and leverage; and is meaningful
to investors as a measure of the degree to which headline operating profit is
converted into cash after the cost of leased operating assets, investment in
capital expenditure, and working capital.
Adjusted free cash flow is meaningful to investors because it is the measure
of the Group’s funds available for acquisition-related payments, dividends
to shareholders, share repurchases and debt repayment. The purpose of
presenting adjusted free cash flow is to indicate the ongoing cash generation
within the control of the Group after taking account of the necessary cash
expenditures of maintaining the capital and operating structure of the
Group (in the form of payments of interest, corporate taxation, and
capital expenditure).
ADJUSTED NET DEBT AND AVERAGE ADJUSTED NET DEBT
Management believes that adjusted net debt and average adjusted net debt
are appropriate and meaningful measures of the debt levels within the Group.
Adjusted net debt at a period end consists of cash and short-term deposits,
bank overdraft, bonds and bank loans due within one year and bonds and
bank loans due after one year.
Reconciliation of adjusted net debt:
Cash and short-term deposits
Bank overdrafts, bonds and bank loans
due within one year
Bonds and bank loans due after one year
Adjusted net debt
2023
£m
2,217.5
2022
£m
2,491.5
2021
£m
3,882.9
(946.3)
(3,775.0)
(2,503.8)
(1,169.0)
(3,801.8)
(2,479.3)
(567.2)
(4,216.8)
(901.1)
Average adjusted net debt is calculated as the average monthly net
borrowings of the Group. Adjusted net debt excludes lease liabilities.
Headline earnings (£ million) (page 223)
Weighted average shares used in headline
diluted EPS calculation (million) (note 9)
Diluted headline EPS
2023
£m
1,025.7
2022
£m
1,100.2
2021
£m
954.5
1,094.0
93.8p
1,116.4
98.5p
1,215.3
78.5p
224
WPP ANNUAL REPORT 2023
RECONCILIATION TO NON-GAAP MEASURES OF PERFORMANCE
FINANCIAL STATEMENTS
EARNINGS/(LOSS) FROM ASSOCIATES – AFTER INTEREST AND TAX
Management reviews the ‘Earnings/(loss) from associates – after interest and
tax’ by assessing the underlying component movements including ‘share of
profit before interest and taxation of associates’, ‘share of adjusting items of
associates’, ‘share of interest and non-controlling interests of associates’,
and ‘share of taxation of associates’, which are derived from the Income
Statements of the associate undertakings.
The following table is an analysis of ‘Earnings/(loss) from associates –
after interest and tax’ and underlying component movements:
Share of profit before interest and taxation
Share of adjusting and other items
Share of interest and non-controlling interests
Share of taxation
Earnings/(loss) from associates
– after interest and tax
2023
£m
181.2
34.0
(112.5)
(32.5)
2022
£m
219.6
(134.3)
(104.7)
(41.0)
2021
£m
208.5
(62.3)
(83.9)
(38.5)
70.2
(60.4)
23.8
Share of adjusting and other items for associates was earnings of £34.0 million
(2022: loss £134.3 million, 2021: loss £62.3 million). In 2023 this included
£45.1 million of distributions received from Kantar, described in note 4. In 2022
this included £75.8 million (2021: £38.8 million) of amortisation and impairment
of acquired intangible assets as well as restructuring and one-off transaction
costs of £54.8 million (2021: £18.8 million) within Kantar.
CONSTANT CURRENCY AND PRO FORMA (‘LIKE-FOR-LIKE’)
These consolidated financial statements are presented in pounds sterling.
However, the Group’s significant international operations give rise to
fluctuations in foreign exchange rates. To neutralise foreign exchange impact
and illustrate the underlying change in revenue and profit from one year to
the next, the Group has adopted the practice of discussing results in both
reportable currency (local currency results translated into pounds sterling
at the prevailing foreign exchange rate) and constant currency.
Management also believes that discussing pro forma or like-for-like contributes
to the understanding of the Group’s performance and trends because it allows
for meaningful comparisons of the current year to that of prior years.
Further details of the constant currency and pro forma methods are given
in the Glossary on pages 232 and 233.
