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Good morning, ladies and gentlemen, and welcome to WPP 2025 Interim Results Conference Call and Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session, at which time, if you wish to ask a question, please press star 1 on your telephone keypad. Today's conference is being recorded. Now I would like to hand it over to WPP CEO, Mr. Mark Reid. 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 two and read that carefully. So turning to the highlights on page five of the presentation. First in terms of the first half performance for 2025. When we updated you in early July we went through how a more challenging macro environment coupled with a slower net new business environment had weighed in our performance in the second quarter and in particular in June and Joanne will take you through the details shortly but 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 you said on July 9th, the second quarter was impacted by several one-off factors that negatively impacted our growth rate, even excluding those 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. Headcount has come down by 3.7% since the start of the year, broad in line with the organic growth trend. In addition, we continue to take out structural costs and focus on back office 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 the second half of the year. As importantly, open, getting Group M, now WPP Media, back to growth and winning more new business. And we've made progress on those, which I'll talk about in a minute. But more broadly, I want to emphasise it has been a period of intense activity across the group, whether that be the release of new products, for example, Reputation Capital and DecipherTech at Burson, or signing of new partnerships, for example, collaboration with Vercel, TikTok and Pateo. That has been particularly important in terms of further strengthening our retail media offer within WPP Media. There's also been a very busy period in terms of welcoming top talent to the organisation. Vincent Bejian Shah, who joins us from Accenture and Accenture Song as CEO of AKQA. We've 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. And Daniel Barrack, who joins us from RGA, is a global creative and innovation lead, working on a very important platform with a focus on AI and technology. Coming back specifically to the 2025 priorities on slide six and those three taking those three in turn. First, in terms of adoption of WPP Open, it's growing fast with 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, put in context what we're doing, in the last month our team created more than a 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 drives behind the increased adoption of WPP Open has been rapid expansion in Open Media Studio, which is encouraging in itself, but more important is 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 re-engineering the operational model, making WP Media a much more client-centric organisation, but also in terms of bringing its AI-enabled technology platform to market, via the acquisition and integration of InfoSum, the launch of Open Intelligence, the data performance grain that powers the open real estate world. Another third priority in your 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 and Media, L'Oreal Influencer, TK Maxx and PR, Heineken and Commerce, IPO Creative. But there have been setbacks, and overall it has been a much slower new business environment, with, 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 consumer spend or the impact of tariffs or commodity prices, and these have delayed and prolonged decision-making. And I'm sure we've discussed that in the call and the Q&A. So now I can hand over to Joanne to take you through the details of the first half of the call.

