WPP plc (WPP) Earnings Call Transcript & Summary

Good afternoon or good morning, everyone, and thank you for joining us. We've got a great session lined up for you on a really successful part of our business, actually, that we don't talk about that much. And that's, of course, our public relations and public affairs business. It actually represents over 10% of our business today. And over the last few years, we've built 3 very strong global brands, BCW, Hill+Knowlton Strategies and FGS Global. And I'm pleased to say you're going to hear from the leaders from each of these businesses today. This was one of our best-performing businesses through COVID as client demand for Board-level strategic communications advising was obviously very strong. And actually coming out of COVID, that demand has only accelerated, with key drivers being purpose, reputation, strategic M&A, crisis management, et cetera. So growth in Q1 was actually 14.1%, ahead of our overall business at 9.5%. We're also increasingly seeing PR services acting as the tip of the spear for our creative and media agencies or actually being very much part of an integrated offer, for example, on the likes of WBA and Coke. So now I'm going to hand over first to Brooke Hovey, who is the Global President for BCW. She will then, in turn, pass the baton to AnnaMaria DeSalva, the Global CEO of Hill+Knowlton. And then finally, we'll hear from Alexander Geiser, the CEO of our newly formed FGS Global business. And then, of course, we'll take any questions that you may have. So Brooke, over to you.

Perfect. Thank you, John. So Brooke Hovey here. As John said, I'm the Global President of BCW, which is Burson Cohn & Wolfe. I've been with the agency in multiple roles over the years, leading growth, leading digital key clients and so on. So I'm really excited to share an overview of BCW and also some insight into how our discipline has evolved and how we've really been at the forefront of that, along with my colleagues who you'll hear from later. So we often get the question, what kind of agency is BCW? Are you a PR agency, a comms agency, an integrated agency? And I think rather than label what we are, I think it's really helpful to describe what it is that we do in the context in which our clients are operating today. So you can go to the next slide. Virtually every client that we serve is in the midst of some kind of transformation, their business and their industry. And it's somewhat inevitable, but it's also, as John said, really accelerated by the events of the past 3 years: a global pandemic, geopolitical and social unrest, climate change and so on. So this transformation is the backdrop of every brief that we receive, whether it's stated explicitly or not. On to the next slide. And the thing is you cannot simply advertise your way through transformation. No disrespect to our advertising colleagues but that's not enough. I think the environment that we're in demands really strategic, well-orchestrated communications. And that's why, to John's point, we've seen the communications function really rise in value and in respect. It's tremendously respected in the C-suite, in their making Board-level decisions. Our clients operate in complex connected stakeholder ecosystems, and they need to bring every single audience along, not only consumers but employees. Employees today are perhaps the most important stakeholder audience. Also customers, partners, policymakers, investors. Our clients need every single audience to think differently, to feel and to take action. If you go to the next slide, this is what we do. We move people with power and precision to move our clients forward day by day, audience by audience. This is what we do. We work to craft compelling stories, shape perceptions and drive our audiences to act so that our clients can thrive in this kind of a volatile environment. Simply put, we are a global full-service agency that is built to move people. So then the question becomes, how do we do it? And I'll just take a minute or 2 to give us a tiny bit of history on how our discipline has evolved. So 15 years ago, I think PR agency really equated to media relations in the minds of most people. And that was the core of what a PR agency did was earned media relations and actually, paid media was kind of a dirty word. We didn't pay for coverage. We had to craft stories and we had to earn coverage and earn attention. And by the way, that heritage is still a big differentiator and advantage for us today. But with the rise of social media, our business naturally evolved to be more at the forefront of influencer marketing, conversational marketing, content-driven marketing. That was the first evolution. Then we made investments into insight, strategy, creative, thought of ourselves as an earned-first agency. I'd say where we are today, something we're calling earned-plus. We're making big investments into data and analytics to better craft stories and engage audiences into technology, creative technology, content production and then, of course, paid and performance media. Because our earned heritage still allows us to craft incredible stories, the paid media is critical to reaching and moving audiences in the right way. So I think with this change, we do compete against other disciplines today. All the disciplines are converging a little bit even within WPP. But we're always going to bring that unique strength in earned and then specializations in corporate communications, public affairs, crisis consulting, reputation. That's always going to give us an advantage. So this next slide shows just a snapshot. This is the BCW earned-plus offer. We're a full-service global agency, about 4,000 people around the world. Part of our advantage to clients, we serve a lot of big brands in 20, 30-plus countries. And we can stand up a team that can do this kind of work and bring local insights on the ground every day. Our offer spans brand marketing through to corporate reputation, public affairs, government relations, issues and crisis. We're doing a lot of work in DE&I consulting or polycultural consulting, as we call it. So all of these solutions, though, are powered by core capabilities in strategy, creative, data, integrated media, so not just earned but paid, digital, social and technology. And then a real advantage for us is we have deep, deep industry expertise. And here, we can kind of consult, we can compete with and complement some of the bigger consulting firms because we have experts who are incredibly knowledgeable in transportation, supply chain, travel, tech, you name it. So this is the offer at a glance. And if I could just, on the next slide, I'm just going to underscore specifically some of the work that we're doing in corporate affairs. This is becoming even more of a priority for us now based on what our clients are needing from us. So here's a snapshot of what we do in corporate affairs. Corporate positioning, executive visibility, as John said, a lot of work in purpose and ESG, so environmental, social, governance. We're working with clients to craft their ESG strategies and stories. DEI, incomes, employee issues and so on. So this is a big, big part of our business today. All right. And with that, I selected 2 cases that I think are good illustrations of the kind of work that we do today. So I think this first one sets up itself pretty nicely. So I'll just go ahead and roll tape on this one. [Presentation]

