WPP plc (WPP) Earnings Call Transcript & Summary

Welcome, everyone. Good morning, good afternoon and good evening, and happy new year to you all. It's great to have you all on the call today. Today, we are actually hosting the latest in our webinar series. As you know, we've run a number of these historically. They provide a deeper insight into our individual agencies, our products, our services and the markets within WPP. Actually today is our seventh webinar, and it's focused on 2 high-growth markets of Brazil and India. And just to give you a little bit of context in Q3 of 2022 last year now, net sales actually grew by 20% in Brazil and 11% in India. So significantly faster than WPP overall, which in the third quarter grew at 3.8%. So these are 2 high-growth markets. They are also sizable markets. These countries themselves are 2 of our top 10 markets. They represent 5% of our net sales and actually comprise around 17,000 colleagues in our business. And in both territories, we have strong market positions and leading market capabilities, which you'll learn obviously for about, today. The following presentations will be led by 2 of our country managers, Stefano Zunino for Brazil; and CVL Srinivas, as we call him, Srini for India. I put simply, their role as country managers is to really coordinate WPP resources across our business to facilitate collaboration between our agencies within these markets and also very importantly develop talent within these markets. But look, they'll talk obviously in much more detail about that in a second. So with that, I'll hand over to Stefano first to introduce himself, and then kick off what we're up to in our Brazilian market. Thank you.

