Strategy Update and 2025 Preliminary Results
Summary by AI BETAClose X
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26 February 2026 |
Strategy Update and 2025 Preliminary Results
WPP announces multi-year strategic plan to simplify and integrate client proposition, restore growth and drive long-term value for clients, talent and shareholders
"My first six months as CEO have only reinforced my conviction that WPP is an extraordinary company. As our clients navigate uncertainty, AI disruption and macro-volatility, we're looking ahead with a clear and focused mission: to be the trusted growth partner for the world's leading brands in the era of AI.
"Today we are unveiling a bold plan for a simpler, more integrated WPP. Our intention is to stabilise the business, return to organic growth, create capacity to invest in the future and deliver attractive returns for our shareholders. WPP will become a single company, streamlined into four operating units across four regions, all unified by our pioneering agentic marketing platform, WPP Open.
"Our recent underperformance has been driven by excessive organisational complexity, a lack of an integrated operating model and inconsistent strategic execution. While disappointing, I see huge potential as these issues are all within our power to fix and we're already making great progress.
"We have everything we need to succeed: exceptional talent, world-class capabilities, trusted data and technology solutions and groundbreaking partnerships, as well as the scale and reach to service the most complex multi-national, multi-brand clients in the world. The momentum we are seeing from the decisive action we've already taken gives me the confidence that we're on the right path to creating a WPP that is fit for the future and built to win."
Cindy Rose OBE, Chief Executive Officer of WPP
Strategy Update: Elevate28
WPP today announces 'Elevate28', a multi-year strategic plan to simplify and integrate our client proposition, restore growth and drive long-term value for clients, talent and shareholders. Transitioning from a holding company structure to a single company, WPP will simplify its business to deliver fully integrated, AI-enabled solutions through four core operating units: WPP Media, WPP Creative, WPP Production and WPP Enterprise Solutions across four regions, North America, Latin America, EMEA and APAC.
Central to this strategy is a new mission: to be the trusted growth partner for the world's leading brands, helping them navigate change, capture opportunity and deliver growth, while transforming their business in a dynamic, complex environment. The plan focuses on stabilising the business in 2026, building momentum in 2027, and delivering accelerated, high-quality growth from 2028, supported by £500m of gross annualised cost savings and portfolio rationalisation to unlock value.
Meeting to cover the Strategy Update and 2025 Results at 9.30am GMT/4.30am EST:
• In-person meeting: Please contact WPP Investor Relations at irteam@wpp.com for more details and to register
• Webcast: Live webcast will be available here
ELEVATE28: OUR STRATEGY TO STABILISE WPP SHORT-TERM, BUILD A NEW PLATFORM FOR GROWTH AND ACCELERATE FUTURE PERFORMANCE
• Deliver superior growth for clients
• Lead with Media at the heart of an integrated proposition
• Establish next-generation Creative and Production capabilities
• Elevate Enterprise Solutions to partner with clients on AI transformation
• Become a simpler, integrated company
• Simplify the operating model
• Strengthen execution and transform our go-to-market
• Drive a high-performance culture and attract and retain the world's best talent
• Unlock the advantage of WPP Open
• Connect capabilities through WPP Open
• Differentiate with trusted data solutions through Open Intelligence
• Expand strategic technology and data partnerships
• Create firm financial foundations for the future
• Unlock £500m of annual cost savings, enabling a reallocation of investment
• Focus the portfolio to reduce leverage and create further capacity to invest in growth
• Disciplined capital allocation with a focus on maintaining an investment-grade balance sheet while delivering attractive returns for shareholders
OUTLOOK & PHASES OF DELIVERY
The plan is designed to deliver sustained growth through three distinct phases:
• Phase 1 - Stabilise (2026): The immediate priority is to stabilise net new business performance. We will execute cost savings initiatives and rationalise the portfolio.
• Phase 2 - Build (2027): Our transformed go-to-market strategy supported by a more effective operating model will be embedded and will help deliver a fully integrated offer spanning media, creative, production and enterprise solutions. We are targeting a return to organic growth during the course of 2027.
• Phase 3 - Accelerate (2028 and beyond): We aim to be a simpler, lower-cost, AI-enabled business, recognised by clients as a trusted growth partner, showing accelerated growth, improved margin and strong cash conversion.
To achieve this transformation and deliver £500m of gross savings by 2028, we anticipate total cash costs of approximately £400m phased over two years. We will reinvest a significant portion of savings into high-growth areas. See below for more details.
WPP's Strategy Update and 2025 Preliminary Results announcement has been submitted in full unedited text to the Financial Conduct Authority's National Storage Mechanism and will be available shortly for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
The Report is also available at http://www.rns-pdf.londonstockexchange.com/rns/4449U_1-2026-2-25.pdf and on the WPP investor relations website www.wpp.com/investors.
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For further information: |
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Investors and analysts |
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Media |
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Thomas Singlehurst, CFA |
+44 7876 431922 |
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Niken Wresniwiro, WPP |
+44 20 7282 4600 |
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Anthony Hamilton |
+44 7464 532903 |
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Melissa Fung |
+44 7353 107064 |
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irteam@wpp.com |
wpp.com/investors |
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press@wpp.com |
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Key figures (£ million) |
2025 |
+/(-) % reported1 |
+/(-) % LFL2 |
2024 |
|
Revenue |
13,550 |
(8.1) |
(3.6) |
14,741 |
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Revenue less pass-through costs |
10,176 |
(10.4) |
(5.4) |
11,359 |
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Reported: |
|
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|
|
|
Operating profit |
382 |
(71.2) |
|
1,325 |
|
Operating profit margin (%)3 |
2.8 |
(6.2)pt |
|
9.0 |
|
Diluted EPS (p) |
(20.0) |
(140.5) |
|
49.4 |
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Dividends per share (p) |
15.0* |
(61.9) |
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39.4 |
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Headline4: |
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Operating profit |
1,321 |
(22.6) |
(17.1) |
1,707 |
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Operating profit margin (%) |
13.0 |
(2.0)pt |
(1.8)pt |
15.0 |
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Diluted EPS (p) |
63.2 |
(28.4) |
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88.3 |
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Cashflow and balance sheet: |
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Adjusted operating cash flow pre WC5 |
1,189 |
(11.5) |
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1,343 |
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Net cash inflow from operating activities |
724 |
(48.6) |
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1,408 |
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Adjusted net debt |
2,167 |
24.4 |
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1,742 |
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Average adjusted net debt |
3,404 |
(2.9) |
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3,506 |
*including proposed final dividend.
