WPP announces results for the year ended 31 December 2012

wppWPP has today posted its annual report and accounts for the year ended 31 December 2012.

A copy is available to view on WPP’s website www.wpp.com.

  • Read the letter to shareholders here
  • Full financial statements are available here

Highlights

  • Reported billings were down slightly at £44.4 billion, but up 1% in constant currencies.
  • Revenues were up 3.5% to £10.4 billion and up almost 6% in constant currencies. Including 100% of associates, revenue is estimated to total 2.6 billion ($20.0 billion).
  • Headline PBIT was up over 7% to £1.531 billion against £1.429 billion in 2011 and up over 11% in constant currencies.
  • Headline PBIT margin was 14.8% in 2012 against 14.3% in 2011 (surpassing the historical pro forma high of 14.3% in 2008) On gross margin, the headline PBIT margin was 16.1%, up 0.6 margin points on 2011.
  • Reported profit before interest and tax rose over 4% to £1.311 billion from £1.258 billion. Headline EBITDA increased by 7% to £1.756 billion.
  • Headline profit before tax was up over 7% to £1.317 billion and reported profit before tax was up over 8% to £1.092 billion.
  • The share price is up by 31% in 2012 to 888.0p at year end. (2013, 16% since 1st January).
  • Dividends increased by almost 16% to 28.51p (a record level).
  • Diluted headline earnings per share were up over 8% to 73.4p (an all-time high) and diluted reported earnings per share decreased by over 2% to 62.8p, reflecting the release of prior year tax provisions in 2011.
  • Free cash flow strengthened to £1.094 billion in the year, over £1 billion for the second consecutive year.
  • Net debt averaged £3.2 billion in 2012, up £0.4 billion at 2012 exchange rates, and net debt at 31 December 2012 was £2.8 billion, £0.3 billion higher than 2011, reflecting increased spending on acquisitions (chiefly AKQA) and higher dividends.
  • Average net debt, was around 1.8 times headline EBITDA in 2012 compared with 1.7 times in 2011, and well within the Group’s current target range of 1.5-2.0 times.
  • In September 2012, the Group successfully issued $500 million of 10-year bonds at a coupon of 3.625%, together with $300 million of 30-year bonds at 5.125%.
  • So far, in the first three months of 2013, average net debt was up approximately £0.3 billion at £3.0 billion against £2.7 billion for the same period in 2012, at 2013 exchange rates.
  • With a current equity market capitalisation of approximately £13.0 billion, the total enterprise value of WPP is approximately £16.3 billion, a multiple of 9.1 times 2012 headline EBITDA.

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