WPP Plc. - ADR Aktie

Hello, everyone, and thank you for joining the WPP Q1 Trading Update Call. My name is Claire, and I'll be coordinating your call today. [Operator Instructions]

I will now hand over to Joanne Wilson, Group Chief Executive Officer of WPP, to begin. Please go ahead.

Good morning, everyone, and thank you for joining us for our first quarter results. I'm joined today by Tom Singlehurst, our Head of Investor Relations. Hopefully, you've had time to read the press release from this morning. There's also a full deck that accompanies this session with our usual disclosures, including our cautionary statement, which you should read carefully and take note of.

Before we dive into the numbers, this is, of course, the first quarter that we are reporting on since we outlined the Elevate28 strategy. As you know, this is a multiyear plan focused on returning WPP to growth. While it is still early days, we are very much on track against our strategic plan and encouraged by the client and employee response to the actions we are taking and the changes we are making. Driving this scale of change takes time and of course, won't be linear, but there are definitely encouraging signals, which I will talk about shortly.

Before that, I'm going to share some detail on our first quarter financial performance, and then I will open the call up for your questions. And starting with our operating performance in the first quarter on Slide 4. Like-for-like revenue less pass-through costs fell 6.7% in the first quarter with organic revenue growth, a key metric disclosed by some of our peers down 4%. Both figures represent a mild sequential improvement from the fourth quarter of last year and were in line with our expectations.

The impact from M&A was negligible and FX represented a headwind of 2.1% in the quarter, resulting in a reported decline in net revenue of 8.9%. You will find further detail on performance by business segment, geography and client industry on Slide 5 of the presentation, but I would call out the following features of performance in the first quarter.

And starting with business segments, WPP Media saw a like-for-like decline of 8.5% in the first quarter. While this was a sequential improvement from a double-digit decline in Q4 '25, we continue to see a significant drag from gross account losses while new business won in the fourth quarter and in the first quarter of this year will take time to ramp up.

Performance across our non-Media businesses showed a slight decline quarter-on-quarter. However, we delivered growth across WPP production and our larger specialist agencies, including Landor, Design Bridge and CMI.

By geography, the shape of performance largely reflects account losses, which weighed most heavily on North America and the U.K. Elsewhere, we see signs of stabilization, including sequential improvement in Asia Pacific and with pockets of growth in markets, including India, Italy and Japan.

I want to also mention performance in the Middle East, which represents just under 2% of our business. The region saw a like-for-like decline of 12.6% in the quarter following low single-digit growth in Q4 2025. With the ongoing conflict, we expect the Q1 trends in the region to continue through the second quarter. By client sector, CPG in particular, reflects the impact from client assignment losses. Meanwhile, we see a high degree of polarization across health care and tech.

Looking at growth through the lens of our largest clients, Q1 like-for-like decline for the top 25 clients was 9.4%, which reflects the impact of specific client losses. This level of performance is not where we wanted to be, but with organic growth, a lagging metric, this outturn is very much in line with our expectations.

And turning to Slide 6. Organic growth is our North Star as a management team and improving this is the primary focus of the Elevate28 strategic plan we announced at the end of February. Organic growth, however, is a lagging metric, and the focus in the first stage of our plan is on stabilizing the business. As we discussed in February, the key leading indicator of success is net new business, both new client wins and critically client retentions.

Alongside this, we are also focused on leveraging strategic partnerships, implementing our operating model changes and delivering the associated cost savings as well as progress on asset disposals to provide a greater degree of financial flexibility. On this front, we are encouraged with progress in the first quarter, and our plans are on track.

Our new business, Q1 was the second consecutive quarter where WPP was ranked #1 in net new business by JPMorgan. We also expect to be ranked #1 by COMvergence, which more narrowly focuses on media. Key wins during the quarter include Estee Lauder, SC Johnson, JLR and Norwegian Cruise Lines. And post the quarter close, we were appointed as Wendy's media buying agency in the U.S., and we won Natura in Brazil.

Just as important as client acquisition is client retention, and we were delighted to be reappointed by Tesco in the U.K. and across Central Europe and to retain mandates for Huawei in China and Red Bull in India. On partnerships, we announced the expanded partnership with Adobe in February. This brings together Adobe's industry-leading AI capabilities, content platforms and data orchestration with WPP's deep strategic insight, creative prowess and end-to-end transformation expertise.

We are very excited about the potential from this partnership, and it is a great example of how we are expanding our go-to-market sales channel for Enterprise Solutions. We also continue to expand our data partnerships in order to build the value of the open intelligence ecosystem, including Trainline in the U.K. and the Salling Group in Denmark.

On the people front, we've continued to fill critical roles in our operational leadership, including Nancy Hall as CEO of WPP Media in the U.S.; Angela Steele as U.S. Chief Client Officer for WPP Media; and Andrea Suarez as CEO of WPP Media in Lat Am. At the group level, Mark Taylor has joined as Chief People Officer and Anne-Isabelle Choueiri as our first Chief Transformation Officer, both of whom will play a critical role in supporting execution of our Elevate28 plan.

Now there remains much to do, and we are laser-focused on the disciplined execution of the strategic initiatives which underpin the stabilization phase of our Elevate28 plan. The early actions we have taken to build a simpler, more integrated WPP, powered by WPP Open, are resonating strongly with clients, giving us the confidence that we are on the right path to return to growth and deliver longer-term sustained returns for our shareholders.

Turning to our balance sheet, and you can see the detail of where net debt stands at the 31st of March on Slide 7. In short, average adjusted net debt at GBP 3.3 billion continues to come down both year-to-date and year-on-year, albeit assisted by a relatively small beneficial impact from IFRS 9 amendments, which were effective from the beginning of 2026.

I'm also pleased with the successful issuance of a $600 million 10-year bond in March, marking our return to the U.S. credit market after more than a decade. This takes our weighted average maturity to almost 6 years and covers all of our debt maturities through to mid-2028. As encouraged as I am by this, I want to reemphasize that creating firm financial foundations is a core tenet of the Elevate28 plan. And at the heart of this is a commitment to maintaining an investment-grade balance sheet.

As we indicated in February, we have initiated processes to assess the potential sale of certain portfolio assets. Those processes are advancing as planned. And while we do not have any additional comments to make on them today, we will update in due course as appropriate.

Looking forward and on Slide 8, while we are encouraged by the first quarter performance, which was in line with our expectations, we still see ongoing volatility in client spending and note uncertainty in the Middle East. Coupled with the phasing of net new business, we continue to expect like-for-like revenue less pass-through costs to decline in the mid- to high single digits in the first half of 2026, consistent with the performance in the first quarter before seeing an improving trajectory in the second half.

On profit, we anticipate headline operating profit margin for the full year to be in the range of 12% to 13% and expect H1 margins to be down, reflecting the impact of net sales performance and investments in our growth drivers. As shared previously, the in-year cost savings benefit from our operating model changes will be skewed to the second half. We also expect to rebuild our incentives, which are also skewed to the second half.

Turning to cash flow. We continue to expect adjusted operating cash flow preworking capital in the range of GBP 800 million to GBP 900 million. And as a reminder, this includes the anticipated restructuring costs associated with the Elevate28 program and historical restructuring programs. Excluding these, we would anticipate adjusted operating cash flow before working capital of GBP 1 billion to GBP 1.1 billion.

The final thing I want to mention before we open up to questions is the evolution of our reporting, both by segment and by geography on Slide 9. As shared in February, we are aiming to align our segmental reporting disclosures from half year 2026 with our new operating model, moving from 3 reporting segments to 1 global integrated agencies. This corresponds to the vision and plans to make WPP a single unified operating company.

In 2026, we will provide additional disclosure on operating performance within the key units, WPP Media, WPP Production and WPP Creative. This will include like-for-like growth and net sales splits, but will not include the profitability metrics consistent with our peers. We will also shift our geographical reporting to 4 recalibrated regions: North America, Latin America, EMEA and Asia Pacific. We anticipate moving to this new reporting at the half year. And from 2027, it is our intent to also provide like-for-like growth and the net sales split for WPP Enterprise Solutions.

So that wraps up my preprepared remarks. I would like to take this opportunity to thank all of our people for their hard work and their unwavering commitment in the year-to-date. And I would now be delighted to take your questions. So I'll hand back to the operator.

[Operator Instructions] Our first question comes from Nicolas Langlet from BNP Paribas.

So I've got 3 questions, please. First of all, what was the net new business effect in Q1 '26? And how do you split it between gross losses and gross win? And based on the recent account moves, what is the net new business effect you expect for the full year?

Second question on China. So the trend remained quite soft despite heavy decline in the past 2 years. What initiatives have you put in place recently? And when do you think the business could stabilize?

And finally, on the H1 margin, so you said you expect it to be down, but do you expect the decline to be in the full year guidance range? So flat to minus 100 basis points or it could be worse than 100 basis points and then improving in H2?

Thanks very much, Nicolas. So let me just start with the net new business impact in Q1 '26. Look, it was broadly similar to Q4 2025. As I talked about in February, we are expecting gross account losses to have an impact of 500 to 600 basis points in the full year. And the gross wins offsetting that, we did say at the end of February that we were already ahead of that level for 2025. And of course, that has improved through Q1 as we continue to build on the momentum on new business that I talked about in my preprepared remarks. So yes, similar -- very similar to Q1.

I also expect that as we go through the year, that drag from net new business will ease, and we have talked about the improving trajectory into the second half. And so I would expect Q1 to be the worst quarter for net new business.

And in terms of the full year, look, it's too early to put a number on net new business impact. I've shared what we are seeing for gross losses and also where we are at this point in the year on gross wins. The pipeline is healthy. We talked last year about particularly Media, there have been a lower volume of pipeline activity. We've been encouraged by the level of activity that we've seen in the last few months and also our improving win rates. And so I think we'll update on that as we go through the course of the year in terms of that net new business impact. But hopefully, that gives you some color.

In terms of China, yes, China was down just over 12% in Q1. I'd say a couple of things on China. First of all, we are seeing a stabilization in our Media business in China. We've done an awful lot of work in the last couple of years around our proposition and our go-to-market, and we're starting to see the benefits from that. I referenced the retention of Huawei in China, who has become an important client for us in that market. I would also say that we're starting to lap through some of those client losses that impacted us last year. Some will continue into the balance of the year, but I would assume that we will see an improving trajectory in China as we go through the balance of 2026.

And thirdly, we've talked about the mix of clients in China. So historically, our portfolio was more skewed to global clients. That's rebalancing towards local clients, and we have improved our proposition to make sure it's competitive and relevant for that market, including introducing WPP Open to that market. And we operate in our market model in China. So that's a much more integrated proposition. And as I said, I would expect to see an improving performance as we go through the year for China.

In terms of your last question, I can't even read my -- margin, yes, in H1. So yes, I would expect margin to be in line with the expectations for the full year in terms of the year-on-year decline. Just a couple of things on margin. In the first half, obviously, we'll have the negative impact from operating leverage. As we've said, we expect to see the top line trajectory improving in the second half versus the first half.

Our investment through the year is fairly balanced between H1 and H2 and the cost-saving initiatives from Elevate28 are very much skewed to the second half. And as I also shared in my remarks, we will be looking to rebuild our incentives in the full year, and that will also be skewed to the second half. So that will give you an indication of some of the drivers between H1 and H2.

Our next question comes from Annick Maas from Bernstein.

My first question is on the Middle East. I have a couple actually for the Middle East. So first of all, is it fair to assume that March was down about 30%?

And my second one on the Middle East, I think you're now forecasting the same trends for the second quarter as well. If these trends were to persist for the full year, are there any other geographies that have been performing slightly better that could offset this Middle East weakness? Or if we would see continuous weak trends there that could impact actually the full year guide? That's the first one.

And the second one is you have some defensive pitches coming up in the second quarter. Do you have already an idea of how those have been going? Respectively, have there been some that you hadn't planned at the start of the year?

Okay. So let me start with the Middle East. Look, as I shared in my preprepared remarks, the Middle East is less than 2% of our net sales. We did see a deteriorating trend as we went through the quarter, but March wasn't as bad as a 30% decline, but March was the worst month in the quarter.

In terms of the Q2 trends and if they persist and in the other geographies to offset that, look, I talked about some markets we are seeing stabilization and getting back to growth. But I would say is when we've seen regional conflicts or challenges in the past, what you tend to find is clients do redirect spend across the region. And of course, it will really depend on how prolonged the conflict is. But as I said, it's very much reflected in our guidance and the Middle East at 2% is a fairly immaterial share of our overall net sales for WPP overall.

In terms of defensive pitches, what I would -- how would I comment on that is we're very much focused on new business, but also client retentions, and I talked to some of the important clients that we've retained in the first quarter. We are very encouraged by our new business performance. There's significant opportunity with our existing clients to continue to grow with them. And I think the Q4 and the Q1 net new business momentum that we're seeing really reflects the improvement in our competitive proposition and how we're showing up to pitches. And so the pipeline, as I said, is active. It's healthy. It's more skewed to opportunities than it is to defensive pitches. But you are right, there are a number of defensive pitches with existing clients, and I won't comment on those. But as I said, encouraged by the momentum that we're seeing and our performance in new business.

Our next question comes from Laura Metayer from Morgan Stanley.

Two questions from me, please. The first one is the growth with existing clients. Could you give us an idea of what the number was in Q1, excluding the losses?

And then second question is on your Enterprise Solutions business. Could you give us a sense of the performance of that business versus the Media and Creative business of WPP? Is it doing better or worse in Q1?

Okay. In terms of our existing clients, if you look at our top 25, we talked about them being down high single digits. If you strip out the losses from that top 25, the decline would drop to low single digits. So we have talked in the past about the relatively better performance we see across our largest clients. And as I said, I think it was in response to Nicolas' question, the net new business impact in Q1 was very similar to Q4. So we're seeing continued similar trends in Q4 across our existing client base.

In terms of Enterprise Solutions, very encouraged by the work that Jeff and the team have been leading on. We shared in February just 2 months ago, how we were going to scale the capabilities across Enterprise Solutions and really build 3 go-to-market channels, the first through our existing agencies; the second, building a direct go-to-market; and then the third through partners and a good example of that is Adobe.

In terms of Enterprise Solutions, it's a very different business to Creative and Media. It's more project-based, but we do have a significant opportunity to cross-sell with our creative clients. We don't report Enterprise Solutions yet. As I said, it is our intention to do that from 2027. But Enterprise Solutions, where we to report it would have done better than Creative and Media in the first quarter. I think the most important thing is we're very focused on growing our share of Enterprise Solutions. The market, as we shared in February, is growing at around 7%, and we see lots of white space to do that. So excited about the opportunity for Enterprise Solutions in the year ahead.

Our next question comes from Ciaran Donnelly from Citi.

A couple just from me left. One, it'd be great to get a sense of in terms of the pitch activity and the wins in Q4 and Q1, I guess, what's changed? What's been the feedback in terms of why you have, I guess, started to turn the tide in terms of those wins?

And two, can you just remind us in terms of expecting these client wins to impact numbers going forward just in terms of those forward-looking indicators and how we should think about that?

Okay. Let me just start with the second one. So in terms of the client wins, I've talked about the gross losses, gross wins, et cetera. I've talked about the fact that we expect that have the biggest drag in Q1 in terms of all the quarters in 2026. So as we go through the year, we'll start to see the benefit from those new business wins ramp up. So it starts to ramp up in Q2. But really, we'll see the biggest impact from those in the second half, and that's really reflected in that guidance of an improving trajectory and like-for-like in the second half.

In terms of what's driving the improvement, look, I talked to a few things, and I'm going to start with the Media team and Brian and the team that he's leading. We've been working on improving the competitiveness and the performance of our Media business since Brian joined around 18 months ago now. And we have made great progress on the competitiveness of that proposition. And that's really resonating both with our existing clients and also with new business. And as I said, you can -- the real lead indicator on that is our new business and also our client retentions.

Brian and the team have also been incredibly focused on building a much more effective and much more agile operating model. And I guess, most critically in that is our global media platform, which means that we have one way of delivering our work now across all of our markets, and that's really important. And a huge lift has gone into that, and that is performing well for us.

The third aspect of what Brian and the team have been doing is really developing a very clear and a very compelling data strategy, and that was supported with the acquisition of InfoSum, which is now fully integrated into Open Intelligence. And again, that's really resonating with clients. We're using it in our pitches and with existing clients. And we do think that, that gives us a differentiated data strategy.

And alongside that, we've been upgrading our talent in Media. So I talked in my remarks about Nancy, Angela and Andrea joining the team in North America and Latin America. So I think that's a key factor in our performance because in the last couple of years, a number of the client losses have really been in Media.

I would also add that Open Intelligence really operates across our business, and that leads me on to the real second driver of our better performance, and that's our integrated capability. We've been very focused with WPP Open on leveraging that to connect our capabilities. Open Intelligence is not just for our Media business, but it serves all parts of our business, creative and production. And we are really showing up much stronger as an integrated proposition for our clients. And that is really resonating. We talked about JLR in February, but I would also call out Wendy's, where we had the Creative business, and we won the Media business earlier this month.

I think the third area I'd call out is really our go-to-market approach. Dev took on an expanded role in Q4 and has really been busy leading one approach to our go-to-market, a strong central team with solution architects really at the core of that. And we have really leveraged more our ability to lead with media and data. And that is really resonating. You can see that in the Q4 and the Q1 new business performance.

And then finally, just to wrap up, Ciaran, the point on this. We talked in February, and I alluded to it today again, our North Star is really organic growth. Elevate28 is really built around getting our business back to growth, and we're making good progress on that and pleased with where we are against our plans, albeit it's still early days.

Our next question comes from Adrien de Saint Hilaire from Bank of America.

So I've got a few questions, if you don't mind. Just to come back on your guidance for H1 mid- to high single-digit decline. Are you signaling that you think Q2 will be more or less in line with Q1? And if so, apart from the Middle East, why would that be the case given the comparatives seem to be getting easier?

Secondly, I guess, usually agencies tend to grow faster with their top clients. You just mentioned before that your revenue with top 25 clients would be down low single digits, excluding losses. So I'm just curious like what's driving the reduction there? Is that a reduction in scope of work? Is that fee pressure or just broader cuts in their marketing budgets?

And the third topic is in the last couple of weeks, I think we've seen a bit of a spat between the platforms like The Trade Desk and media agencies. You think that reflects a broader encroachment of DSPs on to media agencies and vice versa? Or is it just like an isolated incident with a few clients and just one platform?

Okay. Thanks for the questions, Adrien. In terms of your first question on Q2 being more or less in line. If I come back to Q1 was very much in line with our expectations, and it was consistent with our guidance for H1 to be down mid- to high single digits. Now we expect trends to be broadly similar in Q2. You are right, the comps do ease from Q2. But as we shared in February and as I've talked again today, the trend of net new business through the year, that will ease and improve. And really, most of that easing we'll see in the second half. So we will still see a similar drag from net new business in the second quarter as we've seen in the first quarter.

We've also talked about the ongoing conflict in the Middle East albeit it's a small percentage of net sales, it was a drag in Q1, and it is driving heightened geopolitical uncertainty. But we feel very comfortable with the guidance that we have set, the mid- to high single-digit decline in the first half and then that improving trajectory into the second half.

In terms of the existing clients down low single digit, look I think a couple of things in this. We've talked about a polarization of spend. And as I look at spend within our sectors, that polarization remains with some clients investing with us and increasing their spend and others being a little bit more cautious. And that trend is continuing, particularly in the tech sector and in health care.

I'd also add that we talked last year about the step down we saw in Q2 where in some of our creative agencies, we saw a reduction in client spend. And that's a continuation into Q1. So we really did start to see that step down in Q2. And so that's carrying forward into Q1. I think it's quite important to also note that in Q1 last year, our top 25 clients are growing at 7%. So it is difficult in our business when you focus on 1 quarter and try to interpret a longer-term trend from that quarter. So the comps do have an impact.

In terms of The Trade Desk and other DSPs, look, I shouldn't comment and I can't really comment on what others are doing. But I think what's important for our business is that we work with a number of the DSPs and SSPs. And what's important for us is that we are optimizing our client spend. And sometimes that means a particular DSP will work well, and we will work with them. And in other cases, it won't work so well, and we won't work with them. But we leverage those partnerships well. I'd say some of the DSPs, in particular The Trade Desk that you mentioned, operates in the open Internet. So it tends to be a smaller segment of the overall advertising market. But what's most important for us is effective investment of our clients' media spend and full transparency, and that's transparency for our clients and transparency for our partners. And that's really what we aim to do and what I think we do incredibly well.

Our next question is from Julien Roch from Barclays.

Coming back on net new business, you said Q1 was similar to Q4. Can you remind us what Q4 was? And also at the time of the full year results, you said that the gross wins would be 250. Today, they're better than that. So what have they reached today? Is it 300, 350, 400? That's my first question.

Then previously you said most of their contracts had an element of performance compensation, but that performance net sales was only 10% of total. How much is it for you? And then coming back on DSP and The Trade Desk, what percentage of your client money goes through DSPs?

Okay. Okay, Julien. So you're going to ask me the question every which way. Look, I -- what I'd just reiterate, our gross loss is 500 to 600 basis points. Last year, the numbers that we shared wouldn't fair, but our gross wins were around 250 basis points. We said in February that we were already exceeding 2025, and we've seen an improvement in the balance of the year. So I don't want to give a number now on gross client wins because it's still very early on in the year. As I said, we have a healthy pipeline, which we're very much focused on continuing to improve that win rate. And so as we go through the year and we get closer to the end of the year, we can share a little bit more on that. But I would repeat the comment that I do expect Q1 to be the weakest quarter in terms of our net new business.

And in terms of performance-related spend, in the past, we've talked about performance-related spend being about 20% to 25% of our overall net sales. You tend to see it higher in Media than in other parts of our business. I think that's important because we are used to structuring performance-related pay in a way that works for both our clients and ourselves. And what we are seeing is an evolution away -- a little bit away from purely time and materials to more output-based pricing, more performance-based pricing, and we're seeing that come into pitches and with existing clients more regularly. And we're building up the muscle to be able to do that. But as well as performance and output-based fees, we are introducing more tech fees and just given the offer that we have around WPP Open, WP Open Pro is a good example of that. But really, the way to think about this is an evolution of our tech fees. And in terms of the percentage of our revenues that go through with DSPs...

Typically, I think that is the open Internet, Julien, in the main, i.e., the sort of long tail. And if you look at Kate Scott Dawkins this year, next year, or as [ she ] points out, it's a relatively small proportion of the overall market. And actually, over time, forecast to get relatively smaller. Frankly, we don't have a specific figure for you. The only thing I would say is that the role of WPP Media is to work in the best interest of our clients, to do whatever it takes to deliver best execution. And that's, in some cases, will involve working with third-party DSPs and we'll literally make those decisions project by project, client by client once again in the best interest of the customer.

If I could follow up. I understand you don't want to give us gross wins going forward because it's early days. But if you could come back and tell us what was the net impact in Q4, that's the past. And when you say 20% to 30% of net sales linked to performance, do you mean that 20% to 30% of your contracts have an element of performance or is actually of net sales, i.e., performance is already 20% to 30% of net sales, i.e., 2 to 3x...

Yes. I said 20% to 25%, just to clarify, and it's net sales. Julien, I don't really want to get into giving quarter-by-quarter impacts on net new business because when I come back in August, then you're going to ask me what Q1 was and Q2 was. So I think we've shared enough information that you can probably get a good approximation of it.

[Operator Instructions] We currently have no additional questions, and I'd like to hand back to the management team for any closing remarks.

Okay. So thank you very much for all of your questions. Before we end the call, I would like to give you a small sense of what's next. As discussed in February, we're going to be hosting a series of webinars to double-click on our key operating units, and we'll start with WPP Media, and we will be in touch in due course with some further details on that. And thereafter, we anticipate reporting our H1 results in early August. And at that point, Cindy will give a further update on our strategic progress.

I'd just like to echo my comments from earlier. We remain relentlessly focused on execution of our Elevate28 plan. And while our like-for-like revenue recovery will, of course, take time, we are encouraged by the progress to date against our Elevate28 plans, and we very much look forward to sharing more in due course. In the meantime, I want to say thank you again for your interest and your engagement. And as ever, the Investor Relations team and myself are available if there's anything further we can do. But for now, thank you very much, and have a great remainder of your day.

Thank you. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.

Good morning, everyone. Good morning, and warm welcome to our 2025 preliminary results and strategy update. By the way, that's our new brand refresh. I hope you like it, created by Landor AMP and Man versus Machine, WPP agencies, all powered by WPP Open. So look, I'm delighted to welcome you all here to One South Work Bridge to our campus here in London, which in many ways is symbolic of the future of WPP. It's modern, it's adaptive, it's collaborative workspace for our talent, our clients and our partners.

So the plan this morning is I'm going to start with some opening remarks, and then I'm going to hand over to Joanne Wilson, our Chief Financial Officer, to share our 2025 preliminary results. Then I'll share our strategy update, and then we'll open up to Q&A.

Before we start, I'd like to recommend that you take a moment to read this cautionary statement while I get out of your way. So Joanne and I will be joined on stage later by Brian Lesser, who's CEO of WPP Media. When we get to the media section of the presentation, and most of my senior management team are here in the audience as well.

Let me start by saying that WPP is an extraordinary company. We are built on agency brands with remarkable histories going all the way back to the 1800s. Some are still well known today. Others have evolved into new parts of WPP. But together, they have roots in creating iconic work that moves people and shapes culture.

We serve some of the biggest, most demanding clients in the world, and we steward and grow some of the most well-known brands on the planet, several of whom you'll hear from and see referenced throughout today's presentation. And our business model is actually very simple. We exist to make our clients successful.

We help our clients build brands that matter, drive meaningful engagement with their consumers and drive outcomes for their business. It drives growth for them and growth for us. However, it's really clear that what has made us successful in the past will not make us successful in the future. And as you can see from the numbers that we released this morning, our performance is not where it needs to be.

Yes, of course, there are externalities we can point to market volatility, economic headwinds. But really, the results point to the need for us to embrace a single unified growth strategy to execute with increased rigor and evolve as the needs of our clients evolve. After several years on the WPP Board of Directors, I took this role with a clear thesis in mind as to what we need to do differently. We've spent the past 6 months as a team validating this thesis through rigorous analysis and by speaking directly to our clients and actively listening to their feedback.

And the good news is we haven't been waiting for today's presentation to take action. We've already made several decisive changes, and you can see the positive results in our recent new business success. In the fourth quarter of 2025, WPP was #1 in JPMorgan's net new business rankings for the first time since 2020 with a series of excellent client wins across media, creative and our integrated offer.

These include being appointed the U.K. government's lead media agency, Reckitt and Henkel Media in Europe, Kenvue and Haleon Creative globally, TruGreen Media in the U.S., Norwegian Cruise Line Global Media, Suncor Media, just to name a few. And I'm delighted to say we've maintained this strong momentum into 2026, winning Jaguar Land Rover, Global Media and Integrated Services. In fact, the impact from new business wins in 2026 already exceeds the impact of new business wins for all of 2025 combined, and it's only February.