Thank you, Mark, and good morning, everyone. So let me start by taking you through where our performance has landed relative to the revised guidance we set at the beginning of July. And you can see this on the slide here. Like-for-like revenue less past three 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 profits, this came in at £412 million, the middle of our range. This is consistent with a margin of 8.2%, with a 290 basis point life-for-life 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 life-for-life 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 US decline against a tougher comp and reflecting client losses. Trends remained tough in the UK. WPP Media declined 1.6% in H1 and minus 2.3% in Q2. Like for like for, other global integrated creative agencies fell 7.2% in the second quarter and compares 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 digit in the second quarter, impacted by cuts in client spending, in particular in CPG, tech and government. We continue to see an impact on weakness in project-based work. However, AKQA saw a slight sequential improvement quarter-on-quarter down from 6.6% in the first quarter. This performance reflects a more challenging environment for client discretionary spend, in particular 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 CMI, our specialist healthcare media agency, and a return to growth of design region partners, OSSEP, that continued, albeit moderating declines at Landor and other smaller specialist agencies. Turning now to 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 toughening camp, the performance was impacted by cuts in client spend, particularly impacting 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 an easy income. Performance continues to be impacted by its higher raising 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 comfort and reflecting the impact of one-off factors. The rest of the world declined 6.8% in the second quarter, largely driven by persistent pressures in China, which declined 15.9%. As discussed in 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 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. Healthcare has continued to stabilise with broadly flat growths in the quarter as 2023 client losses start to roll off, but Automotive and Financial Services, which was 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 a low single-digit decline in the second quarter. The water spore 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% decline on a reported basis and a 2.9% move like for like adjusting for FGS and Ethelix. The near-moving parts of the impact of negative operational gearing on the reduced like-for-like net sales, as well as the impact of severance. To put some numbers to this, although our overall staff costs excluding severance and incentives is down £261 million, given the decline in net sales, this is still consistent with the 250 basis points decline in margin. This reflects a 6% reduction in headcount when compared to the 30th of June 2024 and reduced usage of freelancers, but also the impact of the FGS global disposal. Severance and other associated costs is up £59 million year-on-year, and this takes another 130 basis points off margin. This is primarily driven by actions of WPP Media, and we expect a payback progressively through the second half and into 2026. As we discussed in July, we estimate the annualised gross savings benefit associated with these actions will be at least £150 million, and we anticipate margins in the second half to improve as a result. 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 0.6% point drag on margin. On slide 13, we look in detail at restructuring costs and to note ongoing severance action, both in reaction to the weaker top line as well as in more strategic actions at WPP Media are included in headline operating profit. Restructuring costs associated with historical programmes are coming down and in the first half were £45 million compared to £153 million in the first half of 2024. £40 million of the restructuring costs are cash and primarily relate to the ongoing IT. £110 million and we have reduced our full year expectation for restructuring costs to £90 million. We pull this all together to headline P&L on slide 14. Overall reported revenue less past year costs was £5 billion, a decrease of 10.2% period on period. FX contributed to a 2.4% drive, with M&A a further 3.5% headwind, leaving a like-for-like decline of 4.3%. Moving on to the P&L, a reminder that income from associates excludes any contributions on Cantar, in accordance with IAS 28, due to nil carrying value on our balance sheet. Net finance costs of £129 million was down year-on-year, affecting 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 success and resolution of a tax matter. Given the impact from a lower level of profit based on our revised guidance, our modelling assumption is that the full year effective tax rate will be 31%. Non-controlling interests of £26 million were down significantly year-on-year, largely reflecting the impact of the disposal of FGS Global. Headline diluted EPS of 20 pence is down 35% in reported cases, a 10.9 pence move consistent with an 8.8 pence decline like for like and a 2.1 pence impact from FX and M&A. Turning to the dividend, the board recognises the importance of dividends to shareholders and also the importance of retaining financial flexibility for the business. With a new CEO starting imminently, alongside a review of the strategy, careful consideration, the board has declared an interim dividend of 7.5 pence. Moving to slide 15 and the reconciliation between our headline and reported operating profit, headline operating profit of £412 million is adjusted for goodwill impairment of £116 million, which relates to NKQA and grey lower year-on-year. As already discussed, we've seen a fall in restructuring and transformation costs to £45 million from £153 million a year ago. Putting these items together, that leaves a reported operating profit at £221 million in the first half, with the decline slightly lower than the move in headlines 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 £1.2 billion. While we continue to focus on working capital management, we saw a working capital outflow of £175 million in the 12-month period. We saw a net outflow of £118 million, comprising the net impact of dividends from associates to minorities and including M&A earners. Net interest and tax contributed to a £633 million art flow, with the cash tax including £43 million of tax associated with the FGS global disposal. Net M&A and disposals was a £383 million inflow, primarily reflecting the disposal of FGS in the second half of 2024 and the acquisition of Interstam. Cash dividends paid in the 12-month period was consistent with prior year, while buybacks and other items amounted to net debt to the end of June, with adjusted net debt at £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 of £3.4 billion. Despite a reduced net debt balance, the average adjusted net debt to headline EBITDA ratio at the 30th of June is outside our 1.5 to 1.75 times target range, given the lower profit, and our expectation is that we will be above our target range for the full year 2029. Our balance sheet, however, remains robust. The weighted average maturity of our £3.8 billion of bond debt is 6.4 years, and this is an average coupon rate of 3.5%. Meanwhile, our total available liquidity across the group stood at £3 billion at 30 June 2025, including a $2.5 billion committed RCF, which matures in February 2013. Neither our bond debt nor our RCF have any covenants, and our credit remains invested in. And finally, for me, turning to slide 18, which shows our guidance for the full year. At our July trading update, we shared our 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 changes in those revenue and margin guidance, we now expect adjusted operating cash flow before working capital to be 1.1 to 1.2 billion pounds. As I already mentioned, the lower level of anticipated profitability in 2025 or of M&A has materially changed since the first quarter results. So thank you, and I will now hand over to Brian.

