UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_____________________
FORM
6-K
____________________
Report
of Foreign Private Issuer
Pursuant
to Rule 13a-16 or 15d-16
under
the Securities Exchange Act of 1934
For
the Month of October 2020
Commission
File Number: 001-38303
______________________
WPP
plc
(Translation
of registrant's name into English)
________________________
Sea
Containers, 18 Upper Ground
London,
United Kingdom SE1 9GL
(Address
of principal executive offices)
_________________________
Indicate by check
mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F:
Form 20-F
X
Form 40-F
Indicate by check
mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ___
Note: Regulation S-T Rule
101(b)(1) only permits the submission in paper of a Form 6-K if
submitted solely to provide an attached annual report to security
holders.
Indicate by check
mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ___
Note: Regulation S-T Rule
101(b)(7) only permits the submission in paper of a Form 6-K if
submitted to furnish a report or other document that the registrant
foreign private issuer must furnish and make public under the laws
of the jurisdiction in which the registrant is incorporated,
domiciled or legally organized (the registrant’s “home
country”), or under the rules of the home country exchange on
which the registrant’s securities are traded, as long as the
report or other document is not a press release, is not required to
be and has not been distributed to the registrant’s security
holders, and, if discussing a material event, has already been the
subject of a Form 6-K submission or other Commission filing on
EDGAR.
Forward-Looking Statements
In
connection with the provisions of the Private Securities Litigation
Reform Act of 1995 (the “Reform Act”), WPP plc and its
subsidiaries (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, projections and anticipated future economic
performance based on assumptions and the like that are subject to
risks and uncertainties. As such, actual results or outcomes may
differ materially from those discussed in the forward-looking
statements. Important factors that may cause actual results to
differ include but are not limited to: 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, natural disasters or
acts of terrorism, the Company’s exposure to changes in the
values of major currencies other than the UK pound sterling
(because a substantial portion of its revenues are derived and
costs incurred outside of the United Kingdom) 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” in the Company’s Form 20-F for the
year ended 31 December 2019, 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 the
oral or written public statements should not be regarded as a
representation by the Company that the Company’s plans and
objectives will be achieved.
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.
EXHIBIT INDEX
Exhibit
No.
|
Description
|
1
|
Third Quarter Trading Update dated 29 October 2020, prepared by WPP
plc.
|
WPP
Third
Quarter Trading Update
Resilient performance in a challenging environment: improvement on
second quarter; strong new business momentum; tight cost
control
|
£ million
|
∆ reported[1]
|
∆ LFL[2]
|
Third Quarter
|
|
|
|
Revenue
|
2,969
|
-9.8%
|
-5.5%
|
Revenue less pass-through costs
|
2,401
|
-11.9%
|
-7.6%
|
|
|
|
|
Year to date
|
|
|
|
Revenue
|
8,552
|
-11.5%
|
-9.5%
|
Revenue less pass-through costs
|
7,069
|
-10.8%
|
-8.9%
|
Note:
all numbers relate to continuing operations unless otherwise
stated
■ Q3 revenue -9.8%; LFL revenue
-5.5%
■ Q3 LFL revenue less pass-through costs
-7.6%
■ Top five markets Q3 LFL revenue less pass-through
costs: US -5.5%; UK -6.5%; Germany
-1.8%; Greater China -16.7%; India -16.3%
■ Continued good momentum in new business: $1.6
billion won in Q3, taking the year-to-date wins to $5.6
billion
■ Strong liquidity and balance sheet, supported by
tight working capital management: year-to-date average net debt
£2.5 billion, down £2.0 billion
year-on-year
■ On track to be towards upper end of £700-800
million cost reduction target
■ Full year 2020 LFL revenue less pass-through costs
growth and headline operating margin expected to be within the
range of latest analysts' expectations[3]
Mark Read, Chief Executive Officer of WPP, said:
"WPP continues to demonstrate its resilience in a challenging
market. We have maintained our new business momentum as clients
seek out our creativity and our skills in media, technology, data
and ecommerce. This month, Uber joined a growing list of major
assignment wins that includes Alibaba, Dell, HSBC, Intel, Unilever
and Whirlpool, and we continue to lead the new business rankings.
We have also renewed and expanded our relationship with Walgreens
Boots Alliance to encompass its data- and technology-driven
marketing strategy.