All right. And I'm not sure where everyone on this call is based and if everyone is familiar with Dollar General, but it's a really important retailer here in the States. And so in this, hopefully, you can see we created the creative platform here for what matters, executed across a range of audiences. Our job was to appeal to multiple stakeholder audiences, including their employees, and it's a really powerful purpose-driven campaign. I'm going to share one more example, also a purpose-driven campaign. This is work that was done out of Sweden for a leading insurance company out of Sweden. And it's a good example of how when we're creating stories, we're also trying to solve clearly important problems, life or death problems in some cases. So let's look at this case from Trygg-Hansa. [Presentation]

Obviously, we're really proud of this work. It's really important work. What I would say, too, for this company, it's a multiyear campaign. So the tattoos, that was the idea for this year. In prior years, we've created apps. For example, we created an app that would go into "beach mode" so it uses geolocation so that when you're close to a beach, it actually goes into a different mode, making sure that parents are more attentive to their child being in the water. So a multiyear commitment that does far more than create buzz, it truly does have the potential to change consumer behavior and to save lives. So that's an introduction to BCW, and I'm happy to hand over to my colleague, AnnaMaria, next.

Brooke, thanks so much. Appreciate the introduction. And by the way, that was a great way to get us started and to set the table really for the role of our discipline in our segment. I'm AnnaMaria DeSalva, I'm the CEO of Hill+Knowlton Strategies, and I'm really delighted to be a part of this conversation today because the segment is so important, both strategically and now, I think with the significant growth and value creation opportunity. And we see that, that's certainly been true for Hill+Knowlton, which some of you may know is essentially the category creator. We were founded in 1927 by John Hill. And we've had a distinctive presence in the industry now. But like every great mature company, we have had to renew. And I think that we're going through a really exciting period of renewal right now as we consider our purpose and consider how to really invest in the capabilities that grow our resiliency and relevancy at this extraordinary time when there's never been, frankly, so much demand for the discipline. What's striking, if you go to the next slide, is that Hill+Knowlton is an American brand, an American company, but we've become very international. And it's been exciting to see the development of the company well beyond North America. And in fact, some of our most dynamic growth is in other regions all around the world. And so I feel as though we're bringing to bear that capability in both strategy and global execution for very large clients globally. But also, we have a long tail of clients who are both regional and local. So I think that we have rather extraordinary diversity in the client portfolio and rather extraordinary diversity in our staff and in our employee population globally. I think that the growth that we've enjoyed over the last several years also has been very consistent in regions around the world. So the quality of our result has been striking. And I feel like we at H+K are just really energized to be a part of a globally thriving company both at the H+K level and also at the WPP level. I'd like to share with you a couple of thoughts and insights that have really guided our renewal and revitalization. So if you go to the next slide, please. I'd love to share with you a perspective of really the voice of the customer. And you can see on the left-hand side of the quote, some very poignant insights that we've sought from major leaders in our industry and beyond, who have reflected with us where Hill+Knowlton can and should go in its second century and what they most want and need right now in a strategic communications partner. And you can see some of these themes are consistent with some of the remarks that Brooke made a few minutes ago in terms of the extraordinary interdependencies, the need to have strategic communications partners who can move into integrated unclear areas because the disciplines are converging, that they're looking for a large firm to be an integrator that can help take the complexity out of a massively complex environment, and that there is also a high standard now for business acumen and that they want to see business leadership with a communications capability instead of traditional communicators. And I feel as though they're asking Hill+Knowlton, in particular, to lean into the fact that we are an established and mature firm but that we have the brains and the creativity to apply a disruptive mindset. And they also see that we can synthesize both strategy and execution in a way that can be difficult for many other companies. And so this market opportunity has guided our growth strategy and our investment strategy. And on the right-hand side of this slide, you can see the themes, the places where we're focused in terms of building strength and capability, and we could double-click on each of these and each would have a story and a chapter and would be very exciting and very dynamic. And of course, we don't have time for that. But from a corporate advisory standpoint, we're looking into the types of capability, building the types of capability for clients when they have their most value-determinative events, public affairs responding to the extraordinary role that governments are playing now in business all around the world and regulators and also this extraordinary geopolitical shift that is occurring in the changing world order. We have an interdisciplinary approach to innovation and creativity. I'm sorry, could you please stay on the prior slide? We have an interdisciplinary approach to innovation and creativity with I&C hubs that are being built in about 7 regions all around the world that are really driving our new business and client performance. I'm going to talk a little bit about ESG and sustainability. Data and technology plays a very large role across the WPP portfolio, and that's certainly true in this segment. And at H+K, we're looking at specific investments to expand our capability in data science and intelligence. And of course, this is a people business and so people are the products. So it could not be more important now to have a really robust talent -- end-to-end talent strategy for attraction and development and retention. And clients are at the center of our business. So I feel as though we've had just a tremendous emphasis on improving our client service methodology and growing our large and medium relationships, in particular, which has contributed so much to our organic growth. So with that as a little bit of backdrop, I'll share with you a philosophy, sort of the opportunity that we see on the next slide and building on these client insights, is that we are really mining the fusion of growth, risk and reputation to transform outcomes for our clients. And our clients, when they talk about interdependency, when they talk about convergence, really what they're saying is they never talk to one stakeholder about one thing anymore at one time. There are layers, there's multiplicity of interest and stakeholders. And your commercial objective one day becomes a public affairs issue the next day. And all of that has to do with the intangible value created by both brand and reputation. So it's this intersectionality that we find that really has to guide the work we do, the people we hire. And to add some dimension to this, if you consider the domains of growth, risk and reputation, there are vivid examples of where we solve for clients' problems and opportunities in each of these areas that have a lot of impact and relevancy for the others. So if you go to the next