So while the turnaround of our business will take time, our momentum is undeniable, and these wins give me huge confidence that we are firmly on the right path. My team is united, committed and hungry to win. Today's session is the culmination of months of detailed work by our team. We have a bold plan to make WPP a simpler, more integrated company, one that's fit for the future, relentlessly focused on growth and brilliant execution.

Personally, I'm very excited to be here at a time of such revolutionary change, and I feel quite privileged to lead WPP as we play a defining role in shaping the future. So I'll come back shortly and talk about our view on the evolving landscape and our growth plan for the new WPMP, which we're calling Elevate28.

But first, I'm going to hand over to Joanne to take you through our 2025 results. Joanne?

So thank you, Cindy, and good morning, everybody. And can I add my warm welcome to you here today. So let me start by taking you through the main financial headlines for 2025. Our like-for-like revenue less pass-through costs fell 5.4% for the full year due to client assignment losses and spending cuts.

Now this is slightly better than our most recent guidance for a decline of 5.5% to 6%, and it reflects a Q4 like-for-like decline of 6.9%, and that's a deterioration from the third quarter decline of 5.9% -- in the context of the weaker top line, we delivered a headline operating margin of 13%, in line with our expectations and down 180 basis points year-on-year on a like-for-like basis.

Our fully diluted EPS was 63.2p, a decrease of 28.4% year-on-year, with the impact of reduced headline operating margin and a higher headline effective tax rate, partially offset by lower net finance costs and noncontrolling interests. Turning to cash flow. Our adjusted operating cash flow before working capital was GBP 1.2 billion, down from GBP 1.3 billion in 2024 and at the top of our most recent guidance range and includes GBP 82 million of cash restructuring charges.

On my next slide, I provided some color on our net sales performance, both for the fourth quarter and across the full year. And please note that we have included more detail in the appendix to this deck. Now you have some of the detail here on trends by business, by region and by client sector, but I thought it would be more useful to unpack some of those trends by theme to help give a sense of what is WPP specific and what is more market driven.

And when we consider what is WPP specific, the major negative impact to call out both for the full year and for the fourth quarter is the impact of gross client losses, which deteriorated through the year. Now this was driven by the impact of incremental losses in year in 2025. And by segment, this particularly weighed on media, by geography on the U.S. and the U.K. and by client sector on CPG and TME.

Now against this, we had the positive impact of new business wins in 2024 and '25, which indeed contributed progressively through the year. The aggregate level of in-year wins, however, was lower than we initially expected and significantly below what we have experienced over the past number of years. This was in part because of a lower win rate, but in EMEA, it was because of a lower level of aggregate new business activity.

Industry estimates are that global pitch activity was down double digit in the year. While we saw an encouraging new business performance in the fourth quarter with the wins of Reckitt, Henkel, the U.K. government, Pizza Hut, NCL and JLR, the impact on our like-for-like performance is expected to take time to ramp up, and we expect the overall net new business headwind to sustain into the first half of 2026.

The final theme to call out is spend by existing clients. We characterize the year as one of more cautious spending from clients with a higher degree of volatility than we would typically expect to see. Now the impact was seen most strongly across the CPG, auto and the tech and digital services sectors.

And while many of our businesses were impacted, it weighed most heavily on Ogilvy. The waterfall chart on this next slide bridges our headline operating margin from 15% in 2024 to 13% in 2025, a 1.8 percentage point deterioration on a like-for-like basis. There are a number of moving parts and starting with staff costs, including our severance and incentives on the left.

Now these reduced by GBP 576 million on the back of lower permanent headcount, which ended the year down 8.7% and reduced use of freelancers, which was down 14% year-on-year. However, due to that lower revenue, this resulted in 180 basis points drag on our margin. This was amplified by the impact of increased severance and other associated costs, which was up GBP 89 million in the year, taking a further 100 basis points of margin.

And we did increase investment levels in WPP Open in AI and data, and this was more than funded by a reduction in back-office costs, leading to a net reduction in tech spend and other costs of GBP 128 million. Again, with the impact from those lower revenues, this translated into a 60 basis point drag on margin. These drags on margin were offset by a 50% reduction in staff incentive payments to GBP 182 million, providing a margin cushion of 140 basis points, which is equivalent to 120 basis points like-for-like if we exclude FGS.

And taken together, this resulted on that net margin move of 200 basis points on a reported basis and 180 basis points on a like-for-like basis, which includes 20% of the impact from the disposal of FGS and from FX. Now moving to my next slide, we show our headline income statement. Overall reported revenue less pass-through costs was GBP 10.2 billion, a decrease of 10.4% year-on-year on a reported basis. Our headline operating profit was GBP 1.3 billion, which was down 22.6% year-on-year on a reported basis and is consistent with that 13% operating profit margin.

Our net finance costs of GBP 274 million were slightly down year-on-year on lower average net debt and lower interest rates. And our effective tax rate increased to 32% given that lower profit base and the impact of nondeductible fixed elements. By contrast, noncontrolling interest of GBP 43 million was down year-on-year, partially driven by disposals.

Our headline diluted EPS, as I said, was 63.2p and down 28.4% on a reported basis. The Board has recommended a final dividend of 7.5p, giving a total dividend of 15p for 2025. Now while this is a reduction year-on-year, it represents a stable dividend from the first half, and it underlines our commitment to maintaining shareholder returns. We include a full reconciliation between our headline and our reported financials in the appendix.

And the main items I would call out are the impact of restructuring programs as well as further goodwill impairments of GBP 641 million, which primarily relate to our integrated creative agencies and property impairments of GBP 114 million, both of which are noncash in nature. Now this next slide bridges the year-on-year movement in net debt, which ended 2025 at GBP 2.2 billion versus GBP 1.7 billion in 2024.

Our adjusted operating cash flow before working capital was GBP 1.2 billion and reflects a lower level of cash profit, partially offset by a lower level of CapEx and a year-on-year decrease in cash restructuring costs, which came in at GBP 82 million.

Our working capital saw an outflow of GBP 334 million, primarily driven by the temporary impact of reduced staff incentives, adverse FX movements and business mix. Within this, our trade working capital, excluding the impact from FX was broadly flat year-on-year. We remain disciplined on our working capital management and saw an improvement in underlying operating metrics year-on-year, including reduced overdues. We saw an outflow of GBP 17 million from earnouts of GBP 65 million and the net impact of dividends to minorities and from associates and earn-outs have decreased year-on-year and are expected to continue to progressively fall in 2026.

Our net interest and tax contributed to a total adjusted free cash flow of GBP 202 million and note that the tax payment includes GBP 43 million of one-off taxes related to the disposal of FGS Global. And turning to the uses of cash, M&A spend was GBP 147 million and largely related to the acquisition of Infrum, while cash dividends amounted to GBP 343 million.

Adding in the impact of buybacks at GBP 97 million to offset the dilution from incentives and other factors, including FX, our spot net debt was GBP 2.2 billion, up GBP 500 million year-on-year. Now my next slide provides more detail on our overall net debt and our leverage profile.

As we've already said, we think it's more prudent to look at average adjusted net debt through the year rather than the year-end level, which typically benefits from a favorable working capital position. Now our average adjusted net debt was slightly down year-on-year at GBP 3.4 billion compared to GBP 3.5 billion in 2024.

However, given that lower headline EBITDA, the average adjusted net debt to headline EBITDA ratio for 2025 was 2.2x, which was up from 1.8x in 2024. While our average leverage ratio has increased, our maturity profile stands at 5.8 years and the average coupon on our net debt is 3.5%. We, of course, also completed a successful GBP 1 billion bond issue in December 2025, which more than covers our GBP 650 million bond maturity in September 2026.

We have no covenants. And as of December 2025, we had GBP 4.4 billion of liquidity, including an undrawn committed RCF of $2.5 billion, which does not mature until 2031. And furthermore, I'm very pleased to share that today, Fitch Ratings has assigned WPP a BBB rating with a stable outlook, reinforcing our investment-grade balance sheet. And on my final slide for now, I have shared guidance for 2026 across key financial metrics.

Now we will talk about the impact of our strategy update later this morning. But for 2026, we're setting the following parameters in terms of our headline guidance. Our like-for-like net revenue growth is the most important metric for judging our business, but it is a lagging indicator with account losses continuing to drag for around 12 months after they first start to impact.

And meanwhile, new account wins take time to bed in and move toward a steady state. For the year as a whole, we estimate that gross client losses will represent a 500 to 600 basis point drag, an increase from the 300 to 400 basis points in 2025. At the same time, the positive impact on like-for-like from gross client wins in 2026 already exceeds that for the full year 2025.

Now while it is still early in the year to indicate the impact of new business in the full year, we do expect it to be a more significant drag in the first half in 2025. We are encouraged by the new business performance in the fourth quarter and the performance year-to-date and the nature of the pipeline. And as a result, we anticipate a progressively improving impact from net new business through the course of the year.

Now reflecting all of this, we are guiding to like-for-like revenue less pass-through costs down mid- to high single digits in the first half of 2026 with an improving trajectory in the second half. And we also anticipate that the first quarter will see the weakest like-for-like for the year.

On profit, there are a number of moving parts that will impact our headline operating margin. On the positive side, we will benefit from the annualized impact of cost actions, which were taken in 2025, alongside a part year benefit from the cost initiatives we are implementing as part of our new strategy. We also expect a lower impact from headline severance costs. Against this, we will continue to invest in WPP Open in AI and in data as well as our growth drivers and also expect to rebuild our incentive pools.

Cindy and I will share greater detail on both the growth drivers and the cost initiatives as part of our strategy update. Taking all of that into account, we anticipate headline operating profit margin in the range of 12% to 13%.

And turning to cash flow, we continue to focus on adjusted operating cash flow before working capital as the most important metric, reflecting the potential for volatility in the year-end working capital position, including both the anticipated costs associated with historical plans as well as the restructuring costs linked to the Elevate28 8 plan, we anticipate adjusted operating cash flow before working capital of GBP 800 million to GBP 900 million.

This includes total anticipated cash restructuring charges of around GBP 250 million, of which around GBP 190 million are associated with the Elevate28 plan. Excluding these charges, we would anticipate adjusted operating cash flow before working capital of GBP 1 billion to GBP 1.1 billion. And finally, in terms of leverage, given the expectation of a further moderation in headline EBITDA, we would anticipate our average leverage metrics to move up further in 2026.

We do, however, expect average net debt to remain broadly stable, and we note that any proceeds from asset disposals during the year will be used to strengthen our balance sheet, providing a greater degree of financial flexibility. Now you will find more detail on other modeling assumptions for 2026 in our preliminary results press release. And that is it for me for now, and I will hand back to Cindy, who I know is very keen to share our strategic update.

Thank you, Joanne. Thank you. Look, the first thing I want to say to you is that I fully recognize that recent years have been disappointing from a shareholder perspective. I acknowledge our performance on core metrics like net sales margin, free cash flow. It's disappointing. No one is more determined to turn that around than I am.

And as I said in my opening remarks, I took this role with a clear thesis as to what we needed to do differently. We've spent the past 6 months as a team really validating that thesis with rigorous analysis and by actively listening to feedback from our clients. There are plenty of reasons for optimism, and I'm going to get to those in a moment. But first, I thought it's just appropriate to share with you some of the feedback that we have received from clients. It's clear and consistent and not only supports my thesis, but provides us with an excellent blueprint for what we need to do differently going forward.

Clients pointed to the fact that our complexity got in the way of true client obsession. We were siloed. We were hard to navigate. We haven't been intentional enough about evolving our integrated proposition to adapt to the changing needs of our clients. It's taken us too long to land our data proposition and our media business has suffered as a result. Now the good news from my perspective is that all of these issues are fixable. And as I said, we've already started to do so.

So while it's true that our performance hasn't been where we want it to be, it's also true that WPP is full of potential and has all the ingredients that we need to win. We have incredibly talented, hard-working people with deep domain expertise who do amazing things for our clients, for some of the most demanding clients in the world, I might add, every single day. We have world-class capabilities that span the entire marketing workflow from media to commerce, creative, PR, production, digital experiences, software engineering, data, AI and more.

We've made really smart investments over the years in technology that have now enabled us to build WPP Open into a powerful future-facing agentic marketing platform, giving us a real competitive advantage. We have a presence in over 100 countries around the world, which means we can serve the most complex multinational, multi-client brands in the world. We have a scaled media offer and partnerships with every relevant player in the ecosystem. But maybe most importantly of all, we have an ambitious, competitive, high-energy team that is ready to embrace change and hungry to win.

So notwithstanding the challenges, which are clear, I stand here with immense optimism because we're at a really pivotal moment in WPP's journey. We're not just adapting to change. We're actively shaping the future. We are building a WPP that is more agile, more connected, more powerful than ever before, a WPP that is simpler to work with, fit for the future and built to win. A WPP that is obsessed with the client -- the success of our clients and as a result, that drives better returns for our shareholders.

So our strategy starts with a new mission, to be the trusted partner for the world's leading brands in the era of AI, valued for combining cutting-edge media intelligence, trusted data solutions, world-class creativity, next-generation production and transformative enterprise solutions to help our clients navigate change, capture growth and capture opportunity.

Now there's 4 key objectives of our strategy, and we're going to unpack these in some detail. But just to summarize, our objectives are to drive superior growth for our clients, to become a simpler, more integrated company, to leverage our agentic marketing platform, WPP Open for competitive advantage and to create firm financial foundations for the future. As I said earlier, this is going to take time, but we've already made a promising start.

And to support our growth strategy, we've built a very detailed execution plan that broadly spans these 3 distinct phases. Our immediate priority is to stabilize the business, make the structural changes needed, strengthen our execution, win and retain clients to sustain our current market momentum. The next phase is about building on these foundations and returning the company to growth sometime during 2027.

And the third phase will be about accelerating our growth so we can capture our fair share of the market from 2028 and beyond. And just to summarize what you can expect from this plan in terms of outcomes, you can expect the stabilization of our performance in the near term, a return to growth sometime in 2027, gross cost savings of GBP 500 million over 3 years, a reallocation of investment against our key growth priorities and a more focused portfolio, an investment-grade balance sheet, as Joanne said, and greater financial flexibility.

So that's the basic framework, the time line of our growth strategy and what you can expect in terms of outcomes. We're going to unpack all of this in more detail. But before we do, I would like to step back, if I may, and just do a bit of scene setting to offer some perspective on how we see the world changing, the needs of our clients evolving and the opportunity of AI.

So for some time now, we've known that our industry is experiencing dramatic transformation. With the rapid diffusion of AI, we're not just seeing incremental shifts in consumer behavior, like this is a complete metamorphosis of the commercial ecosystem. Brands are now discovered in AI-driven conversational search. All the old barriers that protected established brands are gone. creators and influencers have reshaped consumer preference and can launch brands in an instant.

Media is everywhere. It's in everything. It's no longer episodic and campaign-driven. It's continuous, always on, a stream where social, search and physical spaces all blend together. Commerce is the new organizing principle. Every action, every interaction is shoppable, and we're rapidly shifting to agented commerce where AI agents do the shopping on our behalf. Trust is scarce, right?

It must be earned every day in this world of synthetic content and deep fakes. Brands need to balance hyperpersonalization with personal privacy. And as the world is flooded with AI-generated content, the demand for verifiable human creativity, craft, empathy, taste is increasing as key brand differentiators. These changing dynamics are not fleeting trends. The acceleration of AI is unstoppable.

And as I said, it's driving a complete metamorphosis of the commercial ecosystem. And this is the reality our clients are navigating every day. The fragmentation, the complexity, the pace of change is dizzying for our clients and the paths to growth are much harder to find. He's never been more urgent to build compelling trusted brands that endure for generations and provide competitive advantage and long-term enterprise value.

To cut through this noise and find new growth audiences in this environment, brands need to embrace new strategies grounded in deep data insights, real-time signals and AI that acts on these signals at the speed of light. In this perpetually changing environment, clients don't need more traditional marketing agencies. What they need is a new playbook for growth and a trusted partner who can help them build it and operationalize it.

A partner that operates as an intelligent orchestration layer across creativity, media, commerce, data and tech who fuses technical expertise with breakthrough creative thinking into one cohesive approach to modern brand building. At WPP, we work with some of the most consequential brands and clients on the planet, Coca-Cola, Unilever, Nestle, Kenvue, Ford, so many more. We know how to navigate disruption. We know how to find signal in noise and help clients build new paths to growth.

Now for many clients, this new playbook for growth means real transformation at every level. So I spent the last decade delivering large-scale technology transformation to enterprise clients around the world. And I can tell you, it's not easy. Clients need to have AI-ready data foundations and agentic tool and governance in place. They need to be trained and skilled. Processes need to be reimagined. There's really no shortcut when it comes to AI transformation. Every client I meet is going through it, and they all need our help.

So for WPP to seize this opportunity, we need to evolve from being a collection of traditional marketing agencies to being a trusted partner for growth and transformation, helping our clients build modern marketing capabilities and move boldly and confidently into the future. A wonderful example of this kind of partnership in action is the Coca-Cola Company.

Let's hear from Manolo.

[Presentation]

Commerce and Retail media at 23% and high-velocity content production at 38%. These changes that we're making at WPP to integrate our client proposition will enable us to cross-sell more effectively and grow our share in these fast-growing markets. So that's my perspective on how the world is changing, what it means for our clients and the opportunity of AI.

Thanks for indulging me in that. But I'd like to now unpack our growth strategy in a bit more detail. So as I mentioned earlier, we have 4 strategic objectives: to deliver superior growth for our clients by reorienting around an integrated proposition to become a simpler company moving to 4 operating units across 4 regions with common incentives across the company, to leverage the power of our agentic marketing platform, WPP Open for competitive advantage and to create firm financial foundations for the future.

We've built a detailed plan that sets out the actions we're taking to deliver on these objectives, and the entire management team worked together to build this plan. This was the ultimate team collaboration. We're all behind it. We're all aligned and committed to its execution.

There are 8 core pillars to the plan, which you can see on this slide, but I'm going to double click and I'm going to double-click briefly on each of them, but I do want to start with WPP Open, our pioneering agentic marketing platform because it sits at the center of everything we do. It's where all of our capabilities come together into one integrated end-to-end platform. It's the cornerstone of WPP's own transformation, and it's how we deliver services, transformation and growth to our clients. WPP Open is a platform that we've been investing and building for a few years now.

We recognized that we needed an end-to-end orchestration layer to connect workflow inside of WPP. And the platform enables us to scale intelligence and best practice across our group and reimagine business process and client solutions with the agentic capabilities that now live inside Agent Hub, an important recent addition to the platform. But let me show you an example of the power of the platform with a recent example from Google Pixel.

Using WPP Open and AI personas, we analyzed millennial conversations from across social media, uncovering a shift towards romantasizing everyday life and reframing mundane moments as cinematic moments. Guided by this insight, our brand agent recommended focusing on Pixel's camera coach feature to help users take control of their story. Thanks to specialized agents, our workflow moved from social listening to creative concepts in just 1 hour.

With Google's advanced AI models within WPP Open, campaign assets were approved and live within 24 hours. And this delivered a 3% increase in brand uplift, demonstrating a new marketing flywheel where insight, creativity and production really move at the speed of culture. So recognizing the pace of technology change, we knew that the future of marketing would look very different than in the past. And to anticipate these changes, we've significantly enhanced the platform over the past 12 months.

Open Intelligence is our foundational intelligence layer that securely connects trillions of live data points from clients, partners and WPP in a privacy-first way. And it's now integrated and powers the entire WPP platform end-to-end. We consolidated our technology and data solutions into one organization. We have one WPP development team, one integrated product road map and one set of design and portfolio management principles, which dramatically simplifies how we think about evolving this platform in the future.

Our people work on WPP Open every day, and it features in every client pitch as the single unified agentic platform that clients need to deliver integrated marketing workflows and a collaborative workspace where humans and agents can work together to deliver a system of growth that clients can trust. There are many, many point solutions available in the market today that address pieces, fragments of the marketing workflow, and they're often tied to specific platforms, leaving clients to manage costly complex tech stacks with fragmented workflows.

WPP Open solves this problem in a single end-to-end platform. It's an agnostic system built on a common data model. It gives clients one source of truth to integrate operations, optimize investment and drive growth at scale. It's really hard to explain technology, though. So let me show you how this works.

[Presentation]

Great. So I talked about the importance of partnerships because in today's changing world, like no single company can go it alone. WPP Open, as the name indicates, is open by design. We will continue to enhance our own technology with the very best and latest AI models and agentic tool sets through our groundbreaking strategic technology and data partnerships with Google, Microsoft, TikTok, Meta, Amazon, Stability AI and more. These partnerships don't just give us access to new AI models and tools.

They enable us to bring cutting-edge innovation resources to our clients and unlock important new routes to market, particularly important for our Enterprise Solutions business. You might have seen earlier this week, we announced a significantly expanded partnership with Adobe, embedding their industry-leading AI marketing suite directly into WPP Open.

This is a powerful integration that delivers effective streamlined marketing operations for our clients, enabling them to scale personalization, optimize media and create on-brand content efficiently with agentic AI workflows. This build, buy and partner approach that ensures that WPP Open remains at the forefront of cutting-edge technology innovation so that our clients always have state-of-the-art capability at their fingertips.

WPP Open is a significant source of competitive advantage for WPP. This platform puts AI to work to transform our clients' marketing function and enable new outcome-based commercial models, tying our success directly to client growth. So that's WPP Open.

Now let's go back to the strategic plan and briefly step through the actions we're taking to deliver on our growth objectives. Our first key action focuses on media and data and positioning these capabilities at the core of our integrated client proposition. Brian Lesser joined WPP 18 months ago and has done a fantastic job spearheading the transformation of WPP Media. He's implemented structural change and led the acquisition and integration of InfoSum, which now underpins our differentiated data approach.

We know there's more work to do, but recent wins in WPP Media that Brian and his team have secured give us full confidence that we're on the right path.

So I'd like to invite Brian to the stage now to dive a bit deeper on WPP Media's transformation. Brian?

Hi, everybody. Good morning. And thank you, Cindy, for the introduction and for leading the way at WPP. 12 months ago, I promised a transformation, and we delivered. We have united WPP Media, placing our clients at the heart of everything we do, ready to unlock limitless growth in a media everywhere future.

Our foundation is built on our proprietary open intelligence, driving real-time predictive decision-making. Today, I'll detail how we're now perfectly set up for success with the client always at the core of a truly integrated WPP, powered by a differentiated platform that sets us apart. This is our winning recipe, and I'll share tangible case studies proving this model is designed to win. From the outside, it might seem as if all marketers have the same basic needs.

The truth is that every client is unique with vastly different context, growth strategies and audiences. This is why we have restructured the way we work to ensure each client's unique needs sit at the heart of our business. This radical client centrality is allowing us to unlock true integrated marketing across WPP.

We have built a single financial and data ecosystem that eliminates siloed operations to bring the full power of WPP's people and tech to life. This empowers us to deliver seamless connected solutions that cut across the traditional ways of doing business like customer experience, commerce and social and influencer that accelerate client growth. Whether it's a media pitch, a creative pitch or a production pitch, more than ever, clients are looking for a single integrated solution. This is what we're now set up to deliver and why clients are choosing us.

You can see the power of this integrated approach with Mazda. When creative is as intelligent as you're targeting, you don't just reach people, you move them. Mazda's first to the finish was a groundbreaking branded content series. It spotlighted trailblazing female racecar drivers connecting on a human level beyond motorsport. This innovative program became the first branded content designated a prime video original. It showed how media intelligence fuels powerful storytelling.

The series achieved 16 million minutes watched, drove 93% new website visits, increased purchase consideration by 23% and contributed to Mazda's highest sales year ever. This is the type of results the new WPP media generates. Our data approach isn't merely an evolution. It's a fundamental revolution. Traditional marketing with its static definition of identity and commoditized view of audiences is increasingly obsolete and constrained by privacy risks. We ask a different question, what signals truly matter to our audiences.

We unlock intelligence from diverse live signals, context, interests and behaviors to find new patterns in the consumer journey. This identifies new growth audiences and predicts their future actions to accelerate business growth. Central to this is our market-leading solution, enhanced by InfoSum, which establishes private data networks directly within our clients' environments. This enables secure multiparty data collaboration without any data ever moving. This decentralized approach breaks down silos, creating comprehensive AI-ready consumer insights from previously inaccessible sources, far surpassing traditional ID matching alone to deliver truly predictive intelligence.

For the first time, clients can harness the full potential of their first-party data from any cloud or warehouse environment. including Adobe, AWS, Microsoft Azure, Google Cloud, Salesforce, Databricks and Snowflake. This proprietary intelligence can then be connected and enriched with our comprehensive identity data and robust network of over 350 integrated partners, giving us access to quadrillions of real-time signals.

This allows us to produce faster, smarter and more effective marketing across all leading global platforms like Amazon, Google, Meta, LinkedIn, Snapchat and TikTok. By synthesizing this vast data, we build predictive media strategies that deliver deeper engagement and superior client growth, moving beyond just reach and frequency and validating actual outcomes with historical performance data. To bring this to life, consider our work with Heineken. They needed a way to connect their first-party consumer data with ITV's on-demand viewing audience and Tesco shoppers.

Powered by InfoSum, Heineken was able to identify relevant audience segments based on age and real-time drinking preferences. Crucially, Tesco provided closed-loop measurement of sales impact, all without moving or sharing any customer data out of Heineken's environment. In a world where measurable outcomes truly matter, the campaign success wasn't measured in brand uplift or impressions, but in real sales data from Tesco stores, which increased by an impressive 189%. Another real-life example of driving business results through our market-leading data and technology solution.

Powered by Open Intelligence and enhanced by InfoSum's federated learning infrastructure, WPP Open offers a unique agentic marketing platform. This gives our clients speed, simplicity, scale and AI innovation to modernize marketing, optimize media and accelerate their growth. Our differentiated approach to data is helping move marketing beyond legacy static databases by enabling more connected and intelligent ways of working.

For Coca-Cola, this means bringing together creativity, technology and real-time insights to create more integrated marketing experiences. There's no one better than Manolo to share how WPP Open and Open Intelligence are transforming marketing at the Coca-Cola Company.

[Presentation]

Our strong Q4 2025 momentum continued into 2026. with WPP Media achieving its best January in 4 years for net new business wins, leading all media holding companies. We have an inspired, dynamic market-leading team of winners leading this charge. The change in our culture has been palpable. Major integrated wins like JLR and Estee Lauder confirm our strategy works.

Our winning client-centric proposition built on this future-proof integrated foundation rapidly meets evolving client demands and delivers truly predictive intelligence. With media at its core, WPP is now exceptionally positioned to drive continued growth, sustain client relationships and deliver significant value for our investors. Thank you, and now I'll hand it back to Cindy.

Thank you, Brian. Thanks so much. So the next key action we're taking is to establish next-generation production and creative capabilities. And I'm going to start briefly with production. Just last month, we announced the creation of WPP Production, our new production unit led by Richard Glasson. And of course, we marked the occasion with a video.

[Presentation]

So as I think you can see, production is being pretty radically transformed, and we're facing into this head on by fundamentally reimagining how it all works. WPP production, it's a mouthful. It's designed to solve for both volume and performance. We operate an end-to-end content orchestration through WPP Open as one unified content production engine.