Reconciliation of reported revenue to like-for-like revenue:
2021
Impact of exchange rate changes
Impact of acquisition
Like-for-like growth
2022
Impact of exchange rate changes
Impact of acquisition
Like-for-like growth
2023
£m
12,801.1
725.4
41.0
861.2
14,428.7
(211.2)
172.0
455.3
14,844.8
Reconciliation of reported revenue less pass-through costs to like-for-like
revenue less pass-through costs:
2021
Impact of exchange rate changes
Impact of acquisition
Like-for-like growth
2022
Impact of exchange rate changes
Impact of acquisition
Like-for-like growth
2023
£m
10,397.2
611.9
72.8
717.4
11,799.3
(150.8)
101.4
109.8
11,859.7
%
6.7
5.7
0.3
6.7
12.7
(1.5)
1.2
3.2
2.9
%
6.5
5.9
0.7
6.9
13.5
(1.3)
0.9
0.9
0.5
WPP ANNUAL REPORT 2023
225
ADDITIONAL
INFORMATION
In this section
Shareholder information
Five-year summary
Glossary
Where to find us
228
231
232
234
226
WPP ANNUAL REPORT 2023
ADDITIONAL INFORMATION
WPP ANNUAL REPORT 2023
227
ADDITIONAL INFORMATION
SHAREHOLDER INFORMATION
SHARE CAPITAL AND CONTROL
Details of our issued share capital and the number of shares held in Treasury
as at 31 December 2023 can be found in note 26 to the financial statements.
Our ordinary shares are listed on the London Stock Exchange (LSE) and are
also quoted on the New York Stock Exchange (NYSE) in the form of American
Depositary Receipts (ADRs).
MAJOR SHAREHOLDERS
The table below shows the holdings of major shareholders in the Company’s
issued ordinary share capital in accordance with the Disclosure Guidance and
Transparency Rules (DTRs) notified to the Company as at 31 December 2023
and 15 March 2024. Information provided to the Company under the DTRs
is publicly available via the regulatory information services and on the
Company’s website.
The rights and obligations relating to the ordinary share capital are outlined in
the Articles of Association; there are no restrictions on transfer, no restrictions
on voting rights and no securities carry special voting rights with regard to
control of the Company.
At the AGM on 17 May 2023, shareholders passed resolutions authorising the
Company, in accordance with its Articles, to allot shares up to a maximum
nominal amount of £35,697,911 of which £5,354,687 could be allotted for cash
free of statutory pre-emption rights. In the year under review no shares were
issued for cash free from pre-emption rights. Details of share capital movements
are given in note 26 to the financial statements on page 212.
AUTHORITY FOR PURCHASE OF OWN SHARES
At the AGM on 17 May 2023 shareholders passed a special resolution authorising
the Company, in accordance with its Articles of Association, to purchase up
to 107,093,734 of its own shares in the market. In the year under review, no
ordinary shares were purchased.
BlackRock Inc
Silchester International Investors LLP
Harris Associates L.P.
1 Percentage as at date of notification
At 31 December
20231
7.04%
5.03%
5.02%
At 15 March
20241
8.33%
5.03%
5.07%
SHAREHOLDERS AS AT 31 DECEMBER 2023
Holding of shares
Up to 1,000
1,001 to 5,000
5,001 to 100,000
100,001 to 1,000,000
Over 1,000,000
Number of
holders
4,961
1,365
1,981
804
214
% Owners
53
15
21
9
2
Shareholdings % Outstanding
0.10
0.30
5.30
23.08
71.22
1,198,246
3,363,029
60,505,494
263,433,145
813,013,282
Shareholders by geography
UK
United States
Rest of World
Total
%
24.2
45.7
30.1
100
Shareholders by type
Institutional investors
Our people
Other individuals
Total
%
96.4
0.5
3.1
100
228
WPP ANNUAL REPORT 2023
SHAREHOLDER INFORMATION
ADDITIONAL INFORMATION
SHARE PRICE
The closing price of the shares at 31 December was as follows:
Ordinary 10p shares
At 15 March
2024
707.2p
2023
753.0p
2022
820.2p
2021
1,119.5p
2020
800.0p
2019
1,066.5p
Share price information is also available online at wpp.com/investors/share-price
SHARE BUYBACK PROGRAMME
The Board has been authorised to issue and allot ordinary shares under Article
12 of the Company’s Articles of Association. The power under Article 12 and
the authority for the Company to make purchases of its own shares are subject
to shareholder authorities which are sought on an annual basis at our Annual
General Meeting (AGM). Any shares purchased by the Company may be
cancelled, held as Treasury shares or used for satisfying share options and
grants under the Company’s employee share plans.