slide, I can just tell you briefly some recent experiences. In the risk domain, we've been engaged by the global management board and the risk management team of a leading global retailer to provide ongoing political and even military analysis, both before and after Russia's invasion of Ukraine. And they've used this information to inform their business continuity plan, their crisis management and supply chain decision-making because they have significant exposure in both markets. From a growth standpoint, we've worked for one of the world's leading airlines to create new brands that really focus on their cleanliness and also their broad ESG commitment. And that work has helped increase awareness and preference for the corporate master brand, which has helped them capture market share globally. And from a reputation standpoint, we've worked recently with a global natural resources company that's experienced a really existential crisis that profoundly damaged the credibility of management and Board. And I feel like our Board-level engagement with that firm made it possible to establish proactive reputation management as really central to value creation. And a very purpose-centric approach for this company improved all their outcomes, including shareholder return in the wake of a really difficult disaster. So this gives you a sense of the range of what we're doing from a growth, risk and reputation standpoint, and oftentimes, how those domains intersect and how we're always sort of surfing the fusion between these business imperatives to drive long-term value for clients. I'd like to go a little bit deeper on the next slide to talk about where this is especially visible or especially poignant right now, and that has to do with our growing ESG advisory business. And I'm sure you're very aware of the emphasis now on sustainability and ESG communications. And certainly, many companies in our category are involved in communicating sustainability commitments and efforts. We find now that we're moving upstream and the people that we're hiring into the company are very much focused on the business strategies and the concrete decision-making and data inputs that go into making these commitments and creating road maps to fulfill them. And I think we've had some important examples of that, most recently, in a couple of different categories. So if you go to the next slide, there's an example of some really exciting work we did, climate action planning for a leading freight rail provider. This was a company that, like many companies, have enthusiastically made a commitment to support the Paris Agreement. And they wanted to fulfill a net zero commitment by 2050. It's very hard to do in their segment because the technology isn't catching up. And so they quickly found that they had to have a much more tangible plan. And we worked with them to determine how to reduce their Scope 1 and 2 greenhouse gas emissions 26% by the end of the decade. We worked with them to develop a comprehensive report that would disclose their climate risk assessment strategy and also how they were going to govern their process going forward. And then that was followed by an announcement to make the largest investment in battery electric locomotive technology by a U.S. Class I railroad. So this was a really defining unprecedented commitment and communication and business strategy by a leader in their segment and actually was highlighted by President Biden subsequently as an example. We've done some work on the next slide, similar work with P&G, who is one of our longest-standing clients. We've worked with them for a very long time across various corporate reputation and corporate brand opportunities. But as we've built our strength and sustainability strategy, we've been able to work with them to also substantiate and help their Board determine a net zero 2040 commitment. So I think that they were, like many companies, very concerned, understandably cautious about wanting to make a really robust substantiated net zero commitment and not have it be arbitrary. And when they communicated their commitment, they wanted there to be a road map and a legitimate path to fulfillment that they could engage with their stakeholders on and across their supply chain. And so we did the formative work, the benchmark analyses, the other analyses to help inform management's discussion with the Board. And then once the commitment was made, the end-to-end communication strategy and engagement with all their stakeholders across their supply chain. So I hope this gives you a little bit of texture of how ESG advisory is really becoming a very vivid example of what we do to have robust stakeholder strategies in the intersection of communication, reputation and business and operating priorities. I want to be sensitive to time. And so if you move to the next slide, I'll just quickly acknowledge that we've had some wonderful work across the pandemic with Walgreens and WBA to really creatively engage with in driving the immunization strategy and growth with those who are most vulnerable and those who are most at risk and where vaccine inequities have been the most persistent. And I think that it's just an incredible public health story, again, based on a commitment by WBA, a recognition that they have an outsized role to play to get into these communities and transform public health outcomes but also tapping into our significant creativity and innovation capability to understand what would actually work and how to reach these difficult-to-reach populations. I'd like to share just some data, just as I sort of conclude here, to add some additional perspective. I've dedicated my career to corporate communication, strategic communication. I'm a boomerang to Hill+Knowlton. I was here in the late 2000s, leading the global health care practice. I spent about a dozen years as a senior client. I'm technically still a client because I am Vice Chairman of the Board of a supply chain management and transportation -- freight transportation company globally and also their Governance and Sustainability Chair on the Board. And so all of these issues and all of these opportunities really mean a great deal to me. It's something that I understand deeply in terms of our market opportunity and the opportunity for investment. And so if you look at the next slide, it's been just great to see and to understand that there has been a receptivity to our value proposition that we've been able to perform as Hill+Knowlton during the pandemic and in the ways that John Rogers described at the start of the call. Really, it's been almost countercyclical during a downturn that as the world becomes more chaotic, the demands for our services increase. And if you look at the next slide, you can see that there's been really attractive growth in the category and an opportunity for us at WPP to participate in that growth and to be growth companies ourselves and to grow even faster than the market. So I'm passionate about our opportunity as H+K and as WPP and across the segment to do even more and to be an engine for value creation for WPP going forward. We are rebranding Hill+Knowlton. And if you go to the next slide, my final slide, it's just a reflection that I'd like to leave with you that our work really has never mattered more. And this is a call to action and an expression of purpose that I bring to our company. And I feel like almost every day in just reflecting that we do live in an era of disruption, it's an extraordinary time. But at the same time, there is an opportunity and a race to innovation to generate more growth. But there are grand challenges, and all of these grand challenges demand extraordinary communication. And I think what you're seeing is across these companies at WPP, across the category, just an ability to respond to that challenge and to build these assets for purpose, and that's what we feel like we're doing at H+K. So thank you. And with that, I'll hand it over to Alexander to talk about FGS Global.