We're establishing high -velocity studios deeply integrated into WPP Media for real-time measurement and content optimization. And we're centralizing commissioning and supplier management to in-source more work where appropriate and create a more curated roster of external production partners. We're investing. We're investing in cutting-edge capabilities, high-velocity studios, as I mentioned, Gen AI studios, virtual production, video effect of virtual effects and digital twin pipelines.

With WPP production, we are well positioned to support our clients as they look to transform and often consolidate their content production activities. And we're confident over time, we will take a greater share of this market. So next, I want to talk about creative. Like we know how critically important creativity is to our clients. I talked a bit earlier about the increasing demand for verifiable human creativity and craft in the era of AI. This is an important source of brand differentiation and value creation for our clients.

And while the market for creative service is projecting limited growth over the medium term, creative capabilities are still a vital element of an integrated proposition, and there is significant opportunity for us to unlock white space across our client portfolio through joint propositions and cross-sell. So recognizing these factors, today, we are formally announcing the launch of WPP Creative, led by Jon Cook, and this organization will be home to our most iconic agency brands, VML, Ogilvy, AKQA, Berson, Landor, Design Bridge and Partners.

I want to be very, very clear on this one. We are not merging agency brands. We are not consolidating agency brands. We are not sunsetting agency brands, okay? On the contrary, Jon and our agency leaders will unite them in new ways and empower them like never before. I've spoken to many clients. They all share with me how much they value choice and the unique perspectives and cultures that our agency brands provide. However, they also want to make it easier for those agencies to collaborate and efficiently access the whole breadth of WPP's capabilities.

A simplified structure also removes barriers for our global client leaders, creating a frictionless path to our top talent so we can put the right resource in front of the right client at the right time without the constraints of the past. With WPP Creative, all of our agency brands will have access to the full modern stack of commerce, customer experience, digital platforms, enhancing their client proposition and expanding the go-to-market channel for these services.

Much greater alignment with WPP Media and WPP Production will ensure that creative ideas are instantly adaptable and executable across the whole customer funnel. While agency brands remain, WPP Creative will have a more competitive cost base from a simpler, more unified operating model and greater shared infrastructure. I'm excited that WPP Creative will double down on our agency brands and arm them with the capability they need to make them more modern and more united than ever before.

And we're already seeing the power of bringing together our portfolio in recent successes securing, for example, the creative mandate for Kenvue, the parent company to well-known brands like Listerine LSTERIN, Sudafed, BAN-AD and more, a strength also recognized by our client there.

Next, I'd like to spend a few minutes talking about enterprise solutions. Because today, every global business needs a partner that can help them build, run and evolve their core platforms and systems in a world where AI is part of everyday operations. Businesses are being forced to rethink how they establish competitive advantage and the potential to reinvent workflows has never been greater.

For some of our clients, the need is clear and well articulated. For others, the need is completely unarticulated. They know there's a better way, but they don't know what it looks like. To partner most effectively with our clients on their AI transformation, we are elevating our existing enterprise solutions capability into a new externally facing operated unit called WPP Enterprise Solutions, led by Jeff Geheb.

Enterprise Solutions provides a complete enterprise transformation offer for clients that spans consulting, content, customer experience, commerce, CRM and platforms. We have a unique ability to fuse these capabilities with media intelligence and world-class creativity to build an AI-powered marketing operation end-to-end for our clients. WPP Enterprise Solutions benefits from multiple routes to market, including via our agency brands and both direct and partner-led go-to-markets as well.

These multiple routes to market maximize our coverage and enhance our ability to cross-sell, capture white space, TAM growth opportunity within our installed client base and will drive more direct and partner-influenced revenue. The enterprise transformation market is huge. It's worth $230 billion and projected to grow cumulatively 7% over the next 3 years. Although our share of that market today is small, the opportunity is really significant.

And actually, we already have really solid foundations to build on. Today, our Enterprise Solutions business employs around 10,000 people and generates around $1.8 billion of revenue. It's about 13% of our overall group net revenue. This business has quietly built a book of exceptional clients and has already earned notable industry recognition from Gartner, Forrester and IDC.

In many ways, as I like to say, Enterprise Solutions is the hidden gem within WPP that we will now elevate to become the crown jewel. And if you ask our clients at Ford, it's already the crown jewel. We have a partnership with Ford that started with J. Walter Thompson 80 years ago, and we've continued supporting them with cross-functional teams as their needs have evolved. Let's hear directly from Ford.

[Presentation]

Great. Okay. So we have talked about how we're going to deliver superior growth for our clients by reorienting around an integrated proposition that brings together media creative, production enterprise solutions, all powered by WPP Open. Now I want to talk about the organizational changes that we're going to make to become a simpler, more integrated company because these are key enablers for our strategy.

And as I mentioned earlier, we haven't been waiting for today's update to change how we engage with clients. We know that when we show up as the new WPP, as the best of WPP, we win. But to build on our current momentum and make it sustainable, we need to radically simplify our organization really to unlock true client centricity. So to do that, WPP will no longer be a holding company. We will no longer be a shopping basket full of stand-alone businesses, hundreds of stand-alone businesses.

We're going to move to a single company model. with 4 operating units across 4 regions with incentives that closely align to the overall performance of WPP. Being a single company with a simpler structure and common incentives are critical enablers of our strategy. As part of these structural changes, we'll also further simplify corporate functions, particularly in finance and people to reduce duplication, increase our use of shared services and redesign our processes, leveraging AI and Agenta capabilities.

Alongside these structural changes, we're also focused on significantly strengthening our execution, both in terms of client service delivery and new business growth. At the heart of WPP's relationship with our largest clients are our global client leaders, our GCLs -- and our GCLs are already masters of creating value. But our existing operating model and our incentives and our internal processes have not always afforded them the agility needed to deliver seamless client-centric services that unlock new avenues for growth.

I'm sure my GCLs in the room would agree. But we're transforming our approach. We're going to empower our GCLs with the authority and the resources to function as true leaders for their client portfolios, exercising strategic leadership rather than merely orchestrating a bunch of activities. This is going to include greater control over client P&Ls and the authority to make the best strategic decisions supported by streamlined internal processes designed to eliminate organizational friction and provide access to the right resource at the right time.

We're also establishing a new team of client solution architects. This team will apply deep industry expertise to develop winning growth strategies for clients and then architect tailored solutions to deliver on those strategies, unifying technology, media data, all of our marketing capabilities to really drive successful execution. And finally, we're establishing more integrated growth operations, creating a stronger network of growth talent across WPP with a shared hunger to win. These changes will enable us to build on our current momentum, all of our recent wins as we strengthen our new business engine and champion a stronger winning mindset.

And speaking of winning mindset, the next core priority for us, perhaps the most important of all, is to embed a high-performance culture to attract and retain the world's best talent, grounded in collaboration, client obsession, humility, accountability and a hunger to win. I know from experience that culture can be the biggest differentiator and competitive advantage of them all. Talented people choose to join companies and stay at companies that have strong cultures where they can thrive in their careers and be their authentic selves.

I also know that changing culture takes time and persistence, and it's about both winning hearts and minds. I think winning hearts is about inspiring people with a new mission that feels fresh and relevant and clear. It's also about creating an environment that feels safe and inclusive, where creativity, where intelligent risk-taking are valued, where failure is treated as a path to learning and continuous improvement is celebrated. Now winning minds is about getting the basics right.

So that's about clear communication and active listening to people, investments in learning and development. We've got to ensure that our people are building new capabilities with a focus on AI so they can deliver what our clients need from us. It's about common incentives across the company that just unlock collaboration and frictionless resource sharing. It's about performance management and feedback to allow us to build that culture of accountability and greater talent mobility and career progression opportunities.

But what I really want is for people to have a world-class employee experience and feel proud to be on a winning team and proud to be part of WPP. Now the final pillar of our Elevate28 execution plan is about creating firm financial foundations for the future. And that's about creating capacity to invest in growth and building a WPP that's fully optimized to deliver for our clients. I'm going to hand over to Joanne now to step through the financial aspects of our plan. Joanne?

So thank you, Cindy. And okay, let me share the financial framework, which underpins our Elevate28 8 plan, including our approach to capital allocation. Elevate28 8 is first and foremost about getting WPP back to growth, and our financial priorities underpin that. In the near term, our focus will be on stabilizing the business, and that means improving our net new business performance and our client retention. As I mentioned earlier, net sales like-for-like is a lagging indicator, and that will take time to recover as we cycle through historic client losses.

Now as we progress through the 3 years of our plan and we deliver strongly against the core growth building blocks, which I will talk to in a later slide, we anticipate a return to taking our fair share of the market. And in some areas and over time, we will seek to outperform the market. And to support this, we will unlock GBP 500 million of gross annual cost savings between now and 2028, enabling a reallocation of investment towards our growth drivers. And this will, in turn, support a rebuild of margins.

And finally, we are setting out to make WPP a simpler and more focused business reducing the perimeter of the group and then still doing strengthening the balance sheet and providing a greater degree of financial flexibility. As you've heard today, we are already implementing many parts of our plan. However, it will take time to deliver and to realize the full benefits in our operational and in our financial outcomes.

As Cindy indicated, we see delivery across 3 phases. In 2026, we will stabilize the operational performance of the business, leveraging the improved competitiveness of our media and our data proposition and our production consolidation. We will action our cost saving plans, and we will prioritize investment into the parts of our business, which represent the largest growth opportunities.

In parallel, we will take a more proactive approach to our portfolio, unlocking embedded value and operating with a tighter and a more focused perimeter. This will require focused execution and a rigorous reallocation of resources to support our growth plans. Now as a lagging indicator, we expect organic growth to remain subdued in 2026, and we also anticipate margins to remain below historic levels as we reinvest savings to support growth.

Alongside this, we expect an elevated average leverage ratio. From 2027, we expect to start to see a progressive ramp-up of the benefits from both our operating model changes and the investments we are making to enhance our new go-to-market, our integrated proposition and from scaling capabilities, including our full service enterprise solutions and production. It is our ambition for the group to return to growth during 2027 for margins to start to rebuild and for our leverage to start to come down.

And from 2028, our plan assumes a significantly improved operational performance characterized by accelerating growth and improving margin and strong cash conversion. While we are not providing specific medium-term guidance today, rest assured, we are relentlessly focused on immediate stabilization and disciplined execution of the building blocks to return WPP to growth.

And let me spend some time on those building blocks of growth, which we are, of course, aligning our investment priorities against. And I'll start with media. Now the market for Media Services is around $40 billion and is forecast to grow at a 4% CAGR from '24 to '28. And within this, commerce and retail media is a high-growth market, expected to deliver a CAGR of 23%.

As you heard from Brian, we have been busy transforming our media and our data proposition and improving our execution. And this not only supports our ambition to improve new business and retention across our media business, but it will also enable us to deliver that improved integrated proposition for our clients with media at the heart. And our recent win with JLR is a great example of that.

Now taking back our fair share of the media market is the most significant growth opportunity for WPP at a group level, and it's a core tenet of Elevate28. Now the second area is our next-generation production offer. Now while the overall production market is seeing muted growth, we are seizing the opportunity to take share, internalizing third-party production spend by our agencies, which is estimated at hundreds of millions over the course of Elevate28.

We have also identified significant incremental opportunities from new ways of originating creative work, leveraging GenAI and BFX pipelines, which enable us to build next-generation studio capability and make much more of our client work directly. High-velocity content production is a great example of this, which despite being a relatively small proportion of the overall production market today is forecast to grow at a CAGR of 38% over the next 3 years. As the largest production agency globally and with our investment in dedicated capabilities, including content studios, we are well placed to take more than our fair share of this opportunity.

We are working with a number of our large clients already in these areas, and we've leveraged innovative content opportunities in some of our recent new business wins. And finally, scaling our enterprise solutions proposition. The enterprise solutions market, as we define it, is forecast to deliver a CAGR of 7%. We play in this space already, but as part of a fragmented offering, existing within agency silos and as such, our current share of the market is low single digit.

Now scaling our enterprise solutions across all of our creative brands as well as establishing it as a distinct pillar and investing in direct go-to-market capability, we believe will enable us to significantly grow our market share over the course of Elevate28. The strength of our capability in this area has been recognized by Forrester, amongst others. And with many recent client wins, we are confident we will see an improving growth trajectory.

For 2026, the focus will be on consolidating these capabilities under one leader, establishing a strong direct go-to-market team and leveraging partnership opportunities such as the one announced this week with Adobe. Now cumulatively, these opportunities represent a significant white space gross revenue opportunity estimated at up to $900 million over the term of Elevate28 8. And delivering against our growth priorities will, of course, require investment, which will be self-funded from our cost initiatives. Our shift to a new operating model will yield significant efficiencies, building on what we have already done.

Since 2024, we have removed GBP 300 million of gross cost savings and our Elevate28 operational plan unlocks a further GBP 500 million of gross annualized cost savings by 2028. Now we expect the associated cash restructuring costs to be around GBP 400 million and for those to be incurred across '26 and '27. It's important to emphasize that our cost actions are targeted at improving our execution and supporting our growth priorities as much as they are about simply removing costs from our business, and they will come from 3 key areas.

The first area is that shift to a new operating model. It will drive a more simplified, more integrated way of working. It will enable us to scale our capabilities across the organization and support a stronger and a more effective client proposition. We will consolidate leadership at a global, at regional and at market levels, providing clear roles and responsibilities for our people. We will optimize spans and layers.

We will remove duplication across our creative assets, driving a more aligned model, enabling a more effective cross-selling and providing a more holistic view of client success and outcomes. The second bucket focuses on structural cost savings. And as a result of our new operating model, we will deduplicate corporate functions, particularly across our finance and our people teams.

We'll further leverage our shared service centers and create centers of excellence. This will set us up to unlock more scaled productivity savings from greater automation and the use of AI across our corporate functions. And the third bucket will come from rationalization opportunities. We will deliver savings from our real estate footprint and from across our long tail of markets and agency operations.

In 2026, we expect to realize at least GBP 100 million of in-year P&L savings and GBP 250 million of annualized savings. The estimated restructuring costs associated with these savings in 2026 is around GBP 190 million. Now these targeted actions will improve our execution as well as enable a reallocation of investment into the highest growth opportunities across our business, supporting a rebuild of our margins over time. We will prioritize investment across 3 key areas.

Firstly, we are bolstering the main engines of the Elevate28 plan, which you've heard about today. We are directing investments specifically into media and commerce into high-velocity production and enterprise solutions to ensure we capture demand in those high-growth areas. This will include investment in commerce and influencer and analytics talent and in content studios.

Second, we are investing to upgrade our go-to-market approach with a focus on our client needs and our new business capabilities. Alongside this, we will rebuild our incentive pool, and we have redesigned our incentive model to align it to our new operating model and with the aim of disincentivizing the past siloed way of working. Third, we are sustaining our commitment to WPP open to data and to AI.

To give you a sense of scale, in 2025, we invested more than GBP 300 million in this area, and we will protect this investment to ensure continued enhancements to our technology platform and our AI capability. In 2026, we are expecting to reinvest all of the in-year savings from the cost initiatives into the first 2 priorities, and this is reflected in our margin guidance for the year.

Now these investments will be made in a disciplined manner, and we will fully leverage our more integrated approach to benefit from scaled capabilities and a rigorous prioritization in the areas that will drive the highest growth opportunities and returns for WPP. And let me move on to talk about our portfolio review.

In recent months, we have conducted this review aimed at assessing opportunities to unlock embedded value and refocus our perimeter. Now this review has covered all assets that we own, whether an operating unit or a minority investment. We've evaluated how each strengthen our proposition and fit our future integrated offer.

While we have many great assets within our portfolio, it may not be optimal for us to remain owners either in whole or in part of some of those in the future, and we've applied that best owner assessment to identify the assets where value is potentially maximized outside the group alongside a plan for continuing to rationalize noncore passive investments. Now this has also been an exercise in determining the areas we want to prioritize investment in and being rigorously disciplined in our allocation of capital.

And of course, underpinning this is a disciplined approach to M&A with a focus on organic execution in the near term. With the review now complete, we are moving directly to action. And while we don't have specific transactions to announce today, the work is underway, and we will update you in due course. And that leads me to our approach to capital allocation, which is framed across 3 clear priorities. First, we are committed to our investment-grade balance sheet. This is our foundation.

Our primary focus here is retaining strong liquidity, reducing our gross debt and improving our leverage ratios over time. As shared earlier, Fitch Ratings has assigned WPP, a BBB rating with a stable outlook, further solidifying our investment-grade balance sheet. Our second priority is funding organic growth.

As you heard, we are prioritizing investment in the highest growth and the highest returning areas of the business. And crucially, we are funding this through our cost initiatives I shared today with a strict focus on scaling capabilities that support growth across the entire group rather than in silos. And third, we will share the proceeds of growth. We aim to balance consistent, sustainable shareholder returns over the medium term with inorganic investment. Reflecting this, the Board have proposed a full year dividend of 15p for 2025.

We will apply a focused approach to M&A, deploying capital only when an acquisition is clearly more efficient than building that capability internally. And beyond that and as appropriate, any excess capital will be returned to shareholders. And finally, for me, a brief note on how we -- how our reporting is going to evolve to reflect this new structure.

Now the current structure is shown here, and our ultimate objective is for our financial reporting to map directly onto our new organizational model. For segmental reporting purposes, the 4 operating units, which are the engines of our business will be included in an enlarged global integrated agencies reportable segment, which will now include public relations and our design agencies. For regional reporting, results will be broken down by North America, EMEA, Latin America and APAC.

And over time, we want to give you better visibility into the engines of our business. And therefore, within global integrated agencies, we will provide specific disclosures on net revenue and organic growth for our key capabilities, media, production, creative and enterprise solutions.

So that's all for me, and I will hand you back to Cindy to wrap up.

Amazing. Thank you, Joanne. Home stretch folks. So before we conclude and open up to questions, I just want to spend a minute on how my team and I will hold ourselves accountable and measure success. As Joanne mentioned, our primary focus is to return our business to growth. Organic growth is our most important success metric and getting back to consistent organic growth is our North Star as a management team. But as you know, organic growth is a lag indicator and will take us some time to deliver.

So beyond the lag indicators, you can see on the right-hand side of the slide behind me, we've also included on the left a few leading indicators and success metrics that my team and I have as part of our own scorecard. -- that will provide tangible evidence along the way that the actions we're taking are working. I won't read them to you, but you can see there are things like new business wins, client retention, cost savings, asset disposals. These are the types of lead indicators we'll be rigorously managing, and we're confident that these will drive the outcomes that matter the most over time, consistent organic growth, supported by a solid financial foundation.

I also want to reassure you that we're not going to just simply disappear and report back on KPIs in a year's time. We really want you to see the execution of the strategy in real time. We want to invite more frequent engagement with our investor community. So over the coming months, we'll be hosting a series of deep dive webinars to take you further under the hood of our key growth engines, specifically in the areas of media, next-gen production and enterprise solutions.

So I know we've shared a lot of information with you today, and thank you for listening. But I have to say our mission has never been clearer to be the trusted growth partner to the world's leading brands in the era of AI. Elevate28 is a bold plan for a simpler, more integrated WPP.

We will stabilize the business, return to organic growth, create capacity to invest and deliver attractive returns for our shareholders. And we'll do that by delivering growth for our clients by being a simpler, more integrated company by leveraging our agentic marketing platform, WPP Open for competitive advantage and creating firm financial foundations for the future.

I am very confident that WPP has a bright future ahead. This is a WPP that is fit for the future and built to win. Now we're going to draw this strategy update to a close. We're going to invite questions from the audience for me, Joanne, Brian or any members of the senior leadership team.

And I want to thank you. Thank you very much.

Thank you very much, Cindy. My name is Tom Singlehurst. I head up Investor Relations for WPP. We're going to go to questions. We'll -- before we dive in, a couple of quick parish notices. For those in the room, we're going to bring a mic to you. So if you can just be patient. If you could state your name and which firm you represent, that would be fantastic.

And to make sure we've got enough time for everyone, it would be hugely appreciated if you could ration yourself to maybe 2 questions and a follow-up. [Operator Instructions] But let's start with questions in the room.

Laura, maybe start with you.

Laura Metayer from Morgan Stanley. Three questions today, please. First question on differentiation and competitive advantage. I'm curious, what do you think is the single differentiation of WPP. Obviously, we've heard from peers need to like have an integrated offering, a focus on data, driving leading with AI.

So I'm just wondering what do you think is the single differentiating factor of WPP. Second question is when you talked about the JLR win, you said you pitched it as an outcome-based revenue model. Do you mind providing a little bit more details here, like any KPIs that -- and if you can also say maybe like telling us a little bit more generally, like how you think the revenue model will evolve and what sort of KPIs will be used to measure performance?

And then lastly, on the Enterprise Solutions business, could you give us an example of a typical project of WPP here and how it differs from leading IT services consultants because obviously, it's part of an agency.

Sure. Thank you for your questions, Laura. They're great. I'll have a go at the first one and then maybe invite Johnny Horny to talk about JLR. He led the pitch and maybe Jeff Geheb to give an example of an enterprise solution engagement, if that's okay. So I think Brian was incredibly articulate on this. I tried to paint a picture of WPP Open as a very different proposition, right?

And it's -- because it's integrated, it's not a point solution. It transforms the entire end-to-end marketing workflow. It's powered by Open Intelligence, which is our foundational data layer. And we've integrated InfoSum's distributed data collaboration capabilities, which means it's built for the future of marketing, not the past. And that is an incredible competitive advantage. Like we have all the ingredients we need to win. And what we really needed to do is pull it all together into an integrated proposition and then power it with this incredible platform that we have.

And frankly, when clients see that, they see the power of it and its ability to drive growth without compromising on data ownership. We win in head-to-head competition. That's what you're seeing happen. But I don't know, Brian, do you -- is there anything you want to add?

I think one of the things I said was that every client is different. And there is no one approach to driving business results for clients. We've built a platform in WPP Open that is flexible that includes our own proprietary technology, but also partners effectively with other companies. So we're always ready for what's next. And we built a data model that similarly doesn't rely on a static data asset that is a legacy CRM solution.

Instead, it relies on the ability to connect any and all data sources so that we can be more intelligent and more dynamic in understanding consumer behavior and driving those business results for our clients. So it's different for every client. But as Cindy said, it's really an integrated approach across all parts of our business grounded in that data and technology strategy.

Thank you. I would just add, we are still contracting with JLR. So there's a limit to what we can share. But Johnny, why don't you say a few words?

Yes, sure. Yes. Thanks for mentioning that. We haven't officially been appointed by JLR. We pitched throughout last year, went into a period of exclusivity with them through January, and we're now contracting and hoping that by March will be live. But at the core of our pitch to your question, I guess, what's our secret sauce? I think our secret sauce is where you put everything you've seen this morning together.

So starting with Open Intelligence to be able to build cohorts and understand audiences in a way that doesn't require us to do simply old-fashioned ID matching, but to keep the data where it is, keep it safe and secure and then put that into a team that we're going to build with JLR, where we and they are all together on the open platform end-to-end. And it's the end-to-end integrated nature of this offer that I think then allows us to make what I think are becoming genuinely competitive offers when it comes to outcomes.

So those outcomes aren't do you like the agency you work with, those outcomes are, are we selling more product? And will we get paid on being able to sell more product by being able to build their brands and measurably show that there's greater levels of desire for their products and the crown jewels of brands that they've got. So we haven't finished contracting, but those are the defining and that pitch was against all the major holding companies. I think those are going to be the integrated propositions that will see us win JLR and hopefully many more JLRs pulling these ingredients together.

Thanks, Johnny.

Can I just build on that because Laura, I think stepping back a little bit, your question is around what happens with a time and materials model with AI. And the story is really moving on. Hopefully, you picked it up today. Our clients are using us and it's for the industry really. They need brand safety. They need to know that they have got cultural nuances. They have the best creative and strategy talent, working with them on their brands to really differentiate.

And also that they've got the access to the best talent. And navigating through what is an incredibly and ever more complex ecosystem is incredibly challenging for CMOs. It's getting tougher and tougher. And that's what they're paying us for. It's no longer they're paying for us to create 5 ads. In fact, we can create 1,000 ads, but it's how do you get those ads into the right audiences.

And that's really what they're paying for, which is really enabling this output-based pricing, it's outcome-based pricing, and it's also shifting more to tech fees and licensing fees as well. So this will be an evolution, but we're making lots of progress in this area.

To answer your question about enterprise solution scaling. So let's just stay with automotive. This could be JLR. It's certainly true with Ford. So when you begin to solve a marketing problem around content transformation or a customer experience challenge for marketing and you start with the CMO, you quickly evolve that conversation and realize that's an enterprise problem you're solving. Content doesn't live in marketing. It lives as an asset of the entire company.

Customer experience lives as an asset of service, brand of product development. And so the nature of our work usually begins with the marketer and then it expands further and further and further. And soon, we're in rooms with IT leaders, procurement leaders, service leaders. And instead of using their silos to define how we work, we're pulling them together. And with AI, that's collapsing at an even more increased rate of change.

So AI platforms right now are -- they're collapsing the buying patterns with IT buyers used to buy a platform, implement it for years and then draw the business in. Nowadays, there's a really fast iteration cycle. So we're finding ourselves in rooms now starting with marketing, but really extends to all the stakeholder groups.

Can we go to Nico.

Nicolas Langlet from BNP Paribas. I've got 3 questions. The first one on the existing business with clients. which was definitely a weak part in the 2025 performance. Can you tell us a bit more about what happened? Is it related to scope reduction, pricing pressure? Or can you give us more detail about that? And what are the concrete actions you have already implemented to stabilize the business with the existing clients? The second question on WPP Open Pro.

Can you give us an update regarding the rollout, the first feedback and what sort of opportunity you see in the mid- to long term? And finally, of the GBP 500 million gross cost reduction, have you included any benefit from generative AI tools in that GBP 500 million? And if you can share that? And of the GBP 500 million, how much do you plan to reinvest in the business?

Yes, why don't you take the first?

Okay. So look, Nico, it's absolutely the right question. If you look at our performance in 2025, we talked about a drag from net new business of about 150 basis points. So that points to just under 400 basis points from the underlying business. And the majority of the cuts that we saw really came from the creative part of our business.

And as I said in my prepared remarks, it was really an overview, and we did see significant spending cuts, particularly from the start of Q2. Look, we can point to different reasons for it, but there was an awful lot of uncertainty, and we saw heightened volatility across clients. We've talked about the polarization. Many clients, we saw very strong growth during the year, but others cut significantly and at very short notice as well.

And effective, we tend to have more project-based spend in our business. And of course, that's often the first places that get cut when we see that volatility. And I would also just add that as you heard from Brian today, Brian and the team have been incredibly busy in the last 18 months really setting up our competitive proposition for the future, redesigning how we deliver for clients. And that undoubtedly has had some disruption in the business and the underlying business.

And we've been very deliberate in Elevate28 that Brian and the team have done a lot of the heavy lift and their focus is now on execution. So it sort of brings you on to the second part, what are we doing about it. So if you think about that for media. And then with the creative part of the business, we are building an incredible powerhouse within WPP Creative.

We did get in our own way a lot of the time in the past with our silos. WPP Creative will enable scaled capabilities across all of our agencies. WPP Open as well will enable our creative teams to work in a standardized way, and that's everything from big large clients to smaller clients. So it will improve what we're delivering, and that will help both with our larger clients and that tail of clients where we've seen more reductions in spend.

