Wpp Plc Ord New

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 five, 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 polarisation 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 US 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 six, a new business where overall we saw slightly better performance in the third quarter. Within media, we saw the retention of M&S in the UK, as well as wins with True Green in the US, Suncor in Australia, and Maersk and Mastercard globally. We have to acknowledge, however, that the quarter also saw client losses, including bear, and we know that based on convergence data, overall levels of media activity remain subdued relative to historical levels. Looking beyond media, creative new business wins included an expanded global mandate from Helion, PwC globally and the Financial Times in the UK. We continue to see robust momentum within PR, design, brand and identity with wins from Stellantis, Lipton Tees and Tourism New Zealand. Moving to slide seven 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 a nine-month 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 a 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 polarisation. 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 gross 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 the decline of 7.2% in the second quarter. We continue to see signs of stabilisation 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. OGOV continues to see impacts from a more challenging performance in the US and Germany by geography and CPG and technology by client segment. Again, it is difficult to completely attribute this to the macro given the polarisation 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 decline 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 healthcare 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 eight 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 Speccoms all saw growth in the quarter. by sector we've 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 camp. 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 US and the UK 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 robust performance up 1.3% across the third quarter, while the Middle East and Africa were stable. Looking at Q3 performance across our client sectors in 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 2 continued to be weak, down 6.8% in the quarter, driven by client losses and cuts to client budgets. The technology client sector showed 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 polarisation 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 £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-in-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-in-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 nine months of the year at £3.4 billion, benefiting from the impact of the FGS global disposal annualising. 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 two times and we expect it to be slightly above two times 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 £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 £2.9 billion at the end of September, including a $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 at 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 1.1 to 1.2 billion pounds. I've already highlighted some working capital considerations and our other modelling 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 multi-year 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 three 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 Bolchandani 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 Froelich 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 edition 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 roadmap 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 roadmap 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 head of investor relations for WPP. We'll now begin the Q&A session. In terms of housekeeping, as Lucy mentioned at the beginning of the call, to ask a question, please press star one on your telephone keypad. And if you change your mind, please press star two to exit the queue. In terms of housekeeping, if I could ask you to state your name and your organization. And if you could limit yourself to three questions just to give us time to get through the queue, that would be very much appreciated. With that said, it would be great if we could take the first question from Laura Matea.

Hi, Laura Matea from Morgan Stanley. Hi, Cindy and Joan. And Cindy, nice to meet you, and thank you for giving us a first look into your strategic updates. 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? Thank you very much.

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. Good morning, Laura, and thanks for your question. If I just talk about the nature of the spend that we're seeing is getting cut. It tends to be more the project work or delays to work that the plans 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 unhealthy growth rates with them. But on balance, we're seeing more declines across those three sectors. And the sectors are also impacted by some of the time 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 UK and Germany. Germany, where we're more exposed to the auto sector and we've seen cuts from government. And in the UK, 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 that 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 cuts, and I think it reflects just the more volatile environment that we see ourselves in. So I think that covers all aspects of your question, and I'll pass it over to Cindy, WPP Pro.

Thanks, Joanne. Hi, Laura. Nice to meet you, too. Look, 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, you know, revenue and subscribers at this point. But what I will say is the strategy is about CAM expansion, so expanding our addressable market. We don't largely address the SMB and mid-market 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.

Perfect. Thank you, Laura. Our next question is from Julian Rock.

Yes, good morning, Cindy. Nice to meet you. Hello. 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. Mars and Paramount should be an incremental one to two. So it looks like you have a one to four 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 growths. So today, do you feel this extra investment can be, one, self-funded thanks to further efficiencies, or two, should they cover the expense of margin in short terms, 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, you know, it depends on whether it's all self-serve or self-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 WP Up and Go? Thank you.

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

Good morning, Julian. Yes, just in terms of the guidance, you're right, it does assume... 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, particularly in the media business, and there will be a further ramp down in Q4. And the biggest driver of that is two sides of the 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. Our fourth quarter is the largest quarter and just given the nature of spend in the Q4 and the trends 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. Nice to meet you too, Julianne. 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, a 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, you know, 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 hope that helps.

Thank you. Thank you. Thank you, Juliana. Our next question comes from Annick Mass. Annick.

Good morning, all, and thank you for taking my questions. The first one is, going back on this folio guidance, I suspect when you cut it in July, 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, you know, 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? 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? Thank you.

Thanks, Annick. We'll start with Joanne talking about the four-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 client.

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've seen in Q3, but also, you know, caution and making sure that we are setting the expectations at a level that we can deliver against. In terms of, you know, what's really changed, the losses, the client losses are... 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 that 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, yeah, 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, you know, 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 senior guidance.

staff motivation, do you want to mention anything?

Yeah, look, on staff motivation, I often get asked this, and I would say a couple of things on this. You know, 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, you know, I belong to an agency in a market. And therefore, you know, 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, you know, 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, you know, 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 these critical skills for the future. And so there is a lot of, 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 anything.

No, I'm happy to build on the question around employees. And 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 WP. 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, service delivery, and really strengthening our go-to-market through dramatic simplification. So that's where the focus is in the immediate short term.

Great. Thank you very much.