AnnaMaria, thank you. That was very -- I feel just as passionate. Looks awesome. We're the new kid on the block. And maybe, we immediately jump to the next slide. We're a lot smaller. We're a lot younger, but the corporate is both the same. The world has moved. You've heard it from Larry Fink. You've heard it from others. You're reading it. You're seeing it. You're experiencing it yourself. We're moving from the stakeholder -- from the shareholder economy to the stakeholder economy. And we are the firm, and I think that's probably the biggest difference, very focused. So we're focused on work that matters for -- to the boardroom and to the C-suite. So we tend not to -- 99.9% of the case, the firm does not work for products. The only thing we work on are products and projects that matter to the C-suite. And that's what the firm essentially is built for and helping the company essentially execute those issues. I'll get into that and what that looks like. Next slide, right. For that, we have to build a global firm. And so we merged 4 firms: Sard Verbinnen, which some of you might be familiar with. Traditionally, the #1 leading financial communications, transaction communications, shareholder activism, crisis communications firm in the U.S.; Finsbury, which was the #1 financial communications firm in London and built up a tremendous business in Asia and also had a very strong crisis operation in the U.S.; Hering Schuppener, which was the leading capital markets and crisis and regulatory communications firm in Europe; and the Glover Park Group, which was the leading public affairs firm in Washington. And we merged those 4 firms over the last 18 months. It was a busy 18 months, merged them together into FGS Global. So the brand is new, the name is new, and we actually launched it 3 weeks ago and now are essentially one single operating platform globally, one firm, 1,200 professionals. 500 of those are shareholders in the company themselves, so it's a true partnership. And honestly, it will serve the partnership and really help steer the organization forward. So if we jump to the next slide, you'll see that the business is very clearly set up against what matters to the C-suite. We have 5 essentially practice areas. One is focused on transaction and financial communications. The other one, so think -- currently supporting Tesla and their bid for Twitter. Think of Porsche and their ambition to become -- to go public this year. Ernst & Young in their proposed split of the company and listing of the consulting business. Think of the potential Arm IPO. Think of Zendesk. Think of VMware. Think of Spirit Airlines, those kind of projects and obviously, a market leader for decades in shareholder activism and helping boards deal with activists. From a corporate reputation and leadership strategy, think 1,000 CEOs and Chairs plus, helping them launch their strategies, articulate their strategies and not just to the capital market but to all stakeholder groups: to the customers, leadership teams, Boards, et cetera, media, et cetera, and making sure that your strategy essentially continues to resonate and feels compelling to your stakeholder groups. Then crisis and issues management, one of the -- we were actually ranked last week as the only firm in the U.S. by Chambers in their Band 1 category, ranking us as the #1 crisis communications firm, and that's really something that we're very proud of, have tremendous teams, over 200 colleagues around the world, and they essentially work like Navy Seals. So if Volkswagen has a diesel-gate crisis, we lob in 40 people if those kind of things start happening. And that's an incredibly strong team... [Technical Difficulty]