WPP reports 2025 revenue of £13,550m, down 8.1% on a reported basis and down 3.6% like-for-like (LFL), with revenue less pass-through costs of £10,176m down 5.4% LFL, ahead of latest guidance. Q4 LFL revenue less pass-through costs of £2,691m was down 10.1% reported and 6.9% LFL. 2025 reported operating profit margin was 2.8% and headline operating profit margin was 13.0%, representing a LFL decrease of 1.8pt. Adjusted operating cash flow before working capital was £1,189m, in line with latest guidance and year-end average adjusted net debt was £3.4bn, with an average net debt to EBITDA ratio of 2.2x.
FY and Q4 2025 performance
• Revenue - 2025 reported revenue of £13,550m was down 8.1%, with a LFL decline of 3.6%. 2025 revenue less pass-through costs of £10,176m was down 10.4% reported and down 5.4% LFL. Q4 revenue of £3,628m was down 8.3%, a LFL decline of 5.5%. Q4 revenue less pass-through costs of £2,691m was down 10.1% reported and 6.9% LFL.
• Business segment and regions - Global Integrated Agencies 2025 LFL revenue less pass-through costs fell 5.7% (Q4: -7.6%) with WPP Media declining 5.9% (Q4: -10.8%) and other integrated creative agencies declining 5.6% (Q4: -4.3%). By geography, North America declined 4.6% (Q4: -7.3%), UK -7.6% (Q4: -9.2%), Western Continental Europe -4.7% (Q4: -3.5%) and Rest of World -5.9% (Q4: -7.5%), with India increasing 3.8% (Q4: +8.6%) offset by a decline in China of -14.3% (Q4: -13.6%).
• Clients - WPP's top 25 clients declined 4.1% LFL in 2025, including client assignment losses from the first half of the year. While the Healthcare and Pharma client sector improved in 2025, all other client sectors saw reduced spend year-on-year.
• Operating profit - 2025 headline operating profit was £1,321m, a margin of 13.0% (2024: 15.0%), down 1.8pt LFL. The lower margin reflects the decline in revenue less pass-through costs with higher severance costs contributing to a drag of 0.9pt YoY (in particular at WPP Media), and continued investment in tech and data, partially offset by lower staff incentives which contributed a 1.4pt benefit YoY (1.2pt LFL, which excludes FGS). Reported operating profit was £382m, down 71.2%, including goodwill impairment of £641m and property impairments of £114m.
• Cashflow and average adjusted net debt - 2025 adjusted operating cash flow excluding working capital was £1,189m (2024: £1,343m) in line with guidance. 2025 reported net cash inflow from operating activities was £724m (2024: £1,408m). Average adjusted net debt at 31 December 2025 of £3.4bn was down £0.1bn compared to 31 December 2024.
• Dividend - The Board has proposed a final dividend of 7.5p (2024: 24.4p) giving a full year dividend of 15.0p (2024: 39.4p).
Financial outlook for 2026
• LFL revenue less pass-through costs - We are encouraged by the improvement in new business in the fourth quarter and early 2026. Organic growth, however, is a lagging metric and as such we anticipate LFL revenue less pass-through costs to decline in the mid to high-single digits in the first half of 2026 with an improving trajectory in the second half.
• Headline operating profit margin - While we will benefit from the full year impact of cost saving actions taken last year and a part year impact from Elevate28 cost actions, we will invest to support a return to growth and rebuild incentives. Accordingly, for the full year we anticipate headline operating profit margin in the range of 12% to 13%.
• Adjusted operating cash flow before working capital - Including both the anticipated costs associated with historical plans as well as the restructuring costs linked to the Elevate28 strategy update, we anticipate adjusted operating cashflow before working capital of £800m to £900m. Excluding these charges, we would anticipate adjusted operating cashflow before working capital of £1.0bn to £1.1bn.
• Financial leverage - With the implementation of the new strategy, our focus over the next 12 months will be to stabilise the business while freeing up capital to provide further financial flexibility. We are committed to maintaining an investment grade balance sheet, a position supported by Fitch Ratings today assigning WPP a Long-Term Issuer Default Rating of 'BBB' with a Stable Outlook.
1. Percentage change in reported sterling.
2. Like-for-like. LFL comparisons are calculated as follows: current year, constant currency actual results (which include acquisitions from the relevant date of completion) are compared with prior year, constant currency actual results, adjusted to include the results of acquisitions and disposals for the commensurate period in the prior year.
3. Reported operating profit divided by revenue less pass-through costs.
4. In this press release not all of the figures and ratios used are readily available from the unaudited results included in Appendix 1. Management believes these non-GAAP measures, including constant currency and like-for-like, revenue less pass-through costs and headline profit measures, are both useful and necessary to better understand the Group's results. Details of how these have been arrived at are shown in Appendix 4.
5. Adjusted operating cash flow before working capital as reconciled in Appendix 4.
Elevate28 - Detailed plan
Market context and strategic rationale
The global total addressable market (TAM) for agency marketing, creative, digital and transformation services is growing at c.5% and expected to exceed $500bn by 20281. However, the commercial ecosystem is seeing fundamental change, driven by the rapid diffusion of AI, changing consumer behaviour, competitive disruption and macro-volatility. Clients need a trusted growth partner capable of orchestrating media, creativity, production and technology to navigate this complexity.
While WPP possesses industry-leading capabilities, recent performance has been impacted by excessive organisational complexity, lack of an integrated operating model and inconsistent strategic execution. Elevate28 addresses these challenges by reorienting the company around the evolving needs of clients, leveraging WPP's scale and WPP Open, our pioneering agentic marketing platform, to deliver transformation and growth for our clients.