DIVIDENDS
Subject to shareholder approval at the 2024 AGM, the final dividend for 2023
will become due and payable on 5 July 2024 to all holders of ordinary shares
on the Register of Members at the close of business on 7 June 2024.
The table below sets out the dividend per share ordinary shareholders have
received for the last five years.
Interim dividend per ordinary share
Final dividend per ordinary share
Total
2023
15.00p
24.40p
39.40p
2022
15.00p
24.40p
39.40p
2021
12.50p
18.70p
31.20p
2020
10.00p
14.00p
24.00p
2019
22.70p
–
22.70p
AMERICAN DEPOSITARY RECEIPTS (ADRS)
Each ADR represents five ordinary shares.
WPP plc is subject to the informational requirements of the US securities
laws applicable to foreign companies and files an annual report on Form 20-F
and other information with the US Securities and Exchange Commission.
These documents are available at the Commission’s website, sec.gov.
ADR DIVIDENDS
ADR holders are eligible for all stock dividends or other entitlements accruing
on the underlying WPP plc shares and receive all cash dividends in US dollars.
These are normally paid twice a year.
Dividend cheques are mailed directly to the ADR holder on the payment date
if ADRs are registered with WPP’s US depositary. Dividends on ADRs that are
registered with brokers are sent to the brokers, who forward them to ADR
holders. WPP’s US depositary is Citibank N.A. (address on page 230).
Dividends per ADR in respect of each financial year are set out below.
In £ sterling
Interim
Final
Total
In US dollars1
Interim
Final
Total
2023
2022
2021
2020
2019
75.00p
122.00p
197.00p
75.00p
122.00p
197.00p
62.50p
93.50p
156.00p
50.00p
70.00p
120.00p
113.50p
–
113.50p
93.29¢
151.74¢
245.03¢
92.72¢
150.83¢
243.55¢
85.98¢
128.63¢
214.61¢
64.18¢
89.85¢
154.03¢
144.88¢
–
144.88¢
1 These figures have been translated for convenience purposes only, using the approximate average rate for the year of US$1.2438 (2022: US$1.2363, 2021: US$1.3757, 2020: US$1.2836, 2019: US$1.2765). This
conversion should not be construed as a representation that the pound sterling amounts actually represent, or could be converted into, US dollars at the rates indicated
Dollar amounts paid to ADR holders depend on the sterling/dollar exchange rate at the time of payment.
No withholding tax is imposed on dividends paid to ADR holders. The dividends received will be subject to US taxation.
WPP ANNUAL REPORT 2023
229
ADDITIONAL INFORMATION SHAREHOLDER INFORMATION
LISTING RULES
For the purposes of Listing Rule (LR) 9.8.4R, the information required to
be disclosed by that section can be found in the following locations:
Section
Applicable sub-paragraph
within LR 9.8.4R
Location
4
5
6
Details of long-term
incentive schemes
Details of Directors’
waiver of emoluments
Director waiver of future
emoluments
Directors’ compensation report
pages 139-168
Directors’ compensation report
pages 139-168
Directors’ compensation report
pages 139-168
The above table sets out only those sections of LR 9.8.4R which are relevant. The remaining
sections of LR 9.8.4R are not applicable
ARTICLES OF ASSOCIATION
There are no restrictions on amending the Articles of Association of the
Company (Articles) other than the requirement to pass a special resolution
of the shareholders at a general meeting. Subject to applicable law and the
Company’s Articles, the Directors may exercise all powers of the Company.
The Articles are available on the Company’s website at
wpp.com/investors/corporate-governance
ACCESS NUMBERS/TICKER SYMBOLS
Ordinary shares
American Depositary Shares WPP
NYSE
–
Reuters
WPP.L
WPP.N
Bloomberg
WPP LN
WPP US
SHAREHOLDER CONTACTS
ORDINARY SHARES
For any queries regarding your shareholding, please contact Computershare:
By telephone: +44 (0)370 707 1411
Lines are open from Monday to Friday, 8.30am to 5.30pm UK time, excluding
public holidays.