And I think that's really important with creative. Sometimes we get very focused on the headline cost saving, but it really is about creating a more agile organization with fewer silos. And just on the GBP 500 million of growth savings and how much we're going to reinvest. I talked about the in-year savings in '26 being GBP 100 million annualized savings will be GBP 250 million.

All of that we're going to reinvest in 2026. I talked about this priority to stabilize and invest in the growth drivers, we will do that. Look, it's too early to say how much of the remainder we will invest, but I would assume that we will invest as much as we need of that to support our growth ambitions.

I'm happy to say a few words about WPP Open Pro. It's early days, right? We only launched a few months ago. But what we did was basically productize or SaaS-ified certain capabilities from within the WPP Open platform. And we did it to target the mid-market SMB kind of end of the client segment. The clients that would largely look to self-service that kind of capability.

I'm very encouraged actually. We've got a number of deals with clients. We've got a very healthy pipeline against this, albeit it's small in absolute terms. I think the interesting learning from my perspective is our top 100 clients, say, are looking at WPP Open Pro as a way to software enable the long tail of markets that they service. So rather than having full teams on the ground, you can start to see a world where they can software enable their long tail. And that's kind of interesting.

Perfect. Maybe we can go to Adrien.

Cindy, this is Adrien from Bank of America. So I've got maybe 2 questions maybe for Brian and maybe one for you, Cindy. Jon, I know we're talking this afternoon. So I'll leave the financial questions maybe for later. But maybe, Brian, on -- you talked about all the business wins in Q4 and Q1 and well done on that.

Can you tell us like what was the factor or what were the factors behind those wins? And how much of a factor price was behind those wins? And then secondly, I know we've talked about this before, but you put data at the core of your strategy. But how do you solve for the fact that you don't really have, as far as I know, at least a proprietary identity graph compared to competitors? And maybe more for Cindy. So today, we heard a lot about the opportunities. Sorry to come back on the risk.

How much like revenue attrition would you expect in maybe in creative because of AI deflation around the revenue per head, for example, how much would you anticipate for the next couple of years?

Adrien, in terms of the new business wins, everything that I showed in terms of our proposition contributed to those wins. And without going client by client, what I said about every client being different applies to how we pitch business and then how we ultimately service business. So whether that was winning JLR or NCL or the various other wins, each one of those solutions was different.

And the great thing about our platform is it allows that and it enables us to go in and do things differently for clients. So selling cars is different than selling cruises is different than various other clients that we have. So I think that contributed to it. The way that we're structured also helps quite a bit. So we're not going into these pitches as Mindshare or Wavemaker or one of our other agencies, we're going to these pitches as WPP media. And increasingly, we're going into these pitches as WPP. So we get a lot of help from our colleagues at VML and Ogilvy and AKQA and from WPP production.

And the clients see that, and they know that while we're pitching one thing, we're going to offer a full breadth of services over time. All these pitches are competitive, so price is always a factor, but that wasn't a defining factor in any of these pitches. We have a proprietary identity asset.

One of the things that you have to understand is that identity is pretty ubiquitous in the market. So there are lots of companies that provide identity solutions. And it's really an old-fashioned notion of what we need to do to join up disparate data points. So we also have an identity asset called MerLink. We see every adult in the United States and we use that. We also use other partners like Experian when we want to augment that. And because we have a solution that allows us to access any identity asset, it's really not a problem for us.

Having identity is such a small part of what you have to do to understand consumer behavior. What we do have is InfoSum, which allows us to connect to hundreds of other data sources. And instead of those being household addresses or e-mail addresses, these are what are people consuming on TikTok? How are they interacting with creators on YouTube. Those signals are much more important than having a traditional identity asset, which again, is a legacy system and fairly ubiquitous and accessible in the market.

Yes. I would just build -- thanks for your question, Adrien. I would just build on what Brian said. I mean, I've never met a client that doesn't want more for less. That's not a new dynamic. We operate in a very highly competitive market and price pressure is a constant feature, right? But I would say that we probably accept on some level some downward pricing pressure from AI productivity, if you will.

But what we're doing here is creating an organization that can cross-sell more effectively to address the white space within our installed client base and be more effective at converting new business. If you take our top 25 clients, for example, we probably capture at best 1/3 of addressable spend. When we unlock this collaboration and cross-sell opportunity for WPP, we have massive opportunity to offset and grow in those areas.

Why don't you pass it on to Steve, given he's right next to you.

Steve Liechti from Deutsche Numis. Just on the -- some numbers, sorry. You said 5% to 6% gross hit from losses. Can you quantify the '25 and '26 to date wins to kind of give us some idea of a net number to work off as we stand today? So that's the first question. Second, Brian, in the new setup and the new kind of pitch that you're doing to clients, where you haven't won, why was that?

I know things is different, but it would just be useful to hear some insights there. And you also said you had some more work to do as well in your comments. I just wonder from my perspective, how much is the pitch that you're going with the clients now absolutely the right pitch? And what more is there that you do have to do?

It's a very dynamic business. So it's very rare that the right pitch today is the right pitch a week from now or a month from now. So when I say we have more work to do, it's that we're on a constant quest to meet the needs of our clients in a rapidly evolving world, and that's never going to change. Structurally, we're set up to win, and we have been winning.

From a data and technology standpoint, I feel great about where we are. We have the building blocks in place to evolve, not just win today, but evolve as the market evolves. So I feel great about that. In terms of why we didn't win, I say all the time to the team, you can be the best in a pitch, you can be the best on the day and you can still lose a pitch. And there are lots of factors that go into it. Sometimes it's price. Sometimes we don't feel comfortable with where a prospect is taking us in terms of commercial negotiations.

Sometimes it's an affinity for one of our competitors between a CMO that knows a certain team. So there are lots of different factors that go into it. And we're not going to win every pitch, but we need to go into every pitch with the right solution for clients. And then I feel great about getting our fair share and actually exceeding our fair share and starting to win back the market share that we've lost.

Thanks for the question, Steve. I'm always hesitant at this time of the year to give a net new business because there's a whole year to play for, there's a pipeline, et cetera. But let me share some of the data that we've already shared and you'll be able to kind of broadly figure it out. And then I'll just give you some context around the pipeline. So last year, we said that our gross wins were 300 to 400 basis points of drag, and then we ended up at the top end of that. And we said that the net new business impact was about 150 basis points for 2025.

Really encouraging, the gross win impact for 2026 exceeds and that gross win impact in 2025, and that really reflects in recent months, the new business, the better business performance that we've seen, and that's really encouraging. 2025 was a much lower activity year for new business. What we have seen in recent months is the pipeline activity building up again, which is also encouraging. And I would also often get asked, what's defensive and what's offensive?

And it's very interesting when you look at the pipeline and the opportunities, it's less black and white than that. It's oftentimes you're defending some scope, but you also have an opportunity to win more. And so it's getting much more nuanced. But as I said, encouraged by the activity, the pickup in the pipeline and of course, the momentum that we've seen in recent months.

Perfect. I'm just going to do a couple of questions from the webcast, and then I will get back to the room. First one is on the broader strategic shift at WPP to become a more holistic partner to solve challenges for clients. Does this increasingly take WPP into competition with different competitors? And how well do you think you are positioned to win against them?

Yes, that's for me, right? Look, I think we have all the ingredients we need to win. Like we have, as I said, amazing talent, incredible capabilities, fantastic technology and technology partnerships. We have scale. We have the trust of our clients, which is super important. What we need to do now is pull it all together into an integrated proposition and lead with our agentic marketing platform. And when we do that, I think what you're seeing is we're pretty hard to beat for clients that are ready for that. Like all of our clients are on a journey.

Some are really at the very beginning, some are way down the line and most are somewhere in between. But when you see the power of that, turn up in your office and the growth that we can deliver, again, without compromising on data ownership, it's a very strong proposition. So I feel very confident that we're going to be in a great position to deliver this on a repeatable sustained basis.

Perfect. And one more from the webcast before coming back to the room. It's on a very important topic, which is leverage. So I presume for Joanne. A question here about clarifying the leverage framework. You previously guided to a net leverage target of 1.5 to 1.75x. Has this target been withdrawn? And how do you manage the process with the rating agencies regarding an investment-grade rating?

Okay. What we've clearly shared today in our capital allocation framework is our commitment to an investment grade balance sheet and that feels more relevant as we progress through Elevate28 plan feels more relevant than the historic range that we had and we are very committed to that investment-grade balance sheet. And I think, as I said in my remarks, and that's reinforced with the Fitch rating.

I want to spend a bit of time on leverage as well. Leverage is really driven by, obviously, EBITDA and net debt. And our net debt -- our average net debt through '25 has actually come down slightly. And so our elevated leverage as a result of that lower EBITDA. And hopefully, as you've heard today, and we presented a plan that is going to get us back to growth. And obviously, with that, we'll follow improved margin, profitability, improved cash generation and we'll help that out.

We also talked about the importance of reducing our gross debt. We talked about the role that the portfolio review will play on that. And over the course of Elevate28 we expect our leverage to come down.

We do have liquidity at the end of the year of GBP 4.4 billion. Our maturity profile is 5.8 years. We recently refinanced our bond, et cetera. So we're in a very strong position. In terms of the rating agencies, I mean, many of them are here today. And we have a very strong relationship with the rating agencies. We engage with the rating agencies, we listen to what's important from their perspective. And like all stakeholders, we take that into consideration as we ensure that we're making the right decisions and taking the right actions to ultimately deliver long-term returns for all of those stakeholders.

Let's come back to the room. Can we go to Julien at the back. Sorry, yes, when you get the microphone back. Sorry.

Julien Roch with Barclays. Looking at Page 41, you have a production CAGR over '24, '28 of minus 1% for the industry. I thought it was a growing part of agency services. So why the decline for the industry? And what can WP production can grow at? That's my first question. Then on organic, accelerate organic growth in 2028, previous CEO had a 3% plus organic guidance. So if everything goes according to plan, what's your cruising altitude? What is your ambition?

And then lastly, moving from holding company to a single company, does that mean one P&L per country? Or will you still have separate P&L for the new 4 entities? Or will you still have separate P&L per agencies?

Sorry, Joanne, I think you're on.

I might need to repeat your second question, but let me answer the first and the third first, and we can come back to that. Yes, look, on production, and I shared this in my remarks -- prepared remarks that there's subdued growth in production overall. That's not the way to look at what production can mean for our business and how that can contribute to our growth.

Hundreds and hundreds of millions of dollars that our clients spend and their production today goes outside of WPP. It goes to a variety of third-party providers. And hopefully, as you saw today as well, production is being completely revolutionized and transformed by AI. We talked about particular parts of production, high-velocity production, which is growing at 38%. That's a very small part of the production market today, but it is a huge opportunity. And as the largest agency globally and with the investment that we're making in content studios and with our team, we're incredibly well placed to take advantage of that.

And also with the WPP production consolidation, we are much fit for purpose to really internalize a lot of that client spend, which we can, in an integrated proposition, make it more efficient for our clients. So it's really, really a win-win and our clients are getting the very best of production capability in the market and that AI investment as well. In terms of the P&Ls, so how we will operate and maybe I'll start with WPP Creative and then look at it overall. So the WPP Creative will run on P&Ls.

The regional and market models will mirror media. And in certain markets as well, actually, those media and creative and production operations and teams will be even more integrated. But we will have one P&L for WPP Creative for the markets. For the agencies, we will still measure them on their revenues and their contributions, but that will not be the lead P&L.

And then across the other 4 areas, of course, they will each have their P&Ls that will roll up to WPP overall. I think the most important thing is as we talk today about the incentives, we have redesigned our incentive model so that it's much more aligned -- everybody is much more aligned on a WPP outcome, and we struck that balance right where it's still incentives that people can really influence as well. So a much simpler P&L structure even if I did.

Just to build on that because I'm trying to see what's behind your question. Please don't underestimate the enormity of the change that we're making. We're moving from hundreds of stand-alone operating companies to 4 operating units across 4 regions.

And this common incentive that is linked to WPP's overall performance is going to change behavior in very dramatic ways. It's going to take all the friction out of the organization. It's going to make us much more client obsessed. It's going to enable us to put the right resource in front of the right client at the right time. So I just wanted to say -- please don't underestimate what's involved in making these changes that we're proposing.

And then, Julien, I think your second question was around our ambition on organic growth, if that's right.

That's right.

And I said we weren't going to give specific medium-term targets, and that was quite intentional. We talked about the 3 phases. The job that we have to do as a management team in '26 is to stabilize the business, continue to build on that new business momentum and improve our client retention. And that will get us back to growth at some point during 2027, and then we will accelerate from there.

So I'm intentionally not putting a number on it, but you can -- that will give you a sense of what we're expecting in terms of the trajectory.

No, I understand that you don't want to give us like a '28 numbers, but it's more -- actually, it's probably more a question for Cindy, right, is what's your ambition in terms of growth rate in 5 years, in 10 years? What would you consider a success for WPP is achieving the previous target of 3% or you actually have more ambition than that? -- without giving us a year or whatever, but what's the...

I'd like to get to the end of Elevate28 capturing our fair share of the market and then go beyond. But look, we're -- in the short term, I'm absolutely focused on delivering growth for clients, building on our market momentum and stabilizing our performance. And that will remain our short-term focus.

Can we go with Annick?

Annick Maas from Bernstein. And first question is, as a company which is employing 100,000 people in a world where change is becoming more and more -- it's accelerating basically, how can you stay nimble and keep up with this pace?

Or what are the challenges here? The second one is on AI, and this is probably for and it's more conceptually. I guess AI is leading to staff efficiencies in terms of absolute numbers of stuff, but you also have an unprecedented industry structure with one less players. So how do you think conceptually about number of staff and absolute and staff cost inflation in the next years? And then you spoke about the rationalization of the portfolio. I suspect you speak with a few players. Who are these potential buyers?

Good. Well, look, I'll say in terms of staying nimble, like that's a continuous process, right? We invest in skilling and building new capabilities in our employees on a continuous basis. We have creative technology apprenticeships. We have all kinds of formal AI coaching and training that we put our people through. But I think it also -- it's about also staying close to our partners. We have what we call forward deployed engineers.

So we take resources from our technology partners. We put them into our organization. We train them on our platform. And then we send them into clients to co-innovate on new solutions. So I think just being in and around this environment creates a very, as I said, very AI native mindset where we can just continuously build these capabilities. These aren't capabilities you build through formal online training. You have to get your hands on it and actually put it to work for clients. And that's -- that's really how we're staying nimble and in front of things. But do you want to take the question on...

Yes. And exactly through the questions, I think. Nico, I think it was you asked me about AI efficiencies and I didn't answer. Look, as we look at the business going forward, undoubtedly, if nothing else changed, we can do more with less. So we can do a lot more with a lot fewer people, but it's never just as simple as that. What we're able to do now for our clients is before we might have created 5 ads and we were managing that.

Now it might be 1,000 ads and they're very different how those ads need to be used to target audiences and drive returns. That's requiring different skills and different talent in the organization. Now some of that, we are upskilling our people, some of that we're bringing new talent into the organization. And if you think about the plan that we shared today, we will be reallocating talent around the business.

So yes, we will be delivering cost savings. And in people -- in a business where most of our cost savings are people, that will mean a reduction of certain heads, but we will be reinvesting back into talent, different types of talent, commerce talent, influencer talent, much more analytics talent. We already have that at scale today, but really, those are the areas that we will be investing in and with that will come a different profile.

In terms of how we measure it, the most important metric will be revenue per head, and that will reflect also our ambition to grow and do more with people, decouple our revenue model from our FTEs. And that's really all around our client delivery. In the back office, there's an opportunity, and we're already doing it in pockets. How do we leverage open, how do we leverage AI to drive productivity savings in our back office. And with the plans over Elevate28, we will do much more of that, much more at scale and on a standardized level. Just in terms of the question, is there AI productivity you asked built into the GBP 500 million.

There is on the back office side. But on the front office, the way we think about it is we are creating productivity efficiencies in how we do things, but we're reinvesting that back into delivering even more value, even more outcomes for our clients. And then that feeds into the evolution of our commercial model as well. So that's all built into our plans. But we don't pull out and say we're going to deliver productivity savings from that delivery. We think about it much more holistic. There was a third...

Portfolio.

The buyers. Well, look, as I -- as we shared and particularly in the people business, incredibly sensitive, and we don't -- we're not at a point where we're ready to share externally. What is important is that we've seen an opportunity where we have embedded value of great assets that we have, and that will give us greater degree of financial flexibility and enable us to target our capital allocation more. And for some of these assets, there are many buyers, some of them are attractive assets.

We go with Ciaran.

A couple left for me. Joanne, maybe just on your comments on 2027. Can you clarify how we should understand the comments of growth during 2027? Should we think about that as implying a positive exit rate on like-for-likes rather than necessarily positive like-for-like growth for FY '27 in total? And then maybe, Cindy, could you just give us a bit more color on the new incentives? I guess, how do you kind of balance it between individual remit and kind of growth targets?

And I guess, just in terms of what they look like versus the legacy incentive structures, how different are they? And then just finally, I mean, on the legacy structures, do they roll off over a period of time? Or what is that phasing period between the new structures and the old structures going at?

Very quick answer to your first, it's the latter. So it's during 2027. So you should think about it as a positive exit rate rather than for 2027 as a whole.

So on the incentives, basically, if you're sitting in an operating unit, your incentives are 50% tied to your operating unit and 50% tied to WPP. If you're in WPP as part of a corporate function, you're 100% WPP. If you're a GCL, you're paid on your client growth. It's that simple. And it's dramatically different from where we are today, where if you're in an agency, you're paid on your agency results primarily.

So that is very, very different. And that's why I think it's going to unlock very different behavior, much different collaboration. In the past, our agencies competed with each other. That was the model. Today, when we go into a pitch, we cast the right resource for the right client at the right time and -- it enables that. It enables a much more client-centric approach to the business. Just to add, we're implementing that in 2026.

I got a couple of people in the wings. I'm going to start with Anna, I think, at the back, and then we'll come to you, sir.

Anna Patrice from Berenberg. A couple of questions from my side. So you were talking about the evolving remuneration part from time and material to project-based. So maybe how it has evolved in the past over the last couple of years? Like what's the share of time and material overall? And where do you see that going into the future? And what could be the impact on your profitability? That's the first question.

The second question on the capital allocation, you were also referring to M&A. So just quickly, maybe what are you looking for? What are the things that are still kind of white spots for you that you would like to enforce within the overall WPP?

Shall I take the first one?

Yes.

So just in terms of that evolution, and it's -- that's the way you should think about it. This will be an evolution in our commercial model. And this is an evolution for the industry and for our clients as well. So there's 3 key areas that we look at.

One is output-based pricing and where we see more and more of that is in our production business today. We then have performance or outcome based pricing. We've talked a little bit about that. I mean we've always had an element of that in our fee structures with clients, but that's becoming increasingly important, particularly as Brian had shared today how we can measure that outcome more. And the third element is just tech and labor fees as well. That can be through licensing fees, through bundles, through subscriptions, et cetera.

And all 3 of those we have in our business today. So with many of our clients for parts of work that we do for them, we're working with our clients to understand what works best, what aligns structures. clients we have going much more major outcome and others, it's more of an evolution of it. So really that's the way to think about it. So -- but very, very much encouraged by the shift that we're seeing. And as we are more and more confident in what we can deliver for our clients, of course, that creates more stickiness with clients.

We see a big opportunity to enlarge the scope of what we do for clients. And you asked specific on margin on a per unit basis, we often say, of course, if you just look at it and everything else is the same, it would be deflationary in revenue because we can produce units at a lower cost. But actually what's more important, what clients are paying a premium for is all of that brand safety, the culture strategic input that we're bringing and how we can drive more growth. We're able to do that in a much more efficient way. And so we're looking at this to be ultimately over time, margin enhancing for us.

Yes. On your question on M&A, again, I would just repeat that Phase 1 of our plan, we are really deeply focused on stabilizing our performance, delivering growth for our clients and building on the current market momentum that we have. As we get into later stage and free up capacity to invest in growth, we certainly will.

And I would -- I stand by the statement we have everything we need to win. But as we create capacity to invest, I'll be looking to enhance in those growth areas that we mentioned, media, data, commerce, social influencer and the growth areas. But that's not the short-term focus. Short-term focus is on stabilizing our performance.

Gentlemen over here has been by patient.

Jerome Bodin from ODDO BHF. Two questions. The first one on the WPP creative. So just to make sure I have properly understood. Will the idea be to pitch from WPP creative or from at the network level? That's my first question. And then also still on WPP Creative. So I have understood that the idea is to improve the mobility in terms of talent between all the networks.

So how do you plan to make the improvements from a pure HR perspective in terms of systems and HR architecture? I think it's not so easy. Second question on disposal. So I fully understood that you can't give any names, but could you maybe explain what could be the idea in terms of disposal? Will it be an asset disposal at 100%? Or could you partner with someone with a minority stake? And then linked to that, could we have an update on Kantar on the stake in Kantar, where you are? And what do you plan?

What was the last question?

Kantar.

Jon? You want to say a word on WPP Creative, our CEO of WPP Creative.

You can see where it came from. Thank you. Yes, first of all, on WPP Trade, it's -- after being at some of these investor meetings in the past, it's nice not to come and talk about a big merger that we're going through in the creative agencies. I've done that before. We all know that game. We've got -- in the analysis we've done in the last 6 months, we've got really powerful agencies. We've done that work in these last 5 years.

And I saw that just this week, the drum creative rankings, #1, Ogilvy, #2 VML. It's not a super power we want to walk away from. So that's thing number one. And so I'm really excited about the strategy of not merging things, but getting behind our agencies. So that's a precursor to your first question, which is -- we're not using WPP Creative as a brand or an agency. It's not an agency. It's an operating system lets those great agencies, those very creative agencies operate together because we have a couple of beliefs, and we heard this from our clients.

Our clients love our agencies. They love the choice. They love the creativity, they love the diversity, but they found it hard to work with them and found that either the clients or our GCLs, our global client leaders had to do the navigation, and that was difficult. So we're doing what we think is the best of both worlds, build around these great agencies, highly recognized, very creative agencies that make it easier to navigate. So WPP Creative is simply a way to navigate. It's an operating system. It's not an agency with a very light layer of infrastructure between them to make that happen.

And if we do that, we will grow better than we ever have before as WPP and as creative agency. So if we unite them in the right way, which we are, -- we have the second part of your question, which is the ability for talent to move around between those agencies or to team up for client assignments. That's something we haven't had as well as we should have in the past. So that mobility, the second part of your question is key, and that's one of the reasons for the group. If we do this, we can also put better capability across all our creative agencies.

Cindy talked about enterprise solutions. Jeff talked about it. This will be different than other holding companies creative agency groups, if you will, because of the embedment of everything Jeff and Cindy talked about with Enterprise Solutions. So to your point, WP Creative is not an agency. It's an operating system lets the great agencies. The creative agencies of WPP be great individually and be great together; and two, it allows for talent mobility.

Jerome, thanks for your question, and I hope you'll forgive me for not answering it. We're not going to name any assets or give any further guidance today. We've carried out a complete strategic review of our group. We've identified assets that we feel we're probably not the best owners for in the long term. We've started a formal process. And as soon as we have anything to report, we will. But thanks for the question.

And I'll just follow up with Kantar, which you asked specifically about. I mean, Kantar, obviously, they sold the media part of the business last year. And they now have 2 divisions, Numerator Worldpanel and Kantar Brands. And those 2 divisions, they've done a big lift in terms of those 2 setting them up to operate independently, and that will be completed in the next few months.

Obviously, that gives more flexibility in terms of realizing value from that business for both ourselves and BN, and we're very aligned with BN on the time lines for that, but nothing really more to add. I mean I think just specifically to your question on could this look like minority sales? Yes, it could. So there may be some assets that we bring majority owners into as well.

And Richard.

I will keep it to 2 questions. Richard Kramer from Arete Research. Cindy, you mentioned productizing WPP Open and Pro and for the mid-market in particular, do you see offerings like Meta, Andromeda and Google Pomelli as fundamentally competing with WPP? Or do you see them as somehow complementary?

And my question for Brian, there's been a lot of recent discussion and disclosure around principal trading and rebates. How are you going to address this question of transparency going forward? And is this an opportunity in the market for you to take some more share?

Thanks for your question, Richard. As I said, there's a lot of point solutions out there. Some are tied to specific platforms. I think when companies start to stack all these up, -- it becomes expensive, complex and you break the workflow. So I don't -- I think what we have is fundamentally different. It's an end-to-end platform. We are agnostic and independent in terms of how we invest our clients' media budgets. And we have relationships with all the major platforms anyway.

So I think what's behind your question is, are we going to be disintermediated by the big tech players? I don't think it's that easy to just turn on a solution in a client environment and watch the magic happen. And this involves real transformation and our clients need help. As I suggested, their data is not always ready. Their people aren't always ready. Their systems aren't always ready. So I see a real opportunity in being that intelligent orchestration layer. I don't see -- we're not seeing a disintermediation dynamic play out in any way.

In terms of principal Trading, building compelling performance-oriented products has always been a part of our business, Richard, as you know. In fact, WPP was really a pioneer in building products that drive value for clients. In many cases, those are part and parcel of the services that we provide our clients. And in other cases, it requires us to invest, invest in technology, invest in our trading partners, invest in sources of data and then pull all of that together on behalf of our clients to drive performance.

In a lot of markets for a lot of different channels that we service, we do sell principal media products to our clients. And those products are actually built with our clients. And they are asking us for more, frankly. Both Cindy and Joanne touched on the fact that our clients, in many cases, are CMOs, CMOs are under tremendous pressure to prove the value of marketing and grow their business. And so in many cases, they come to us and they say, how can you help us navigate addressable television? How can you help us navigate social media or commerce or retail media.

And with our clients, we design products where, in many cases, we have to invest in those products. So it's a part of our business, and it's a growing part of our business, and I continue -- I expect it to continue to grow over time. In terms of us taking share, I do think that we can take share through our investment in those products. Again, if you come back to our strategy with respect to technology, we're not trying to sell assets that we acquired for billions of dollars.

We're trying to work with technology companies, data companies, media companies to connect these things to build products that drive better performance. So in many ways, we are more impartial, more objective in how we construct our principal-based media products, and therefore, they're more compelling to our clients, and I expect they'll buy more of them over time.

Now we promised to get you out by midday. I've got a couple of questions, 3 from the webcast, and then we'll draw a line under it. But first one for Joanne, once again on leverage and the balance sheet. Could you please let us know if you intend to refinance the September '26 bond out of cash or by issuing another bond? That was the first question.

That's easy. We've done that. We refinanced in December, our GBP 1 billion bond, which covers that September maturity and our next maturity after that isn't until May '27.

Perfect. Second question, we've had a couple of these, and so I'm synthesizing them, but it's -- for you, Cindy, it's about the transition from moving from the Board to being a CEO. Can you talk about the challenges and surprises during that process?

Gosh, how long do we have? Well, look, I think on balance, it was a strategic advantage because I knew the team, I knew the business, I knew many of the clients. So I think I avoided the 6-month onboarding experience that perhaps an outsider would. And actually, I had -- as I said, I had a thesis even before I arrived in the role. And so I just think it was a strategic advantage and helped me get to where I wanted to get to faster and actually started making changes relatively quickly. So -- but there's always surprises along the way, right? We'll save that for another day.