Hi, everybody. I'm Stefano Zunino. I'm with WPP since 2005 and in this role from September 2019. Before that, I was with J. Walter Thompson and [ Wunderman ] Thompson in different local, regional and global management role. I was born in Italy, but I've been in Latin America for 25 here. I'm married in Argentine. I have 4 children, work in Italy, Argentina and Brazil. And as you can imagine world cup matches are an interesting matter. As I have 2 very happy people at home these days. Next chart, please. Next one. So rule is back, the market already specified it, and we believe [indiscernible] will not have a long-term effect on the economy. We forecast a bumpy year, especially the first semester, but we are quite bullish for our business in 2023. The inflation is under control. We have a young population, the tenth global economy, a rising education level and GDP per capita. Brazil's continental dimension and inequality create use differences. Per capita GDP and Gini index in the south, southwest are close to Portugal and in Northeast are like Nigeria. Next chart. We are the tenth -- sorry, we are the tenth global economy. We are the fourth digital population and leader in social media consumption. Internet assets was boosted by the entry of social media like Facebook and Twitter in partnership with the telcos, providing data users outside the data plan. That drove rapid growth usage and consolidate with the massive use of WhatsApp as communication, source of news, content and even commerce. I would also like to mention the exponential growth of influencer and creators in the market. Brazil has more influencer than dentist or engineers. And that made the fertile ground for the explosion of TikTok usage. Next chart. Brazil is the eighth largest at market. It has recovered very fast after the dip in the pandemic. Digital is growing at a faster pace than linear at 8% per year in '20, '27 and is expected to reach 50% by 2027. Importantly, WPP is already over it in 2022. Retail Media boosted by commerce is growing 25% in '22, continuing an upward trend. Next chart. We are the single biggest group in Brazil in a journey to simplify our portfolio. In 2018, we had more than 35 agency, we are now at 26, we have more than 7,000 people. We are, by far, their digital -- the larger digital media buyer in the market. 60% of net sales come from digital in '22, we're less than 35% in 2018. Our margin is as [ Jon ] mentioned, is higher than WPP average. Next chart. So net sales grew 22% -- sorry, net sales growth 24% in '22 and 34% on a 2-year basis. And this can be simplistically be explained by 2 factors. We anticipated the market and competition, transforming our business. We acquired the best digital company in the market, and we are able to integrate them with our operating companies. We dig it a little bit more in the presentation. Importantly, commerce and technology are more than 40% of our net sales. Next chart, with 6 clear strategic priorities. I mean, first of all, further improve our client-centric model and the cross-sell of capabilities, especially with current clients; number two, maintain our competitive advantage with our partners and digital platform. That was one of the reasons for our solid growth; three, continue to invest on creativity, focusing on creators and influencers capability. Creativity is at the center of our offer. I mean, this year, in [ Cannes, ] we were the most awarded group in Brazil and second only to the U.S. within WPP; four, talent is our most precious resources. We want to be a reference in market, in employee experience and [ DNI; ] five, we want to continue to improve the WPP brand perception portfolio, in client and within the market. And lastly, we would like to continue to focus on our media capabilities with group support and guidance. Next chart. As I mentioned, we are pioneers in mapping and acquired digital companies to complete our offer and client needs. From 2009 to 2014, we acquired the best-in-class performance media agencies . Mirum, i-Cherry and Blinks. In 2016, we anticipated a digital commerce wave with the acquisition of Enext and Pmweb. And last July, we have consolidated the commerce pillar with acquisition of Corebiz, the large just implementation -- implementators of headless commerce technologies like VTEX and Shopify in Latin America, where more than 700 people focusing just on commerce in Brazil. Lastly, to provide end-to-end digital transformation to our client, we acquired a software company called DTI last year, that provides software solutions and integration of system in partnership with our integrated agency in Brazil and abroad, they're already working with Europe and the U.S. This gave us the opportunity to evenly compete with Accenture and Deloitte. 40% of our business basically lies in communication and 60% already from experience, commerce and tech. Next chart. The integration of acquired company with integrated network, for example, like VMLY&R enhance their capabilities and enable them to move from communication only to an end-to-end offering. In the appendix, there is an example on how we do it. This specific is an example of a go-to-market strategy for big client that prove it extremely successful with Heineken and [ Stellantis ] for example, and [indiscernible] Stellantis, as all the business outside of Brazil, and we have part of the Stellantis business in Brazil and others. It's basically a craft WPP solution, working with our 4 pillars with creativity at the center, power with that and tech with different agencies working together in collaboration. You'll also see WPP shared solution like [indiscernible] and DTI. Next chart. And talking about sharing solution, this is our portfolio that is quite similar to the global one, but there is a focus on shared solution because we created a layer of shared services for media with WMS, production with [indiscernible] and software tech with DTI to gain scale, efficiency and improve profitability. The WMS operation linked to GroupM. I mean we have to know that in Brazil on linear media, you cannot unbundle creativity. So there are no medium dependent. GroupM is not in Brazil yet and arbitrage is prohibited by law. The shared service allow us to be compliant, but give us the methodology and tools on GroupM, and this is a big advantage with clients. Now our portfolio is easy to understand and navigate for our clients. We have the 4 big networks, one, global digital media agency Blinks Essence, two, PR groups, a design shop and some specialized clients hub like OpenX for Coca-Cola. We are still looking for to simplify our offer, but we are very, very happy with the results so far. The next chart. Now I would like to take a look at one of the most important things, how clients sees us. I mean, agency scope is a study that happen every 2 years and analyze the status of the relationship with the agency and client. In 2022, they interviewed at 785 CMOs in -- and communication directors in Brazil. As you can see, WPP is a clear winner added shoulder about the competition. The second one is Publicis. And we are particularly happy that the gap with the competitors is rising vis-a-vis [ 2019 ], showing that we have the right strategy. Number three, the other point -- the next chart, please. I believe it's also worth showing our biggest client are now shared with different companies, proving the success of the cross-selling strategy and the clients' interest. The notable exception is [ Varidoriodosa ] is the mining company. It came with DTI acquisition, and we are now pitching our PR and content influencer capabilities. And [ Valle ] will be a good example to test our open up model that's going to be a challenge for 2023. But we're quite sure that we're going to get more inroads on that client. Next chart. One of our group key strengths is our partnership with digital platform and tech partners. And the results are not just financial. WPP and its agency have the best market credential. We command a clear leadership in certification on all platform. We have more than 2,000 certified professionals with Google, Meta, Salesforce and VTEX. We are the biggest Salesforce partner in Latin America for market in cloud. VTEX is recommending Corebiz, the agency that I mentioned we just acquired, which rely to their client in France, Spain and Italy. We are just on group Casino in France, and we are in Italy for Europe. The other point that I would like to mention specifically on Meta, Brazil cases are winning a lot of global prices. Moreover, the centrally-managed partnership and our critical mass allow us to be in the port of choice for beta testing, exclusive training and pilot project. For example, we are the only group so far in Brazil with a TikTok app for creators, and this was key to successfully pitch part of L'Oreal in November. Next chart. We have over 7,000 people, 34% are data and tech talent and growing at par with net sales. We are on the path to balance our workforce with Brazil gender and race characteristics. 29% of our CEO and General Manager are female. And almost 30% identifies as people of color. It's not yet ideal, but we surpassed the pledge that we have signed with the Minister of Law -- sorry, the Minister of Labor this quarter. We are -- I am particularly proud that projects like SOMA in Racial Equity Week that are funded by WPP and implement by AKQA and Wunderman Thompson. They are by far reference in the market. And this is our new companies that will be ready in Q1 2025. It will replace 17 offices. We lost 5,000 talent, and we further improved collaboration with the agency and so boosting efficiencies. Now to Srini.