WPP's competitive advantage
WPP is well positioned to capitalise on this market evolution. Our confidence is grounded in three structural advantages that create a strong competitive edge for WPP:
• Trusted data and intelligence: Open Intelligence is our foundational intelligence layer, securely connecting live data from clients, partners and WPP in a privacy-first way. Built on InfoSum's data collaboration technology, it unlocks unique insights without data ever being shared - turning real-world behaviour into predictive intelligence while preserving privacy, control and trust. Clients see exactly where, how and why their marketing investment is working.
• Integration of media, data, creative and technology: In an AI-driven world, the discipline of brand building is being permanently rewired. In this landscape, human creativity and craft, judgment, taste and empathy are what earn attention, build trust and differentiate brands. We combine cutting-edge media intelligence, world-class creativity, industry leading production and transformative enterprise solutions - all powered by exceptional talent and WPP Open.
• Global scale and deep client relationships: As an established partner to a large number of the world's leading advertisers, we possess a massive installed base of opportunity. By simplifying our operating model, we unlock the ability to cross-sell high-growth capabilities - such as Enterprise Solutions - directly into our existing client relationships.
Elevate28: A unified growth strategy
The Elevate28 strategic plan is anchored in four objectives: delivering superior growth for clients, becoming a simpler, integrated company, unlocking the advantage of WPP Open and creating firm financial foundations for the future.
1. Source: IDC; Madison and Wall; Gartner; Provoke; Citi; PQ Media; Emarketer
Deliver superior growth for clients
• Leading with Media at the heart of an integrated proposition: Re-orient our go-to-market around a more integrated client proposition with media and data at the core to accelerate client growth.
• Establish next-generation Creative and Production capabilities: Build unified, next-generation creative and production capabilities each powered by a single operating model to drive insight-led content delivery and operational efficiency.
• Elevate Enterprise Solutions to partner with clients on AI transformation: Establish a standalone operating unit bringing together WPP's customer experience, commerce, CRM, content transformation and technology & data platform capabilities to capture high-growth demand for enterprise AI transformation services.
Become a simpler, integrated company
• Simplify the operating model: Move to a simplified structure comprising four operating units (Media, Creative, Production, Enterprise Solutions) across four regions (North America, Latin America, EMEA, APAC).
• Strengthen execution and transform our go-to-market: Transform how we engage with clients, empowering Global Client Leaders and leveraging our new team of 'Client Solution Architects' to orchestrate integrated, outcome-based growth strategies.
• Drive a high-performance culture, attract and retain the world's best talent: Overhaul the performance framework to align objectives and incentives globally to client outcomes and overall WPP success.
Unlock the advantage of WPP Open
• Connect capabilities through WPP Open: Connect all four operating units through WPP Open, our pioneering agentic marketing platform. Powered by Open Intelligence, our foundational intelligence layer, enabling privacy-first data collaboration and agentic workflows.
• Differentiate with trusted data solutions through Open Intelligence: Leverage InfoSum's data collaboration technology to connect live data from clients, partners and WPP, unlocking unique, predictive insights and optimising marketing investment in real time while preserving privacy, control and trust.
• Expand strategic partnerships: Deepen integration with strategic partners to co-innovate AI, data and technology solutions that support client growth.
Create firm financial foundations for the future
• Structural simplification: Unlock £500m in annualised gross savings by 2028 from operating model changes, deduplication of support functions and real-estate/long-tail efficiencies.
• Focus the portfolio: Rationalise portfolio, reduce leverage and create capacity to invest in growth.
• Disciplined capital allocation: Maintain an investment-grade balance sheet while prioritising organic investment in high-growth areas and delivering attractive returns for shareholders.
Our execution plan
We are moving with urgency to implement this framework. Actions taken to date include:
• Go-to-market: Created central 'Client Solution Architects' and Growth teams to cross-sell services more effectively and integrate new business capabilities.
• Technology: Full integration and deployment of Open Intelligence into WPP Open driving an improvement in net new media business. Expansion of our Google partnership for AI and cloud technology and Adobe partnership for integrated solutions for global brands; launch of WPP Open Pro (self-service) and Agent Hub (internal app store for AI agents).
• Organisational structure: Launch of WPP Production, bringing together WPP's extensive production capabilities into one unified organisation to centralise expertise and enable a more integrated offering for clients.
Actions announced today:
• WPP Creative: Formation of a unified operating model for our iconic agency brands across Creative, PR and Design. This preserves distinct agency cultures while implementing a shared operating system to facilitate frictionless collaboration and resource sharing and allowing clients to benefit from access to the full breadth of WPP's capabilities and exceptional creative talent.
• WPP Enterprise Solutions: Establishment of a new operating unit consolidating WPP's customer experience, commerce, CRM, content transformation and technology & data capabilities to capture high-growth demand for enterprise AI transformation. Clients will benefit from access to AI transformation and marketing modernisation services.
• Cost efficiency: Initiation of a new £500m savings plan to fund investment in growth drivers and rebuild margins.
• Talent framework: Implement new framework to embed a high-performance culture and align objectives and incentives globally to client outcomes and overall WPP success.
• Focus the portfolio: Action decisions from our portfolio review to unlock capital which will be used to reduce leverage and further build greater financial flexibility. Processes are underway and we will update in due course.
Three phases of delivery
The plan is designed to deliver sustained value through three distinct phases:
Phase 1: Stabilise (2026) The immediate priority is to stabilise net new business performance. We are encouraged by an improved new business performance in Q4 2025 (see Q4 2025 highlights below for detail) and will build on actions at WPP Media to improve competitiveness (specifically in the US and UK). We will also execute cost saving initiatives, and take portfolio actions to improve balance sheet flexibility.
• Financial goal: Deliver positive net new business, achieve gross run-rate savings of £250m by year-end (equivalent to around £100m in-year gross savings) and progress portfolio actions.
Phase 2: Build (2027) We will fully implement and start to benefit from our revised go-to-market strategy and continue to deliver benefits of the new operating model via improved execution and further reductions in costs.
• Financial goal: Return to organic growth during 2027, rebuild margins and reduce leverage.
Phase 3: Accelerate (2028 and beyond) WPP will emerge as a simpler, lower-cost, AI-enabled business. Revenue growth will be driven by the full integration of media, creative, production and enterprise solutions, as well as the global scaling of agentic workflows.
• Financial goal: Accelerate organic growth, expand margins, deliver strong cash conversion.
