WPP PLC 2026 Q3 Earnings Call

Good morning and thank you for joining us for WPP's third quarter trading update. I'm Tom Singlehurst, WPP's Group Director of Investor Relations, and joining me today are Cindy Rose, our CEO, and Joanne Wilson, our CFO. I hope you've had the opportunity to read this morning's press release together with the accompanying presentation and disclosures. As always, I would ask you to read the cautionary statement, which is on page 2 of the slide deck, very carefully. Before Joanne takes you through the numbers in detail, I'll hand over to Cindy for some opening comments.

Brilliant. Thank you, Tom. Good morning everyone. I wanted to offer a brief perspective on our progress before Joanne takes you through the detail. We are less than a year into our three-year Elevate28 plan to return WPP to consistent and sustainable growth. We continue to make progress, and I'm encouraged by the improved momentum in the third quarter. We are reiterating our full year guidance, and we remain laser focused on disciplined execution of the Elevate28 plan. Our Q3 revenue was up 0.5%, both reported and on a like-for-like basis, while net sales declined by 2.1% like-for-like, reflecting further quarterly sequential improvement. This was driven by a return to growth of WPP Media for the first time since 2024, led by our U.S. media operation, which is strategically significant and really wonderful to see. WPP Production also saw 2.5% growth in the quarter.

WPP Media began its transformation a year before we launched Elevate28, with WPP Production following close behind. We're now realizing the benefits of those changes, which gives me confidence that the rest of the business will follow a similar trajectory. That momentum moves us firmly towards the build phase of Elevate28 and strengthens our foundations for a return to growth sometime during 2027. Our singular focus on execution excellence is resulting in improved new business performance and client retention, contributing to the sequential improvement in growth that we're delivering in the second half. At the same time, we are operating more efficiently and creating greater capacity to invest in our outstanding talent and the capabilities that will drive our future growth. The third quarter gave us a lot to be encouraged about.

We secured new client assignments and significant client retentions, including successfully winning a competitive pitch to renew our longstanding partnership with the Coca-Cola Company for global media, data, tech and creator marketing in every market we competed for, as well as continuing to serve as the company's global creative partner. We also expanded our global media partnership with DoorDash, building on an 8-year relationship that now encompasses more than 40 markets worldwide. We were appointed as the media partner across North America and EMEA for Alphabet's Waymo, leading strategy planning and buying, including for the driverless car brand's Super Bowl debut. In Greater China, we're bringing together talent, technology and AI through WPP Open | China to deliver Nestlé's first fully integrated content model. Other notable client wins included a partnership between AKQA and TurboTax, engaging the next generation of taxpayers through digital content.

Godrej Consumer Products Limited consolidated its international media operations with WPP Media across Indonesia, Bangladesh, Sri Lanka, South Africa, Nigeria, Argentina and Chile under a single connected model. WPP was also named the integrated agency partner for the Electoral Commission in the U.K., leading voter communications across Great Britain. These wins reflect the creativity, the deep expertise and determination of our teams, and the trust and confidence that our clients have in WPP's ability to drive brand differentiation and business growth at a global scale. We're also investing in the future with confidence. Last month we opened Devon's Point, our new state-of-the-art AI-powered global flagship production facility in East London.

Devon's Point was built from the ground up to support the modern demands of global brand marketing and offers our clients large scale virtual production sets, dedicated creator facilities such as live streaming studios, rapid shoot and edit facilities, collaboration spaces, and multiple AI-enabled post-production technology suites. We also continue to strengthen our partner ecosystem, welcoming almost 50 additional data partners to WPP Open Intelligence, including, for example, IOTA, whose audience data and technology bring deeper insights, more precise consumer targeting, and enhanced omnichannel performance. This takes the total number of data partners to around 400, further strengthening the open differentiated ecosystem that is central to our long-term data strategy and a source of competitive advantage for our clients. We also expanded our strategic partnership with Kyndryl to accelerate enterprise AI transformation and bring new innovations to our shared clients.

As part of this partnership, WPP was named Kyndryl's global media and marketing partner, delivering a broad portfolio of integrated services powered by WPP Open, our agentic marketing platform. On the people front, we announced a few leadership changes last month. Joanne Wilson will step down as CFO in 2027, and I want to take this opportunity to recognize her contribution to WPP over the years. Joanne's leadership has helped position us for success as we deliver on the first phase of Elevate28. The process to identify a new CFO is well underway, and I know that Joanne is committed to a smooth and orderly transition once her successor is identified and on board. We also celebrate Jon Cook's remarkable 30 years at VML before he leaves us next year.

Looking ahead, I'm excited to welcome Tyler Turnbull from McCann as Global CEO of WPP Creative, while Eric Campbell, currently CEO of VML North America, will become Global CEO of VML. To help us further deepen our trusted client partnerships across our largest WPP clients, Adam Gerhart has been promoted to Chief Client Officer. I'm excited about the leadership team we're building. This caliber of talent brings the energy, experience, and leadership needed to help us accelerate the next phase of our strategy. Alongside these investments, we continue to strengthen our financial foundations. We're on track to deliver the targeted GBP 100 million in year cost savings, and we continue to make progress on asset disposals and expect to generate more than GBP 200 million of proceeds this year. Together, these actions are creating a stronger platform for sustainable growth.

Look, transformation at this scale isn't easy, and the benefits do not materialize overnight. It takes time, and progress may not always be linear, but I am incredibly proud of what our teams are delivering. They are performing and transforming with energy, enthusiasm, and commitment, and that fills me with confidence that we will continue to see progress reflected in the lead indicators that we set out back in February. As I said earlier, we're less than a year into our three-year Elevate28 plan to return WPP to sustainable, consistent growth. We still have a lot of work ahead of us, but we continue to make progress, and I'm encouraged by the commercial momentum we're delivering. We are reiterating full-year guidance, and we remain laser-focused on disciplined execution of the Elevate28 plan.

We'll share a fuller update on our strategic progress when we report our preliminary results in February. With that, let me now hand over to Joanne to take you through the details of our third quarter performance.

Joanne? Thank you, Cindy, and good morning, everyone.

Let me share some detail on our third quarter financial performance, and then, of course, we will open the call up for your questions. I'm starting with our operating performance in the third quarter on slide 8. Like-for-like revenue, less pass-through costs, fell 2.1% in the third quarter, while organic revenue growth, a metric which may ease comparability across our peer set, was up 0.5%. Both figures represent further sequential improvement from the second quarter and were in line with our expectations. The impact from both M&A and FX was negligible, with reported net revenue moving more in line with organic trends down 2%. You will see further detail on performance by business unit, region, and client sector on slide 9 of the presentation, but I would call out the following features of performance in the third quarter.

By business unit, WPP Media saw a return to growth of 0.3% in the third quarter. This compares to a decline of 8.3% in the first quarter and a decline of 2.8% in the second quarter. While we note the impact of easing comparables and some timing benefits, we are encouraged by this performance, especially as it continues to include a significant impact from growth and client losses. We are seeing an improving contribution from new business wins. However, the net impact of new business for WPP Media remains a drag on our like-for-like performance. Looking at the non-media businesses, WPP Creative was down 5.1%, a deteriorating rate of decline versus the second quarter, which was down at 3.5%. This was primarily driven by lower client spending, partially offset by the ramp-up of new business.