The world is changing and media is changing with it. In a future reshaped by artificial intelligence, media will be everywhere and in everything. This new era demands new thinking. Brands need a strategic partner to help them navigate change and drive their business forward. That's why Group M is now WPP Media. One company. One vision. one platform integrated across the WPP network to accelerate growth in the AI era. to deliver unparalleled intelligence, to lead our clients' growth. It's time to realize the power of data and unlock signals others miss. By harnessing trillions of data points using AI-powered intelligence, we transform real-time insights into real-world solutions. We don't just promise growth, we deliver it. with proven performance, smarter activations, and measurable outcomes for the world's leading brands. While others react to what's in front of them, we're deeply invested in the future of media and see the opportunity to reimagine what's possible. We bring together the best people, platforms, partners, and ideas to lead what's next. We are the Global Media Collective. We are WPP Media.

good morning everyone that really 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 group m now wpp media and about four 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 five 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, relaying 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 a 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 for our clients. For a brand 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've 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.

Yeah, thank you, Brian.

So, you know, as we all know, the work that you and your team at WPP Media are 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 you here today so that the financial community can see that strategic time needs the market in terms of a data-driven regional operation. So, turning to the summary. As you know, I announced in June that I plan to stand down after seven years as CEO, and I'm delighted to be handing over to Cindy Rose, who will be taking over on the 1st of September. 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 and looking at industry, I firmly believe that what we do collectively is critical to our clients, the world's largest companies, and in WPP's case, four of the world's five most valuable businesses. These global organisations 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 how to adapt to an AI world and how to take advantage of it in their marketing to drive higher returns and reduce cost. They said for more than two 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. 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 the increasingly complex media and technology landscape. That's what our industry does, or 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 and use it to enhance our people and human expertise, then I believe we'll make it stronger, bring new business opportunities and create more value to 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 they're the answers. 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. To start with, we're a much simpler company today. Six brands make up close to 95% of WPP's business. That's important because we're much more integrated, no longer organised in analogue and digital silos. But its importance goes beyond this, though, because 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 doing in WPP Media this year may have been disruptive, but it's been necessary work, and we'll start WPP Media as a much stronger organisation to deliver to clients in the future. And beside SEAS, we've not just been adapting our client-facing organisation, we've also brought together our technology teams and dozens of teams across WPP. It's effectively one product organisation with a common vision. And similar works we've done in production with Photograph, in our offshore development teams in India and our global development centres, and our commerce capabilities in WPP Commerce, which has Unite won the Unilever Media Shop of 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 need our industry, in my view, for our creative reputation. And here I should call out the efforts of Rob Riley and our creative leaders. While awards are a side product of great work, not an end in themselves, our clients who work in their 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. We'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 a new business environment picks up, they will convert strongly. We've also built a strong technology service offer. VMware Enterprise Solutions is now a $1.5 billion business, offering e-commerce, CRM, marketing automation operations companies around the world, and strong practices 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 of it 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 and now beyond the merger with Hill & Dalton, starting to bring some major client assignments. And finally, and where necessary, come with discipline. We've invested early in new areas like influence and marketing, making acquisitions of agencies like Dope, Village, and obviously. As a result, our clients' dispatches has improved, and they're now at their highest level since I became CEO. We see that in the growth of our largest clients in the first half of this year, which continues to grow despite the overall disappointing performance. We can 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 five and a half billion pounds to shareholders. We shouldn't forget the role that Centaur played in this. She sold a four billion dollar valuation to Bain Capital, giving us financial security to navigate Covid. We still have a valuable and somewhat overlooked fortitude interest in the company. And then there's FGS Global, which we created with Roland and his management team, sold to KKR, pretty close to a billion dollars in value for the whole thing. But my fourth and final most important reason for 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. And if 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 for disciplines integrated. Secondly, we've built into WPP Open a single AI-powered marketing platform that spans the whole of WPP, something we've struggled to do for many years. WPP Open now allows our work to deliver 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 think there's many companies of our size or scale that have deployed it. at that size. And finally, our position as Charlie has been critical of our efforts and the equities that they bring in the application of AI, I think it's really helped us build, has differentiated that thought. Now, I know that for many, you know, AI is a source of concern for WPB. There's a fear that as an hours-based business, many people, it's going to be value-destructive. I take a somewhat different position, which is that if we embrace it, and we make our people use 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 WPB. And overall, my observation would be that those parts of our business that have best embraced technology on media and production business have been the strongest. And AI offers the opportunity to bring data and technology to all of WPB 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 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 had behind. 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 conversions and 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 are assisting clients seeing that it's effective 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 at this challenge with an extremely strong set of capabilities, a well-balanced offer that's created production and media. We're a leader in AI and technology. We have a unique global footprint. We partner to the world's largest clients, four of the world's five 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 six months have been challenging, but if we approach the future with the same determinations we did in COVID and the many other challenges we faced, then we will succeed. It has been, I would say, a privilege to lead this great company, and the successes that we have fall 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.