Across all three phases a priority will be to maintain an investment-grade balance sheet.
Financial framework
To achieve this transformation and support the delivery of £500m of gross cost savings, we anticipate total cash costs associated with the Elevate28 programme to be approximately £400m, phased over two years.
We anticipate separating out restructuring spend from our headline P&L earnings metrics, however all cash restructuring spend will be included in our adjusted operating cash flow pre working capital.
WPP will reinvest a significant portion of these savings into high-growth areas including media, commerce, high velocity production and enterprise solutions, as well as strengthening our go-to-market capabilities, rebuilding incentives and sustaining investment in WPP Open. The balance will support a rebuild of our margins, alongside improved operating leverage as we return to growth.
Balance sheet and capital allocation
Reflecting this investment trajectory, we anticipate financial leverage (average net debt to Headline EBITDA) to rise in 2026 before reducing from 2027 onwards as the company benefits from improved operating performance, alongside actions already in progress to realise value from our portfolio.
In light of the transformation programme, we have reassessed our approach to capital allocation and cash returns. Our priorities, in order, are as follows:
• Maintain an investment grade balance sheet: our primary focus is to retain strong liquidity, reduce gross debt where possible and improve leverage ratios over time.
• Fund organic growth: we will ruthlessly prioritise investment in the fastest growing areas of our business funded with our cost initiatives, enabling a reallocation of investment to those capabilities that support group-wide growth prospects.
• Share the proceeds of growth: we will balance sustainable returns to our shareholders with inorganic investment but will have a laser focus on only deploying capital when acquisition is more efficient than building internal capabilities. Excess capital will be returned to shareholders.
Reflecting confidence in the plan, having declared a 7.5p final dividend for 2025, the Board intends to maintain the annual dividend at 15.0p per share in 2026.
Full year overview
Revenue was £13,550m, down 8.1% from £14,741m in 2024, and down 3.6% LFL. Revenue less pass-through costs was £10,176m, down 10.4% from £11,359m in 2024, and down 5.4% LFL.
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£ million |
Q4 2025 £m |
% reported |
% M&A |
% FX |
+/(-) % LFL |
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Revenue |
3,628 |
(8.3) |
(1.9) |
(0.9) |
(5.5) |
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Revenue less pass-through costs |
2,691 |
(10.1) |
(2.6) |
(0.6) |
(6.9) |
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£ million |
2025 £m |
% reported |
% M&A |
% FX |
+/(-) % LFL |
|
Revenue |
13,550 |
(8.1) |
(2.7) |
(1.8) |
(3.6) |
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Revenue less pass-through costs |
10,176 |
(10.4) |
(3.3) |
(1.7) |
(5.4) |
Segmental review
Business segments - revenue less pass-through costs
|
+/(-) % LFL |
Global Integrated Agencies |
Public Relations |
Specialist Agencies |
|
Q4 2025 |
(7.6) |
(3.4) |
(0.1) |
|
2025 |
(5.7) |
(6.0) |
(0.7) |
Global Integrated Agencies: WPP Media saw a LFL decline in revenue less pass-through costs of 5.9% in 2025 (Q4: -10.8%) which was a result of client assignment losses, cuts to client spending and one-off factors during the year. As anticipated, performance in the fourth quarter has deteriorated further given the client losses in the US and UK from the first half of the year, further weakness in Europe and continuing declines in China, partially offset by improving performance in India and Australia.
Other Global Integrated Agencies declined 5.6% in 2025 (Q4: -4.3%) as a result of lower overall client spending, particularly at Ogilvy which declined high-single digits in the year. There was also continuing pressure on project-based work which weighed on all our agencies, albeit all agencies saw a slight sequential quarterly improvement on easier comparisons in Q4. Declines have moderated at VML (low-single digits) and Hogarth (which was consolidated into the newly formed WPP Production business in February 2026) has grown mid-single digits on the back of new business momentum.
Public Relations: In 2025, Burson saw a mid-single digit LFL decline in revenue less pass-through costs as the business faced a challenging environment for client discretionary spending, in particular in Europe. We are, however, encouraged by a moderately improving trend in Q4, with LFL revenue less pass-through costs down low-single digits (compared to mid-single digits in Q3) and continued new business momentum with a positive trending LFL growth in the US in Q4. Reported revenue less pass-through costs continues to be impacted by the disposal of FGS Global which completed in Q4 2024.
Specialist Agencies: CMI Media Group, our specialist healthcare media planning and buying agency, continued to grow strongly at double-digit digit growth in the year. Meanwhile, Landor and Design Bridge and Partners continued to grow, supported by spend from existing clients. Pressure remains on the longer tail of activities within the segment, and overall Specialist Agencies LFL growth was flat in Q4 and declined 0.7% in 2025.
Regional segments - revenue less pass-through costs
|
+/(-) % LFL |
North America |
United Kingdom |
Western Cont. Europe |
Rest of World |
|
Q4 2025 |
(7.3) |
(9.2) |
(3.5) |
(7.5) |
|
2025 |
(4.6) |
(7.6) |
(4.7) |
(5.9) |
North America declined by 4.6% in 2025, driven by an anticipated further sequential deterioration of 7.3% in Q4 relative to Q3 2025 (-6.0%). Q4 saw the full impact of H1 client account losses at WPP Media, in addition to some client spending cuts, in particular at Ogilvy and AKQA, with pressure centred on CPG and Government and a decline in spend in Tech & Digital Services. Meanwhile, the region saw growth from Healthcare and Automotive in the quarter.
The United Kingdom declined 7.6% in 2025, with Q4 declining 9.2% despite an easing comparison (Q4 2024: -5.1%) with the continuing impact of client assignment losses amplified by spending cuts. Pressure was centred on WPP Media and VML offsetting an improving trend at AKQA.
Western Continental Europe saw an improving sequential decline of 3.5% in Q4 2025 compared to Q3 2025 (-4.4%) and also against a tough comparison from 2024 (Q4 2024: +1.4%). Spain continued to grow in Q4, while declines in Germany continued, albeit at a lower rate compared to Q3, driven by pressure on WPP Media from client assignment losses.