Using the contact form on the website: investorcentre.co.uk/je/contactus
In writing: Computershare Investor Services (Jersey) Limited, 13 Castle Street,
St Helier, Jersey, JE1 1ES
AMERICAN DEPOSITARY RECEIPTS (ADRS) OFFICE
For any queries regarding WPP ADRs, please contact Citibank Shareholder
Services (Citibank):
By telephone: +1 877 248 4237
SHAREHOLDER INFORMATION
2023 FINANCIAL CALENDAR
Ordinary dividend timetable
Ordinary ex-dividend date
Dividend record date
Dividend payment date
Other key dates:
Final
6 June 2024
7 June 2024
5 July 2024
2023 preliminary results
22 February 2024
First quarter trading update
25 April 2024
Annual General Meeting
8 May 2024
2024 interim results
August 2024
Third quarter trading update
October 2024
Interim
10 October 2024
11 October 2024
1 November 2024
Opening hours are Monday to Friday, 8.30am to 6pm US Eastern Standard
Time. Please call +1 781 575 4555 if calling from outside of the US.
By email: citibank@shareholders-online.com
In writing: Citibank N.A., PO Box 43077, Providence, RI 02940–3077, USA
REGISTERED OFFICE
WPP plc
22 Grenville Street
St Helier
Jersey
JE4 8PX
RESULTS ANNOUNCEMENTS
Results announcements are issued to the London Stock Exchange and are
available on its news service. They are also sent to the US Securities and
Exchange Commission and the NYSE, issued to the media and made available
on our website.
Telephone: +44 (0)20 7282 4600
Registered number: 111714
Website: wpp.com
SHAREHOLDER COMMUNICATIONS
A growing number of our shareholders have opted to receive communications
from us electronically. The use of electronic communications, rather than
printed paper documents, means information about the Company can be
accessed through emails or the Company’s website, thus reducing our
impact on the environment. Shareholders who have elected for electronic
communication will be sent an email alert containing a link to the relevant
documents. We encourage all our shareholders to sign up for this service.
You can register for this service at investorcentre.co.uk/je or by contacting
Computershare by the telephone number provided below.
WPP’s public website, wpp.com, provides current and historical financial
information, news releases, trading reports and share price information.
Go to wpp.com/investors
PAYMENT OF DIVIDENDS
We are only able to pay cash dividends in to your nominated bank account.
To update your payment details please go to investorcentre.co.uk/je or
contact Computershare at the details below.
SHAREHOLDERS’ REGISTER
The ordinary shareholders’ register is kept at the offices of the Company’s
registrar in Jersey and is available for inspection on request. The address of
the registrar is 13 Castle Street, St Helier, Jersey JE1 1ES.
TAXATION INFORMATION
As this is a complex area investors should consult their own tax advisor
regarding the US federal, state and local, the UK and other tax consequences
of owning and disposing of shares and ADSs in their particular circumstances.
DIVIDENDS RECEIVED
For UK tax years up to and including 6 April 2022 to 5 April 2023, UK resident
individuals received a Dividend Allowance in the form of a 0% tax rate on the
first £2,000 of dividend income received. The Dividend Allowance has been
cut to £1,000 for the tax year 6 April 2023 to 5 April 2024, and for the
2024/2025 tax year it will be further cut to £500. Dividends received by UK
resident individuals on or after 6 April 2022, and which are over the Dividend
Allowance, are taxed at a rate of 8.75% for individuals in the basic rate band,
at 33.75% for higher rate tax payers and at 39.35% for additional rate tax payers
(individuals with income over £150,000 in the 2022/2023 tax year, and income
over £125,140 in the 2023/2024 tax year).
CAPITAL GAINS TAX
The market value of an ordinary share at 31 March 1982 was 39p. Since that date
rights issues have occurred in September 1986, August 1987 and April 1993.
For capital gains tax purposes the acquisition cost of ordinary shares is
adjusted to take account of such rights issues. Since any adjustments will
depend on individual circumstances, shareholders are advised to consult
their professional advisors.