Thank you. If you would like to ask a question at this time, please press the star 1 equipment. If you are also watching the webcast, please make sure to mute the computer volume to prevent feedback through audio. the phone while asking your question. If you find that your question has already been answered, you may remove yourself from the queue by pressing star followed by two. Again, press star one to ask a question. We will pause for a moment to allow everyone to signal. We will now take our first question from Laura Mateer. With Morgan Stanley, your line is now open. Please go ahead.

Hi, Mark, Joanne, and Tom. Mark, it's been a pleasure to interact with you, and my best wishes for the next step in your career. Three questions for 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 H125? Thank you.

Okay. Thank you, Laura. Thank you all. I'll take the first two questions and then Joanne can add anything she'd like to add on pricing and talk about the one-off. But I think, you know, 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, you know, there has been response to that. But I think we do find that as we influence 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 WPPO 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 influence and marketing, I think we're very confident in the strength of the offer that we have. We run a number of assignments, you know, I call that L'Oreal and other clients. We acquired three businesses I mentioned earlier, Goat, inside WPT Media, that focuses on using influence marketing to drive business success for clients, have a global platform and some scale. We applied a small business village about three or four years ago into what's now VML. and they're extremely talented team making all the work for Kamala Harris around the DNC and while ultimately she wasn't successful obviously in the election I think that work was recognised as sort of at least starting her campaign in a very positive position we have obviously another strong influence of business and actually Oval V has built probably one of the strongest influencer businesses totally organically so I don't think we're in a situation where we need to make acquisitions any clients can get everything that they need for us from an insurance position in terms of the capabilities that we have today. We've probably been slightly ahead of some of the competition in terms of making those acquisitions. Joanne, do you want to take back the financial questions?

Yes, so, Laura, thanks for the question. One of the factors, they relate to contractual obligations in our media business and in Western continental Europe. Given the nature of them, we don't expect them to repeat in the balance of here. We've called them out because it was meaningful in Q2 and therefore helpful to understand the Q2 relative performance.

Our next question comes from Adam Berlin with UBS. Your line is now open. Please go ahead.