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

Hi. Good morning, everyone. a few questions from me just following up on Cindy and what you just said about you spoken to all your top clients. Have you also spoken to clients who chose to kind of stop using WBP over the last couple of years? And then just wondered whether they might give you a different perspective or is there anything that they've said differently that obviously the clients who've chosen to stay with you, um, you know, may have a different view. So just have you, have you done that exercise as well and what feedback did you get from clients who have actually left? Um, the second question, um, I wanted to ask was to Joe, 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? What's the kind of offset to that? And secondly, you talked about there being, 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. Thanks, Adam. Why don't we start with Cindy? Yeah.

Yeah, thanks for your question, Adam. Actually, the very first clients I spoke to were the ones that we lost. You know, 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 processes 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 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. or what we need to do better and differently going forward.

Hi, Adam. So just on the cash question, yeah, I've got it operating cash, so pre-working capital on change 1.1 to 1.2 billion. A couple of things within that, you know, the revised guidance really is an impact of less than 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 cash. 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 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've talked to Two headwinds in 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 do mean 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.

Okay, worth a try. Thanks very much.

Thanks, Adam. Our next question is from Adrienne de Saint-Hilaire. Adrian.

Thank you very much. Good morning, Cindy and Joan and Tom. This is Adrian 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 Julian 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? Thank you.

Thanks, Adrian. Maybe Joanne will start by talking about the balance sheet, and we'll then talk about data and AI.

Adrian, sorry, and good morning. 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 £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, you know, I do think that those factors point to the strength of the balance sheet and liquidity. We are, you know, reducing our leverage is a priority. And we've demonstrated over the last couple of years, you know, we have taken costs out of the business. We have divested off businesses, including FGS, and used the proceeds to delever and strengthen the balance sheet.

Yeah. Thanks, Joanne. Nice to meet you, Adrian. 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 to media. The acquisition of InfoSum gave us a next-generation data collaboration platform, which means our clients can generate deep insights to fuel their 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 to 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 & Spencers, Merck, Suncor, True Green, MasterCard, with more to come. Now, in terms of investing, as I said earlier, you know, 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 we will build from there.

Perfect. Thank you, Adrian. Our next question is from Nico Longley. Nico?

Yes. Hello. Good morning, everyone, and welcome to the VNLV show. All the best for the new role. I've got three questions. First one on net new business. Can you tell us what was the impact for the first nine months and whatever you expect and what you're heading into for in 2023? Secondly, on... WPP open store announcement. I know it's very early, but can you already try to quantify the revenue opportunity at least for the next 12, 24 months? And what's the margin profile over time? And finally, on the leverage and capital allocation, so you will end the year at slightly over time. Do you feel comfortable with that leverage? And can you already clarify in terms of capital allocation priorities between debt reduction and dividend. Thank you.

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

So, just on the impact of net new business, we've signaled that at interim it will be around 100 to 150 basis points of a headwind this year, with gross client losses 300 to 400 basis points. And Yeah, we are seeing that still be in the range, but 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. As I also said in my prepared remarks, we're expecting a similar level of gross client losses, i.e. the 300 to 400 basis point range for next year. But it's still too early to comment on that new business. And I touched on the fact that, you know, 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, you know, 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, you know, 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 WP Open on 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, you know, we will review the balance sheet as well as part of the strategy review. You know, I touched on the fact that in the past with Cantor and FGS, you know, where we have good businesses, but we have concluded we don't need to own them, we have taken action. So, you know, we will update further on that in the year with the strategy review.

John, do you want to make a brief comment on revenue opportunity at OpenPro over the next four months?

In terms of OpenPro, 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 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 Cranor from Arete Research.

Richard. Thanks very much. 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 OpenPro. And then also, I'd love to know your comments or thoughts 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 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 Anthropix, 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, yeah, 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 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 I think we have an expanded opportunity there to help our clients implement and manage large-scale end-to-end AI marketing transformation programs. That's TAM expansion for WPP. Okay.

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

Yeah, morning. Welcome aboard, Cindy. Can I have three, please? One is just to Cindy, just your view in terms of WPP. Do you think it's 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 US 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 and InfoSum and stuff like that, to some extent, gives you the ammunition to kind of claw back business in US 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 light for light revenue, I mean, obviously your exit rate in light for light 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.

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

Good morning, Stephen, and thanks for your question. Look, it's too early to really give definitive outlook on 2026, but just some of the factors that I would highlight. First of all, to your question on the export of Q4, Q4 is seeing an exaggerated impact on 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 might compare to that 100 to 150 basis point range that we get for this year. But hopefully that gives you some levers as you think about 26.

Thanks, Steve. Great to meet you. I think I understand your question. I mean, look, to to improve our execution as we need to. I personally think we need to be a little less home co 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 haven't gone or we've missed the opportunity, shall I say, to go as far and as fast as we could have, could have, and should have. And that's what we're going to do, um, immediately, uh, to improve our execution. Um, in terms of WP media, I mean, turning WPB media around is absolutely critical for us. Um, fortunately as a member of the board, I've had clear line of sight into Brian Lester's plan and I was, and continue to be extremely supportive. You know, 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 mean 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.

Oh, 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. Thank you all for dialing in this morning, and I look forward to further engagement. Thank you. That now concludes this call. You may now hang up.