Looks like we may have lost Alexander there. Sam, if you can just confirm to me that we've lost him. It looks like we lost him, Peregrine. Should we go to Q&A? That's probably the...

Yes, let's take some questions.

If we can't get Alex back, then obviously, we will do so.

Yes. Just pulling up the Q&A now. So I guess the first question we have is, who do you see as your main competitors? And how are you differentiated from them? AnnaMaria, perhaps you'd like to kick us off on that one, please.

Sure, I'd be delighted. Well, look, it varies because as you could see, the point that I made about diversity, I mean, we have extraordinary geographic diversity. We have incredible diversity in the portfolio. And a big part of our proposition is to be that strategic integrator, working at that strategic hub with very senior clients who are dealing with the fusion of growth, risk and reputation. So there are specialist companies that are also our competition. So on the one hand, we compete with the other large global firms that are supporting clients globally all around the world, and those are some of the biggest companies in our category. And then we have some really very worthy competitors who are specialists either in the public affairs domain or in the financial communications domain or even in the brand domain. So I have probably a short list of companies that I benchmark against and that I keep a close eye on and that I think are our most worthy competitors, but they tend to break down into those general categories.

Super. Thank you. I think we have Alex back, so we'll let him finish telling us about FGS Global.

Thank you, Peregrine. Can you hear me?

Yes.

That's what happens when the hotel Wi-Fi crashes. So hopefully, the mobile connection works. Yes, maybe jump on to government affairs policy advocacy. So think 300 people, Washington, Beijing, Brussels, Berlin, et cetera, really helping companies with mission-critical work in getting their license to operate supported in key capitals. If we look at the momentum, last year, we grew 18% globally. So it was a tremendous year, on double-digit growth this year and really working on the work -- doing the work that we want to do, grabbing market share, very, very happy with that. Some of you may be familiar with us, expanding especially some of the work that we're doing, BioNTech and Pfizer, throughout the COVID time and really helping this very tiny biotech company that we actually -- and that may be interesting for you to see, having worked with literally thousands of management teams over the last decades, having been down the fox hole with leading investment banks, law firms, so on and so forth. And they trust us because they know we've been there, we've been in battle times together. We actually had a banker who used to work with us on the Shire transaction recommend us to BioNTech when their CFO asked them and said, hey, listen. We've got this tiny German biotech company, and we believe they actually are going to do a huge deal with Pfizer, and they may be able to "solve COVID." And then we were brought in and the company was like, "Listen, we need to license essentially in political capitals around the world very quickly. We need to get capital in. We have a billionaire German family behind us. We need to make sure that they essentially sign up to this. We need to kind of do this relationship with Pfizer and so on and so forth and get it all communicated, especially to markets." So we brought in 40 people from around the world, essentially went to a small town near Frankfurt and worked there. And that's really what clients love around us because the firm essentially originated in the transactions or the political campaigns business. So we have over 30 people who've worked on presidential election campaigns. We have the person -- I mean, just to give you an idea for the talent, right? We have the campaign manager for Macron in Paris who invented [ on March ]. We have the person who ran all 3 winning Chancellor campaigns for Angela Merkel and so on and so forth, right? And those people come together and they come in and they come in to win, right? It's really a Navy Seal kind of exercise. And what that's led to, since we've announced the merger, is our client relationships are growing. So clients are really saying, listen, thank -- I mean, the biggest response was, "Finally. Finally, you're a global firm so we can really deploy you globally and not just in a SWAT team capability." So we've had -- in the last year, we've had an increase of 40% of the clients that charge -- where we charge fees in excess of $1 million. We've had 200 clients expand their work from one region, one geographic regions to multiple regions with us, which was tremendous. And that obviously is on the backbone of having 150 clients that we've been working with for without a break for a decade-plus. And that obviously led to great organic growth. And even this year, we're up double digits despite having been the market leader in SPACs last year in the U.S., which essentially is a business that went to 0. So we've replaced quite a bit of business, and that shows the resilience of the business. And maybe we switch to the final slide. And that's just to give you a bit of an idea of some of the companies that we're currently working with, some of the biggest companies in the world. And these are all on real C-suites, top-level work. Bayer's is probably quite defining, helping -- to help them with the Monsanto takeover. Then we had a huge litigation, as you can imagine, litigation communications team in there. And now we're helping them really redesign their strategy and move forward and running a huge investor relations campaign for them. And if you have questions on any of the others, don't hesitate to ask later. And maybe with that, I'll pass it on to you, Peregrine, for Q&A.