Good morning, everyone, and I want to also wish Mark the best for the future. A few questions, if I can. The first is on Hogarth. You know, 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 about why Hogarth was flat and why we've seen that deceleration in Hogarth? 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 publicists of Epsonon and Hyper-G of Axiom, which seem to be kind of large data assets. Can you talk a little bit about what you mean by that? Unpick 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. Thank you, on the current guidance.

Okay, so I'll take the Hogarth question, Joanne can take because she's in the room with me in the second, third question and we'll leave Brian to answer later. But I think in terms of Hogarth, we have seen, you know, continued structural growth. There are, as I mentioned, you know, it's been a very volatile client environment and we've seen lots of clients I've never seen a moment where I've seen divergence in performance of the clients, some growing and some cutting back. And Hogarth has been to some extent the victim of some timing issues on product launches of 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 the Hogarth business will only be positive. And I'll give you a good example. We recently took a client, I can't tell you, a client's Super Bowl commercial that they shot, and we remade it using Google VO2 inside Hogarth. And if you run the two commercials side by side, People don't know which ones gives us the ability to produce even more work. And we did actually, for Core, we've created a commercial entirely in AI that they ran on network television in the US. So I think AI will be a source of growth for Hogarth, and I think what we're seeing is going to be just a larger time issue on projects within their business.

Hogarth's incentives is really mechanical and reflects the performance in the first half. I would expect for the full year, based on our incentives, we'll be down and 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.

Hi, 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 models 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 campaigns? 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 send data into a central database, of course they would be reluctant to do that and own it and broker data, which is a business we'd rather not be in.

Thank you.

Our next question comes from Anik Mas with Bernstein. Your line is now open. Please go ahead. Good morning. Thank you very much.

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 I kind of want to understand, I guess, with these senior staff people usually come very high, come to a good client relationship. So, you know, how have you accounted for potential client losses because of the senior staff departures? And then my next question is for Mark. I guess, you know, 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? Thank you.

Okay, why don't I start there and maybe to Dran. Look, I think looking back seven years, there's obviously things. I would do differently. I mean, it wouldn't be human to say that you wouldn't do some things differently. I think, like most CEOs, every CEO I've ever spoken to, they always do all the things that work more quickly and none of the 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 summarise, I think that the direction that we take from the business integrates it more. to integrate analogue and digital, to put technology at the core, to focus on the quality of the work, have all been the right steps, and probably, if you say, inevitably one would want to have done those things more quickly, and particularly one that has been particularly 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 they need to be more there to manage talent, not to manage the organisation. So I think those are all directions in which I'm not going to... set the strategy for Cindy or ever comment on it in any way either. I think those are all directions I'm sure that she will look at as she takes the company. I do think that the acquisition of Satalia will stand out as being an excellent move that we made and many people, not just me, 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 that will power them. what we do and we saw the cost being like that. Joanne, do you want to?

Yeah, so let me just start with the dividend one so and where I would start is the board and management's top priority is 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's starting on the 1st of September 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 put on the dividend. I think it would be premature to assume that based on the half-year earnings will be the basis for the ongoing policy, but of course we will update in due course alongside the strategy. 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 in many parts of the business.

Perfect. Thank you very much.

Thank you.

Our next question comes from Adrian de Saint-Hilaire with Bank of America. Your line is now open. Please go ahead.

Yes. Good morning, everyone. And first of all, again, extending the gratitude to Mark for all those years and best wishes for the future. A few questions if you don't mind. First of all, there was a piece in the campaign that discussed a potential partnership between Accenture and WPP. Can you provide any comment 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? Sure. 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 banking in for the year? And then I've got a last financial question. You set 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

2019 publication and one I look forward to continuing reading, but it's not always entirely accurate and I wouldn't comment much more beyond that. Joanne, do you want to take the financial question?