Rest of World declined 5.9% in 2025, mostly driven by Asia Pacific. India is a relative outperformer, growing 8.6% in Q4 on new business momentum, in particular at WPP Media, although against an easier comparison (Q4 2024: -5.4%). India grew 3.8% overall in 2025. This was offset by a decline of 14.3% in China on the continued impact of client assignment losses and persistent macroeconomic pressures. There were declines in Latin America (2025: -2.5%) but stability in Africa & Middle East, with Q4 returning to growth +2.3% and also growth in Central & Eastern Europe (2025: +2.6%).
Top five markets - revenue less pass-through costs
|
+/(-) % LFL |
USA |
UK |
Germany |
China |
India |
|
Q4 2025 |
(6.3) |
(9.2) |
(5.9) |
(13.6) |
8.6 |
|
2025 |
(4.2) |
(7.6) |
(5.8) |
(14.3) |
3.8 |
Client sector - revenue less pass-through costs
|
|
Q4 2025 |
2025 |
2025 |
|
|
+/(-) % LFL |
+/(-) % LFL |
% share, revenue less pass-through costs1 |
|
CPG |
(12.6) |
(7.1) |
27.5 |
|
Tech & Digital Services |
(5.8) |
(2.0) |
17.8 |
|
Healthcare & Pharma |
2.0 |
2.1 |
11.8 |
|
Automotive |
(3.7) |
(2.6) |
10.5 |
|
Retail |
(1.2) |
(4.1) |
9.0 |
|
Telecom, Media & Entertainment |
(20.1) |
(10.1) |
6.4 |
|
Financial Services |
(11.4) |
(5.0) |
6.2 |
|
Other |
4.0 |
(9.4) |
4.3 |
|
Travel & Leisure |
(3.8) |
(5.8) |
3.6 |
|
Government, Public Sector & Non-profit |
(7.5) |
(0.7) |
2.9 |
1. Proportion of WPP revenue less pass-through costs in 2025; table made up of clients representing 82% of WPP total revenue less pass-through costs.
Financial results
Unaudited income statement1:
|
|
Headline |
Reported |
||||
|
£ million |
2025 |
2024 |
+/(-) % |
2025 |
2024 |
+/(-) % |
|
Revenue |
13,550 |
14,741 |
(8.1) |
13,550 |
14,741 |
(8.1) |
|
Revenue less pass-through costs |
10,176 |
11,359 |
(10.4) |
10,176 |
11,359 |
(10.4) |
|
Operating profit |
1,321 |
1,707 |
(22.6) |
382 |
1,325 |
(71.2) |
|
Operating profit margin (%)2 |
13.0% |
15.0% |
(2.0)pt |
2.8% |
9.0% |
(6.2)pt |
|
Earnings from associates |
39 |
40 |
(2.5) |
39 |
36 |
8.3 |
|
Profit before interest & tax |
1,360 |
1,747 |
(22.2) |
421 |
1,361 |
(69.1) |
|
Net finance costs |
(274) |
(280) |
(2.1) |
(290) |
(330) |
(12.1) |
|
Profit before taxation |
1,086 |
1,467 |
(26.0) |
131 |
1,031 |
(87.3) |
|
Tax |
(348) |
(411) |
15.3 |
(303) |
(402) |
(24.6) |
|
Profit after taxation |
738 |
1,056 |
(30.1) |
(172) |
629 |
(127.3) |
|
Non-controlling interests |
(43) |
(87) |
50.6 |
(43) |
(87) |
(50.6) |
|
Profit attributable to shareholders |
695 |
969 |
(28.3) |
(215) |
542 |
(139.7) |
|
Diluted EPS (p) |
63.2p |
88.3p |
(28.4) |
(20.0)p |
49.4p |
(140.5) |
1. Non-GAAP measures in this table are reconciled in Appendix 4.
2. Headline operating profit margin is headline operating profit divided by revenue less pass-through costs and reported operating profit margin is reported operating profit divided by revenue, with the % change expressed in margin points.
Operating profit
Headline operating profit was £1,321m (2024: £1,707m) at a headline operating profit margin of 13.0% (2024: 15.0%), 2.0 points lower than prior year and 1.8 points lower LFL. This year-on-year decline reflects lower revenue less pass-through costs and increased severance activity compared to the prior period, in particular at WPP Media, partially offset by lower staff incentives.
Total headline operating costs were down 8.3%, to £8,855m (2024: £9,652m).
Staff costs of £7,083m were down 8.7% compared to the prior year (2024: £7,761m), reflecting lower headcount as a result of the actions we have taken to mitigate the top-line decline this year. This has offset wage inflation and higher severance costs of £141m (2024: £61m). Staff incentives of £181m were down 50.1% compared to the prior year (2024: £363m) due to business performance against annual incentive targets and the disposal of FGS Global.
The average number of people in the Group in 2025 was 103,277 compared to 111,281 in 2024. The total number of people as at 31 December 2025 was 98,655 compared to 108,044 as at 31 December 2024.
Establishment costs of £420m were down 11.0% compared to the prior year (2024: £472m) driven by benefits from the ongoing campus programme and consolidation of leases, the benefit from the FGS disposal in 2024 and a favourable FX impact. Technology spend of £642m (2024: £684m) was down 6.1%, reflecting our ongoing focus on driving efficiencies to mitigate inflation, offset by our continuing investment in WPP Open, AI and data. Personal costs of £177m (2024: £209m) were down 15.3% driven by savings in travel and entertainment, while other operating expenses of £533m (2024: £526m) slightly increased by 1.3% due to cost inflation, slightly offset by efficiency savings.
Headline EBITDA (including IFRS 16 depreciation) for the period was down by 20.2% to £1,545m (2024: £1,935m).
Operating profit (continued)
Reported operating profit was £382m (2024: £1,325m) at a reported operating profit margin of 2.8% (2024: 9.0%) with the decrease due to the same factors as headline operating profit above and higher total adjusting items of £939m (2024: £382m). Reported operating profit includes goodwill impairment charges of £641m (2024: £237m), primarily relating to Ogilvy and AKQA, property impairments of £114m (2024: £3m), amortisation and impairment of acquired intangible assets of £61m (2024: £93m) and restructuring and transformation costs of £68m (2024: £251m). The prior year included gains on disposals of investments and subsidiaries of £322m, predominantly related to the disposal of FGS Global.
