WPP laid out strategic goals and targets for the next several years, including a shift in focus to the higher growth areas — commerce, experience and technology — during a presentation to investors today. It said those areas represent about 25% of its business now and that will rise to 40% by 2025.
All of the holding companies have announced huge cost cuts this year and more cuts are coming, although much of the savings will be reinvested to drive growth.
WPP said it would achieve annual cost savings of £600 million ($815 million) by 2025, with roughly two-thirds of that figure re-invested in talent, incentives and new technology. Capital expenditures in the next two years will be higher than normal — up to £500 million ($679 million), earmarked for investments in its campus programs (where agencies across the holding company share space in cities around the world), back-office systems and other areas.
The company told investors it expects to be back to 2019 net revenue levels by 2022, with 3% to 4% growth thereafter.
The firm’s organic net revenue decline for full-year 2020 is expected to be in line with year-to-date performance of 8.4%, with a return to growth next year in the mid-single digits.
WPP CEO Mark Read noted that about three-quarters of the company’s top-100 clients are now working with the company on ecommerce initiatives.
The company is two years into a three-year transformation plan.
“In partnership with our agency brands, we are deepening and accelerating the change already happening within WPP,” he said. “Clients need trusted partners more than ever to help them transform and succeed.”