Yes, just starting with Q3 trading today. It's early in the quarter. The trading environment does remain challenging and I'd want to avoid getting into month-by-month detail, but there's nothing that we're seeing 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 debt to be this year, we have guided to adjusted operating cash flow before working capital. We've guided on tax, billion plus and billions going through our balance sheet. And so, you know, a 200-300 million movement either way is not unreasonable on that. But we are very, very focused on continuing to reduce that average net debt as we move forward. And in terms of the ETR, you know, it was very much the 31% really is mechanical, reflecting the lower level of profit and the impact of non-deductible expenses. The share price reduction has 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.

Thank you.

Our next question comes from Julian Roche with Barclays. Your line is now open. Please go ahead.

Yes, good morning. First of all, Mark, best wishes in your next chapter. I think people underappreciate how much you have transformed WPP. I'll start with you. In your minus five to minus three organic guidance, What did you put in for new business and macro? If you were to lose, I hope not, all the $1 billion you are still defending, could it be worse than minus 5? Or would the impact be mostly next year? If the macro is worse than 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, sometimes in 26? And was Open free operational when you pitched for Marks and PayPal? Yeah. And lastly, probably for Joanne, how much was Ogarth of net sales in full year 24? Thank you.

Okay, Joanne, if you want to tackle those notes for us.

Yeah, let me tackle one and three, Julian, and then if Mark wants to build on it, he can. On Ogarth, it was about 5% of total net cycle impact that we've seen. So you talked about that, seeing that being media. Yeah. And then, you know, the negative percent of net new business. And within net new business, it's really incremental time losses since the start of the year. And again, that's really in media. And then a weaker new business performance. Each volume has been 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 a two-year 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 a drag from that. So hopefully that gives you some of the levers within it. In terms of the The range, it is a wide range, and I think that reflects the volatility that we're seeing in the market. At the lower end of that range, it assumes 0.7% a half a second, which is worse than the past, and also deterioration, they wonder about a second order of performance. And at the top end, it's 0.7%. And really, the variabilities within that are the macro and the continuing new business performance.

Brian, I'll hand to you.

Yeah, Julian, 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 pitch for PayPal. We resigned the PayPal business.

Thank you. Thank you very much. Our next question comes from Steve Lecce from Deutsche Neumis. Your line is now open. Please go ahead.

Yeah, thank you very much, Clive. Can I just focus on the media side, listening clients, and then have you got any evidence in terms of pitches that you are using it for where you've had success? um or not at this stage or is it just too early uh where we are um second question is on on the media changes and the sort of consolidation there um clearly into the third and fourth quarter um are things um happening perhaps you weren't planning for in terms of um you cut too hard um here or there just to give a side stabilize and get back to where you want to be, I guess, in terms of operationally. I'll leave it there.

Thanks for the question. Anytime you transform 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 effect in the second half. We restructured the company. We put new leadership in place. We are consolidating onto one platform, so I feel very good about that. 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 longstanding clients in terms of outperforming traditional identity-based approaches to performance.

Very good.

And I just, Brian, can you actually, sorry, go on, Mark, sorry. I mean, I'll just add to Brian's point. You know, the US and the UK are the two most important markets in which we need to implement open intelligence. They're the most sophisticated data markets. And the area where, you know, we have, let's say, the biggest gap, that has to be the priority. I think that Brian correctly focused on that and the role that the other markets are taking place. But I think that does close the gap in an important way. So, yeah, ask your further question now.

Yeah, sorry. Yeah, the follow-up really was, you know, when we were in Cannes, it kind of felt like you were still really open intelligence to clients. I just really wanted more comfort that, you know, 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, great results on pitches. But as you know, we can't necessarily control how many pitches there are in 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.

Great. Thank you.

Thank you very much. We currently have no further questions at this time. I would now hand the call over to Mr. Mark Reid 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 thank all of you the analysts and investor community who are interested in WPP and engagement I've enjoyed I think I've enjoyed these calls over the years maybe 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 and some of the decisions we made today but i am positive about the future i look forward to seeing what comes next i'm going to end by thanking you know in particular videos to me thank particularly thank you miss here for her support and who stopped his support over the last seven years for the board i wish cindy uh all the best in uh taking over the reigns and thank you all very much and uh goodbye