The restructuring and transformation costs of £68m (2024: £251m) represent a decrease of £183m from the prior year, consistent with the expected ramp down of historical transformation programmes.
Net finance costs
Headline net finance costs of £274m were down 2.1% compared to the prior year (2024: £280m), primarily due to lower average adjusted net debt and lower interest rates in 2025 compared to 2024.
Reported net finance costs were £290m (2024: £330m), including net charges of £16m (2024: £50m) relating to the revaluation and retranslation of financial instruments.
Tax
The headline effective tax rate (based on headline profit before tax) was 32.0% (2024: 28.0%).
The higher headline tax rate resulted from the effect of lower headline profit before tax in 2025 on fixed elements of our headline tax change compared to prior year.
The reported effective tax rate was 231.3% (2024: 39.0%). The reported effective tax rate is higher than the headline effective tax rate due to non-deductible goodwill charges.
Earnings per share ("EPS") and dividend
Headline diluted EPS was 63.2p (2024: 88.3p), a decrease of 28.4% predominantly due to lower headline operating profit and higher effective tax rate, slightly offset by lower headline net finance costs and lower non-controlling interests.
Reported diluted EPS was (20.0)p (2024: 49.4p), a decrease of 140.5% due to a net loss in 2025 compared to net income in 2024.
The Board is proposing a final dividend for 2025 of 7.5 pence per share, which together with the interim dividend paid in November 2025 gives a full-year dividend of 15.0 pence per share. The record date for the final dividend is 5 June 2026, and the dividend will be payable on 3 July 2026. The dividend has been reduced, balancing consistent returns to shareholders with investment for growth.
Cash flow highlights
Unaudited headline cash flow statement1:
|
Year ended (£ million) |
31 December 2025 |
31 December 2024 |
|
Headline operating profit |
1,321 |
1,707 |
|
Headline earnings from associates |
39 |
40 |
|
Depreciation of property, plant and equipment |
142 |
156 |
|
Amortisation of other intangibles |
43 |
32 |
|
Depreciation of right-of-use assets |
201 |
213 |
|
Headline EBITDA |
1,746 |
2,148 |
|
Less: headline earnings from associates |
(39) |
(40) |
|
Repayment of lease liabilities and related interest |
(337) |
(377) |
|
Non-cash compensation |
73 |
109 |
|
Non-headline cash items (including restructuring costs) |
(68) |
(261) |
|
Capex |
(186) |
(236) |
|
Adjusted operating cash flow before working capital |
1,189 |
1,343 |
|
Working capital |
(334) |
117 |
|
Adjusted operating cash flow |
855 |
1,460 |
|
% conversion of Headline operating profit |
65% |
86% |
|
Net dividends (to minorities)/from associates |
(5) |
(36) |
|
Contingent consideration liability payments |
(65) |
(97) |
|
Net interest |
(185) |
(197) |
|
Cash tax2 |
(398) |
(392) |
|
Adjusted free cash flow |
202 |
738 |
|
Disposal proceeds |
22 |
667 |
|
Net initial acquisition payments |
(147) |
(153) |
|
Dividends |
(343) |
(425) |
|
Share purchases |
(97) |
(82) |
|
Adjusted net cash flow |
(363) |
745 |
|
Reported: |
|
|
|
Net cash inflow from operating activities |
724 |
1,408 |
1. A summary of the Group's unaudited cash flow statement and notes for the year ended 31 December 2025 is provided in Appendix 1 and any non-GAAP measures in this table are reconciled in Appendix 4.
2. Cash tax in 2025 includes £43m related to tax payments for the FGS Global disposal.
Adjusted operating cash outflow before working capital was £1,189m (2024: £1,343m). The main driver of the lower cash inflow was the decrease in headline operating profit, partially offset by lower non-headline cash items, capex and lease repayments. Included within non-headline cash items is £82m of cash restructuring costs (2024: £275m). Working capital was an outflow of £334m compared with an inflow of £117m in the prior year, partly due to the impact of lower staff incentives.
Adjusted free cash flow was £202m (2024: £738m), lower than prior year due to a decrease in adjusted operating cash flow and higher cash taxes, partially offset by lower contingent consideration liability payments, net interest and dividends to minorities/from associates.
Adjusted net cash outflow was £363m, compared to an adjusted net cash inflow in the prior year (2024: £745m inflow), primarily due to higher disposal proceeds, predominantly from the FGS Global disposal in 2024, partially offset by lower dividends paid.
Reported net cash inflow from operating activities decreased to £724m (2024: £1,408m inflow) due a reported operating profit decline and a large working capital outflow compared to an inflow in 2024.
Balance sheet highlights
Unaudited balance sheet
Non-current assets of £10,905m decreased by £943m (31 December 2024: £11,848m), primarily driven by lower goodwill due to impairment charges of £641m and lower property, plant and equipment due to property impairments of £114m recognised in the year. The remainder of the decrease primarily relates to depreciation, amortisation and foreign exchange.
Current assets of £13,170m decreased by £491m (31 December 2024: £13,661m). The decrease is principally driven by lower trade and other receivables, which reduced by £443m.
Current liabilities of £14,835m decreased by £681m (31 December 2024: £15,516m). The decrease primarily relates to trade and other payables which decreased by £807m and corporate income tax payable which decreased by £112m, partially offset by a net increase in current borrowings of £238m. The increase in current borrowings is due to the €750m of 2.25% bonds maturing in September 2026 becoming current, mostly offset by the repayment of €500m of 1.375% bonds, further detailed in the section below. The decrease in corporate income tax payable is due to the lower tax charge compared to prior year.
The decrease in both current trade and other receivables and trade and other payables is primarily due to client activity and timing of payments.
Non-current liabilities of £6,468m increased by £209m (31 December 2024: £6,259m). The increase is primarily due to the issuance of €1,000m of 3.625% bonds, offset by the €750m of 2.25% bonds becoming current in the year. Further details on bond activity is in the section below.