Super. Thank you so much, everyone, for that. We've got about 15 minutes now to take your questions. We've had a few that come in. Maybe I will just hand over to Brooke to pick up that question on competitors and then over to Alex after that on the same question, so who are your main competitors globally and how do you differentiate.

Sure. And I'd echo some of what AnnaMaria said as well because we are a full-service business, it really depends on the service that we're selling. So we do compete with the other large integrated [ modern ] communications agencies, whether that's Edelman or Weber Shandwick or those from time to time. We do compete with the more specialized consultancies. And I think as we lean more into strategy, creative, digital, we compete against creative agencies and digital agencies, even media agencies that are vying for the same type of influencer marketing work. So it's a pretty broad spectrum of competitors.

And for us, it's on the traditional side, it is essentially Brunswick, Teneo and FTI in different kind of variations. Those are our key competitors in the U.S. Especially for capital markets communications, it will be Joele Frank. And on the corporate leadership and strategy side, it's a good one. I had a meeting with a senior partner at McKinsey a couple of months ago at a client Board meeting. And he after the meeting said, "You guys are essentially stealing the last mile from us." And that's obviously one of our big opportunities, right? That as it becomes more difficult for leaders to lead, we are the firm they turn to, right? Because they know us, they know we understand stakeholders and not just shareholders. And then we help them devise essentially their leadership strategies and so on and so forth and work hand-in-hand with whoever it may be, Goldman Sachs, Morgan Stanley, the law firm, McKinsey, BCG, et cetera. But we're taking a little bit from everybody and that little bit, as ever marginal that may be, is quite meaningful to us.

Super. Thank you. There are a couple of questions here that I think I'm going to combine because they're kind of 2 sides of the same coin. So do you see an increasing trend to your services being integrated with e.g. creative agencies in the group, is one. And then from Steve Liechti, can you please discuss conflicts with other group agencies in a converged world? So I guess that's the yin and yang of integrated services. Brooke, why don't you take that?

Yes, I can start. I mean, I think -- so within WPP, we're involved in the vast majority of the WPP key client teams. I think one thing that WPP has done really, really, really well culturally is just to get client-centric mindset to how we do our business, how we go to market. So we're part of fully integrated teams. Every organization demands a slightly different structure in terms of whether there's a lead agency or not. But I think more often than not, we are part of an integrated WPP team. We do overlap in some parts of our services, but that's usually pretty easy to resolve. And probably one thing you've heard on this call is that these -- we bring different specializations that our sister agencies don't when it comes to this pretty complex consulting around corporate affair, public affairs, ESG and, of course, that earned heritage.

And Peregrine, if you don't mind, if I could just add to that. One example that I won't name by name, but WPP has a very large client, global client that we and other companies support. And we play a large role in creating solutions, communication solutions for that client all around the world. And that client has a new CEO who actually sees the earned component. He believes that earned -- in today's world, that the earned strategy and the influencer strategy is much more important than the paid strategy. And so it begins to turn the relationship and the emphasis and the strategic emphasis and the demand for our discipline starts to become a much bigger part of the mix. So it's a great example of a multiyear engagement where the integration of disciplines has been a big part of the success, critical to the success and where WPP's ability to flex into the earned and influencer strategy in part of the relationship now is just so critical.

Alex, anything you'd like to add?

Well, for us, it's more of a natural handing off the football kind of situation, and it's enough to say WPP is fantastic about identifying some of the things that are great opportunities for WPP. And as we tend to have really strong Board and C-suite relationships, I mean -- actually, Volkswagen, one of the things I was involved in, Bayer was mentioned earlier. On both, WPP identified to us, listen, there are massive new business pitches going on. Would be incredibly meaningful for our teams to get an edge. And then we simply took a couple of partners who really have been working with the Board and with the senior leadership and knew everybody and really helped the team, right, and said, "Listen, we can give you a briefing that the client will probably not give you and really tell you this is the strategy, this is the stuff that you really need to look at. This is where their head is at. This is what's important," and so on and so forth. And in both cases, the team -- the integrated advertising media buying team won, and those were obviously incredibly meaningful commercial opportunities.