Final question. A couple of people have mentioned the Enterprise Solutions capability, the fact that it's 13% of revenue, and that feels high. Where does it come from? Is it -- where are the assets based? And what's their genesis? It might be one for Jon and Jeff.

Jeff, do you want to take it?

Sure.

Okay. Go forward.

Yes. So the nature of where it came from is 10 years of acquiring companies, 10 years of building capability inside of our creative agencies inside of really every company inside of WPP to be relevant was expanding into new asks. So they were expanding into CRM. They were expanding into technology because their value proposition required them to do it. And so what it happened over the years is that we had distributed capability all over the company.

And through the acquisitions, integrations, as Jon mentioned, specifically when VML and Wunderman Thompson came together, we began to pool all of these assets together, and we could bring them to clients in new ways that didn't require them to, I think Cindy said, shop. They could come together in a holistic offering. So where would you have found it? You would have found it in all the different P&Ls, all the different regions, all the different markets.

And so really, what we're doing now is just we're bringing them together, and we're putting under a framework where not every company or a capability is competing on to itself. And so for the first time, you're going to find it seen outside of the context. This isn't a start-up. I mean we've been doing this for a while. We've been competing on this for a while, but you'll just find it under VML. You would find it in Ogilvy, you would find it distributed throughout the network. So that's where it came from.

So we're strapping rocket boosters to...

Yes. That's right.

WPP Enterprise Solutions. Good. Shall I wrap? Okay. Super. Look, I want to thank you all for joining us today. I mean I've met many of our shareholders individually over the past few months, and I'm genuinely always grateful for your insights and for your support. And thank you. I want to thank you from the bottom of my heart for your trust in us. And we really look forward to sharing our journey as we move forward. So thank you all for coming and for listening. Thank you.

Good morning, everyone, and thank you for joining. For those of you that I have not yet met, I'm Cindy Rose, and I'm delighted to have taken on the role of CEO of WPP 60 days ago.

I want to speak to you candidly today. I acknowledge that many of our investors have been on a challenging journey with WPP, and today's results underline those challenges. I've read the commentary, followed the share price performance. I fully understand your frustration and the need for action. Our recent performance has not been acceptable. I value our shareholders, and I thank you for your support, and I look forward to engaging with you over the coming weeks and months. Please rest assured that a key priority for me and my team is to strengthen our financial performance and in doing so, deliver improved shareholder returns while continuing to deliver great success for our clients.

I'm going to hand over to Joanne to take us through the details of the quarter. And in a few minutes, I'll come back and share with you some perspectives on why I'm here and what I've observed over my first 60 days.

Thank you, Cindy, and good morning, everyone. So let me take you through some more detail on our third quarter 2025 performance. Starting on Slide 5, like-for-like revenue less pass-through costs fell 5.9% in the quarter, which is weaker than expected and leaves our year-to-date like-for-like performance declining at 4.8%. The timing and phasing of new business losses was as anticipated and represented a drag in the quarter, in line with expectations. I will discuss the detail in terms of movement by geography, capability and client sector shortly, but underlying client spend continues to see a high level of polarization and aggregate volatility with a weighting towards caution.

In addition to the organic decline, we continue to see the negative impact of disposals and in particular, FGS Global, which represented a drag on reported sales of 3.2%. This effect will tail off in the fourth quarter when we anniversary the sale of FGS in November.

Finally, FX remains a headwind with the impact in the quarter equivalent to a 1.7% drag on net sales, largely driven by U.S. dollar weakness and mildly offset by a strengthening euro. Overall, revenue less pass-through costs was down 11.1% in the quarter.

Turning to Slide 6 and new business, where overall, we saw a slightly better performance in the third quarter. Within Media, we saw the retention of M&S in the U.K. as well as wins with TruGreen in the U.S., Suncorp in Australia, and Maersk and Mastercard globally. We have to acknowledge, however, that the quarter also saw client losses, including Bayer, and we know that based on convergence data, overall levels of media activity remains subdued relative to historical levels.

Looking beyond Media, Creative new business wins included an expanded global mandate from Haleon, PwC globally and the Financial Times in the U.K. We continue to see robust momentum within PR, design, brand and identity with wins from Stellantis, Lipton Teas and Tourism New Zealand.

Moving to Slide 7 and performance across our businesses. Global Integrated Agencies experienced another challenging quarter, posting a like-for-like decline of 6.2%. Within this, WPP Media saw a like-for-like decline of 5.7% compared to a reported like-for-like decline of 4.7% in the second quarter. This takes the 9-months performance to a like-for-like decline of 3.9%. We expect growth to deteriorate further into the fourth quarter, reflecting the impact from in-year client losses, which start to ramp down from the beginning of this quarter.

There are two factors driving our Media performance. Firstly, the impact of net new business. At a group level, our expectation for the year remains a net impact of new business to be somewhere between 100 and 150 basis points drag on our performance. And we've also indicated that the impact of gross client losses will be between 300 and 400 basis points. These losses have been more skewed to Media than other parts of the business and are therefore having a disproportionate impact on Media's overall performance.

Looking beyond the impact of account wins and losses, we have also seen additional volatility in client budgets. To be clear, there remains a fairly significant degree of polarization. Some markets, some client categories and even some individual clients in more challenged sectors are seeing very robust growth. But on balance, we have seen pressure on spending amplify the impact from assignment losses. Some of those losses begin to ramp down from this month, which will result in a further step down in Media's top line performance in the fourth quarter.

It also seems prudent to mention at this stage that with the profile of net new business performance year-to-date, the headwinds from growth client losses will sustain into 2026 at a broadly similar level as we have seen in 2025. It is too early to talk about the impact of net new business in 2026. We still very much have the opportunity to mitigate the impact of historic losses with new mandates. And in this context, we are encouraged by an increasing level of recent activity in the new business pipeline with that pipeline more tilted to opportunity versus risk than it has been in the past 12 months. Alongside this, there remains a significant opportunity to expand scope with existing clients, which we remain very focused on.

Looking beyond our Media business, like-for-like for our other Global Integrated Creative Agencies fell 6.5% in the third quarter, which compares to a decline of 7.2% in the second quarter. We continue to see signs of stabilization at AKQA, building on sequential improvement in growth through the first half. And a more robust, albeit still negative performance at VML, while Hogarth returned to growth in the quarter. Ogilvy continues to see impacts from a more challenging performance in the U.S. and Germany by geography and CPG and technology by client segment.

Again, it is difficult to completely attribute this to the macro given the polarization of performance across sectors and geographies, but we do believe aggregate market uncertainty is a significant contributing factor.

Turning to Public Relations. Like-for-like declined by 5.9% in the third quarter, following on from a decline of 7.8% in the second quarter. We continue to note a divergence between a more challenging performance in Europe and better new business momentum in North America.

Finally, Specialist Agencies saw like-for-like revenue less pass-through costs declined 2.2% in the third quarter, following a decline of 1.9% in the second quarter. This reflects particularly strong and continued growth from CMI Media Group, our specialist health care media agency and a return to growth for both Landor and Design Bridge and Partners, offset by weaker performance across our other specialist agencies.

Turning to Slide 8 and performance by region. North America declined by 6% in the third quarter, following a decline of 4.6% in the second quarter, lapping another tough comp from 2024. The key drivers of this performance were WPP Media and Ogilvy, reflecting a combination of client losses and client spending cuts. Meanwhile, Hogarth, Landor and spec coms all saw growth in the quarter.

By sector, we have seen continued weakness in CPG and the third quarter saw a step down in tech and digital services. By contrast, healthcare delivered a stronger performance with high single-digit growth.

The United Kingdom declined 8.9% in Q3 compared to a second quarter decline of 6.5%, reflecting a more challenging quarter-on-quarter comp. Performance was impacted by Media client assignment losses with growth in retail offset by pressure on CPG and automotive. Given the impact of account losses, we expect trends in both the U.S. and the U.K. to continue into the fourth quarter.

Western Continental Europe saw an overall like-for-like decline of 4.4% compared to the second quarter decline of 6.5%. We note particular weakness in Germany during the course of the quarter, impacted by client spending pressures across the government and automotive sectors in contrast to a more robust performance in Southern Europe, in particular, in Spain.

The Rest of the World declined 5% in the third quarter compared to a decline of 6.8% in the second quarter. Within the mix, we note declines in China started to moderate with a third quarter decline of 10.6% versus a decline of 16.6% across the first half. We have also seen a return to solid growth in India, which was up 6.7% in the third quarter versus a flat performance across the first half, driven by improved performance from WPP Media. Central and Eastern Europe saw a robust performance, up 1.3% across the third quarter, while the Middle East and Africa was stable.

Looking at Q3 performance across our client sectors on Slide 9, I want to highlight that this reflects growth across our designated clients, which represent 83% of our net sales. CPG continues to be challenging with a decline of 6.7% during the quarter, and this follows from a 4.2% decline in the first half. Automotive too continued to be weak, down 6.8% in the quarter, driven by client losses and cuts to client budgets. The technology client sector showed a slowdown in the third quarter with a decline of 4.5%, impacted by a client resignation earlier in the year and with a fairly high degree of polarization between clients. By contrast, healthcare has returned to good growth with like-for-like of 6.7% in the quarter, reflecting new client wins as well as growth with existing clients.

And moving now to our net debt, slide 10 shows the movement to the end of September with adjusted net debt at GBP 3.6 billion, stable year-on-year, but up from year-end, reflecting our typical cash cycle. Looking towards year-end, as you know, we don't guide on working capital. And as we've always said, the position at the year-end can be volatile. However, a combination of the strong working capital performance in 2024, plus a lower year-on-year volume of fourth quarter billings in our Media business with its negative working capital profile will place additional pressure on our working capital at the end of the year and therefore, on our spot year-end cash position.

In addition, we expect a lower level of incentive expense year-on-year with the cash effect of this felt in 2026, resulting in additional working capital headwind this year. Average adjusted net debt better captures the normal pattern of working capital moves across the year, and this is slightly down through the first 9 months of the year at GBP 3.4 billion, benefiting from the impact of the FGS Global disposal annualizing.

Looking at our leverage metrics, while average net debt has continued to come down, the headline EBITDA implied by our guidance has also come down relative to expectations. At the first half, our average adjusted net debt to headline EBITDA ratio was around 2x, and we expect it to be slightly above 2x at year-end.

While bringing our leverage down is a key priority for us, I would note we have an investment-grade balance sheet, which we are committed to retaining, a strong liquidity position and a broadly distributed debt maturity profile. The weighted average maturity of our GBP 3.8 billion of bond debt is 6.1 years, and this has an average coupon of 3.5%. Meanwhile, our total available liquidity across the group stood at GBP 2.9 billion at the end of September, including a GBP 2.5 billion RCF, which matures in February 2030. Neither our bond debt nor our RCF have any covenants, and our credit remains investment grade.

And finally, turning to our guidance for the full year on Slide 11. Having set our organic growth guidance range of minus 3% to minus 5% in July, based on performance in the third quarter and our expectations running into the fourth quarter, we are revising our like-for-like guidance to minus 5.5% to minus 6%. Although we do benefit from an easier comp in the fourth quarter, the continued volatility in client spending patterns, coupled with the fact we have a limited cushion from net new business to absorb this heightened volatility is leading us to approach our guidance for the full year with a high degree of caution.

In light of our revenue guidance, we anticipate that our headline operating margin performance, which is guided to decline 50 to 175 basis points, will be at the lower end of this range and around 13%. We still expect adjusted operating cash flow before working capital to be in the range of GBP 1.1 billion to GBP 1.2 billion. I've already highlighted some working capital considerations and our other modeling assumptions are unchanged.

So thank you, and I will now hand you back to Cindy.

Thanks so much, Joanne. Let me take a couple of minutes to share with you why I'm here, what I've observed over the last 60 days and some of the core principles that will underpin my approach going forward. But let me start on an optimistic note. This is a great industry with a multiyear track record of delivering growth, expanding margins and realizing significant returns for shareholders.

I took this job because I believe there's an exciting growth opportunity ahead for WPP. I've known this company for 15 years as a client, as a technology partner and most recently as a member of our Board of Directors. I wouldn't be here right now if I didn't believe that we have what it takes to win.

We have strong foundations and the ingredients needed to succeed, amazing clients that represent the largest, most well-known brands in the world, strong capabilities, world-class talent that spans media, production and creative, some of the most consequential agency brands in the market, unrivaled global scale and reach and market-leading technology and technology partnerships that give us a real competitive edge.

This is an exciting platform to build on. But our industry is at a critical inflection point. The era of AI is here, and it's moving faster than any technology we've ever seen before. AI is fundamentally reshaping the industry and transforming how we work, how we serve our clients and how we innovate. AI is reinventing every aspect of the marketing workflow from market research to brief writing to creative ideation, synthetic testing, content production, audience insights, media planning, campaign activation, measurement and real-time optimization, all fueled by advanced AI-powered data models.

I've spent more than 3 decades leading through technology disruption and finding the path to growth, and I've seen firsthand how quickly AI can reshape entire industries and the rewards for those who seize first-mover advantage. WPP has built differentiated data and AI capabilities that we've been investing in for the past several years. We're in a strong position to lead the market and support our clients as they transform their marketing functions for the era of AI.

WPP Open is our agentic marketing platform that enables us to deliver next-generation modern marketing services to our clients, now supercharged by the integration of InfoSum. At the core of this platform is Open Intelligence, our large marketing model, which connects client brand data to data from across our network and from over 350 partners through a privacy-first approach enabled by AI. This approach delivers better business outcomes for our clients with more precision and impact than ever before and frees up humans to spend more time doing what humans do best, building culturally-relevant brands that consumers love.

I personally believe there's never been a better time to be in marketing. You could even say that AI will usher in the golden age of modern marketing. And WPP is uniquely positioned to deliver on this vision and support our clients as the trusted partner of choice as they navigate through an increasingly complex world, rapidly evolving technology landscape, shifting consumer behavior and resource constraints. And all of this gives me great confidence that WPP has an exciting growth opportunity ahead.

That said, we need to face into our relative recent performance, which, as I said earlier, is unacceptable. In my first 60 days, I've been moving at pace to identify and understand the problems. Fundamentally, I believe WPP has been moving in the right direction, but we just haven't gone far enough or fast enough in adapting to the evolving needs of our clients.

I've now met with most of our largest clients, and they were generous with their feedback, most of it incredibly positive. But some of our clients indicated that there was more we could do to generate value and to be a better partner to them. Clients are telling us that they want our offer to be simpler, more integrated, powered by media, data and AI, efficiently priced and designed to deliver growth and business outcomes. This feedback provides an excellent blueprint for what we need to do differently going forward.

In addition, it's clear that we need to significantly improve our execution with singular focus on client acquisition and service delivery excellence, strengthening our go-to-market, dramatically simplifying how we organize ourselves internally as well as systematically building a high-performance culture.

And speaking of high-performance culture, we've already begun to reshape our leadership team with Devika Bulchandani taking on a critical role as Chief Operating Officer with a focus on growth and ensuring world-class client experience; Laurent Ezekiel moving into the role of Global CEO at Ogilvy; and Michael Frohlich rejoining WPP in the role of Global Chief Marketing and Corporate Affairs Officer with many more changes to come.

I also believe we have an opportunity to leverage our data and AI advantage to expand our addressable market by pushing harder into enterprise and technology solutions. Technology partnerships are critical to our future success and a clear source of competitive advantage. I will personally be leaning into these relationships to ensure we're maximizing our opportunity. For example, earlier this month, we announced a new expanded agreement with Google, an incredibly strategic and groundbreaking partnership that provides us with preferred access to Google's advanced AI models and tools, resources to co-innovate customized AI solutions for our clients and enhanced AI skilling for our people.

WPP and Google's shared commitment to innovation means that our new solutions are used and validated first within Google's own marketing operations. Partnerships like this one drive return on our AI investments while supporting client success and new business pursuits. Just last week, we launched WPP Open Pro, a new addition of our WPP Open AI platform that empowers brands to plan, create and publish their marketing campaigns with more control than ever before.

This is a strategic move to expand our addressable market and serve the long tail of smaller companies and emerging brands who may not be in the market for the sort of full service offer that we typically provide to large multinational clients. With WPP Open Pro, clients can choose to self-serve for some aspects of the marketing workflow and then complement this with a range of managed services from WPP. We can tailor a customized approach for these brands and grow as they grow.

In the last 60 days, we've already made a number of bold and decisive moves that hopefully give you a sense of how I will approach this role, and you can expect more of the same in the months ahead. My team and I are hard at work on our road map for the future, and we're planning to give you all the detail of our strategic plan as well as our financial framework early in the new year.

You can expect this road map to reflect the core principles I just articulated: one, simplifying and integrating our client offer and harnessing our data and AI advantage; two, significantly improving our execution and building a high-performance culture; three, expanding our addressable market through enterprise and technology solutions; and fourth and finally, strengthening the financial foundations of the group and improving our performance through operational efficiency and a disciplined approach to capital allocation.

Those are my initial observations in 60 days. I do understand that you will have questions, and I ask for your patience as we work through the detail. I look forward to coming back early in the new year to lay out the full strategic plan and financial framework. But to be clear, this will not be a period of inaction. Between now and then, my management team and I will be working at pace to improve our performance with a real sense of urgency while building a detailed plan for future growth and success.

So let me close by saying that my ambition for WPP is sky high. We are committed to doing the hard work it will take to turn this business around. We know it will take a bit of time to do so. We also know what it takes to win. We're optimistic, we're energized and we're confident that we're building the right plan and the right culture to secure a bright future for WPP, our people, our clients and our investors.

Thank you all so much, and we're now happy to take your questions.

Thank you very much, Cindy. Good morning, everyone. My name is Tom Singlehurst. I'm the Head of Investor Relations for WPP. We'll now begin the Q&A session. In terms of housekeeping as Lucy at the beginning of the call [Operator Instructions]

With that said, it would be great if we can take the first question from Laura Metayer.

Laura Metayer from Morgan Stanley. Cindy, thank you for giving us a first look into your strategic update. I have two questions today, please. The first one is on the lower spend from existing clients that you've been seeing. Just wanted to dig a little bit more into this, if you have a bit more details on what's happening here. Are you seeing lower spend from existing clients in some specific areas of your business? Would you say that AI is having an impact on some of your business? I'm just curious why you're seeing this and some of your competitors are not.

And then the second question is on the recent WPP Open Pro announcement. Can you give us a little bit of a sense of what's the competitive landscape like for the SMB market? And who's competing with your offering? And is there a potential risk that this cannibalizes some of your business with your smaller clients moving to self-serve?

Thanks, Laura. We'll pass the first one over to Joanne to answer and then maybe Cindy will build on that and answer the second question. Joanne?

Thanks for your question. If I just talk about the nature of the spend that we're seeing that is getting cut, it tends to be more the project work or delays to work that the clients have commissioned us for. And across sectors, where we're seeing the biggest step down in Q3 is CPG, auto, and we've seen tech decline as well in the quarter.

Now what I would say is there is a high degree of polarization within each of the sectors. So we are seeing some clients continuing to spend and healthy growth rates with them. But on balance, we're seeing more declines across those three sectors. Those sectors are also impacted by some of the client cuts that we saw earlier in the year.

In terms of markets, we're really seeing the bigger impact in some of our European markets. I would call out the U.K. and Germany. Germany, where we're more exposed to the auto sector, and we've seen cuts in government. And in the U.K., we do tend to have more of our work skewed to that project-based work.

Now what I would call out is we have seen growth in other sectors and particularly in healthcare, where we've seen 6.7% growth, and that is a mixture of client wins and growth with existing clients.

In terms of the question around AI, we don't see this as driven by AI. This work is not going anywhere else. It is -- and I think it reflects just a more volatile environment that we see ourselves in. So I think that covers all aspects of your question, Laura, and I'll pass over to Cindy on WPP Pro.

Thanks, Joanne. Laura, look, it's -- there's a lot of point solutions out there in the marketplace. So I couldn't possibly comment on them all, but I'll talk about WPP Open Pro. It's early days, of course. We only launched a few days ago. So I'm not really in a position to talk about revenue and subscribers at this point. But what I will say is the strategy is about TAM expansion, so expanding our addressable market.

We don't largely address the SMB and mid-market cap segment today. So we expect revenues generated by WPP Open Pro to be incremental and potentially pull through managed services from WPP that are also incremental. That's the expectation. And of course, we'll be in a position to report actual progress in the weeks and months ahead. Thanks for your question.

Thank you, Laura. Our next question is from Julien Roch.

My first question is on the full year guidance. Your minus 5.5% to minus 6% implies minus 7.5% to minus 9.5% in Q4, which is a 3- to 5-point slowdown versus Q3, taking into account the easier comps. Mass and Paramount should be an incremental 1 to 2. So it looks like you have a 1 to 4 underlying slowdown in Q4. Why is that? So that's my first question probably for Joanne.

The second one is, Cindy, you helpfully gave us four pointers of your new strategy that includes a simpler, more integrated, powered by data and AI offering, which imply further investment to go back to growth. So today, do you feel this extra investment can be, one, self-funded, thanks to further efficiencies? Or two, should they come at the expense of margin in short term? Or three, it's too early to tell us?

And then finally, on WP Open Pro, can we get an idea of pricing? I understand you have access fee plus usage-based charge and also it depends on whether it's all self-served or some managed. So the price will be quite viable, but can we have an idea maybe of the minimum monthly or annual price and the maximum. So we have an idea of the pricing on WPP Open Pro?

Thanks, Julien. Yes, Joanne will do the first one on the full year guidance and trends into the fourth quarter, and then we'll pass over to Cindy for questions two and three.

Julien, yes, just in terms of the guidance, you're right, it does assume a like-for-like decline of 7.5% to 9.5% in the final quarter. And there's a few drivers of that. The first one is in Q3, we saw a step down from client losses and particularly in the Media business, and there will be a further ramp down in Q4. And the biggest driver of that is two sizable client losses that we impacted from earlier in the year. They will start to ramp down from the 1st of October. So we'll have the first full quarter impact of those losses.

Net new business has remained slow for us, and that's partly the environment and also our win rate is not where we would expect it to be. And that means that we have a limited cushion to mitigate those losses. And coupled with that, we've talked about the volatility that we're seeing in client spend and delays to work.

Now our fourth quarter is the largest quarter. And just given the nature of spend in the Q4 and the trends that we've seen in Q3, we have taken a high degree of caution to the guidance for the full year and to the expectations for like-for-like in the final quarter of that year.

Great. Thanks, Joanne. Julien, let me take your second question first, if I may, about whether investment -- further investment is required for us to grow. I think I would reiterate what I said in my opening remarks, I'm confident that we have the ingredients needed to succeed. And I talked about fantastic clients, breadth of capability, great talent, our global reach, technology and technology partners that I think give us a competitive edge.

Over time, as we execute on our strategy and create capacity to invest in growth, there are undoubtedly assets I would love to own that will enhance our existing capabilities and accelerate our growth. But I would say our immediate focus is to improve our execution and build from there. In the short term, it really is about bringing together what we own today in the most efficient and effective way, and you'll see much more in terms of how we intend to do this over the coming months.

In terms of pricing for WPP Open Pro, I don't believe we've yet published pricing on the website, but it will be basically priced by user and by usage, and we're clarifying now exactly how this will work by client segment, and you'll see more information on that on the website in due course. It literally launched a few days ago. So I hope that helps.

Thank you, Julien. Our next question comes from Annick Maas. Annick?

The first one is going back on this full year guidance. I suspect when you cut it in July, you -- particularly that -- it was coinciding with your appointment, Cindy, you must have included a buffer in the guidance. So what I would like to understand is really like what went even further wrong, I guess, than what you had suspected already for actually resetting the guidance again today? Or is it really just putting now in an extra buffer for Q4, but actually it's not that bad?

My second question is on staff motivation. I guess this is a people business and the current performance might not be too motivating for the internal staff. So how are you thinking about keeping staff motivated, incentivizing staff going forward?

And then my last question is, you've alluded that you saw all your clients or your main clients. What came out of these conversations for you that was new, better and worse actually?

Thanks, Annick. We'll start with Joanne talking about the full year guide and maybe then talk about staff motivation and maybe then Cindy can pick it up, build on that and answer the third question on clients.

Thanks, Annick, for the question. In short, it's a little bit of both of the factors that you talked about, some of the trends that we have seen in Q3, but also caution and making sure that we are setting the expectations at a level that we can deliver against.

In terms of what's really changed, the new -- the losses -- the client losses are broadly similar to what we shared in the interims. There have been some additional losses since, but they will impact more in 2026. So the biggest step down has really been seen in that volatility of spend that I talked to, further cuts to spend, delays to projects that were expected to take place this year and being pushed out to next year and then that net new business environment. And net new business includes growth from our existing clients and new assignments with existing clients, and that has been slower than what we would have anticipated in the third quarter, which makes us, therefore, cautious on Q4.

And so yes, it's both, some of the trends that we've seen and that caution. I would also just point out that where we've seen the biggest impact on those variables is in our Media business. And that's obviously the largest part of our business. Q4 is the largest quarter, and Media is a big contributor to that. And that has just added to the cautious outlook that we have reflected in the full year guidance.

Staff motivation, you want to mention anything?

Yes. Look, on staff motivation, I often get asked this, and I would say a couple of things on this. If you look at WPP overall, it's absolutely the right question to ask. If you look at how our business operates, it's very much, I belong to an agency in a market. And therefore, the performance is really dependent on how that agency and market is doing. And there are pockets of our business that are performing well.

I would also say that in WPP Media, we've done a lot of work in the last couple of years to set that organization up for success. Brian joined a year ago, set out a new strategy for WPP Media. We acquired InfoSum. We are rolling out Open Media Studio at scale. And that is a huge motivator for our colleagues within WPP Media, and they are very excited about the future and getting that business back to growth and taking its fair share of the market.

And the third thing I would say is we are now deploying WPP Open to everybody in the business. This is not just client-facing colleagues, but it's also colleagues in the back office and my team are using Open. So if you're an employee in WPP, you have access to incredible AI tools. And for any employee, it's important that you're continuing to develop, you're building this critical skills for the future. And so there's a lot of aspects of working in WPP that are incredibly positive as well as the fantastic clients that we work with. I don't know if Cindy wants to build on it...

No, I'm happy to build on the question around employees. So thanks for recognizing we are a people business, and that's something that's very important to me personally.

Look, my job is to ensure that WPP as a company is successful for many years to come. To do that, we need top talent on the team. So one of my core priorities is to make WPP a destination for the world's best talent. And that means retaining the talent we have and attracting new talent. That's a key focus for me. I've already made a number of appointments that I mentioned in my opening remarks, and there's more to come.

But I'm also deeply committed to listening to our employees and providing a world-class employee experience that our people feel invested in from a learning and development perspective and feel they really have a long-term career prospect here at WPP. So those issues -- those matters are very important to us.

But you also asked a question about clients, I believe. I mean, I've spoken to most of our top clients at this point. And what I will say is the vast majority of them have been incredibly positive about the quality of our people, the work that we do, the service that we provide. And actually, our clients want WPP to be successful, right? They feel our success is important to the health of the industry because it gives them more choice. So I would say on the whole, the feedback has been positive.