Thank you, Stefano. Hello, everyone. My name is CVL Srinivas or Srini for short. I've been with the WPP Group for most of my career, working across assignments in India and the Asia Pacific region. I've been in this role as country manager of WPP India for the last 5 years. And just prior to this, I was running GroupM across South Asia. Delighted to be spending the next few minutes with all of you. I'll give you a quick tour of our business in India in the next 10, 15 minutes. The stats of India, of course, I'm sure you're all aware, high-growth market. We're pretty bullish in terms of GDP growth in '23 years well. Most projections are showing us to be at about 7% plus in the coming year. And the point that I'd really like to make on this slide is the kind of infrastructure improvement that's happened over the last 5, 6 years, in particular, a lot of digital infrastructure has been built, thanks to government policy, and that's really made quite an impact in the whole shift and transformation to digital and therefore having an impact in our business as well. Next slide, please. The ad expenditure in India is going to see a pretty decent CAGR over the next 5 years as per the GroupM TYNY estimate. We are expecting to literally double from close to $15 billion to about $28 billion to $30 billion over the next 5 years in terms of ad spend. And the point I was making about digital, so digital is about 49% of the total ad spend. So nearly half of every ad dollars going there. And it's quite a shift in the last 4, 5 years from TV to digital. TV, of course, continues to be a pretty strong medium in India. And digital plus TV together typically accounts for about 85% to 90% of all media budgets. Next slide, please. Key stats of WPP in India. Pretty much like what Stefano mentioned in Brazil, India, do we have a leadership position. Our media market share is close to 50%. We have 45 of the top 50 advertisers in India as WPP clients and perhaps close to 80, 85 of the top 100 work with us as clients. We have 8 global capability sectors in India. I'll talk a little bit more about it in the next few minutes. These are COEs that work for global clients in areas ranging from martech to e-commerce to content production. We have over 1,000 active clients at any point in time. And therefore, any which way you look at it, a pretty dominant share and influence in market. Next slide, please. Pretty similar to Brazil and all our other major markets. We have all the major networks represented in India with the advance. And as WPP is a central team, we obviously provide services across different functions like talent, legal, finance, et cetera. Next slide, please. We have a very interesting client mix pretty well represented across different sectors. This was very different 10, 15 years ago when the Indian ad industry was largely dominated by the CPG clients, the Unilevers, the P&Gs, the Monte leases of the world. There has been quite a change in the last few years, and our portfolio reflects that as well. Today, we have clients like Google, Dell, Microsoft, which actually make up our top 15 clients and also a lot of the big players in telecom, media and entertainment. We also work across all the major Indian conglomerates, the Tata Group, the Birla Group, ITC and others. Over 70% -- or rather 70% of our top 30 clients work with more than 3 WPP agencies. And that's where really the role of the country management team comes in, in trying to give our clients the best of WPP and not just what they get from individual operating companies. Next slide, please. Yes. And John touched upon this. We've had a decent run in the last few years. In fact, over the last 3 years, we've grown our business 32%. And our headcount, of course, has gone up from 7,500 pre-pandemic, close to 10,500 today. Next slide, please. We've been winning a lot of awards in market. We have a fantastic creative output. In fact, Brazil and India were the 2 markets that dominated at Cannes, of course, apart from the usual suspects this year. And in terms of business wins, we've got quite a few of the large Indian clients or some of them are in fact, clients that are going to become very big soon, like Meesho, some of you may have heard, an emerging e-com player. We've also won a lot of recognition for the CSR Foundation that we run in India. CSR, as some of you may know, is mandated by law in India, and we have a foundation that channelizes all our CSR investments. And I'll talk about it in a minute or 2, doing some very interesting work there as well. Next slide, please. Again, similar to what Stefano laid out for Brazil. We have our 6 priority areas, of course, tweaked a bit to local market opportunities. Driving client centricity, we're bringing our different agencies together, so clients get the benefit of the group. Using that same approach across partners, especially in tech and data, I spoke about the COEs in India, the centers of excellence. So that's an area where we, as a central team play an active role, how do we leverage the COEs to drive innovation and transformation for our global clients. We have a strong people and culture focus. You obviously have spent a lot of time simplifying our structure, especially in back office, getting all our units into one campus in Mumbai and Delhi. And of course, last but not the least, given the scale and size that we have in India, we also want to be a responsible corporate citizen and hence, driving social impact and sustainability is part of our overall strategy. Next slide, please. I spoke about client centricity. That's really #1 priority on our list. How do we ensure that clients get the power of WPP. And as you can see on the slide, we've steadily improved our scores with the clients, thanks to this approach. Next slide, please. I'd like to play a short video clip. This is Sanjiv Mehta, CEO and MD of Hindustan Unilever, our biggest client in India, talking about the power of One WPP. Can you please have the video?