Okay, fantastic. In a way, that takes us into the next question on the benefits of being part of WPP. Clearly, there's that kind of cross-fertilization of information and ideas. Anything else the team would like to bring out? I guess, AnnaMaria, you've probably seen this more than anyone?

Yes. Well, look, I mean, we pull on the capabilities, the relationships for sure. And we at H+K have collaborated with Alex and have been a beneficiary in the way that he just described actually with one of their significant clients. So that collaboration is invaluable. The range of capabilities and the opportunity to innovate, I think, is what becomes very exciting. So especially as WPP under Mark Read has established, I think, a very vibrant executive committee, it gives all the operating company CEOs of the major companies a chance to be together on a regular basis to form relationships. And it gives us fodder for new types of collaborations and avenues for more innovation. I think that's important from a technology standpoint. At Hill+Knowlton, we've just hired our first global Chief Technology Officer and that is a need and opportunity that really became very clear to me as a new CEO, given WPP's investment and commitment to technology and also going back to the voice of the customer, some of our very large clients were asking us for more technological innovation. So I feel as though I had the confidence and the range and scope to be able to start looking very proactively and very creatively about what we can do from a technology standpoint and within the WPP ecosystem. So those are just a few, I would say.

Yes. And if I could just add to that, building on that, I do think the investments that WPP has made into central data solutions and a data community into AI, into some of the different martech and platform partnerships, all of that is very easy for OpCos like ourselves to leverage, right? So we don't have to duplicate building these things ourselves, that I can have our head of data, for example, partner with the WPP data team or the commerce team, for example, and really kind of draw upon that to build solutions that are bespoke for our clients. That's a huge advantage that obviously we've been able to leverage in the past couple of years.

Okay, super clear. Thank you. And here's a question we had asked a lot at the WPP level around reputation and the clients we work for, and I guess, really, it is most sensitive in the current PR and public affairs arena. So how do you manage your own reputational risk in terms of kind of clients and sectors? Alex, why don't you kick off on that?

Sure. Listen, we have a global business acceptance committee. So think of a very similar process that a Goldman or a Morgan Stanley would go through, where we have 16 people from different regions and different backgrounds and they look at every opportunity. So every opportunity has to get cleared. Now obviously, very sensitive for us because there's a lot of inside information, potential transactions that may happen, big crisis situations, leadership changes, et cetera. So we need to be very, very disciplined about that. And there is a reputational dimension to it every time. And actually, we had an issue this morning where then -- usually, it's done in a written manner, but sometimes, we need to ad hoc call a Zoom and then actually have a lot of discussion on it. And if we have more than 2 individuals cutting out on it, we will drop and we will not accept it.

Yes. Peregrine, if I could just add, I mean, this is a very important question and it's increasingly important for all of us in terms of, yes, risk management but also value protection and creation going forward. And we've been working with WPP, with the WPP general counsel, with the ExCo and the Board in terms of really advancing a policy and a framework for client acceptance and for ongoing risk and ethics evaluation. And our mechanism is probably somewhat similar to the one that Alex just described, where we have both a risk and an ethics committee. And both those committees are very active. I mean, I think that it's -- and increasingly so in terms of evaluating emerging and potential risks and making good decisions that are good commercial decisions but with our eyes wide open in terms of what risk we may be taking on and how to manage it.

Brooke, anything you'd like to build?

I think my colleagues summed it up perfectly. We have a similar client risk committee. I would say we work with all kinds of companies across sectors that are wrestling with big issues. Of course, climate change is a major issue. And there are imperfect companies that are working to get better and it's important that we help them to get better and to tell their stories. And so I think we take that responsibility really seriously as well.

Super. Now if you remember, when we talked before going live, I said I wasn't going to give you any financial forecast questions and I'll stick to that. We have a question from [ Bernd ] here. And maybe we could talk about the second half of the question, which is what growth opportunities are you most excited about over the next 2, 5 and 10 years? So Brooke, since you've got the mic.

Yes. I mean, there's different ways to answer that, of course. If I look at it from a sector perspective, we see phenomenal growth in health care, of course. We're very, very strong in health care, health care technology. Incredible innovation happening in retail and education so from a sector perspective, those stand out. From a regional perspective, we're a truly global company. We're seeing strong growth, of course, coming out of Asia Pacific right now, Middle East as well. So we're -- strong, strong growth opportunities there. And then in terms of our solutions is what we covered earlier, so a lot of good growth in corporate affairs, public affairs, ESG, advisory, digital marketing. So that's how I answer that.