CAPITAL GAINS
As liability to capital gains tax on a disposal of WPP shares will depend
on individual circumstances, shareholders are advised to consult their
professional advisors.
230
WPP ANNUAL REPORT 2023
FIVE-YEAR SUMMARY
Income statement
Billings1
Revenue
Revenue less pass-through costs1
Operating profit/(loss)
Headline EBITDA2
Headline operating profit2
Profit/(loss) before taxation
Headline PBT2
Profit/(loss) for the year
ADDITIONAL INFORMATION
Continuing operations
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
52,629.2
14,844.8
11,859.7
531.0
2,233.1
1,750.2
346.3
1,524.7
197.2
52,971.4
14,428.7
11,799.3
1,358.2
2,266.7
1,741.8
1,159.8
1,601.7
775.4
50,656.8
12,801.1
10,397.2
1,229.0
2,023.6
1,493.5
950.8
1,365.4
720.7
46,917.8
12,002.8
9,762.0
(2,278.1)
1,812.5
1,260.5
(2,790.6)
1,041.3
(2,917.7)
53,059.0
13,234.1
10,846.5
1,295.9
2,131.4
1,560.6
1,214.3
1,363.0
927.1
Headline operating profit margin2
14.8%
14.8%
14.4%
12.9%
14.4%
Balance sheet
Non-current assets
Net current (liabilities)/assets
Net assets
Adjusted net debt
Average adjusted net debt
Our people
Revenue per employee (£000)
Revenue less pass-through costs1 per employee (£000)
Staff cost per employee (£000)
Average headcount
Share information
Headline3 – basic earnings per share from continuing operations
– diluted earnings per share from continuing operations
Reported – basic earnings per share from continuing operations
– diluted earnings per share from continuing operations
Dividends per share4
Share price – high
– low
Market capitalisation at year-end (£m)
12,678.8
(2,307.2)
3,832.7
(2,503.8)
(3,619.8)
13,724.2
(2,610.0)
4,160.4
(2,479.3)
(2,852.0)
12,535.2
(1,149.8)
4,069.0
(901.1)
(1,457.3)
12,185.4
754.6
5,050.1
(695.6)
(2,331.0)
15,826.7
(298.4)
8,297.3
(1,539.6)
(4,282.0)
2023
2022
2021
2020
2019
129.4
103.4
70.9
114,732
95.7p
93.8p
10.3p
10.1p
39.40p
1,051.5p
681.2p
8,093.5
126.4
103.4
71.5
114,129
100.2p
98.5p
62.2p
61.2p
39.40p
1,224.0p
725.8p
8,783.8
122.1
99.2
68.4
104,808
79.9p
78.5p
53.4p
52.5p
31.20p
1,129.5p
765.8p
12,918.7
116.7
94.9
63.8
102,822
60.7p
60.1p
(243.0p)
(243.0p)
24.00p
1,071.0p
483.7p
9,802.7
124.3
101.8
66.6
106,498
77.8p
77.1p
67.8p
67.3p
22.70p
1,077.5p
800.4p
13,410.0
Notes
1 Billings and revenue less pass-through costs are defined on pages 232 and 233
2 The calculation of ‘headline’ measures of performance (including headline EBITDA, headline operating profit, headline operating profit margin and headline PBT) is set out on pages 223 and 224
3 Headline earnings per share is set out on page 224
4 Dividends per share represents the dividends declared in respect of each year
The information on this page is unaudited.