"Given the tightening of COVID restrictions around the world and
uncertainty in the global economic outlook, we remain cautious
about the pace of recovery. It is important that we maintain our
strong financial position and we are on track to achieve cost
savings towards the upper end of our £700-800 million
target.
"Our people have done a superb job in serving our clients, largely
working from home, but the events of 2020 have of course created
new pressures for everyone. We have increased our investment in
employee support services, with a particular focus on mental health
and wellbeing, and this will be an ongoing priority for our
leadership."
For further information:
Investors and analysts
|
|
Peregrine
Riviere
Fran
Butera (US)
|
+44
7909 907193
+1 914
484 1198
|
Media
Chris
Wade
Richard
Oldworth,
Buchanan
Communications
|
+44 20
7282 4600
+44 20
7466 5000
+44
7710 130634
|
wpp.com/investors
|
|
Revenue analysis
£ million
|
2020
|
∆ reported
|
∆ LFL
|
First quarter
|
2,847
|
-4.9%
|
-3.8%
|
Second quarter
|
2,736
|
-19.0%
|
-18.4%
|
First half
|
5,583
|
-12.3%
|
-11.5%
|
Third quarter
|
2,969
|
-9.8%
|
-5.5%
|
First 9 months
|
8,552
|
-11.5%
|
-9.5%
|
Revenue less pass-through costs analysis
£ million
|
2020
|
∆ reported
|
∆ LFL
|
First quarter
|
2,366
|
-4.3%
|
-3.3%
|
Second quarter
|
2,302
|
-15.6%
|
-15.1%
|
First half
|
4,668
|
-10.2%
|
-9.5%
|
Third quarter
|
2,401
|
-11.9%
|
-7.6%
|
First 9 months
|
7,069
|
-10.8%
|
-8.9%
|
Third Quarter Review
During the third quarter, our markets around the world saw an
increase in economic activity from the second quarter, and this in
turn led to an improving sequential trend in our business
performance. The vast majority of our people are still working
remotely, although many offices are now open, operating at reduced
capacity and observing strict hygiene and social distancing
protocols. Thanks to the continued efforts of our people, we have
continued to serve clients effectively, and our new business win
rate has maintained its momentum from the first half.
Revenue
in the third quarter was down 9.8% at £3.0 billion. On a
constant currency basis, revenue was down 5.9% year-on-year. Net
changes from acquisitions and disposals had a negative impact of
0.4% on growth, leading to a like-for-like performance, excluding
the impact of currency and acquisitions, of -5.5%.
Revenue
less pass-through costs in the third quarter was down 11.9%
year-on-year to £2.4 billion, and down 8.0% on a constant
currency basis. Excluding the impact of acquisitions and disposals,
like-for-like growth was -7.6%. All regions and business segments
witnessed an improving trend over the second quarter.
We
have continued to exercise tight cost control, despite the recovery
in activity compared to the second quarter, with all of the decline
in revenue less pass-through costs mitigated through cost savings
during the third quarter.
Regional review
Revenue
analysis
£
million
|
Q3 2020
|
∆
reported
|
∆
LFL
|
N. America
|
1,087
|
-12.5%
|
-6.8%
|
United Kingdom
|
426
|
0.0%
|
-1.4%
|
W. Cont Europe
|
587
|
-4.2%
|
-3.3%
|
AP, LA, AME, CEE[4]
|
869
|
-13.9%
|
-7.1%
|
Total Group
|
2,969
|
-9.8%
|
-5.5%
|
Revenue less pass-through costs analysis
£
million
|
Q3 2020
|
∆
reported
|
∆
LFL
|
N. America
|
922
|
-10.8%
|
-5.1%
|
United Kingdom
|
311
|
-6.7%
|
-6.5%
|
W. Cont Europe
|
493
|
-4.8%
|
-5.5%
|
AP, LA, AME, CEE
|
675
|
-19.6%
|
-12.5%
|
Total Group
|
2,401
|
-11.9%
|
-7.6%
|
North America like-for-like revenue less pass-through costs was
down 5.1% in the third quarter, compared to a decline of 10.2% in
the second quarter, with a steady improvement in the US and a very
strong recovery in Canada driven by new business. In the US,
VMLY&R continued to grow year-on-year, and GroupM recovered
quickly, in line with client media spend.