Recognised within total equity, other comprehensive loss of £220m (2024: £62m loss) includes a £205m loss (2024: £72m loss) for foreign exchange differences on translation of foreign operations, a £58m loss (2024: £58m gain) for cash flow hedge amounts reclassified to profit or loss and a £54m decline (2024: £7m) of the fair value of equity investments, partially offset by a £68m gain (2024: £3m loss) on the Group's net investment hedges.
A summary of the Group's unaudited balance sheet and selected notes as at 31 December 2025 is provided in Appendix 1.
Adjusted net debt
As at 31 December 2025, the Group had cash and cash equivalents of £2.7bn (31 December 2024: £2.6bn) and borrowings of £4.9bn (31 December 2024: £4.3bn). The Group has current liquidity of £4.4bn (31 December 2024: £4.5bn), comprising of cash and cash equivalents, bank overdrafts and undrawn credit facilities.
As at 31 December 2025, adjusted net debt was £2.2bn (31 December 2024: £1.7bn), up £0.5bn. Average adjusted net debt in 2025 was £3.4bn, compared to £3.5bn in 2024. The average adjusted net debt to headline EBITDA ratio in the 12 months ended 31 December 2025 was 2.2x (12 months ended 31 December 2024: 1.8x).
The Group has a five-year Revolving Credit Facility of $2.5bn which matures in February 2031 following the final one-year extension option that was executed in February 2026. The Revolving Credit Facility has no financial covenants and remained undrawn at 31 December 2025.
In March 2025, we repaid €500m of 1.375% bonds which matured and in December 2025, we issued €1,000m of 3.625% bonds, maturing 2031, in a successful bond raising which was oversubscribed.
As at 31 December 2025, our bond portfolio had an average maturity of 5.8 years (31 December 2024: 6.3 years) and a weighted average coupon rate of 3.5% (31 December 2024: 3.5%).
Financial outlook
Our guidance for 2026 is as follows:
Like-for-like revenue less pass-through costs decline in the mid to high-single digits in the first half of 2026 with an improving trajectory in the second half
Headline operating margin expected to be 12% to 13%
Adjusted operating cash flow before working capital of £800m to £900m
Other 2026 modelling assumptions:
• Mergers and acquisitions will not significantly impact revenue less pass-through costs
• FX impact: current rates (at 27 January 2026, with USD/GBP rate of 1.38) imply a c.1.6% drag on FY 2026 revenue less pass-through costs
• In keeping with our revenue less pass-through cost and headline operating margin guidance, we now expect the following:
• Headline earnings from associates of around £30m
• Non-controlling interests of around £45m
• Headline net finance costs of around £290m
• Headline effective tax rate1 between 33% to 34%
• The following items impact adjusted operating cash flow before working capital:
• Capex broadly flat year-on-year at around £190m
• Total cash restructuring costs of around £250m, consisting of c.£190m from Elevate28 and c.£60m from historical programs
This announcement contains information that qualifies or may qualify as inside information. The person responsible for arranging the release of this announcement on behalf of WPP plc is Balbir Kelly-Bisla, Company Secretary.
1. Headline tax as a % of headline profit before tax.
Q4 2025 highlights
Below we highlight key developments from Q4 across the Group:
1. Clients
• WPP new business momentum - During the fourth quarter WPP's new business improved significantly with a number of new client assignments. Our integrated offering has secured global consolidated wins in December, with Kenvue for creative and production and Jaguar Land Rover for global integrated marketing activities including media and creative. In November, WPP Media also secured the wins of both Reckitt and Henkel in Europe and the win of the UK Government in December. Other wins include: Pizza Hut creative in the US, Major League Soccer creative in the US, BMW creative in India, Warburtons PR in the UK and Burger King PR in France.
• WPP Production launched, uniting WPP's production capabilities into a single operating unit - In February 2026, Hogarth has come together with content producers from across the WPP network and created a single, globally connected operating unit (see link). All teams will now operate on a single platform, harnessing WPP Open's production technology and AI-powered workflows to deliver higher quality, more impactful content. The new offering reflects our broader strategy to provide a more integrated service and empowers our clients to tap into our holistic ecosystem of creative, media and production expertise.
• WPP Media's Business Intelligence releases latest 'This Year, Next Year' report - In December, WPP Media's Business Intelligence published its End-of-Year Global Advertising Forecast for 2025, projecting global ad revenue to reach $1.14 trillion with 8.8% growth (see link). The report underscores the advertising industry's resilience amidst economic and technological shifts, projecting robust growth. This momentum is set to continue into 2026 with an anticipated 7.1% growth. The report highlights a period of significant transformation within the industry, as streaming video continues to gain ground on linear television, retail media captures budget from traditional digital channels, and AI-powered answer engines are beginning to reshape search behaviour.
• Industry recognition of our work for clients - In November, WPP was named a Leader in three IDC 2025 MarketScape assessments, Worldwide Influencer Market Platforms for Large Enterprises, Worldwide Experience Design Services and Worldwide Experience Build Services. In December, WPP Media was named MediaPost's Holding Company of the Year (see link). For the fifth consecutive year, Ogilvy earned Global Network of the Year at the 2025 London International Awards (see link), and at the Drum Awards Festival 2025, VML was honoured with 18 accolades (see link) including for our 'Glassphemy' work for Diageo. In January 2026, our global marketing effectiveness and foresight consultancy, Gain Theory, was named a Leader in The Forrester Wave™: Marketing Measurement And Optimization Services (see link).
2. Technology
• Launch of Agent Hub - In January 2026 (see link) we announced the launch of Agent Hub on WPP Open, which provides clients with access to a suite of advanced AI agents with decades of WPP's collective world-class expertise of proprietary data, strategic capabilities and deep institutional best practice. The initial agents include the Brand Analytics Agent, the Behavioural Science Agent, the Analogies Agent and the Creative Brain. Each agent within Agent Hub adheres to rigorous standards including validation by experts and verification of knowledge sources, while ensuring data remains confidential and secure, and tested for accuracy.
• InfoSum introduces Beacons for cross-cloud data collaboration - Beacons is a new technology from InfoSum (see link), WPP's leading data collaboration platform. Beacons enables secure, AI-ready collaboration directly within clients' own cloud environments, across Amazon Web Services (AWS), Google Cloud and Microsoft Azure. Integrated into WPP Open, Beacons allows clients to train custom Open Intelligence models, unlocking predictive insights and collaborative intelligence, while maintaining full control and trust as this is all done within their own environments. Open Intelligence is our foundational intelligence layer underpinning WPP Open, securely connecting live data from clients, partners and WPP in a privacy-first way.