Hello, everyone. Greetings from India. Now One WPP was created to bring in the power of collaboration, the power of Unity, the strength from multiple agencies under WPP banner to help HUL win. That was the purpose behind my reaching out to Srini and the team and say how can we have one WPP. Now One WPP brings in different specializations, creative, data, analytics, activation, research, media all under one cohesive unit so that we can look at business problems, in a very holistic manner and also harness the opportunities. Now we started this in 2018 with this approach with the project on Red Label, a brand today that is not only synonymous with good tea, but also with the purpose of bringing people together, [Foreign Language]. Now ever since then, I think One WPP as an idea has gained strength. We have had several teams now work on it, several projects, to solve some of the big problems, the big issues that we've had on the brands, create holistic plans and bring out the best of WPP talented leadership to HUL. Now this has led the way. I believe this is going to be the future of marketing from an agency perspective in an era where the conversation on advertising from being just box in inside a brief to answering real business challenges. It has made advertising and brand marketing plans, much more strategic and comprehensive. It has also helped us to go beyond the narrow confines of work and address big issues. Environmental and social issues together such as sanitation, plastic waste management, women empowerment and I'm sure in the days to come, there will be many more. It has also made us much more agile. The partnership with WPP has helped us navigate the difficult phase of the pandemic together with physical shoots on hold, we created a content hub for a brand, which helped us deploy brand communication with speed. I believe that One WPP has huge potential, and it has shown us way to feature a partnership that will help us win in this rapidly evolving and interconnected world.