WPP ANNUAL REPORT 2023
231
ADDITIONAL INFORMATION
GLOSSARY
Term used in this Annual Report
US equivalent or brief description
Adjusted free cash flow
Adjusted operating cash flow
Adjusted free cash flow is calculated as cash used in/generated from operations plus dividends received
from associates, interest received, investment income received, and share option proceeds, less
corporation and overseas tax paid, interest and similar charges paid, dividends paid to non-controlling
interests in subsidiary undertakings, repayment of lease liabilities (including interest), earnout payments
and purchases of property, plant and equipment and purchases of other intangible assets
Adjusted operating cash flow is calculated as cash used in/generated from operations plus investment
income received, and share option proceeds, less repayment of lease liabilities (including interest), and
purchases of property, plant and equipment and purchases of other intangible assets
Adjusted operating cashflow conversion
Conversion is measured as adjusted operating cash flow (defined above) over headline operating profit
(defined below)
Adjusting items
ADRs/ADSs
Allotted
Average adjusted net debt and adjusted net debt
Billings and estimated net new billings
Brand awareness
Brand consideration
Called-up share capital
Click-through rate (CTR)
Adjusting items include gains/losses on disposal of investments and subsidiaries, gains/losses
on remeasurement of equity interests arising from a change in scope of ownership, investment and other
impairment charges, litigation settlement, restructuring and transformation costs, goodwill impairment,
amortisation and impairment of acquired intangible assets, intangible asset impairment, property-related
restructuring costs and share of adjusting items for associates
American Depositary Receipts/American Depositary Shares. The Group uses the terms ADR and ADS
interchangeably. One ADR/ADS represents five ordinary shares
Issued
Average adjusted net debt is calculated as the average monthly net borrowings of the Group. Adjusted
net debt at a period end consists of cash and short-term deposits, bank overdraft, bonds and bank
loans due within one year and bonds and bank loans due after one year. Adjusted net debt excludes
lease liabilities
Billings comprise the gross amounts billed to clients in respect of commission-based/fee-based income
together with the total of other fees earned. Net new billings represent the estimated annualised impact
on billings of new business gained from both existing and new clients, net of existing client business lost.
The estimated impact is based upon initial assessments of the clients’ marketing budgets, which may not
necessarily result in actual billings of the same amount
The number of people or percentage of a group that are aware of a brand
Those who would consider purchasing a brand are measured as a subset of those aware of a brand
Ordinary shares, issued and fully paid
The ratio of the number of users exposed to a specific link on a website page or in an email and those who
click the link and view the advertised product or service
Client Net Promoter Score (CNPS)
A metric used to assess overall customer satisfaction and how likely customers are to recommend a
company to a peer or colleague
Company or Parent Company
WPP plc
Constant currency
The Group uses US dollar-based, constant currency models to measure performance across all
jurisdictions. These are calculated by applying budgeted 2023 exchange rates to local currency reported
results for the current and prior year, which excludes any variances attributable to foreign exchange rate
movements
Direct-to-consumer
Marketing from company to consumer without distributor or retailer involvement
ESOP
Establishment costs
EURIBOR
Finance lease
Freehold
Full-time equivalent (FTE) employee
General and administrative costs
Employee share ownership plan
Establishment costs are costs directly related to the occupancy of the buildings utilised by WPP. These
include the depreciation of right of use assets and leasehold improvements; and the costs of property
taxes, utilities, maintenance and facilities management amongst others
The euro area inter-bank offered rate for euro deposits
Capital lease
Ownership with absolute rights in perpetuity
A permanent person or employee of WPP Group or any of its majority-owned operating companies, as
captured locally by each reporting unit and entered into the centralised finance system. FTE employees
does not include contractors
General and administrative costs include marketing costs, certain professional fees and an allocation of
other costs, including staff and establishment costs (defined above), based on the function of employees
within the Group
General Data Protection Regulation (GDPR)
A European Union law governing digital data collection, use and storage
Group
WPP plc and its subsidiaries
232
WPP ANNUAL REPORT 2023
GLOSSARY
ADDITIONAL INFORMATION
Term used in this Annual Report
US equivalent or brief description
Headline costs
Headline earnings
Headline EBITDA
Headline operating profit
Headline costs comprise costs of services and general administrative costs excluding gains/losses on
disposal of investments and subsidiaries, investment and other impairment charges/reversals, goodwill
impairment, amortisation and impairment of acquired intangible assets, restructuring and transformation