• From adoption of WPP Open to everyday usage - In 2025 we prioritised investment in WPP Open, our pioneering agentic marketing platform, focusing on deployment across our business as part of our £300m investment in 2025 on AI-driven technology. A key metric for us is internal adoption and we have seen continued progress with over 70,000 of our people (equivalent to around 90% of client-facing staff) using the platform actively on a monthly basis during the course of December (December 2024: 33,000/c.40% client-facing staff). As adoption targets in 2025 have been achieved, increasing everyday usage across all our agencies is our key priority.
3. People
• WPP's first Chief Innovation Officer - In November, WPP appointed Elav Horwitz (see link) to the Chief Innovation Officer position, a new role created to solidify WPP's leadership in applied AI and deliver groundbreaking technology-driven solutions for clients. Elav is responsible for connecting WPP's partners with our unparalleled creative and strategic talent to drive applied AI and client transformation, and to redefine how clients engage with commerce, create compelling content and shape culture.
• WPP launches Client Solution Architects Group - In January 2026, WPP created the Client Solution Architects Group which is an end-to-end strategic function unifying WPP's capabilities, including technology, media, data and marketing, to deliver tailored solutions for clients and will focus on driving growth amongst our top clients. Alex Hesz has joined WPP as President, Strategy and Solutions as part of this new group, and will co-lead the team alongside Antonis Kocheilas, global Chief Transformation Officer at Ogilvy, and Ben Kay, WPP's Head of Planning. The Client Solution Architects Group reports to Devika Bulchandani, WPP's Chief Operating Officer.
Business segment and regional analysis
Business segments - revenue analysis1
|
|
Q4 2025 |
2025 |
||||
|
|
£ million |
+/(-) % reported |
+/(-) % LFL |
£ million |
+/(-) % reported |
+/(-) % LFL |
|
Global Integrated Agencies |
3,218 |
(7.0) |
(6.2) |
11,956 |
(5.6) |
(3.7) |
|
Public Relations |
180 |
(31.6) |
(4.9) |
705 |
(39.0) |
(6.7) |
|
Specialist Agencies |
230 |
(1.3) |
4.0 |
889 |
(3.8) |
1.0 |
|
Total Group |
3,628 |
(8.3) |
(5.5) |
13,550 |
(8.1) |
(3.6) |
Business segments - revenue less pass-through costs analysis1
|
|
Q4 2025 |
2025 |
||||
|
|
£ million |
+/(-) % reported |
+/(-) % LFL |
£ million |
+/(-) % reported |
+/(-) % LFL |
|
Global Integrated Agencies |
2,328 |
(8.4) |
(7.6) |
8,740 |
(7.5) |
(5.7) |
|
Public Relations |
168 |
(32.3) |
(3.4) |
667 |
(38.8) |
(6.0) |
|
Specialist Agencies |
195 |
(4.9) |
(0.1) |
769 |
(6.0) |
(0.7) |
|
Total Group |
2,691 |
(10.1) |
(6.9) |
10,176 |
(10.4) |
(5.4) |
Business segments - headline operating profit analysis1
|
£ million |
2025 |
% margin2 |
2024 |
% margin2 |
|
Global Integrated Agencies |
1,165 |
13.3 |
1,491 |
15.8 |
|
Public Relations |
102 |
15.3 |
166 |
15.2 |
|
Specialist Agencies |
54 |
7.0 |
50 |
6.1 |
|
Total Group |
1,321 |
13.0 |
1,707 |
15.0 |
1. Prior year figures have been restated to reflect the reallocation of a number of businesses between Global Integrated Agencies and Specialist Agencies.
2. Headline operating profit as a percentage of revenue less pass-through costs.
Business segment and regional analysis
Regional - revenue analysis
|
|
Q4 2025 |
2025 |
||||
|
|
£ million |
+/(-) % reported |
+/(-) % LFL |
£ million |
+/(-) % reported |
+/(-) % LFL |
|
N. America |
1,250 |
(11.4) |
(5.1) |
4,966 |
(10.8) |
(3.4) |
|
United Kingdom |
530 |
(8.0) |
(9.5) |
2,055 |
(5.9) |
(7.6) |
|
W Cont. Europe |
848 |
(1.6) |
(1.8) |
2,891 |
(4.0) |
(0.1) |
|
AP, LA, AME, CEE1 |
1,000 |
(9.7) |
(6.8) |
3,638 |
(8.5) |
(4.0) |
|
Total Group |
3,628 |
(8.3) |
(5.5) |
13,550 |
(8.1) |
(3.6) |
Regional - revenue less pass-through costs analysis
|
|
Q4 2025 |
2025 |
||||
|
|
£ million |
+/(-) % reported |
+/(-) % LFL |
£ million |
+/(-) % reported |
+/(-) % LFL |
|
N. America |
940 |
(14.2) |
(7.3) |
3,837 |
(12.7) |
(4.6) |
|
United Kingdom |
389 |
(7.2) |
(9.2) |
1,503 |
(5.4) |
(7.6) |
|
W Cont. Europe |
619 |
(5.6) |
(3.5) |
2,143 |
(9.8) |
(4.7) |
|
AP, LA, AME, CEE |
743 |
(9.8) |
(7.5) |
2,693 |
(10.3) |
(5.9) |
|
Total Group |
2,691 |
(10.1) |
(6.9) |
10,176 |
(10.4) |
(5.4) |
Regional - headline operating profit analysis
|
£ million |
2025 |
% margin2 |
2024 |
% margin2 |
|
N. America |
663 |
17.3 |
825 |
18.8 |
|
United Kingdom |
164 |
10.9 |
237 |
14.9 |
|
W Cont. Europe |
212 |
9.9 |
259 |
10.9 |
|
AP, LA, AME, CEE |
282 |
10.5 |
386 |
12.9 |
|
Total Group |
1,321 |
13.0 |
1,707 |
15.0 |
1. Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe.
2. Headline operating profit as a percentage of revenue less pass-through costs.
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