Thank you. So I'd just like to spend a minute on One WPP. What we're seeing here is we're not dissolving our agency brands and creating 1 amorphous team called WPP to work with clients, what we're really saying is metering our global strategy. We are, in fact, strengthening the different agencies, the domain expertise that they have, the cultures that they have and just ensuring that we join the dots so that our clients get to see a more integrated service. And in our experience we started with a HUL, 5 years ago when we began this journey of having a country leadership team. And today, we've taken that model across our top 25 clients. And in our experience, what that's done is it started elevating the conversations from being more tactical to being a lot more strategic. And as Sanjiv said, today, we are getting into areas which are more around solving business problems, apart from, of course, creating the ad that one will see tomorrow. So that's really what we're -- what we refer to as One WPP approach. Extending that to some of the newer sectors. On this slide, you could see health and wellness, ESG and in fact, B2B perhaps, these are fast-growing sectors in India like they are in other markets. So the agencies that you see on this slide, each of them has certain expertise and they complement each other. So again, our role in market is to get all of these agencies together and offer a more joined up service to clients. Next slide, please. And taking the strategy across to our tech and data partners as well, both with the global players, where they're in India, like Salesforce and Google as well as with the large Indian tech and data players like [indiscernible] or ONDC, which is what the government has recently kicked off the open network for digital commerce. We engage with all of these players as WPP so that we benefit not just individual agencies but we build in a competitive advantage for our group as a whole. Next slide, please. Again, similar to what Stefano mentioned, we've been, obviously, on an acquisition spree over the last few years. These are some of the key acquisitions we've made in areas like e-commerce, marketing technology, digital media, et cetera. And the last 2, 3 years, have actually gone in consolidating these acquisitions into our existing agency brands. If you look at the India business, there are 2 ways of demonstrating this to you. If I look at just the business with the local clients here that we service, it includes, of course, multinational corporations, all based out of India, service through India. A large part of our services, of course, are still in the more traditional comms area. But in the emerging areas of experience, commerce and technology, it's close to 20%. In fact, this equation was closer to a 90-10 pre-pandemic. We see this moving to a 70-30, maybe 75-25 in the next 1 to 2 years. But if you look at the total value that gets created out of India for WPP because we have all the COE sitting in India, the capability center that I spoke about. We in fact deliver more services in the ECT space to our global clients. So in fact, another important role of the country manager in India is to say how do we again join the dots between our COEs and our local agency so that we're able to fast track transformation in the areas of experience, commerce and technology as well. Next slide, please. Yes, this is just a point on the COEs. In fact, most of those acquisitions I spoke about today sit in one of these capability centers. So 4,500 people work across these different centers. More than half of them are tech certified across the various platforms, and we play a pretty active role in shaping the product and service here. Next slide, please. People and culture, of course, is another area where we work along with the agency leadership teams to ensure that we have the right talent mix to ensure we have the best talent. And as you can see in the slide, we have close to 30% of our staff today in India who are pure digital data and tech. And a host of initiatives that we run as WPP has helped us drive up engagement scores. In fact, all-time high as to the last survey that we did. Next slide, please. Yes. And so just to kind of wrap up, social impact and sustainability, like I said, again, a very, very important part of our overall strategy. The foundation that we run in India, in fact, supports the CSR Foundation. It supports 20,000 children who are from the underprivileged sections of society. We provide them vocational and educational skills. So we work with around 20 schools across Mumbai and Delhi. And there's a lot of intervention that we make and help with curriculum, help with -- in fact, through the pandemic when most of the schools were closed, helping the kids continue with their education through digital media and so on. We also run the world's largest women mentorship program across all WPP markets. It's called WPP Stella. We have over 300 women leaders being groomed. We have a coalition called Vikasa, which we have set up in India, along with Unilever, the Tata Group, the State Bank of India. And this is a coalition of about 9 like-minded corporates that's driving sustainability as an agenda across corporate India. So there are -- lots of these activities, we drive pretty actively as WPP beyond, of course, the regular business. Next slide, please. So just to summarize the role of the country manager or rather the impact that this team has had across the last 4, 5 years, of course, driving a lot more integration and getting our clients the power of the network and taking that strategy across with our tech and data partners as well. A lot of strong focus on people and culture, driving a lot of industry leadership in social impact and sustainability. And I think most importantly, somewhere to get the balance right between what can we offer as one company as WPP. And on the other hand, what can we offer as individual agency brands? How do we play the best of both world's game so that the clients continue to benefit from us and we build competitive advantage in market. Thank you.

Right. Thank you, Srini. Thank you, Stefano, for that excellent run through. of your markets. We have a number of questions already in the chat, but if people have more questions, please do add them to the Q&A chat, and we'll try and get through as many of them as we can. Stefano, I think you did touch on the recent situation in Brazil, but we had a question from Adrian at BofA, who was asking whether there was any concern that the recent political unrest would hurt organic growth going forward.