At the same time, we've had some feedback that, as I mentioned, our offer is very complicated. They'd like us to be simpler to engage with. They'd like a more integrated proposition because when your proposition is integrated across creative, production and media, it's easier to optimize your total investment spend, particularly when it's powered by a common data model and AI across the entire workflow. We're more able that way to deliver growth and business outcomes, and that's where we need to be.

And as I said, we also need to significantly improve our execution. We need to be focused on client acquisition, client retention and service delivery and really strengthening our go-to-market through dramatic simplification. So that's where the focus is in the immediate short term.

Thanks, Annick. Our next question is from Adam Berlin.

A few questions from me. Just following up on -- Cindy, on what you just said about you've spoken to all your top clients. Have you also spoken to clients who chose to kind of stop using WPP over the last couple of years? And I just wondered whether they might give you a different perspective or is there anything they've said differently that obviously, the clients who've chosen to stay with you may have a different view. So just have you done that exercise as well? And what feedback did you get from clients who have actually left?

The second question I wanted to ask was to Jo, just more kind of cash related for this year. Just curious, why is there no downgrade to the cash flow guidance, the operating cash flow guidance given the lower margin and top line guidance? And what's the kind of offset to that?

And secondly, you talked about there being -- I think -- I'm not sure you said this, I just want to clarify, did you say there'll be a negative working capital outflow this year? And if so, are you able to give us a range as to how big that might be?

Thanks, Adam. Why don't we start with Cindy and...

Yes. Thanks for your question, Adam. Actually, the very first clients I spoke to were the ones that we lost. I'm a big believer in growth mindset, and that means every loss is an opportunity to learn. And so that's where I started. And actually, the feedback has been remarkably consistent. A lack of clarity about our end-to-end story and how it lands, how it resonates with clients to deliver growth and business outcomes for them, complexity in our organizational structure. So how do I get the best of WPP with all the constraints of an agency structure. These are the sorts of feedback that -- feedback we're getting from clients that we've lost and clients that we've won equally. So again, as I said in my opening remarks, the feedback provides the clearest blueprint possible for what we need to do better and differently going forward.

Adam, so just on the cash question, yes, I've guided to operating cash flow pre-working capital unchanged at GBP 1.1 billion to GBP 1.2 billion. A couple of things within that. The revised guidance really is an impact of less than GBP 100 million on the cash. So that's one consideration. We've had a bit of an FX tailwind, so that's offset some of that profit impact. And then we've had a -- very disciplined around our cash management. So on CapEx and restructuring, some of the reductions there will help that final outlook in the balance of the year. And we had a little bit of buffer in it when we guided at the half year. So that's really why it's unchanged.

In terms of working capital, look, I talked to two headwinds on working capital. One, just given the step-down in Media, we will have a lower volume of billings in Q4. And we've always said that, that is a big driver for working capital given the negative working capital that sits in our Media business. So that is one headwind that we will see at the year-end. And the second is incentives. So I am expecting a significantly lower level of incentives just given the performance. The cash effect of that will be seen in 2026, but it does have an adverse impact on our working capital at the end of the year.

So those two factors and [indiscernible] that last year, we had an inflow on working capital. This year, working capital will be an outflow in the full year. We don't guide to working capital, but hopefully, that helps you understand some of the drivers of the working capital performance at the year-end.

Thanks, Adam. Our next question is from Adrien de Saint Hilaire. Adrien?

This is Adrien from Bank of America. So I've got a few questions, if that's okay. Cindy, I noticed you talked in your prepared remarks about maintaining a strong balance sheet. What's your sense of where it stands today? Do you consider it to be strong indeed? Or do you think it needs further shoring up?

And maybe following up on what Julien asked, I think you highlighted that you want your offering to be powered by data and AI. Do you believe you've got enough capabilities there? Or might you go down the route of M&A to beef up this part of the businesses?

Thanks, Adrien. Maybe Joanne will start by talking about the balance sheet and will then talk about data and AI.

We have a strong balance sheet. Our balance sheet is investment grade. And as I said in my prepared remarks, we're committed to retaining that investment-grade balance sheet. Our liquidity as well is strong at the end of September, it was just under GBP 3 billion, and we have no covenants on any of our debt. We have broadly distributed maturities across that debt and the coupon is 3.5%.

I would also say that I feel that we have been making investment in the business over the last few years. So we have an investment base as we look at the new strategy review that we can make sure that we're reallocating that investment or prioritizing it into the areas of the business that will deliver the fastest returns and the fastest growth.

So while I expect leverage to remain outside of our target range, I do think that those factors point to the strength of the balance sheet and liquidity. We are -- reducing our leverage is a priority. And we've demonstrated over the last couple of years, we have taken costs out of the business. We have divested of -- businesses, including FGS and used the proceeds to delever and strengthen the balance sheet.

Yes. Thanks, Joanne. Adrien, so look, I'm confident that our data and technology solutions today are robust, future-proofed and competitive. Let me talk for a minute about that.

We have WPP Open, as you know, it is not a point solution. WPP Open is a single end-to-end AI-powered platform that transforms the entire marketing process for our clients. As you noted, it's powered by a common data model that we call Open Intelligence. Because it's a single platform powered by a common data model, we can offer clients an opportunity to really optimize their entire marketing investment across creative production and media.

The acquisition of InfoSum gave us a next-generation data collaboration platform, which means our clients can generate deep insights to smoother marketing and communications without sharing first-party customer data, which gives them the opportunity to protect the privacy of their customers. So that's what we've got today, and I'm confident that it's competitive.

Now have we learned to land it consistently or land the story consistently in a way that resonates with our clients? No, we haven't. And that is fundamentally part of the execution improvement that we're focused on. But by the way, when we get it right, as we are increasingly doing, we start to see the sort of client wins we're seeing in Q3, Marks & Spencer, Maersk, Suncorp, TruGreen, Mastercard with more to come.

Now in terms of investing, as I said earlier, as we create capacity to invest, what I would love to, of course, I would, but the focus in the short term is on improving our execution and then we will build from there.

Perfect. thank you, Adrien. Our next question is from Nico Langlet. Nico?

I've got three questions, first one on net new business. So can you tell us what was the impact for the first 9 months and whether you expect a much higher headwind in Q4 compared to Q3?

Secondly, on the WPP Pro announcement, I know it's still very early, but can you try to quantify the revenue opportunity at least for the next 12, 24 months? And what's the margin profile over time of this type of business?

And finally, on the leverage and capital allocation. So you will end the year at slightly over 2x net debt to EBITDA. Do you feel comfortable with that leverage? And can you clarify in terms of capital allocation priorities between debt reduction and dividend in the...

Thanks, Nico. Maybe Joanne can take questions one and three, and I'm sure will offer some perspective on two as well.

So just on the impact of net new business, we've signaled that at interims will be around 100 to 150 basis points of a headwind this year with gross client losses 300 to 400 basis points. And we are seeing that still be in the range, but we -- probably we're towards the bottom end of that range for this year. I talked about the step down in Q3, and we'll see a further step down in Q4. So Q4 will be a bigger impact on that and will particularly impact our Media business.

And as I also said in my prepared remarks, we're expecting a similar level of growth client losses, i.e., the 300 to 400 basis point range for next year. But it's still too early to comment on net new business. And I touched on the fact that we are seeing more opportunities in the pipeline and our pipeline is more skewed to opportunities and defensive reviews.

In terms of the leverage and the capital allocation, obviously, and as you would expect, this will be a key area of focus for Cindy and I and the wider team as we do the strategy review. We are focused and a big priority is to reduce the leverage in the business, as I commented earlier. We also need to make sure that we have the right investment, organic investment in the business. As I said earlier, we do have a good, invested business. We have been investing in WPP Open and our data offer and our commerce offer over the last couple of years and making sure that we are getting the highest return from that investment will be a critical component of our strategy review.

In terms of the dividend, we talked about the dividend in our half year results and the decision to reduce the dividend to give greater financial flexibility ahead of the strategy review and balance that with the recognition that the dividend is important to shareholders. And that has not changed since the half year.

And the other comment I would make is that we will review the balance sheet as well as part of the strategy review. I touched on the fact that in the past with Kantar and FGS, where we have good businesses, but we have concluded we don't need to own them, and we have taken action. So we will update further on that in the new year with the strategy review.

Joanne, do you want to make a brief comment on revenue opportunity at Open Pro over the next 12 months?

In terms of Open Pro, as Cindy talked to, it's an opportunity for us to target a market that we don't service today, and that's both with existing clients and potentially with smaller businesses that -- where the traditional agency model just hasn't worked for them. It's too early to say what the revenue will be from that, but it's an exciting opportunity for us, and we already have some pilots with our existing clients.

Perfect. Thank you, Nico. our next question comes from Richard Kramer from Arete Research. Richard?

Cindy, I'd like to ask you about the renewed $400 million partnership deal with Google and whether you see WPP's role as implementing Google's AI tools with clients or whether we should expect WPP to go beyond API access and remain very much committed to your own product investment long term as we're seeing with WPP Media and Open Pro?

And then also, I'd love to have your comments or reflections on the position of WPP relative to Meta's promise that clients can just give them their campaign objectives and budget and allow their AI to manage everything. How do you respond to that with clients and especially sort of winning over those SMEs that are -- seem to be very much captured by Meta and Google today?

Thanks for your question, Richard. Appreciate it. Look, I think Google is clearly a key strategic partner, not the only strategic partner. So we integrate multiple large language models and tool sets into our platform, Google being one of them. We also have relationships with Anthropic, with OpenAI and with others, and that will continue to be the case. So yes, we will continue to invest in our own platform in addition to partnering closely and constructively with key partners like Google and with others.

In terms of -- yes, there is a -- there are a lot of solutions out there. There's no doubt about it. The feedback I get from clients, most of my large clients is that they are navigating through a rapidly evolving technology landscape and a lot of complexity.

The reality is you can't just put -- drop AI into your environment to modernize your marketing function and just expect magic to happen, right? And you can't just apply AI to old processes either. You have to reimagine them. You have to train your people. You have to embed new behaviors in your organization in order to realize the benefits of AI.

Large multinationals are going to need the help and support of trusted partners to navigate this environment and learn how to innovate with AI. It's not always obvious. And I think the more fragmented and complex this environment becomes, the greater the opportunity for WPP to act as a trusted partner to our clients as they pursue their transformation journey. And that's actually why we're pushing into enterprise solutions because we think we have an expanded opportunity there to help our clients implement and manage large-scale end-to-end AI marketing transformation program. That's TAM expansion for WPP.

Perfect. Thank you, Richard. We're now going to move to our last question, which is from Steve Liechti of Deutsche Numis.

Can I have three, please? One is just to Cindy, just your view in terms of WPP, do you think it still run as a holding company today? And how much heavy lifting has been done? How much more is there to do to get you into a kind of integrated operating company, which I'm presuming is kind of where you want to get to? So that's the first question.

Second question, just in terms of the U.S. Media business and linking that to the data and Open Intelligence comments that you made. I'm taking from that, that you think all the changes that have been undertaken in the first half in InfoSum and stuff like that, to some extent, gives you the ammunition to kind of claw back business in U.S. Media. I'm just interested in your views there or whether there's more to be done, whether you think that's the right solution compared to some of your competitors who are more ID-based and broader solutions?

And then the third one is, I know it's a bit repetitive, but just going back to the building blocks for fiscal '26 on the like-for-like revenue. I mean obviously, your exit rate in like-for-like is going to look quite poor coming out of the fourth quarter. You mentioned your 100 to 150 basis points at a net level and your gross 300 to 400. Can you just give us a little bit more color in terms of the best way to think about building up that view of '26 at this stage with what we see?

Thanks, Steve. We'll maybe start with the third question from Joanne and then hand it over to Cindy to talk about Holdco and WPP Media.

Thanks for your question. Look, it's too early to really give a definitive outlook on 2026. But just some of the factors that I would highlight. First of all, to your question on the exit of Q4, Q4 is seeing an exaggerated impact from losses. We have 2024 client losses, which are still ramping down in the last quarter of this year. And we also have the incremental losses from 2025. So you have the double impact from those. Q4 is also our biggest quarter. Q1 is our smallest quarter. So the impact on that quarter is disproportionately higher. I wouldn't expect Q1 to be at a similar level. I also alluded to the nature of Q4 typically means that we're being a little bit more cautious in our guidance for the full year.

But that being said, I did talk to the gross client losses, which we have visibility of and those being in a similar range to what we saw in 2025, 300 to 400 basis points and skewed to Media. And so that will be a factor in 2026. It's too early to say on net new business and that 100 -- how it might compare to that 100 to 150 basis point range that we give for this year. But hopefully, that gives you some levers as you think about '26.

Thanks, Steve. I think I understand your question. I mean, look, to improve our execution as we need to, I personally think we need to be a little less holdco and a little more Co. And I do think we were on the path to doing that. We've made over the years, great investments in AI and technology. We've simplified our structure. We've nurtured fantastic talent. We just -- we haven't gone -- or we've missed the opportunity, shall I say, to go as far and as fast as we could have and should have, and that's what we're going to do immediately to improve our execution.

In terms of WPP Media, I mean, look, turning WPP Media around is absolutely critical for us. Fortunately, as a member of the Board, I've had clear line of sight into Brian Lesser's plan, and I was and continue to be extremely supportive. I would be the first to say that GroupM in the past probably lost its way, but I feel very confident that Brian's vision of an open, privacy-first data and AI-powered ecosystem is the way the market is moving. And now that we're putting that plan into action, I am supporting Brian in every way possible in terms of implementation. And we're starting to see the green shoots of success with important retentions and wins this quarter, which we've mentioned earlier and hopefully, many more to come.

Perfect. Thank you, Steve. So we're coming up on 10:30. We're going to draw a line under the call there. Thank you so much for your questions and for your interest in WPP. The Investor Relations team and I are at your disposal if there's anything we can help with. But for now, I will pass over to Cindy for some concluding remarks.

Thank you so much, Tom. Look, as I said earlier, our current performance is a long way from where it should be. But as you can probably tell, I feel quite optimistic about WPP's future. We know what it takes to win. As a team, we are optimistic, energized and confident that we're building the right plan and the right culture to secure a bright future for WPP. So thank you all for dialing in this morning, and I look forward to further engagement.

Good morning, ladies and gentlemen, and welcome to WPP 2025 Interim Results Conference Call and Webcast. [Operator Instructions] Today's conference is being recorded.

Now I would like to hand it over to WPP CEO, Mr. Mark Read. Please go ahead, sir.

Thank you very much, and good morning, everybody, and welcome to our 2025 interim results earnings call, and thank you for joining us. I'm on today's call with Joanne Wilson, our CFO; Brian Lesser, the CEO of WPP Media; and Tom Singlehurst, our Head of Investor Relations.

And before we get started, please do look at the cautionary statement, which you can see on Slide 2 and read that carefully.

So turning to the highlights on Page 5 of presentation. First, in terms of the first half performance by 2025, when we updated June, early July, we went through how the more challenging macro environment, coupled with a slower net new business environment and weighed on our performance in the second quarter and in particular in June. And Joanne will take you through the details shortly, but the performance in the first half is in line with those revised expectations, with H1 organic net sales growth of minus 4.3% is consistent with the second quarter down 5.8%.

Now as we said on July 9, the second quarter was impacted by several one-off factors that negatively impacted our growth rate. Even excluding those, our H1 growth was minus 3.8% and minus 4.8% in the second quarter below our expectations at the start of the year. Now in the face of this, we are maintaining strong financial discipline. Head count has come down by 3.7% since the start of the year, brought in line with the organic growth trends.

In addition, we continue to take out structural costs and focus on back office efficiently -- efficiency, underlining our disciplined approach to managing the cost base. As a result, headline operating margin was 8.2%, down by 290 basis points on a like-for-like basis, but this includes the cost of severance action taken in particular at WPP Media, which has not been treated as an exceptional, and we expect margins to improve in second half of the year.

As importantly, the operating environment we saw in the first half hasn't stopped us in taking significant action against our strategic goals. And in February, we talked about 3 strategic -- specific priorities for 2025, driving adoption of WPP OPEN, getting GroupM, now WPP Media back to growth and winning more new business. And we've made progress on those. I'll talk about in a minute.

But more broadly, I want to emphasize, it has been improved intense activity across the group, whether that be the release of new products we put out to consult on reputation capital indicates, we're starting to do partnerships, for example, coverages, TikTok, latter being particularly important in terms of further strengthening our retail media offer within WPP Media.

It's also been a very busy period to be working with top talent to organization, Vincent Basin Shar, who joins us from Accenture and Accenture Song as CEO of AKQA, which has had some more success in AKQA in the past few months in terms of winning new business. And I think we will see a continued turnaround in that business, which is reassuring.

When Daniel Barrack, who joins us from RGA is a global as an innovation need working on a very important takes focus on and technics.

So coming back specifically to the 2025 priorities on Slide 6, and those 3 -- taking those 3 in turn. First, in terms of adoption of WPP OPEN, it's growing fast at over 80% of our client-facing people actively using the platform. And with adoption running ahead of our expectations, we're now pushing for greater engagement per user. Just to give you some statistics, but in context of what we're doing, in the last month, our team created more than 1 million images, 240,000 videos on the platform, and we now have more than 50,000 agents active across WPP, helping our people to use AI to deliver work for clients.

The second priority was media. And one of the drivers for highly increased adoption of WPP OPEN has been rapid expansion in Open Media Studio, which is encouraging itself, but more important to the progress made by Brian and his team, and he'll take you through that in a few minutes, but an enormous amount has been achieved in the first half, not only in terms of reengineering the operational model, making WPP Media much more client-centric organization, but also in terms of bringing AI-enabled technology platform to market by acquisition and integration of InfoSum, the launch of Open Intelligence, the data performance brand that powers the open and reissue.

And on the third priority in our business, I would say this has been a source of relative disappointment. Now to be clear, we have had some significant wins, whether that's the Hero, MotorCore in Media, L'Oreal in Influencer, TJ Maxx in PR, Heineken in Commerce, IT and Creative, but that have been set back. So overall, it has been a much slower new business environment. I mean, as the chart shows, new business running at less than half the typical rate at this point in the year.

Now my view is that clients have been dealing with a lot of short-term issues, whether that's pressure on to assume the spend with the impact of tariffs or commodity prices, and these are delayed pictures and prolonged decision-making. And I'm sure we've discussed that in the call and the Q&A.

For now, I'll hand over to Joanne to take you through the details of the first half performance. Joanne?

Thank you, Mark, and good morning, everyone. So let me start by kicking through where our performance has landed relative to the revised guidance we set at the beginning of July, and you can see this on Slide 8.

Like-for-like revenue less pass-through costs fell 5.8% in the quarter, which was in line with the anticipated range. This leaves the first half organic decline at 4.3%. As mentioned in our July trading update, there were some one-off factors, which did weigh on the second quarter performance. Excluding this, the like-for-like decline would have been 3.8% in the first half and 4.8% in the second quarter.

Turning to headline operating profit. This came in at GBP 412 million, in the middle of our range. This is consistent with the margin of 8.2%, with a 290 basis point like-for-like decline driven by a combination of the impact of negative operating leverage on lower net sales and higher severance in particular, at WPP Media.

Moving on to Slide 9 and looking at performance across our business. Global Integrated Agencies saw a like-for-like decline of 6% in the second quarter, a step down from minus 2.8% in the first quarter. Within this, WPP Media was down 4.7%, which saw the U.S. decline against a tougher comp reflecting client losses. Trends remained tough in the U.K. as we continue to be impacted by prior year client losses, and Western Continental Europe was impacted by one-off factors amplifying the effect of a more challenging media environment. Excluding one-off factors, WPP Media declined 1.6% in H1 and minus 2.3% in Q2.

Like-for-like for other integrated creative agencies fell 7.2% in the second quarter and compared with the decline of 4.4% in the first quarter of 2025. Within this, the main moving part is Ogilvy, which declined high single digits in the first half and was down double digits in the second quarter, impacted by cuts in client spending, in particular, in CPG, tech and government.

We continue to see an impact from weakness in project-based work. However, AKQA saw a slight sequential improvement quarter-on-quarter on easier comps.

Turning to PR. Like-for-like declined by 7.8% in the second quarter, a slight step down from 6.6% in the first quarter. This performance reflects a more challenging environment for client discretionary spend, particularly in Europe and across smaller local clients. Looking forward, we are encouraged by improved momentum on new business in North America.

And finally, specialist agencies saw a like-for-like decline of 1.9% in the quarter, with continued double-digit growth from C&I, our specialist health care media agency, and a return to growth of Design Bridge and Partners, offset by continued, albeit moderating declines at Landor and other smaller specialist agencies.

Turning now to the performance by region on Slide 10. North America declined by 4.6% in the second quarter, following a decline of 0.1% in the first quarter. While there was a toughing comp, the performance was impacted by cuts in client spend, particularly impacted Ogilvy and the ramp down of a Q1 client loss.

The United Kingdom declined by 6.5% in the second quarter, a slight deterioration on the 5.5% decline in the first quarter despite a lease income. Performance continues to be impacted by its higher weighting towards project-based work and the impact of client losses at WPP Media, although Ogilvy posted positive growth.

Western Continental Europe saw an overall like-for-like decline of 6.5%, again, versus an easy year-on-year comp and reflecting the impact of one-off factors.

The rest of world declined 6.8% in the second quarter, largely driven by consistent pressures in China, which declined 15.9%. As discussed on the first quarter call, we expected performance to continue to be challenging in China in the first half of 2025 with some improvement later in the year.

Against this, we saw a relatively better performance in India, which was flat at 0.1% in the first half driven by WPP Media. Central and Eastern Europe saw a robust performance, up 2.4% in the second quarter.

Slide 11 shows Q2 performance across our client sectors. Having been stable in the first quarter, CPG saw a step down in the second quarter, declining 8.3%. Cuts to client spending and the loss of a large client in North America were key factors. Performance in the tech client sector moderated in the second quarter, showing a decline of 1.2%, having seen Q1 growth continue to improve at 4.5%.

Geographically, the U.S. saw the biggest delta driven by client spending cuts, with trends elsewhere more robust. Health care has continued to stabilize with broadly flat growth in the quarter, the 2023 client losses start to roll off. But automotive and financial services, which both started the year well saw a step down in the second quarter.

The performance of our top clients continues to be relatively more robust than for the group as a whole, with our top 25 clients growing 0.1% in the first half, albeit this is consistent with the low single-digit decline in the second quarter.

The waterfall chart on Slide 12 bridges our headline operating margin from 11.5% in the first half of 2024 to 8.2% in 2025, a 3.3 percentage point decline on a reported basis and a 2.9 percentage point move like-for-like adjusting for FGS and FX.

The main moving part to the expected negative operational gearing on the reduced like-for-like net sales as well as the impact of severance. To take some numbers to this, although our overall staff cost, excluding severance and incentives, is down GBP 261 million, given the decline in net sales, this is still consistent of the 250 basis points decline in margin. This reflects a 6% reduction in headcount when compared to June 30, 2024, and reduced usage of freelances, but also the impact of the FGS Global disposal.

Severance and other associated costs is up -- is down GBP 59 million year-on-year, and this takes another 130 basis points off margin. This is primarily driven by actions in WPP Media, and we expect to pay back progressively through the second half and into 2026.

As we discussed in July, we estimate the annualized gross savings benefit associated with these actions will be at least GBP 150 million, and we anticipate margins in the second half to improve in the results.

While total IT costs have remained broadly flat, this represents back office savings and enterprise tech, offset by our continued investment in WPP Open, AI and data. Total IT costs were a 0.6 percentage point drag on margin.

On Slide 13, we look in detail restructuring costs and conduct ongoing severance actions, both in reaction to the weaker top line as well as the more strategic actions at WPP Media are included in the headline operating profit. Restructuring costs associated with historical programs are coming down and in the first half were GBP 45 million compared to GBP 153 million in the first half of 2024. GBP 40 million in restructuring costs are cash and primarily related to the ongoing IT transformation as well as property-related costs from historical impairments.

We are running below the previous full year modeling assumption of GBP 110 million, and we have reduced our full year expectation for restructuring costs to GBP 90 million.

We put this altogether to headline P&L on Slide 14. Overall reported revenue less pass-through costs was GBP 5 billion, a decrease of 10.2% period-on-period. FX contributed to a 2.4% drag, with M&A a further 3.5% headwind, leaving a like-for-like decline of 4.3%.

Moving down the P&L. I remind you that income from associates excludes any contributions from Kantar, in accordance with IAS 28 due to no carrying value on our balance sheet. Net finance costs of GBP 129 million was down year-on-year, reflecting the lower average adjusted net debt.

Our effective tax rate at 18.3% is down year-on-year, principally driven by the benefit of credits from the successful resolution of a tax matter. Given the impact from a lower level of profits based on our revised guidance, our modeling assumption is the full year effective tax rate will be 31%.

Noncontrolling interests of GBP 26 million were down significantly year-on-year, largely reflecting the impact of the disposal of FGS Global. Headline diluted EPS of 20p is down 35% on a reported basis, a 10.9p move consistent with an 8.8p decline like-for-like and a 2.1p impact from FX and M&A.

Turning to the dividend. The Board recognizes the importance of dividends to shareholders and also the importance of retaining financial flexibility for the business. With UC EU starting imminently alongside a review of the strategy, we will evaluate our capital allocation policy to ensure we align our financial resources and distribution policy with our strategy and our priority to drive sustainable growth. As a result, and after careful consideration, the Board has declared an interim dividend of 7.5p.

Moving to Slide 15 and the reconciliation between our headline and reported operating profit. Headline operating profit of GBP 412 million is adjusted for goodwill impairment of GBP 116 million, which relates to AKQA and Grey. Gains on disposal are fairly minimal at GBP 2 million in the first half, while amortization and impairment of acquired intangibles is also lower year-on-year. As already discussed, we've seen a fall in restructuring and transformation costs to GBP 45 million from GBP 153 million a year ago. Putting these items together, that leaves our reported operating profit at GBP 221 million in the first half with a decline slightly lower than the move in headline operating profit.

Slide 16 looks at our adjusted operating cash flow and bridges the year-on-year movement in adjusted net debt to June 2025. Our 12-month adjusted operating cash flow before working capital to June 2025 was GBP 1.2 billion. While we continue to focus on working capital management, we saw a working capital outflow of GBP 175 million in the 12-month period. We saw a net outflow of GBP 118 million, comprising the net impact of dividends from associates -- to minorities and including M&A earn-outs.

Net interest and tax contributed to GBP 633 million outflow with the cash tax, including GBP 43 million of tax associated with the FGS Global disposal.

Net M&A and disposals was at GBP 383 million inflow, primarily reflecting the disposal of FGS in the second half of 2024 and the acquisition of InfoSum.

Cash dividends paid in the 12-month period was consistent with prior year, while pay back -- while buybacks and other items amounted to an outflow of GBP 104 million.