costs, property-related restructuring costs, litigation settlement, and gains/losses on remeasurement of
equity interests arising from a change in scope of ownership
Headline PBT less headline tax charge and headline non-controlling interests
Profit before finance income/costs and revaluation and retranslation of financial instruments, taxation,
gains/losses on disposal of investments and subsidiaries, investment and other impairment charges/
reversals, goodwill impairment, amortisation and impairment of acquired intangible assets, amortisation
of other intangibles, depreciation of property, plant and equipment, depreciation of right-of-use assets,
restructuring and transformation costs, property-related restructuring costs, litigation settlement, share
of adjusting and other items for associates and gains/losses on remeasurement of equity interests arising
from a change in scope of ownership
Operating profit before gains/losses on disposal of investments and subsidiaries, investment and other
impairment charges/reversals, goodwill impairment, amortisation and impairment of acquired intangible
assets, restructuring and transformation costs, property-related restructuring costs, litigation settlement,
and gains/losses on remeasurement of equity interests arising from a change in scope of ownership
Headline operating profit margin
Headline operating profit margin is calculated as headline operating profit (defined above)
as a percentage of revenue less pass-through costs
Headline PBIT
Headline PBT
Headline tax charge
Profit before finance income/costs and revaluation and retranslation of financial instruments, taxation, gains/
losses on disposal of investments and subsidiaries, investment and other impairment charges/reversals,
goodwill impairment, amortisation and impairment of acquired intangible assets, restructuring and
transformation costs, property-related restructuring costs, litigation settlement, share of adjusting and
other items for associates and gains/losses on remeasurement of equity interests arising from a change in
scope of ownership
Profit before taxation, gains/losses on disposal of investments and subsidiaries, investment and other
impairment charges/reversals, goodwill impairment, amortisation and impairment of acquired intangible
assets, restructuring and transformation costs, property-related restructuring costs, litigation settlement,
share of adjusting and other items for associates, revaluation and retranslation of financial instruments and
gains/losses on remeasurement of equity interests arising from a change in scope of ownership
Taxation excluding tax/deferred tax relating to gains/losses on disposal of investments and subsidiaries,
restructuring and transformation costs, property-related restructuring costs, litigation settlement, the
deferred tax impact of the amortisation of acquired intangible assets and other goodwill items
IFRS/IAS
International Financial Reporting Standards/International Accounting Standards
Media/Digital Media billings
Net working capital
OCI
Pass-through costs
Pro forma ('like-for-like')
Media billings comprise our clients’ spend on media, plus our fees. Within this, Digital Media billings
comprises our billings in relation to media served on digital properties and platforms, including but not
limited to online video, display, search, social, digital out of home and addressable TV
The movement in net working capital consists of movements in trade working capital and movements in
other working capital and provisions per the analysis of cash flows in note 11
Consolidated statement of comprehensive income
Pass-through costs comprise fees paid to external suppliers where they are engaged to perform part or all
of a specific project and are charged directly to clients, predominantly media costs
Pro forma 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, the reclassification of certain
businesses to associates in 2022. The Group uses the terms ‘pro forma’ and ‘like-for-like’ interchangeably
Profit
Income
Profit attributable to equity holders of the parent
Net income
Programmatic advertising
Automated buying and selling of ad inventory, using software to make data-driven decisions
Revenue less pass-through costs
Revenue less pass-through costs is revenue less media and other pass-through costs
Sarbanes-Oxley Act, or SOX
An Act passed in the United States to protect investors by improving the accuracy and reliability
of corporate disclosures made pursuant to the securities laws, and for other purposes
Share capital
Shares in issue
Ordinary shares, capital stock or common stock issued and fully paid
Shares outstanding
Share premium account
Additional paid-in capital or paid-in surplus (not distributable)
UK Corporate Governance Code
The UK Corporate Governance Code published by the Financial Reporting Council dated April 2018
WPP
WPP plc and its subsidiaries
WPP ANNUAL REPORT 2023
233
ADDITIONAL INFORMATION
WHERE TO FIND US
COMPANY CENTRES
NEW YORK
3 World Trade Center
175 Greenwich Street
New York NY 10007
Tel +1 (212) 632 2200
LONDON
Sea Containers
18 Upper Ground
London SE1 9GL
Tel +44 (0)20 7282 4600
ASIA PACIFIC
50 Scotts Road
Singapore 228242
Tel +65 6508 5219
COMPANY INFORMATION
If you would like further general
information about WPP, its agencies
or any of the programmes or initiatives
mentioned in this Annual Report, please
visit our website, wpp.com, or email:
enquiries@wpp.com
