WPP (WPP) H2 2025 & Strategy update earnings summary

Executive summary

• Like-for-like revenue/net sales declined 5.4% in 2025, reflecting client losses and spending cuts, with Q4 down 6.9% year-over-year.

• Headline operating margin was 13%, down 180 basis points year-over-year, due to lower revenue and increased severance costs.

• EPS fell 28.4% to 63.2p, impacted by margin compression and higher tax.

• Adjusted operating cash flow before working capital was £1,189m, at the top of guidance.

• New business momentum improved in late 2025 and early 2026, with major client wins exceeding prior year levels by February.

Financial highlights

• Reported revenue less pass-through costs was £10.2bn, down 10.4% year-over-year.

• Headline operating profit was £1.3bn, down 22.6% year-over-year, with a 13% margin.

• Adjusted operating cash flow before working capital was £1.2bn, including £82m restructuring charges.

• Net debt ended 2025 at £2.2bn, up £500m year-over-year; average adjusted net debt was £3.4bn.

• Final dividend proposed at 15p for 2025, reflecting a reduction year-over-year but stable from H1.

Outlook and guidance

• 2026 like-for-like revenue less pass-through costs expected down mid-to-high single digits % in H1, with improvement in H2.

• Headline operating margin guided at 12%-13% for 2026.

• Adjusted operating cash flow before working capital expected at £800m-£900m, including £250m restructuring charges.

• Average leverage metrics anticipated to rise in 2026, but average net debt to remain broadly stable.

• Return to organic growth targeted during 2027, with margin and leverage improvement from 2028.