United Kingdom like-for-like revenue less pass-through
costs was down 6.5% in the third quarter, a significant improvement
on the second quarter (-23.3%), which was affected by an extensive
economic lockdown. GroupM returned to growth, but our integrated
creative agencies have been slower to recover so
far.
Western Continental Europe like-for-like revenue less pass-through costs was
down 5.5%, compared to a decline of 18.8% in the second quarter.
Germany recovered to be nearly flat year-on-year, and France, Italy
and Spain all significantly improved on the second quarter. Growth
in Denmark accelerated.
Asia Pacific, Latin America, Africa & the Middle East and
Central & Eastern Europe like-for-like revenue less pass-through
costs was down 12.5%, a steady recovery from the second quarter
(-14.8%). All regions improved their performance, with Central
& Eastern Europe relatively better than the other
regions.
Business sector review
Revenue analysis
£
million
|
Q3 2020
|
∆
reported
|
∆
LFL
|
Global
Integrated Agencies
|
2,316
|
-8.9%
|
-3.8%
|
Public
Relations
|
219
|
-9.1%
|
-4.8%
|
Specialist
Agencies
|
434
|
-14.6%
|
-14.1%
|
Total Group
|
2,969
|
-9.8%
|
-5.5%
|
Revenue less pass-through costs analysis
£
million
|
Q3 2020
|
∆
reported
|
∆
LFL
|
Global Integrated Agencies
|
1,805
|
-11.3%
|
-6.7%
|
Public Relations
|
210
|
-6.9%
|
-2.9%
|
Specialist Agencies
|
386
|
-16.7%
|
-13.9%
|
Total Group
|
2,401
|
-11.9%
|
-7.6%
|
Global Integrated Agencies like-for-like revenue less pass-through
costs was -6.7% year-on-year, compared to -15.7% in the second
quarter. VMLY&R continued to be the best performing global
agency, and was down only slightly year-on-year, while GroupM
recovered strongly as client media expenditure picked up. The other
integrated agencies recovered steadily.
Public Relations like-for-like revenue less pass-through
costs was down 2.9%, an improvement over the second quarter (-7.5%)
as it continued to be the best-performing segment in WPP. Client
demand for strategic communications advice in light of the pandemic
remained robust, with BCW recovering well.
Specialist Agencies like-for-like revenue less pass-through
costs was down 13.9%, showing a small recovery from the second
quarter (-16.3%). GTB showed an improved performance over the
second quarter, but this was offset by ongoing pressures in Brand
Consulting, which is more project-based than much of our other work
and continued to suffer from client budget cuts. In addition, our
specialist airline and events production agencies remained under
pressure.
Balance sheet highlights
Average net debt in the first nine months of 2020 was £2.5
billion, compared to £4.5 billion in 2019, at 2020 exchange
rates, a decrease of £2.0 billion. The year-on-year
improvement largely relates to the proceeds from the Kantar
transaction. Net debt at 30 September 2020 was £2.3 billion,
compared to £4.6 billion on 30 September 2019, at 2020
exchange rates, a decrease of £2.3 billion.
Outlook and capital markets event
Progress in the third quarter on both the recovery in activity and
cost management has been ahead of our expectations. We do, however,
remain cautious on the speed of recovery as we track further waves
of the pandemic and government responses. Assuming no widespread
lockdowns in any of our major markets for the rest of the year, we
expect full-year like-for-like revenue less pass-through costs to
be within the current range of analysts' forecasts of -8.5% to
-10.7%, and headline operating margin to be within the current
range of analysts' forecasts of 11.4% to 12.5%.The previous ranges,
given at the time of our first half results on 27 August 2020, were
-10.0% to -11.5% and 10.4% to 12.5% respectively.
We are hosting a virtual capital markets event for investors and
analysts on 17 December 2020. The event will cover: strategic
progress against the December 2018 plan and the next steps in our
strategy; efficiency savings and our plans for reinvestment in
growth areas; capital allocation; and medium-term targets for
growth and margin.
