WPP (WPP) H1 2025 earnings summary

Executive summary

• H1 2025 organic net sales/revenue less pass-through costs declined 4.3%, with Q2 down 5.8%, driven by macro uncertainty, client spending cuts, and slower new business.

• Headline operating margin fell to 8.2%, down 2.9-3.3 percentage points year-over-year, mainly due to revenue decline and higher severance costs, especially at WPP Media.

• Strategic actions included rapid adoption of WPP Open, transformation and rebranding of WPP Media, new partnerships, and significant investment in AI and data capabilities.

• Headcount reduced by 3.7% since year start, reflecting cost savings and back-office efficiencies.

• Leadership transition: Mark Read stepping down, Cindy Rose to become CEO in September and lead a strategic review.

Financial highlights

• H1 2025 revenue less pass-through costs: £5,026m (down 10.2% reported, 4.3% LFL); headline operating profit: £412m (down 36.2%); margin at 8.2%.

• Headline diluted EPS: 20.0p (down 35.3% year-on-year); interim dividend declared at 7.5p, halved for financial flexibility.

• Adjusted net debt at June 2025: £3.3bn; average adjusted net debt/headline EBITDA at 1.98x, above target range.

• Available liquidity at June 2025: £3.0bn; no major bond maturities until September 2026.

• Cash restructuring costs in H1 2025: £40m (down from £149m in H1 2024).

Outlook and guidance

• FY 2025 like-for-like revenue less pass-through costs expected to decline 3% to 5%.

• Headline operating margin expected to decline 50 to 175 bps year-over-year, excluding FX impact.

• Adjusted operating cash flow before working capital for 2025 expected at £1.1bn–£1.2bn.

• Headline effective tax rate for 2025 expected at 31%.

• Margins anticipated to improve in H2 as cost actions take effect.