And moving now to Slide 17, which shows the movement in net debt to the end of June with adjusted net debt of GBP 3.3 billion, down year-on-year but up from year-end, reflecting our typical cash cycle. Average adjusted net debt better captures the normal pattern of working capital moves across the year, and this is slightly down through the first half at GBP 3.4 billion. Despite a reduced net debt balance, the average adjusted net debt to headline EBITDA ratio at June 30 is outside our 1.5 to 1.75x target range, given a little of profit, and our expectation is that we will be above our target range for the full year 2025.

Our balance sheet, however, remains robust. The weighted average maturity of our GBP 3.8 billion of bond debt is 6.4 years, and this has an average coupon rate of 3.5%. Meanwhile, our total available liquidity across the group stood at GBP 3 billion at June 30, 2025, including a $2.5 billion committed RCF, which matures in February 2030 Neither our bond debt nor our RCF of any covenants on our credit remains investment-grade.

And finally for me, turning to Slide 18, which shows our guidance for the full year. At our July trading update, we shared a revised guidance for revenue and operating profit with a like-for-like decline in the range of minus 3% to minus 5% and a headline operating margin decline of 50 to 175 basis points.

Looking beyond the net sales and margin guidance and reflecting the change to those revenue and margin guidance, we now expect adjusted operating cash flow before working capital to be GBP 1.1 billion to GBP L 1.2 billion. As already mentioned, the lower level of anticipated profitability in 2025 drives changes to our assumption for the effective tax rate. We also expect a lower level of CapEx and cash restructuring costs than our guidance at the start of the year. Elsewhere, either the impact of FX or of M&A has materially changed since the first quarter results.

So thank you, and I will now hand over to Brian.

[Presentation]

Good morning, everyone. That video you just watched captures just a glimpse of the energy and momentum behind what we're building at WPP Media. It's been almost 11 months since I rejoined GroupM, now WPP Media, and about 4 months since we formally introduced the market to the scale and scope of the transformation underway.

This morning, I want to go beyond what's changing to focus on what's already taken hold, how we operate what this organization looks like today and why we're in a strong position to win.

In February, I laid out our 5 strategic priorities. Today, I'll walk you through the meaningful progress we've made, particularly in how we've evolved our data, technology and organizational design.

I'm pleased with the collective progress we've made in the first half of this year. From launching Open Media Studio in our largest markets, to debuting Open Intelligence, restructuring our teams and centralizing leadership, we're laying the foundation for a stronger, more agile organization.

We've also accelerated our data strategy with the acquisition of InfoSum. This is a reflection of the collective effort of thousands of people working toward a common goal. It's progress worth acknowledging and momentum we're committed to building on. We know the transformation at this scale doesn't happen quietly. It takes clarity of vision, conviction and execution and, above all, commitment from our internal teams.

As you know, we made bold decisions to overhaul our operating model, integrated marketing services that focus on one team, one process and one platform. One team. We've broken down silos to operate as a single global organization with local relevance. Whether you sit in Mindshare or Wavemaker, in London or in Vietnam, you're part of a connected system with shared goals, led by a newly reorganized leadership team solely focused on driving results.

One process. We've streamlined how we plan, activate and optimize campaigns. This alignment not only increases efficiency, it reduces friction for our clients.

One platform. This is where it all comes together with the culmination of several years of development. WPP OPEN is the operational backbone of our business that is powered by Open Intelligence. This platform is more than workflow automation. It's how we deliver media infused with AI and supported by one of the most advanced data models in the industry. We now have more data than any of our competition, reaching 5 billion consumers, connecting intelligence of all forms, including IDs across the vast Federated ecosystem.

Our platform connects hundreds of data sources, publisher, retail, platform, client structured and unstructured and extracts insight through Federated Learning and AI native tools. That's how we move from reactive to predictive by optimizing hindsight to anticipate what's next. It's what will separate us from our competitors and allow us to operate at speed for our clients.

This isn't theoretical. It's live, it's adopted, and it's already delivering measurable value for our clients. For our brands in a highly impulsive category, our platform used behavioral signals like commuting patterns and content consumption habits to identify moments of peak buying potential. That campaign drove a 10x improvement in reach to high propensity buyers. In another case, we doubled in-store sales for a CPG brand by predicting exactly when and where to engage Gen Z shoppers near retail hotspots.

Technology without people is just potential. Since our last update, we've reshaped our organization around this vision. Today, WPP Media is a fundamentally different company than it was a year ago, not just in name. We centralized leadership where it matters and empowered local markets where it counts. We have restructured teams to focus on transformation, growth and client experience. We've added world-class talent from tech, consulting and media who bring new thinking and challenge old assumptions.

The result, clients no longer see a network of agencies. They see one WPP Media with a unified vision, a modern capability set and a consistent global offering.

Since we last spoke, we've moved from strategizing to operating, from talking about change to leading it. We have a simplified, aligned organization. We have a world-class platform, AI-enabled, future-proofed and live today. We have a client value proposition that is stronger than it's ever been.

We've built a global platform that meets the unique needs of multinational advertisers, while unlocking the benefits of those investments for clients in every market and creating more opportunities for value-added proprietary offerings within that platform.

Now our focus is execution at scale, growth with discipline, leadership through performance and, as always, the client at the heart of everything we do. We have the team, the process, the platform and the opportunity. I'm incredibly proud of what we've built and excited about what's ahead. Thank you, and I look forward to continuing this journey together.

Now I will hand it back over to the team in London, and I look forward to your questions during the Q&A.

Yes. Thank you, Brian. So as we all know, the work that you and your team at WPP Media doing is critical to getting us back to where we need to be in terms of growth and also strengthening our long-term competitive position. And we wanted to do here today, so that the financial community can see the strategic focus on data and technology within our Media business and the progress that you're making. We have great confidence that WPP Media will not just catch up, but in time, lead the market in terms of a data-driven media operation.

So turning to the summary. As you know, I announced in June that I plan to stand down after 7 years as CEO, and I'm delighted to be handing over to Cindy Rose, who will be taking over on September 1. And I have to say WPP is an incredible company. And while I know well that we have immediate challenges, we also have tremendous assets, not least our people and our clients.

And I thought it would be helpful for me to end my last call of many, I must say, with my reflections on where we are as an industry and as WPP and why I'm positive about the outlook, both for our industry and for WPP.

Taking a step back in our industry, I firmly believe that what we do collectively is critical to our clients, the world's largest companies and, in WPP's case, the world's 5 most valuable businesses. These global organizations rely on us to help them build their brands, manage their reputation, sell their product, get high rankings in search engines, sell in retail channels, design their packaging identities and produce their work. And yes, increasing to advise them on how to adapt to an AI world and how to take advantage of it in their marketing to drive higher returns and reduce cost.

We said in more than 2 years that AI is no doubt going to fundamentally change what we do and how we do it. It's also going to give us new opportunities, as technology has always done in the past. And I'd say that at least half of the jobs in WPP today were not in the company 10 years ago, and that will be increasingly true in the future.

But I still believe our clients will need the creativity, the strategic judgment, the objectivity and insights that we and our industry bring them if they're going to successfully differentiate themselves from competition and navigate an increasingly complex media and technology landscape.

That's what our industry does, what I believe it will continue to do in the future, even if it is in a very different form and with much more data and technology. And just as we've adapted in the past, we will adapt in the future.

So yes, AI will change how we work. But if we embrace it fully, it needs to enhance our people and human expertise, then I believe we'll make it stronger, bring new business opportunities and create more value for our clients and, in the long run, more value for our shareholders as well.

I believe the critical question is how ready is WPP for this AI-powered future. And there, the answer is I believe we are very well prepared and certainly as well, if not better prepared as anyone in our industry.

And let's go through that on Slide 25. And to start with, we're a much simpler company. Today, 6 brands make up close to 95% of WPP's business. That's important as we're much more integrated, no longer organized in analog and digital silos.

But its importance goes beyond this, though, that this is a simpler company allows us to move faster to take out structural costs, to focus our resources on clients and to deploy technology much more quickly across the business. The work that Brian and his team have been done -- doing in WPP Media this year may have been disruptive, but it's been necessary work, and we set WPP Media as a much stronger organization to deliver to clients in the future.

And beside these things, we've not been adapting our client-facing organization. We also brought together our technology teams and dozens of teams across WPP as one product organization with a common vision. And similar work has been done in production with Hogarth, in our offshore development teams in India and our global development centers and our commerce capabilities in WPP Commerce, which as Unite won the Unilever Media Shopper Work last year.

Secondly, we have a transformed offer. When we use the word creative to describe our agencies, I don't think it captures the work that they do that goes way beyond television ads. Our agencies like VML and Ogilvy have completely transformed the work that they do, developing great ideas that work on TikTok and YouTube as well or better than they do on NBC or ITV.

We now lead our industry, in my view, for our creative reputation. And here, I should call out the efforts of Rob Reilly and our creative leaders. While awards are side products of great work, not an end in themselves, our clients who work -- led WPP being awarded Creative Company of the Year at Cannes come to us because of the creative quality of the work that we do for them. And I continue to believe that will be even more critical in an AI-driven future where creativity is what will differentiate companies.

And despite its challenges this year, WPP Media remains the world's leading media industry. You've heard from Brian and with new leadership, a new AI-led approach to data aimed to leapfrog legacy systems, I firmly believe that when the new business environment picks up, they will convert strongly.

We've also built a strong technology service offer. VML Enterprise Solutions is now a $1.5 billion business, offering e-commerce, CRM, marketing automation operations to companies around the world with strong practice with Adobe, Salesforce, Braze and the other marketing technology companies. Similarly, AKQA combines creativity, innovation and technology now with new leadership joining us, as I said, from Accenture.

Our production business, Hogarth, is now the market leader in production globally. I don't think it always gets the credit that it deserves. It's actually been the fastest-growing capability within WPP, all delivered entirely organically and in partnership with our agencies.

There's also Burson, now the world's second largest public relations company with new leadership now beyond the merger within Burson, starting to win some major client assignments.

And finally, and where necessary come with discipline. We've invested early in new areas like influencer marketing, making acquisitions of agencies like DoT, Village and obviously. As a result, our client satisfaction scores has improved, and they are now at the highest level since I became CEO.

We see that in the growth of our largest clients in the first half of this year, which continued to grow despite the overall disappointing performance. And we get better at telling the story to prospective clients in my view.

Thirdly, WPP is in a much more solid financial footing. We've moved from a situation where we're heavily indebted to a significantly firmer financial footing while returning over GBP 5.5 billion to shareholders. We shouldn't forget the role that Kantar played in this. We sold a $4 billion valuation to Bain Capital, giving us financial security to navigate COVID. We still have a valuable and some overlooked 40% interest in the company.

And then the FGS Global, which we created with Roland and his management team sold to KKR, creating close to $1 billion in value for WPP.

But my fourth and final most important reason being positive is our investment in AI. There's no doubt in my mind or that of our Board that AI will be fundamental to WPP's success in the future. We've been investing significantly in that.

And if I can be competitive and highlight what I believe are our strengths, Firstly, we've taken a very broad strategic approach to AI. We haven't looked at it just as a data opportunity or just in our media or our production business. We consider the impact of AI on the end-to-end marketing process. And over time, the comprehensiveness of our approach will be a source of increasing competitive advantage and disciplines integrate.

Secondly, we've built into WPP Open, a single AI-powered marketing platform that spans the whole of WPP, something we struggled to do for many years. WPP Open now powers our work, delivering the best AI solution at the right time. As I said earlier, we have 69,000 people using AI in their work. I don't believe there's many companies of our size or scale that have deployed it at that size.

And finally, our acquisition of Satalia has been critical to our efforts, and the expertise that they bring in the application of AI, I think, has really helped us build this differentiated platform.

Now I know that for many, AI is the source of concern for WPP. There's a fear that as an our space business, for many people, this is going to be value disruptive. I take a somewhat different position, which is that if we embrace it and we make our people use it, it will add more value to our clients. And if we can create more work more quickly, that will create additional value. It's going to open up new opportunities and new horizons for WPP.

And overall, my observation will be that those parts of our business that have best embraced technology, our Media and Production business have been the strongest, and AI offers the opportunity to bring data and technology to all of WPP, particularly our Creative businesses. And I believe that, that will make us collectively stronger.

So turning to Slide 26. I do believe that WPP is making significant slides -- strides in getting ready for the future. That said, there's absolutely no doubt in my mind or that of our management team that we have work to do. We have to strengthen WPP Media and deliver on the promise of WPP Open and Open Intelligence that Brian outlined.

Clients need to see the power of our new data approach and how we can use it to drive stronger returns. We have to improve our new business conversion, so new clients can see the strength of our offer, the quality of our work and our ability to work across WPP to deliver integrated solutions that our existing clients see that is reflected in our client satisfaction scores.

And as I said before, we have to embrace the opportunities and challenges of AI. But I firmly believe that we come out this challenge with an extremely strong set of capabilities, a well-balanced offer across creative, production and media. We're a leader in AI and technology. We have a unique global footprint with partner to the world's largest clients, 4 of the world's 5 most valuable companies, we have an extremely strong bench of talent and culture that takes us into the future.

So to wrap up, I'd like to end by thanking our people. You are, I think, what I will miss most in the next chapter, and I wish you all the best. I know that the past 6 months have been challenging, but if we approach the future with the same determination as we did in COVID and the many other challenges we face, then we will succeed.

It has been, I would say, a privilege to lead this great company and the successes that we have all down to you. I'll be handing over to Cindy in a few weeks, and I'm sure that you and our clients are in very good hands.

So thank you all very much for listening. And now we're ready to take your questions.

[Operator Instructions] We will now take our first question from Laura Metayer with Morgan Stanley.

Mark, it's been a pleasure to interact with you, and my best wishes for the next step in your career. Three questions from me, please. The first one is on the pricing environment. What are you seeing in terms of pricing in this challenging macro environment? Would you say there are some pressures or it's been relatively flat?

Second question is, can you tell us a little bit more about your product offering in influencer marketing? One of your competitors acquired a relatively large influencer platform, so I was wondering if you believe you need to make more acquisitions in this space or if you have already the required capabilities. And how do you see this market evolving more broadly?

And then lastly, can you tell us a little bit more about the one-off that you mentioned that negatively impacted H1 '25?

Thank you, Laura. Thanks for your wishes. I'll take the first 2 questions and then Joanne can add anything she like on pricing and talk about the one-off.

Look, I think our industry has always been very competitive, and it remains competitive. And I think to some extent, the larger the review, the more competitive it becomes. And there has been, perhaps in a slower new business environment, a slightly tougher financial environment.

I think our job is to respond to that. But I think we do find that as we win clients and expand scopes, we can address some of the pricing issues that inevitably come. I think we will see with AI, and one of the things we're doing is using WPP Open to demonstrate to clients how we can deliver work more quickly and more efficiently. And I think that will be a source of competitive advantage for us in responding to some of the pricing challenges.

In terms of influencer marketing, look, I think we're very confident in the strength of the offer that we have. We won a number of assignments. I would call out L'Oreal and other clients. We acquired 3 businesses, I mentioned actually on Goat inside WPP Media that focuses on using influencer marketing to drive business success for clients to have a global platform and some scale.

We acquired a smaller business, Village, about 3 or 4 years ago into what's now VML and an extremely talented team. They do all the work for Kamala Harris around the DMC. And while ultimately she wasn't successful, obviously, in the election, I think that work was recognized as sort of at least starting her campaign in a very positive position.

We have obviously another strong influencer business. And actually, Ogilvy has built one of the strongest influencer businesses totally organically. So I don't think we're in a situation where we need to make acquisitions, and clients can get everything that they need for us from an influencer position in terms of the capabilities that we have today. And we've probably been slightly ahead of some of the competition in terms of making those acquisitions.

Joanne, will you take the financial questions?

Yes. So Laura, thanks for the question. On one-off factors, the related to contractual obligations in our Media business and impacted Western Continental Europe. Given the nature that we don't expect them to repeat in the balance of the year, we've called the market because it was meaningful in Q2 and, therefore, helpful to understand the Q2 relative performance.

But from a full year perspective, they will obviously be less meaningful.

Our next question comes from Adam Berlin with UBS.

I want to also wish Mark the best for the future. A few questions, if I can. The first is on Hogarth. You talked, Mark, about how that's been a real source of growth. But I did notice that in the first half, it was only flat. And I think given people's concerns about AI and the progress people are making using AI to do production, could you explain a bit more why Hogarth was flat? And why we've seen that deceleration in Hogarth, just to -- is there an AI impact there? Or is it just to do with the overall market slowdown? So that's the first question.

Second, I want to ask Brian about his comments around data within WPP Media. I think you said that you have more data than your competitors. I think people would find that surprising because, obviously, purposes of Epson and IPG of Acxiom, which seem to be kind of large data assets. Can you talk a little bit about what you mean by that? Like what data do you have that they don't have? How do you -- where do you get this data from that they don't have access to? Just trying to unpack that comment a little bit because I'd just like to understand better what you mean.

And then thirdly, I'll ask, you cut staff incentives in H1 by about 60%. I know some of that was M&A. Is that the right way to be thinking about H2 as well? Just to understand the plan there on the current guidance.

Okay. So I'll take the Hogarth question. I think Joanne can take, because she's in the room with me, the second -- third question. Then we would leave Brian to end on Peter.

But I think in terms of Hogarth, we have seen continued structural growth. There are -- as I mentioned, it's been a very volatile client environment, and we've seen lots of clients -- I've never seen -- divergence in performance in time, some growing and some cutting back, and Hogarth has been, to some extent, the victim of some timing issues on product launches for some clients. So I don't think there's anything there.

There's nothing there in terms of impact of AI. I think the impact of AI in Hogarth business will only be positive, and I'll give you a good example. We recently took a client -- I can't tell you client's Super Bowl commercial that they shot, and we remade it using Google VO2 insight Hogarth. And if you run the 2 commercial side by side, people can't tell -- people don't know which one was done with AI and which one was done in a real shoot. And I think that's sort of a tremendous growth opportunity for Hogarth. Currently, we don't produce television commercials. But actually, this gives us the ability to produce even more work. And we did actually for CoreWAve create a commercial entirely in AI as they run on -- in a network television in the U.S.

So I think AI will be a source of growth for Hogarth. And I think what we're seeing is really just largely timing issue on projects within their business.

Joanne, do you want to tackle the question, then we'll go to Brian?

Yes. So on the incentives, we are a performance-based business. And in the first half, the results of incentives is really mechanical, and it reflects the performance in the first half. And I would expect for the full year, based on our outlook for incentives, will be down. We'll confirm by how much at the full year. But we are very sensitive to the importance of motivating and retaining our top talent. And we do review our incentives on a discretionary basis when we have the full year results, and this is reflected in our planning assumptions.

Adam, on your question about data, what I would say is we have more data than other holding companies because we think about how to incorporate data into our performance model differently. The business for 20 years has focused on how much traditional legacy CRM data you can collect in a database. And that notion of collecting legacy data is increasingly under pressure as what we do evolves to go beyond just paid media on traditional channels to include things like content development, influencer marketing, retail media.

And so our model, which is called Open Intelligence, has the same amount of traditional identity data, but also includes hundreds of other partners, including data companies and media companies. And we use InfoSum and a technology called Federated Learning to learn from those sources of data, so that we can more accurately predict the performance of campaigns before we run those campaigns.

So we have the identity data for the traditional approach to digital advertising. And we also have hundreds of data partners that help us better understand consumer behavior to drive performance. And we've seen that outperform our competition on existing campaign.

I want to ask, Brian, if you could just give an example of like one of those data providers would be just to bring it to life a bit more.

Sure. There are providers like Google, like Amazon, like TikTok, traditionally considered walled gardens of information. If you were to ask many media companies to spend data into a central database, of course, they would be reluctant to do that.

But using InfoSum and technologies like Federated Learning, we can learn from those data sets without having to centralize the data and own it and broker data, which is a business we'd rather not be in.

Our next question comes from Annick Maas with Bernstein.

My first question, maybe it's a bit too early, but can you just talk to us potentially about what the dividend reset means for the dividend strategy going forward?

My second one is on staff turnover. So I guess, in recent months, you've also seen some senior staff departures. And I kind of want to understand, I guess, with the senior staff -- people usually come very high -- come with a good client relationship. So how have you accounted for potential client losses because of the senior staff departures?

And then my next question is for Mark. I guess, if you take a step back and if you think about what -- if you knew when you started what you know today about AI, about the industry, about tariffs, how would you have differently approached WPP when you became CEO?

Okay. Why don't I start there and maybe -- look, I think looking back 7 years, there's obviously things I would do differently. I mean, you would be -- I won't be human to say, but you wouldn't do some things differently. I think like most CEOs, every year have ever spoken to, they always do all the things that work more quickly, and none of those things that didn't work. And I think in my case, I'm sure there are things that I would do differently and things I would do more quickly.

I think as I tried to summarize, I think the direction that we have taken the business to integrate it more, to integrate analog and digital, to put technology at the core, to focus on the quality of the work have all been the right steps. And probably, as you say, inevitably, one should done those things more quickly, except what has been successful.

I do think that the brand structure that we have has been effective. And I think that they still remain important, but they need to be more brands, less companies. And in order to manage talent, not to manage the organization. So I think there's all directions in which I'm not going to set the strategy for Cindy or ever comment on it in any way. I think there's all directions I'm sure that she will look at to actually take the company.

Yes, I do think that the acquisition of Satalia will stand out as being an excellent move that we made, and many people, not just who were involved in making that decision. I think it's given us now close to 200 people who are world-class AI experts, able to build a platform with more power on what we do. And we saw the cost of seeing what the impact of AI beyond. This is probably -- that's the thing -- I mean, other than beyond the people and the client think I'm mostly seeing how we implement that.

Joanne, do you want to tackle the other questions?

Yes. So let me just start with the dividend one. So -- and where I would start is the Board and management's top priorities to drive sustainable growth. And in the context of our current performance, reducing the interim dividend gives a greater degree of financial flexibility to support that growth.

Obviously, Cindy starting on September 1, and we will review the strategy alongside her, and that will include an evaluation of our capital allocation policy and our distribution to shareholders.

The reduction of the interim dividend by 50% gives that greater flexibility, but it also reflects the importance of shareholders -- or the importance of shareholders who put on the dividend. I think it would be premature to assume that the payout biz and the half year earnings will be the basis for the ongoing policy. But of course, we will update in due course alongside the strategy.

And sorry, you had a second question just on staff turnover. I would say on that, there's been some staff turnover, yes, but also we have attracted very senior strong talent into the business as well. I think it's no higher or lower than what it has been historically.

And specifically to client losses, I mean, the short answer is no. It's not driving client losses. We have a very strong team of client leaders, but our client relationships are not really based on any one individual. They are very long-standing and deep partnerships that we have across many parts of the business.

Our next question comes from Adrien de Saint Hilaire with Bank of America.

Yes. And first of all, again, extending the gratitude to Mark for all those years and then best wishes for the future. A few questions, if you don't mind. First of all, there was a piece in campaign that discussed a potential partnership between Accenture and WPP. Can you provide any comments around that?

And then maybe some questions for Joanne. Can you comment a bit on Q3 trading to date versus the underlying minus 4.8% that you had in the second quarter? And then can we talk also about where you expect average net debt to land for the year? What's the underlying working capital outflow assumption? It was a minus 168% for the last 12 months, as you highlighted. So what are you baking in for the year?

And then I've got a last financial question. You said your tax rate at 31% for the year given a lower profit before tax. Do you think that's the new sustainable level going forward? Or should we go back to 29% as you rebuild profitability looking out?

Okay. I mean, on campaign, it's an excellent publication and one I look forward to continue reading, but it's not always entirely actual at the moment and we can't comment much more beyond that.

Joanne, do you want to take the financial question?

Yes. So just starting with Q3 trading to date, look, it's early in the quarter. Trading -- the trading environment does remain challenging, and I want to avoid getting into month-by-month detail, but there's nothing that we have seen that would change our revised guidance range.

In terms of the average net debt, the average net debt has been coming down, and that partly reflects the use of the FGS proceeds to reduce debt last year. In terms of where we expect average net dent to be this year, we have guided to adjusted operating cash flow before working capital. We've guided on tax, interest, restructuring costs. We don't guide on working capital, and that's consistent with our peers.

Our working capital can fluctuate at the end of the year. We have GBP 60 billion plus going through our balance sheet. And so a GBP 200 million, GBP 300 million movement either way is not unreasonable amounts. But we are very, very focused on continuing to reduce that average net debt as we move forward.

And in terms of the ETR, it was very much -- the 31% really is mechanical, reflecting the lower level of profit and the impact of nondeductible expenses. The share price reduction had a bit of an impact as well on deferred tax assets. I mean, going forward, the tax rate will really depend on business mix and level of profits. And we'll update on the 2026 rate in February.

Our next question comes from Julien Roch with Barclays.

First of all, Mark, best wishes on your next chapter. I think people underappreciated how much you have transformed WPP. I'll start with you. In your minus 5% to minus 3% organic guidance, what did you put in for new business and macro? If you were to lose do, I hope not, all the GBP 1 billion of billings you are still defending, could it be worse than minus 5%? Or would the impact be mostly next year? If the macro is worse in Q4 in December, could it be worse than minus 5%, so kind of new business and macro parameters to lend within minus 5% to minus 3%? That's my first question.

The second for Brian. Your single media platform is live in the U.S. and the U.K., so not globally, which means you are not done in terms of transforming WPP Media. So when do you think you'll be mostly done? Are you going to every pitch with the solutions and products you want? Is it end of '25, some time in '26? And was Open fully operational when you pitched for Mark and PayPal?

And lastly, probably for Joanne, how much was a gap of net sales in full year '24?

Okay. Joanne, do you want to tackle those? And then we go to Brian.

Yes. Let me tackle 1 and 3, Julien, and then if Mark wants to build and maybe he can. On Hogarth, it was about 5% of total net sales last year. And then in terms of the guidance, as we described in July, the revision in guidance is really split roughly equally between the macro impact that we're seeing. So perhaps, we talked about that at the media.

And then the 80% of net business, and we've been in that new business, it's really incremental client losses since the start of the year. And again, that's really in media. And then a weaker new business performance, driven by conversion, but also just the lower volume of new business that we're seeing.

Convergence talked about Media pitch volumes being a third of what they were in the first half of 2024. So there is a lower volume of that.

In new business specifically, at the start of the year, we were expecting it to be broadly flat. We're now expecting to be a drag of 100 to 150 basis points for the reasons I outlined. And if you look at it from a gross client loss perspective for the full year, we're probably expecting around 3% to 4% of the drag from that. So hopefully, that gives you some of the levers within it.

In terms of the reengineer, the wide range, and I think that reflects the volatility that we're seeing in the market at the lower end of that range assumes 0.7%, that's what we expect, just worse than the half and also deterioration of the underline second quarter performance. And at the top end, it's declined -- and really, there's variability within that are the macro and the continuing business was launched.

Brian, I'll hand to you.

Yes, Julien, thanks for the question. In terms of the implementation of Open Media Studio, we will be substantially done with the deployment of the platform by the end of 2025. So we're prioritizing by market and by client, but that rollout is happening as we speak.

In terms of Mars, we were in the process of deploying Open Media Studio for Mars. And in terms of PayPal, we did not fit for PayPal, and we resigned the PayPal business.

Our next question comes from Steve Liechti from Deutsche Numis.