Thank you. Alex, anything you want to add?

Listen, lots of organic opportunity. We really can't complain. Demand is coming from nearly every client. And the core where the key success factor is actually being able to manage it is we have a lot more opportunity to come in than A, and that was the question before, we are willing to accept; and B, we can only grow as quickly as we can essentially grow our people. And that is something that is absolutely central to the business model because, obviously, if you're charging up to $1,500 an hour for the services you provide plus success fees, value building, those kind of things, clients expect the exceptional. And take the Ukraine situation, for example. If you don't show up and you have a former U.S. ambassador who's based in Kyiv come in, and he's part of your client teams and he can really advise part of the geopolitical offer that you then bring into kind of the Board advisory part of our business, then that business very quickly falls flat. So the investments into talent are -- especially at the highest end of the talent market are absolutely going to be critical for us, and that's where we're very much focused in the coming years.

Go ahead.

Yes. Sorry, I was just going to just very quickly add that it's so interesting to look at how the Boards of major companies are prioritizing reputation risk. And they are forming -- many of them, especially in certain regulated industries, are now forming reputation risk committees or public policy committees or even dedicated sustainability committees. I mean, this is all -- the work that we're doing is highly material to long-term sustainable value creation. And so I think it's an enormous growth opportunity. And frankly, I think it's incumbent upon us to really make the case to WPP and to our Board and to our investors about what the opportunity is, frankly, to invest more in this segment because I think it's an extraordinary growth opportunity.

And maybe then I can give you the last question around the additional capabilities you'd like to acquire or grow. You mentioned data science, I think, in particular, in your presentation. It would be great to unpack that a bit more.

Yes. I think that we have to have a genuine muscle in terms of understanding the role of data, how to ensure quality data that really drives our insights and strategy and allows us to do some more predictive types of work and not just reflect on what's happened but foresee what's going to happen in an environment that is -- just keeps moving faster and is more dynamic all the time. I also think that we -- in the business leadership and governance circles that I travel in, I'm struck by the degree of alarm that business leaders are expressing on the problem of disinformation. And I feel as though the threat of disinformation, of deep fakes is understood but is -- it's hard to grasp the magnitude of that threat. And I think that our discipline in our segment and our company has to lean into that challenge and opportunity to make the right investments and develop the right technological solutions to help our clients solve for the disinformation problem. So those are just a couple of examples I could -- I suppose, reflect on more, but I'll share the mic.

Last chance on that for Brooke or Alex before I hand back to John to close.

Happy to jump in. Listen, cyber is a big issue. So not just cyber with regards to your systems but also cyber, how do you communicate, how do you deal with a situation and so on and so forth. And a lot of those situations are incredibly complex. And the type of people we're targeting there are: one, boutiques, but on the other hand, really, we're looking for -- lawyers from law firms who are specialized. We brought on the spokesperson for the FBI on cyber and so on and so forth, right? He was very, very trained and doing that around the world. So that's one area of focus right now. And the other end is really the geopolitical advisory. So you can expect a lot more kind of former political leaders or people incredibly close to the most senior political leaders in the world because that is one thing. The world is getting a heck a lot more geopolitical, and that's relevant to our clients. And it's incredibly relevant to what they say, when they say it and to whom they say it. And that's a muscle we're definitely investing into.

Axios recently had an article about that, how every CEO now needs their own geopolitical advisory team or geopolitical adviser. And we have seen that in our business. We invested in someone who is strong, both from a government relations and public affairs standpoint, but also is a military leader. And he's in the fresh special forces still and has brought a diplomatic and international relations and military intelligence capability that has just -- I mean, just mushroomed in terms of interest from clients. So it's a real harbinger of, I think, directions for us in the future.

Yes, and I know we're at time so I would echo my colleagues. I mean, I think we're looking at specific parts of policy, so tech policy, health policy, really that kind of niche expertise that gives us a seat at the table with C-level executives.

Fantastic. Thank you so much, all 3 of you. John, I'll hand back to you to close.

Thank you, Peregrine. And look, let me just say thank you, a huge thank you to our 3 speakers today, so AnnaMaria, Alex and Brooke. I think they did a fantastic job actually of bringing to life the huge growth potential of our PR business. We're certainly very excited about what the business has achieved over the last 3 years and very excited, of course, about the growth opportunity in the future. So thank you to them for bringing that to life. Thank you to everyone for listening today. Hopefully, you found it valuable. Please give us some feedback, positive and negative, so we can improve these events going forward. And I look forward to seeing you or sort of hearing from you at our next event, which, of course, is our interims on the fifth of August when we'll report our half year results. Thanks very much, everyone, and goodbye for now.

Thank you.