So as I briefly mentioned, we believe that we and -- I mean, major analysts also in Brazil believe that what happened on Sunday, the riots and so on, will not have a long-term effect on the economy. Also said that this year is going to be bumpy for a series of reason. But for our business, we are still quite bullish because we believe we have the right balance that clients need in terms of communication, commerce, technology and experience. So in short, we don't believe that it's going to have a long-term effect.

Brilliant. Thank you. So a number of questions on competitive position for both markets. So perhaps to bundle them together. If you could talk to who your strongest competitors are in each market, Stefano and then Srini, and how we're differentiated from them in your markets?

I will start, and then I'll pass that to Srini. I mean we have a solid #1 position within the big holding groups. Second one, and within that is obviously [indiscernible]. But on the other hand, what we are seeing is more and more -- especially when we move towards commerce and tech. We are basically working on a sort of broader spectrum, and we're going to see a lot of pictures with Accenture, Deloitte and also local or Latin American partners, company like Globant and so on. So Publicis, again, is a strong #2 in market. But on that other part of the spectrum, Accenture and Deloitte are the one that we see more and more as our competitors. Srini?

Thanks, Stefano. Yes, I think we see competition of 3 kinds actually. I think one and most obvious is the peer group that we have and pretty similar to what Stefano said. We have Publicis. We have IPG as some of the major players here. But I think the other 2 are the ones who are kind of emerging in the last few years, I would put the second bucket as the consultants, broadly speaking, the Accentures, Deloittes and of course, a lot of the Indian companies like TCS, Infosys as well who are getting into our space. And the third set, I would say, would be the local agencies. Many of them are start-ups. Many of them are still in early stages, but obviously compete very heavily with us on price. So those are the 3 kinds of competition. But I think our strategy is very clear. I think when it comes to our peer group, I think the scale, the deep client relationships, the fact that we have a lion's share of the market, especially the top brands and build over the years, I think, keeps us well ahead most of the time. When it comes to the consultants, I think the fact that we drive a creative transformation agenda and we marry creativity with tech and data has helped us actually in the recent past, win over them in fact in some of the assignments where we pitched. And finally, of course, we have the price warriors. And many times, we're pretty okay not competing with them.

Thank you very much, both of you. Some questions for you, Srini, around the talent in India. Lina of BNP asked, could we share how wage inflation is trending in India versus the rest of the world. And given that some of our peers in the region are doubling down, and perhaps the other side of the coin Christophe from SocGen has asked about staff attrition levels in India, so perhaps bundles together and then perhaps Stefano, if you have comments on similar trends that you're seeing in Brazil, that would be useful.

Yes. Well, in terms of our staff, just quickly -- I think there was also a question on the profile. So I think out of 10,500 people that we have today close to 4,500 work in our COEs. Now pre-pandemic the total staff strength was about 7,500, and we had less than 2,000 in the COE. So as you can see, we've really increased the ratio of number of people working out of our COEs. In terms of wage and on all of that, I think it's pretty much in line with most of the peer group, I would say, in India. And I don't think it's ever been a big issue for us because I think people value what they get out of WPP -- out of our carrier in WPP. Was there any other question apart from this? Sorry, Tom, which you...

No, I think you've covered it there...

So I mean, it's similar to India. I mean, also in Brazil, we are pretty strong especially on the commerce and tech vis-a-vis the competition. We don't have a lot of problem in terms of wage also because we were able to basically expand a little bit our talent, not just in the classic cities of Sao Paulo, Rio de Janeiro. So now we are part of -- especially working in tech and experience. We have a lot of people working for us in the Northeast and in the South. The attrition is quite high. And one of the reasons why, I mean, being a leader in the market, obviously, the competition is looking at our talent. That's basically it.

Yes, sure. That's very clear. So the next question I have is from Silvia at Deutsche Bank, who asks, you mentioned that the margin in Brazil is higher than the WPP average, Stefano, can you please talk about the drivers for that gap and how sustainability is.

I believe one of the keys, I mean, mentioned -- Srini mentioned the price war, especially in the ad land and so on. That's happened also in Brazil, but the balance of our portfolio and the fact that we basically were earlier in segments like experience, commerce and tech vis-a-vis our competition made our basically portfolio far more balanced in area when we can command a higher pricing. And so that's the key explanation on that, yes. How sustainable is, I believe that we are still at a shoulder about the other before in communication. So we're going to have pressure, but I believe that we still command a good advantage for the next -- at least for the next couple of years.

