WPP plc

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the WPP 2020 Preliminary Results Conference Call and Webcast. At this time, all participants are on a listen-only mode. After the initial opening remarks, there will be a question and answer session. At which time, if you wish to ask a question, please press the star and one on your telephone keypad. Today's conference is being recorded, and at this time, I would like to hand the conference over to WPP CEO, Mr. Mark Reid. Please go ahead, sir.

Thank you very much, and good morning to everybody that's listening to us from the United States. Welcome to our 2020 results presentation. I'm here in London with John Rogers, our CFO, and Peregrine Riviere, who heads up our Investor Relations Department. And as is customary, we're going to have a few brief opening remarks and then open up the floor to questions. You should look at the presentation that we made this morning, including the cautionary statement that was included within that presentation. I think to start, it's now been actually exactly one year to the day since we asked everyone at WPP, some 100,000 people to work from home if they weren't working from home already. And it's been quite a year. But I think overall, a very productive year. We entered 2021 in a good place. It's clearly been an amazing effort from our people who have looked after each other very well. We've had a great degree of support from our clients, and I'm very pleased with our client satisfaction scores and the new business that we've won. And actually, as a company, we've done a lot to help our communities to manage their way through COVID. Overall, I think the performance we've described is resilient, and we've made significant progress on our strategic goals, and we need to highlight some of the key themes that perhaps we can touch on in the Q&A. The first is the sequential recovery in our business that we've seen since the initial lockdown. The second quarter we were down 15.1%, down 7.6% in the third quarter, and 6.5% in the fourth quarter. So we have seen an improvement throughout the year in our relative net sales performance on last year. We have got major parts of our business that are growing well. For the year overall, indeed, in Q4, so CPG, tech, pharma, about 57% of WPP's business. And they have turned to us for help and advice during this period. We're seeing growing demand for commerce services. We're working with 76 of our top 100 clients in that area, and that extends both to the work we do in helping them build websites, but also the work they do in digital media, where GroupM, we've seen commerce media grow by 43%, and the overall shift of GroupM's digital billings by 3.8% business mix over the year. Our new business performance has been excellent. We've led all the new business tables and I think it's going to be a busy year in 2021 for new business with both opportunities and challenges for all of us in our industry. I talked about our people and we have really had a fantastic effort from our people. We focus a lot as a company on their wellbeing more as you would expect as the year has gone on. And I think everyone's keen to get back into our offices, if not five days a week for at least a fair part of the week. And we have had a great degree of success in attracting top talent into WPP over the last 12 months. I talked to a few people, Rob Riley, who's joining us, our Chief Create Officer, Andy May, the CEO of Ogilvy, Kurt McDonald, running GroupM in North America, Devika Porchandani, who's running Ogilvy in New York and heading up their advertising business, and then also the work we're doing with Barry Waxman and Sunil Radia back in Croto, their new digital transformation consulting. And I think talent is at the heart of our business, and we're really pleased to be able to attract top talent into WPP, but also pleased to be able to invest in the talent of the people who already work for us inside the company. So the work we've done on the sort of the front end, if you'd like, the client facing part has been supported by the work that John and our finance teams have done. You know, we've shown, I think it's very strong financial discipline throughout the year. So despite our net sales being down 8.2%, we saw 1.4% decline in our operating margin and very pleasingly our net debt end of the year, 700 million pounds, the lowest since 2004. So we've made a lot of progress, as I say, during the year. We laid out in our capital markets day our plans to accelerate our growth, to invest in the company while building an efficient platform. And we can touch on some of those topics during a Q&A. So I'm going to end these opening remarks just by thanking all of our people and our clients for the work that they've done and now give you the chance to ask any questions that you may have.

Thank you, sir. If you would like to ask a question at this time, please press the star and 1 on your telephone. Please ensure that the mute function on your telephone is switched off to allow the signal to reach our equipment. If you're also watching the webcast, please make sure the computer's volume is down to prevent feedback. So your first question today comes from the line of Dan Salmon from BMO Capital Markets.