Appendix
Regional Review
Revenue analysis - Nine Months Year-to-Date
£
million
|
9M 2020
|
∆
reported
|
∆
LFL
|
N. America
|
3,264
|
-8.8%
|
-7.4%
|
United Kingdom
|
1,184
|
-11.3%
|
-9.9%
|
W. Cont Europe
|
1,680
|
-10.5%
|
-10.3%
|
AP, LA, AME, CEE
|
2,424
|
-15.6%
|
-11.5%
|
Total Group
|
8,552
|
-11.5%
|
-9.5%
|
Revenue less pass-through costs analysis - Nine Months
Year-to-Date
£
million
|
9M 2020
|
∆
reported
|
∆
LFL
|
N. America
|
2,779
|
-6.9%
|
-5.8%
|
United Kingdom
|
897
|
-12.6%
|
-11.7%
|
W. Cont Europe
|
1,412
|
-9.4%
|
-9.7%
|
AP, LA, AME, CEE
|
1,981
|
-15.8%
|
-10.9%
|
Total Group
|
7,069
|
-10.8%
|
-8.9%
|
Business Sector Review
Revenue analysis - Nine Months Year-to-Date
£
million
|
9M 2020
|
∆
reported
|
∆
LFL
|
Global
Integrated Agencies
|
6,565
|
-11.5%
|
-8.8%
|
Public
Relations
|
666
|
-6.6%
|
-5.9%
|
Specialist
Agencies
|
1,321
|
-13.8%
|
-14.3%
|
Total Group
|
8,552
|
-11.5%
|
-9.5%
|
Revenue less pass-through costs analysis - Nine Months
Year-to-Date
£
million
|
9M 2020
|
∆
reported
|
∆
LFL
|
Global Integrated Agencies
|
5,267
|
-10.6%
|
-8.6%
|
Public Relations
|
636
|
-4.7%
|
-4.0%
|
Specialist Agencies
|
1,166
|
-14.4%
|
-12.5%
|
Total Group
|
7,069
|
-10.8%
|
-8.9%
|
Cautionary statement regarding forward-looking
statements
This document contains statements that are, or may be deemed to be,
"forward-looking statements". Forward-looking statements give the
Group's current expectations or forecasts of future events. An
investor can identify these statements by the fact that they do not
relate strictly to historical or current facts. They use words such
as 'anticipate', 'estimate', 'expect', 'intend', 'will', 'project',
'plan', 'believe', 'target' and other words and terms of similar
meaning in connection with any discussion of future operating or
financial performance.
These forward-looking statements may include, among other things,
plans, objectives, projections and anticipated future economic
performance based on assumptions and the like that are subject to
risks and uncertainties. As such, actual results or outcomes may
differ materially from those discussed in the forward-looking
statements. Important factors which may cause actual results to
differ include but are not limited to: 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, natural disasters or
acts of terrorism, 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 under Item 3D 'Risk Factors' in
the Group's Annual Report on Form 20-F for 2019 and any impacts of
the COVID-19 pandemic 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.
Other than in accordance with its legal or regulatory obligations
(including under the Market Abuse Regulation, the UK Listing Rules
and the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority), the Group undertakes no obligation to update
any forward-looking statements, whether as a result of new
information, future events or otherwise. The reader should,
however, consult any additional disclosures that the Group may make
in any documents which it publishes and/or files with the SEC. All
readers, wherever located, should take note of these disclosures.
Accordingly, no assurance can be given that any particular
expectation will be met and investors are cautioned not to place
undue reliance on the forward-looking statements.
Any forward looking statements made by or on behalf of the Group
speak only as of the date they are made and are based upon the
knowledge and information available to the Directors on the date of
this document.
[1] Percentage
change in reported sterling.
[2] Like-for-like.
LFL comparisons are calculated as follows: current year, constant
currency actual results (which include acquisitions from the
relevant date of completion) are compared with prior year, constant
currency actual results, adjusted to reflect the results of
acquisitions and disposals for the commensurate period in the prior
year.
[3] Like-for-like
growth in revenue less pass-through costs of -8.5% to -10.7% and
headline operating margin of 11.4% to 12.5%. Equivalent ranges on
27 August 2020 were -10.0% to -11.5% and 10.4% to 12.5%
respectively.
[4] Asia Pacific,
Latin America, Africa & Middle East and Central & Eastern
Europe.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
WPP PLC
|
|
(Registrant)
|
Date:
29 October 2020.
|
By:
______________________
|
|
Balbir
Kelly-Bisla
|
|
Company
Secretary
|