Yes. Can I just focus on the media side? Just -- and sorry if this replicates Julien's last question actually. Just on Open Intelligence rollout, just to confirm, U.S. and U.K., it's with existing clients. And then have you got any evidence in terms of pictures that you are using it for where you've had success or not at this stage? Or is it just too early where we are?

Second question is on the media changes and the sort of consolidation there. Clearly, a lot of disruption in the first half. Can you just confirm that, that disruption is being contained? Or is there a further drag into the third and fourth quarter? Are things happening perhaps you weren't planning for in terms of you cut too hard here or there? Just to give us some comfort that where -- when does that Media business stabilize and get back to where you want to be, I guess, in terms of operationally. I'll leave it there.

Any time you try and turn a business as dramatically as we have, you're going to experience some disruption, and we did see that in the first half. We are substantially through that transformation. And I don't expect any lingering effects in the second half.

We've restructured the company. We put new leadership in place. We are consolidating onto one platform. So I feel very good about going into pitches in the second half of 2025.

In terms of the Open intelligence rollout, Open Intelligence is our data model. It underlies Open Media Studio, which is our platform. And yes, we have seen success already on some of our long-standing clients in terms of outperforming traditional identity-based approaches to performance.

I just add to Brian's point. The U.S. and the U.K., the 2 most important markets in which we need to implement Open Intelligence, they're the most sophisticated data markets and the area where we have, let's say, the biggest gap versus the competition. I think that has to be the priority. And I think that Brian correctly focused on that, and the rollout in the other markets is taking place. But I think that does close the gap in an important way.

But yes, you ask you a further question here.

Yes. Sorry. Yes, the follow-up really was when we were in Cannes, it kind of felt like you were still really introducing Open Intelligence to clients. I just really wanted more comfort that you're actually out there deploying it, and it was being successfully used in pitches. Anything you can just say on that, please, would be helpful.

Well, frankly, I wish there were more pitches, but it is being successfully used on pitches. We're towards the tail end of some pitches now. So I expect it to produce great results on pitches. But as you know, we can't necessarily control how many pitches there are in the market. What I can tell you is as we adopt Open Intelligence for our incumbent clients, we are seeing performance gains that are substantial as compared to traditional approaches to identity.

We currently have no further questions at this time. I would now hand the call over to Mr. Mark Read for further closing remarks.

So thank you very much. There's no more questions. I think we'll leave it there. So before I go, I just want to say thank our clients and our people for their ongoing trust and support. And also to thank all of you, the analysts and investor community, with your interest in WPP and engagement I've enjoyed.

I think I've enjoyed these calls over the years, and maybe the thing I will miss the most, or not.

So look, it's a continuing challenging environment out there. And I think we're under no illusions about that, as you say, but I think we have made some difficult decisions that some of these decisions we made today. But I am positive about the future. I look forward to seeing what comes next. I think it ends by thanking, in particular, videos to meet that particular and this year for her support and Scott support over the last 7 years, to the Board. I wish Cindy all the best in taking over the reins. And thank you all very much, and goodbye.

That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the WPP First Half Trading Update Call. [Operator Instructions] Today's conference is being recorded. I would now like to pass the conference over to our host, Mark Read. Please go ahead.

Thank you, operator, and good morning, everybody, and thank you for taking the time to be with us first thing in the morning. I know this is an unscheduled announcement, and so we do appreciate your flexibility. Hopefully, you've had time to review the release, and we'll go into more detail.

So on this call, Joanne will take you through some of that detail on the trading performance and then discuss our guidance for the full year. And following that, we'll open up the line for questions. Given that we have another call coming in a month, I'm going to ask them to focus on the main points, and we can get into detail, obviously, in a month's time. But over to you, Joanne.

Thank you, Mark, and good morning, everyone. So let me take you through our trading performance in the first half and our updated guidance before we open the line for questions. At the outset, I think it's important to recap what we have communicated so far this year. At our preliminary results in February, we set out our expectation for net sales to be flat to down 2% in 2025 with a profile that anticipated a stronger performance in the second half compared to the first.

We expected Q1 trends to be broadly similar to the Q4, which at minus 2.7% like-for-like they were. And at our Q1 trading update in April, we expected similar trends to weigh on Q2 performance, namely the uncertain macro environment to continue and the net new business impact reflecting prior year account losses. In the event, we saw a deterioration in performance as the second quarter progressed with, first, a greater degree of caution on client spending than expected; and secondly, weaker net new business.

This is exacerbated by one-off factors, which impacted WPP Media's performance in the quarter and which we don't expect to continue in the balance of the year. As such, we now expect H1 like-for-like to show a decline of minus 4.2% to minus 4.5% with a second quarter decline of minus 5.5% to minus 6%. Stripping out one-off factors, the underlying run rate like-for-like would be closer to minus 3.6% to minus 3.9% in the half and minus 4.5% to minus 5% for the second quarter. In absolute terms, we expect revenue less pass-through costs of around GBP 5 billion.

We will share more detail on the performance in the second quarter when we report interim results on August 7. But at a headline level, I would make the following comments. Starting with regional performance, we saw a deterioration in Q2 like-for-like in North America, reflecting tougher comps and a weaker like-for-like versus Q1 in the U.K. and Western Continental Europe despite softer comps. In contrast to when we met in April, we are seeing an increasing number of clients across different sectors, cut budgets and spend in reaction to pressure in their businesses from ongoing macro uncertainty.

Turning to performance across segments. We have seen the most significant quarter-on-quarter impact in WPP Media and Ogilvy, reflecting a pullback in client spending. And for WPP Media, the one-off factors I referred to earlier as well as a quicker ramp down of the Q1 client loss. As a result, we expect the like-for-like decline in global integrated agencies to weaken from minus 2.8% in Q1 to a mid-single-digit decline in Q2.

Moving on to headline operating profit. We noted at our Q1 results that the severance actions at WPP Media would weigh on our H1 profit margin. In the first half, we expect our total severance costs to be around GBP 100 million, reflecting the actions in WPP Media and other parts of the business. This represents an incremental severance charge of around GBP 65 million or 120 basis points versus H1 2024.

In addition to a higher severance cost, the weaker net sales performance has also weighed on year-on-year margin performance in the first half despite benefiting from a lower level of accrued incentives. As a result, we expect our first half headline operating profit to be in the range of GBP 400 million to GBP 425 million with a headline operating margin range of 8% to 8.5%. Excluding FX, this reflects a 280 to 330 basis points decline year-on-year.

Turning now to our revised guidance for the full year. We expect our 2025 net sales to decline on a like-for-like basis by minus 3% to minus 5%. This compares to the guidance we set at the start of the year of flat to minus 2% like-for-like. Reflecting a weaker top line, we now expect margins, excluding the impact of FX, to be down 50 to 175 basis points versus previous guidance of flat year-on-year margin. To help build a bridge between our guidance at the start of the year and now, I will provide some context on what has changed.

And let me start with our top line and net new business. Our original guidance anticipated a headwind from net new business in the first half and a tailwind in the second half, leaving the full year impact broadly neutral. This reflected known wins and losses at that time and an expectation on the volume of new business and our win rate. We now anticipate a negative impact from net new business for the year as a whole, reflecting incremental client losses and a lower level of new business conversion. We estimate that impact to be around 100 to 150 basis points.

This includes some pull forward of client losses, which we would have originally expected to impact in 2026. At the same time, the impact of the macro on current client spending has been more pronounced in the second quarter than we anticipated and more than we had assumed at the bottom end of our original guidance.

Turning to margin. The first half has been impacted by a weaker-than-expected top line performance. Actions have been taken in response to this with headcount at the end of H1 expected to be down around 3.5% since the start of the year, while the full benefit of these actions will only be realized in the second half. As we look to the full year, we anticipate a margin decline of 150 to 175 basis points. This reflects the weaker top line and also our expectation that the actions we are taking and have taken, including the restructuring of WPP Media, will deliver an improved margin performance in the second half.

In the full year, we expect a broadly neutral P&L impact from the Q2 restructuring actions in WPP Media. At the same time, it is our intention to continue to prioritize selective investment in the business with a focus on WPP Media and our data and tech offering through WPP Open. We believe this is critical for the longer-term success of the business.

So thank you, and I will hand you back to Mark.

Thank you, Joanne. Before we take your questions, I'll make a few closing remarks. So first, it's obviously disappointing to have this update, but we wanted to be clear with you about what's happening in the business and our expectations for the full year as soon as we could. If I go back to the 3 strategic priorities we shared for the full year back in February and how we're doing against them, I'd make the following observations.

First and most importantly, the implementation of the new strategy for WPP Media, I would say, is going well, but we're clearly not yet seeing that translate into better business performance. The InfoSum acquisition has been well received by clients, and it is definitely starting to address the perceived data deficit in our media strategy, but it's early days, and I think it's encouraging. The restructuring is delivering significant structural cost savings. It doesn't help us in severance in the first half, but that will flow through into the second half, and that's going to help make us more competitive.

I think it has come with some distraction to the business. And WPP Media has suffered with a deficit of new business opportunities. The latest convergence tracker shows that new business opportunities in media year-to-date are running about 1/3 of the level in 2025 as they were in 2024. I do believe that WPP is a strong competitor with an excellent global offer.

Secondly, and linked to that new business issue, new business conversion in terms of win rate is probably similar to last year, but is falling short at WPP Media and a lower level of new business opportunity, and the pipeline in general has made us more cautious in the second half.

And then lastly, we have focused a lot on AI, as you know, I am convinced by the progress in AI and the power of WPP Open and that's being seen in the level and degree of engagement we're having with our top clients and will be seen in competitiveness. I think it's important to say that as we prioritize our investments for the year, we do continue to invest in WPP Open in line with our plans at the start of the year.

So with that, we'll open up for questions. Just please bear in mind, we do have another call in a month, so we can get into more detail then, but we're obviously happy to take anything anybody has. Operator, do you want to give people a chance to ask questions.

[Operator Instructions] Our first question comes from the line of Adrien de Saint Hilaire with Bank of America.

I'm really sorry, I missed the first couple of minutes of the call, so you probably have touched on that. But I'm just curious like what actually changed during the month of June. It sounds like it was the worst month of the quarter. So why would you now expect second half to be stable versus the first half in terms of organic sales growth if June was indeed the worst?

Secondly, do you expect that there will be incremental severance and restructuring costs coming with that lower guidance? What does that imply in terms of full year free cash? And where does that leave leverage? And if you're above range, do you think there's a risk of other measures to be -- to mitigate maybe that higher leverage?

Joanne, can you get the first question?

Adrien, we lost the line a little bit. Could you just repeat the first question? We got your second question. That would be very helpful.

Sorry, excuse me. My first question was about like what actually changed in June? And if it was indeed the worst month during the quarter, I think, your guidance implies that the second half is stable versus Q2. But how is that consistent if indeed June was the worst month of the quarter?

Okay. Let me start there. Look, what we saw was a weakening in client sentiment from the start of the quarter, but we didn't see a material step down in spend and like-for-like performance was broadly in line with expectations and very much within our guidance range. Performance did deteriorate through the quarter, particularly in June. It was really driven by 3 factors as we do progress through the quarter, we saw deeper client spending impacts than we saw in prior months. That was particularly in CPG and auto. Net new business was lower than expected.

We saw Coke North American Media rolling off as we went through the quarter. And then there were one-off factors which impacted June's net sales performance as well and impacted the Q2 like-for-like overall. So look, I think, it's -- June, of course, performance is a consideration, but it's important to look at the quarter as a whole. Certainly, the performance through the quarter has made us more cautious. And at the lower end of that guidance, it does assume an H2 deterioration versus H1 and a deterioration in the underlying Q2 like-for-like.

In terms of the second question on incremental severance and restructuring costs, we did see, as I spoke to, a significantly higher level of severance in the first half and which relates to the actions we took at WPP Media, but also across the rest of the business, and that's included in the headline operating profit. I'm not expecting restructuring costs to change as a result of the actions we're taking. We'll take those -- that severance through headline operating.

And our guidance for the second half margin reflects the further cost actions that we are planning to take as we go through the balance of the year. In terms of leverage, obviously, the lower profit does have a negative impact on cash and our leverage ratio. We are very focused on our cash flow management, as you'd expect us to be. We'll give further detail at our interims update on the 7th of August. We do have an average debt maturity of 7 years. Our average cost of finance is 3.7% with no covenants. But as I said, I can give more update on cash on the 7th.

Our next question is from Bernd Klanten with Barclays.

Also, apologies, I missed the first couple of minutes, so you may have already addressed that. But if I got it right, you said the impact of the account losses to be 100 basis points to around 150 basis points. Can you perhaps just go into where the rest of the delta of that downgrade comes from?

Yes, so the -- in terms of the delta versus where we were expecting, it's about 3 percentage points at the top and bottom of the range. And with net new business, as we said, we expect that to be about 100 to 150 basis points. So that's half of it. The remainder is really the impact that we're seeing on the macro is -- was more pronounced than what we were anticipating in Q2 and more than what was built into our guidance at the start of the year.

And as I said, we've seen that across different sectors, so not just sectors where they've seen direct impact from tariffs and uncertainty, but also some of those sectors that are seeing second order impact. So we've just seen more caution from clients. So the way to think about the delta is roughly half from net new business and half from that weaker macro.

Our next question comes from the line of Adam Berlin with UBS.

My question was, is it fair to take the H2 implied run rate on organic growth into the first half of 2026? And obviously, we need to start thinking about 2026 numbers now. I know it's a bit early, but just any reason not to kind of assume that's the case. And the second question, I was a bit surprised to hear that June has been so weak in terms of macro. How can you be sure that your clients are just spending less overall and not just less through your agencies?

Look, I think, on the first question, it's too early to talk about 2026. When we think about what we're able to say, in the interim, so I would normally give you sort of guidance indication so far. And I think the way to think about it broadly is the trends in the first half continue into the second half with a range that implies some ability to have continued -- some improvement in the underlying performance from the first half to the second half, but also the ability -- but also with derisking where we are today as we look at the pattern. I think that June is just 1 month.

And I think it's quite dangerous to look at 1 month overall and extrapolate from that. But I think what we saw in June was a combination of both sort of more pressure on the top line and then derisking of plans across the rest of the year as we went through our forecast in the second half. And I think it's a combination of those 2 factors that get us to this place and realization, and the fact that clients are cautious and that cautious extends both into the macro, but to some extent, into new business activity because new business activity is driven by the degree of confidence in the future.

So we're seeing fewer opportunities. Opportunities tend to be smaller. And I think that in WPP Media, it's more a factor of sort of annualization of losses going into this year, some losses that we thought would impact. We thought that March would impact Q1 next year, but actually would impact us Q4 this year as a result of decisions that the clients have taken. And fewer opportunities to drive growth within WPP Media because of fewer pitches. I mean the convergence data is quite stark.

The pitches year-to-date are running 1/3 this year as the level they were last year. And I think that that's out there. I think it's a combination of macro caution. And again, we can go into more detail in a month's time on how we see that broken out by sector and how that continues into the second half. Thank you, Adam.

Operator, any further question?

Our next question comes from the line of [ Keval Patel ] with Citi.

I was just hoping for a bit more clarification just on Q2 and the scale of the miss versus expectations. Were there any one-offs that came in, in that quarter that could help explain the miss a bit better?

Yes. Thanks, Keval. Yes, there were one-off factors, which impacted the Q2 like-for-like by about 1%. So the underlying performance in the Q2 was more like negative 4.5% to 5%. And those one-off factors impacted in the last month of the quarter. So I think that's important as we think about the Q2 underlying rate, it's certainly in the context of our guidance for the balance of the year. And so at the bottom end of our guidance we are, that would assume a deterioration in the underlying rate in Q2.

Our next question comes from the line of Laura Metayer with Morgan Stanley.

I'm sorry if it's been said already. I just wanted to check on the margin on the new guidance range. What does the low end imply versus the high end? And why such a big range for the margin guidance?

Yes, in terms of -- I think, the lower -- the margin guidance is quite closely related to the net sales guidance. And if we're at the top end of the range for net sales, we'll be at the top end of the range for margin and vice versa. And I think that is the best way to think about it. I also think I'd observe with our headcount down 3.5% at the end of the first half, roughly, you would expect that to flow through in terms of savings, which would support the relatively lower margin impact in the second half than the full year. But Joanne, do you want to add anything to that?

Look, I mean, I think that's right. It's really reflecting the top end of -- sorry, the range of guidance that we're giving for the balance of the year. In terms of the guidance, we are assuming an improvement in the second half. And that's really driven by the fact that we took restructuring actions in WPP Media in Q2, we alluded to those in Q1. And therefore, the bulk of actions that we've taken in that part of our business was really skewed to the second quarter, and that drove a much higher severance. We'll see that to be a tailwind on margin in the balance of the year.

And also in Q2, the step down in sales is more significant. So we have taken headcount action, as Mark said, but there will be a lag effect of seeing the full benefit of that in H2. I think it's important as well to say, Laura, that we are continuing to invest selectively in the business with that focus on Media and WPP Open, and it's our intention to continue to do that through the second half. We remain, as you'd expect us to be, very cost-focused, particularly around our discretionary spend.

There are no questions waiting at this time. So I'll pass the conference back over to Mark. Please go ahead.

Okay. So thank you, everybody. Thank you for your questions. We'll have our update in a month. We are going to have the WPP Media leadership CEO on that call, so hopefully, we'll be able to give you a bit more of an update.

I mean if you look at sort of where this is focused, as Joanne said, the issues primarily have been in WPP Media and, to some degree, will be impacted by project-related work in the creative part of the business. So thank you all, and I'm sure we'll have a follow-up on. And Tom, Joanne and I are here to follow up. Thank you.

Thank you.

That concludes the WPP First Half Trading Update Call. Thank you for your participation. You may now disconnect your lines.

Hi, everyone. I hope you had a great day. I've heard it's been high energy. We're going to try and keep it that way, aren't we? So I think the topic of all topics, particularly for anyone at Google, but anyone across all of our fields is around AI. And I have been at Google for shy of 2 years now really because of AI and its impact. I've worked with marketeers in the advertising industry for over 20 years. And I think this is a seismic moment, and I wanted to be in the center of it and Google really is at the heart of that.

So I asked to speak a little bit about AI's impact on advertising. And I think it goes without saying that AI is, and can impact advertising significantly and there's huge potential. If we kind of contextualize that, I'm always wowed by Sundar, CEOs statement around the profound impact of AI on humanity being bigger than electricity or fire. So I think it can't not affecting everything in our world. I think for us, what we're really trying to understand is how we use AI to be more effective to personalize, to bring on magic, I think, as well. And so a lot of what we'll be talking about today is around centering around that. So I'm looking forward to this discussion.

Wonderful. Very nice to be here, Vanessa. So hi, everyone. I'm Stephan Pretorius, I'm the Global CTO for WPP. My job has become a sort of move from being Head of Technology to being the AI guy at WPP, which is some sort of saved my career. But I think the -- in all seriousness, like all knowledge work, whether it's accounting or, law or consulting, AI is having an absolutely profound impact on the advertising market and the practice of marketing services in general. And so look at WPP at AI is really affecting our work in 3 ways. It affects how we work, our day-to-day productivity and how we get has done. It affects how we make work, how we produce work. And lastly, it affects how consumers experience the work.

So there are new forms of personalization and creative that can only be done with AI. I mean controversly, I think a lot of you would have seen recently, CEO of another large digital media company saying that AI will replace all marketers and all agencies in the future. Not an uncontroversial statement. And I think in fairness, the segment was really aimed at small businesses and how AI would empower small businesses. But I think the point in seriousness is very much true also, transformationally true for large companies and agencies and marketing service providers. I mean we really look, and the reason why we here together, WPP and Google is because we have a very close partnership. We invest billions of our clients' marketing dollars on the Google marketing platforms.

We use Google's Cloud platform to build our products. We use their AI models, Gemini, Imagen, VO to make content. The film you saw just in the beginning was the launch form of when we introduced VO2 into our open platform in March. Already now, there's VO3 which can generate sound and music, and the state-of-the-art already moved on. And so we very much see a partnership between brands, marketing agencies and Google as being something very symbiotic and actually very productive.

But Vanessa, maybe just to focus a bit more on Google again, how do you see AI more broadly impacting Google's products?

Well, I mean, the interesting thing for us is that Google has been an AI-focused company since 2016. I just didn't want to speak about it too much. And now it kind of seems to be all we speak about because it's so important. And I almost have found in the pivot in my career, if I'm going from sort of the creative side to tech that talking about AI, sometimes like talking about air, it's sort of in everything that we do now. So we recently had IO at Google, which is our sort of Rockstar conference for all of our new announcements.

The pace of change or over 100 announcements across our products in terms of updates or newness. So -- and all of those were AI-powered, right? And so as consumer human behavior and consumer behavior changes, so do all of our products whether it be search or YouTube translates, it's many, many more languages and every single touch point. But of course, what that means is that we have our consumer-related products and also our ad-related products for marketers. They both have to meet this changing behavior. I think one of the things that's really interesting in terms of our product is, of course, the anchor of Google is Google Search. And what we're seeing now is the shift in behavior, meaning that we're creating so many more touch points full search using AI.

So one of the things that we're really focused on is this shift in away from singularity to people sort of symbiotically searching, scrolling, shopping and streaming sort of all at the same time. So how do we make sure that we're showing up for our audience in the correct ways all of the time, which is why we have the development in sort of Google Lens, Circle to Search, so much going on with AI overviews, which we're looking at kind of how we monetize going forward and so on. So almost every single touch point is changing.

What that means for marketers, which is what I'm focused on, my partnerships with our CMOs and C-suites is that -- for a very long time, our ad products over a decade have been powered by AI in the background. Now it's much more in the forefront, really driving performance of ads and campaigns, so making them much more effective. But also, I think the relevance to consumers in terms of where campaigns show up and how brands are surfaced. So personalization is huge. And I think that that's good for everyone. That's good for brands and marketeers. They're able to ensure that their investments work much harder. They're able to drive much more growth. But it's also good for our consumers because people have less time and they want more relevance in what they served. And what we've seen on the marketing side of the business, we had BCG to a bit of research for us is that the marketeers who are deeply adopted with AI ad products are seeing 60% higher revenue increases than their peers who don't adopt in AI.

So for us, that's all the motivation we need to keep investing heavily in these products and how they can surface more relevant content. And I think for us, the other area is around creativity. And I think that's one of the areas that we can speak to in a bit that I think is one of these areas that I think has huge potential, but it's also an area of nervousness, I would say. I would love for you to speak to that a little bit from kind of WPP's approach and how you're seeing sort of creativity and marketing evolves.

Yes. No, it's a key issue for us. And as you alluded to, I mean, a lot of the application in AI in marketing has been focused in the last 2 years on efficiency. So automating processes that were laborious before, difficult to access data, et cetera. And all of those things are great. But ultimately, it still has to be good work at the end of the day. And if you take away all the technology, it still has to be a great idea. And so we think a lot about this, and we work a lot with our teams in terms of how do we build tools and how do we train our people in order to see AI as augmenting their creativity, not replacing it.

Because, I mean, simplistically, AI replaces task or AI eliminates tasks, it doesn't eliminate jobs. And I think there's a big distinction between the two. The degree to which a company can make the transition from being an analog business or kind of a pre-AI to an AI-enabled business is the degree to which people can actually adopt AI to augment them, and to improve what they output. So I think ultimately, creativity in its purest form, stays a human skill and a kind of a human purview. I think a lot of what happens in marketing services can be done with AI. I mean I have researchers to tell me that most of marketing is just the vector embedding. I mean that's a bit of a nerdy comment. But it really is kind of true to some degree. But ultimately, creativity is about judgment, it's about experience, it's about cultural relevance. It's about emotional connection with people. And ultimately, it's about taste.

And taste, I have one of my creative director partners has us saying taste is evidence of a life well lived. And that's something that's very difficult to train a machine on. So I do think that there's going to be an incredibly important role for creative people or people with taste in the age of AI, but it certainly changes the unit economics of what we do as agencies. So we are not going to be paid to manually adapt 100,000 ad units in Photoshop anymore, right? That's simply not, no offense to Adobe, it's a wonderful product. But doing that work manually is simply dead, right? It does. AI can now adapt 100,000 ad units from a master in less than a minute at virtually no incremental cost to me.

So a lot of what we used to get paid for is not getting automated. And therefore, our commercial models have to change. Our team structures are changing the way that we incentivize by our clients is changing, but that's a transition.

I think that one of the things that's interesting about that is that there's sort of more to do. So it's not only the creative landscape and what does this mean for creatives that -- but it's also around one of the questions I get asked about a lot by the C-suite is, what's the future of marketing as these tools become much more effective at targeting at -- and I think that there's still this huge need for human sort of creativity in all of these roles within the marketing function, within a creative function. But how almost the way that we are looking at these products is how do we turbocharge these concepts, these ideas, the work that's done in targeting and make sure that they're hyper effective, and so that the work goes further and is more powerful.

We look at something like Imagen 3, for example, you're able to put in a text prompt and then generate images of people for the first time. And you think about what that does for a B2B business who may not have product. Yes, they're able to save a lot of money, and they might not be spending as much on quick. But they probably would not have done that in the past anyway. So it's just giving them an extra layer in order to engage. So for our large-scale marketers, this is huge. It's meaning that they have many more types of copy to test and put out into the world. And for some of the smaller brands in the world that's meaning they can engage in a way that they wouldn't have been able to before. So I think it's really powerful.

And I think -- I mean that's a really important point. I mean if you think about your VO video models, for instance, what that's going to do to video supply and demand on YouTube, right? Or the larger advertising kind of platforms channels to take video. You're going to have thousands of millions of new advertisers to video, which you previously didn't have. I mean that search was popular initially because it was really low entry point and anyone could do it. Now you can create a decent video as a small business owner by yourself.

I think the interesting thing about Google's position and the ecosystem is that you not only manage the consumer platforms and the advertising platforms, but for enterprises looking to build enterprise-grade AI systems, intelligent operating systems for your business. You offer the entire suite from cloud to the machine learning platform Vertex and the models. And that's where every business here has the opportunity to combine their data, their domain knowledge, and their methodologies with these powerful AI systems to build a new kind of intelligent enterprise.

And I think that sort of the unique relationship between our organizations and that we don't have the resources or the know-how to build state-of-the-art large language video and image models, but we know how to apply them to marketing. And I think that's the case ready for everyone in this room, if you apply your domain knowledge of whatever you do, whether it's law or telecoms or media, combined with these tools and platforms, you can really transform how you run your business.

Yes, definitely. I think with -- what is clear is that marketing is becoming more complex because there is so much more, there's bigger breadth of opportunity. There are more tools, there are more ways to go. And so it's -- our partnership is super helpful to our partners because you help them disseminate what's right and good for them.

Absolutely.

That's amazing. I think we have to wrap soon. Very fast. So for us, I think the world of AI, and I know there's been lots of conversation around this throughout the day, is a huge opportunity. It's constant learning. There is -- the #1 scale, I think that will help us navigate through this moment is really agility. I know that's talked about a lot. And what does that mean? It means, I think, working with the right partners shifting partners, but also on an individual and personal level, being willing to learn, reskill, rethink and dial up your own creativity in how you apply yourself to work, but it's a really exciting time. It's not without it's scary bits, but definitely for me, I think it's incredibly fascinating. Thank you for being here.