CONTACT POINTS
INVESTOR RELATIONS
Tom Waldron
Group Investor Relations Director
Tel +44 (0)20 7282 4600
tom.waldron@wpp.com
Anthony Hamilton
Director Investor Relations
Tel +44 (0)20 7282 4600
anthony.hamilton@wpp.com
INVESTOR INFORMATION
Investor relations material and our financial
statements are available online at
wpp.com/investors
CORPORATE COMMUNICATIONS
AND MEDIA RELATIONS
Chris Wade
Director of Communications & Corporate Affairs
Tel +44 (0)20 7282 4600
chris.wade@wpp.com
SUSTAINABILITY
Hannah Harrison
Chief Sustainability Officer
Tel +44 (0)20 7282 4600
hannah.harrison@wpp.com
FORWARD-LOOKING STATEMENTS
In connection with the provisions of the U.S. Private Securities Litigation
Reform Act of 1995 (the ‘Reform Act’), the Company may include forward-
looking statements (as defined in the Reform Act) in oral or written public
statements issued by or on behalf of the Company. These forward-looking
statements may include, among other things, plans, objectives, beliefs,
intentions, strategies, projections and anticipated future economic
performance based on assumptions and the like that are subject to risks
and uncertainties. These statements can be identified by the fact that they
do not relate strictly to historical or current facts. They use words such as
‘aim’, ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘forecast’, ‘guidance’, ‘intend’,
‘may’, ‘will’, ‘should’, ‘potential’, ‘possible’, ‘predict’, ‘project’, ‘plan’, ‘target’,
and other words and similar references to future periods but are not the
exclusive means of identifying such statements. As such, all forward-looking
statements involve risk and uncertainty because they relate to future events
and circumstances that are beyond the control of the Company. Actual results
or outcomes may differ materially from those discussed or implied in the
forward-looking statements. Therefore, you should not rely on such forward-
looking statements, which speak only as of the date they are made, as a
prediction of actual results or otherwise. Important factors which may cause
actual results to differ include but are not limited to: the impact of epidemics
or pandemics including restrictions on businesses, social activities and travel;
the unanticipated loss of a material client or key personnel; delays or reductions
in client advertising budgets; shifts in industry rates of compensation; regulatory
compliance costs or litigation; changes in competitive factors in the industries
in which we operate and demand for our products and services; changes in
client advertising, marketing and corporate communications requirements;
our inability to realise the future anticipated benefits of acquisitions; failure
to realise our assumptions regarding goodwill and indefinite lived intangible
assets; natural disasters or acts of terrorism; the Company’s ability to attract
new clients; the economic and geopolitical impact of the conflicts in Ukraine
and Gaza; the risk of global economic downturn; slower growth, increasing
interest rates and high and sustained inflation; supply chain issues affecting
the distribution of our clients' products; technological changes and risks to
the security of IT and operational infrastructure, systems, data and information
resulting from increased threat of cyber and other attacks; effectively
managing the risks, challenges and efficiencies presented by using Artificial
Intelligence (AI) and Generative AI technologies and partnerships in our
business; risks related to our environmental, social and governance goals
and initiatives, including impacts from regulators and other stakeholders,
and the impact of factors outside of our control on such goals and initiatives;
the Company’s exposure to changes in the values of other major currencies
(because a substantial portion of its revenues are derived and costs incurred
outside of the UK); and the overall level of economic activity in the Company’s
major markets (which varies depending on, among other things, regional,
national and international political and economic conditions and government
regulations in the world’s advertising markets). In addition, you should
consider the risks described in Item 3D, captioned “Risk Factors,” which could
also cause actual results to differ from forward-looking information. In light of
these and other uncertainties, the forward-looking statements included in this
document should not be regarded as a representation by the Company that
the Company’s plans and objectives will be achieved. Neither the Company,
nor any of its directors, officers or employees, provides any representation,
assurance or guarantee that the occurrence of any events anticipated,
expressed or implied in any forward-looking statements will actually occur.
The Company undertakes no obligation to update or revise any such
forward-looking statements, whether as a result of new information, future
events or otherwise.
WEBSITE
WPP’s website wpp.com gives additional information on the Group.
Notwithstanding the references we make in this Annual Report to WPP’s
website, none of the information made available on the website constitutes
part of this Annual Report or shall be deemed to be incorporated by
reference herein.
234
WPP ANNUAL REPORT 2023
Written by WPP
Designed and produced by Design Bridge and Partners, London
designbridge.com
©WPP 2024
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