Thank you. That's very clear. So in terms of the next question. It's a question on mix. So can you talk to the -- for both of you, so perhaps we'll start with Stefano. Can you talk to the mix of local versus international clients in your market? And how -- and the differentiated capabilities required to service those different types of clients.

I will start with the easy one. There is no difference in terms of capabilities to serve global local clients. I mean, all the clients are looking -- I mean, looking into, I mean, digital transformation, commerce. And lately, one of the key headache for CMOs and even CEOs are, I mean, how we manage creators and influencers, that is one of our strategic priority. In terms of balance, we are well balanced between international and local clients. So sort of 50-50 with the local client growing more and more. And that as Srini mentioned, it's something that is growing through the year. We have a completely different percentage just 10 years ago. Srini?

Yes, pretty similar here as well. It's a balanced portfolio between local and global clients. However, in the recent past, just given the economic activity in India, given the start-up boom that's happened, and you would have also seen on my slide on the recent pitch wins, there are a lot of local clients, both the start-ups as well as some of the larger ones or the midsized ones who are investing more in branding who are coming into our basket. So yes, in the future, it's probably going to be a bit more skewed in that sense because of the economic activity that's happening locally. And yes, I think in terms of ambition, in terms of, therefore, what is required of us, it's pretty similar. I would just add one additional opportunity we have with local clients. Obviously, many of them have global ambitions, and we are a large global company. So I think that's the added attraction for the local client to work with WPP.

Thank you. That's very clear. Question for Stefano from Tom at Citi. You mentioned some idiosyncrasies associated with the traditional media market, creative having to be bundled, no possibility for arbitrage. How does this impact barriers to entry and in terms of trade?

Okay. Thanks for the question. So right now, basically, it's impossible by law to unbundle media and creative for linear, I mean, basically TV and so on. It's possible for digital. And that was getting to the previous question was also one of our growth level. The fact that we had very, very good media -- digital media companies that basically answered one of the key needs of our clients. There is a lot of discussion, but still, it's going to be very, very -- I mean, we don't launch a media independent in Brazil right now. And being #1 in the market, we are not going to be the one that we are not going to be compliant on that. On the other hand, as I mentioned, we created the shared service layer with WMS that basically work end-to-end with GroupM basically getting methodology and tools for our client and working also with GroupM client that works outside of Brazil, that had boosted our growth with clients because, I mean, Brazil was not a customer to have this deepness of tools and methodology.

Thank you. That's very clear. Srini, I don't know if there's anything you can add about the specifics of the Indian market that might be of interest?

Well, unlike Brazil, I mean, here, the media industry or media agency industry is kind of pretty established over the years. So we don't have those kind of constraints. Of course, the -- the other side of the story is just the explosion of media options in India over the last few years and leading to fragmentation was one of the challenges. But I think now with digital media kind of coming in more data-led kind of campaign planning happen. Again, we're kind of going back in terms of more value creation. So yes.

No, that's very clear. So in terms of sort of a question here around a specific area of competition. I think you both touched on this in the more -- in your more general comments, but both Brazil and India having a very vibrant IT service and consultancy sector, how specifically do you compete with that set of competitors? And perhaps Srini, you can go first on this one.

Yes. Well, in our experience, we really play to our strengths when we're up against this kind of competition. And like I mentioned, our strength is really, first and foremost, we're a creative company. We believe in the power of the idea. Of course, technology and data and all of that is very important. But ultimately, what moves the needle in business is the power of the idea, [indiscernible] therefore to our core strength. So as long as we're able to play true to our vision of bundling creativity with tech and data, we are able to kind of stand up to this kind of competition. And don't forget the relationships built with clients over the years, especially the marketing organization. And in the last few years, you're taking that relationship across other parts of the clients' organization, the CIO, the CTO organizations have also helped us almost become a part of any pitch list for assignments beyond traditional advertising as well.

Thank you. So the next question comes -- sorry, Stefano.