WPP plc (WPP) Earnings Call Transcript & Summary

Okay. So that film shows just some of the incredible work that we do for our clients, work that combines strategy, creativity, media insights to drive results for our clients. It's why they come to WPP to build brands, to drive sales, to sell product, to shape culture, is also why our people work for WPP companies. They want to do great work for the world's biggest companies. So welcome to our 2024 Capital Markets Day. We're calling this next phase of our strategy, Innovating to Lead. And what we'll show you today is how we're going to achieve that ambition. First, we'll show you how our investments in AI are paying off, allowing us not just to pay division of the future but to use it in our work to deliver benefit to clients today. After C. Clarke said, the best technology is indistinguishable from magic. And I think that's what you'll see today. Secondly, we'll show you why creativity matters. Sometimes underestimated, creativity makes our work effective and multiplies our clients' investments in marketing to drive financial growth. In a more complex AI-driven world, we believe it's even more critical for our clients. But to deliver it, we and our clients need to transform, and that's what we are doing. And thirdly, we'll show you how our new powerhouse agency VML, and the world's leading media agency GroupM are transforming themselves to grow faster and create more scale. Along with the creation of Burson, this means that 6 brands now represent 90% of WPP's business, a simpler, more effective strategy. And finally, we set out the financial commitments that result from this plan. Now this is my third Capital Markets Day as CEO of this company. I can honestly say that WPP has never been better positioned, thanks to the decisions and investments that we have made. I hope you'll see the confidence that I and our whole leadership team have in WPP and in our future. Now I know we faced slower growth in 2023 after 2 of the fastest growth years in our history coming out of COVID. Our technology clients reduced their investment after very strong growth. And while we've been doing well on winning new business in general, we face a tougher set of reviews, particularly in our media business in the U.S. But I hope you'll see how the actions we've taken, the investments we've made, together with the commitment of a very talented set of leaders, we will deliver this plan for faster growth, improve margin and stronger returns to our shareholders. So let's get down to it. So this is a statement that you have to read quickly. But what we're going to cover today, we'll start by taking you through our journey today to show you what we've achieved. Then we'll look at the strengths of our business, why we're positioned to grow. We'll talk you through our strategy to lead with detailed presentations from leaders across WPP, they're going to dig into the detail and explain what we're doing in practice. Joanne, our CFO and my financial partner will then take us through the financial plan. And finally, we're delighted to be joined by Manolo Arroyo, the Chief Marketing Officer at the Coca-Cola Company in conversation with Laurent, will talk about our partnership, our use of AI, the transformation we're achieving together and why we're ambitious for the future. We'll have some time at the end for Q&A. So here's the detailed agenda, which for those of you in the room, is printed on your chairs. And those of you who joined us in-person, we have to come upstairs for drinks at 5:30. And during that time, Stephan and his team will give you live demos of Open, our AI-powered platform in operation. So let's start by looking at our strategy and how we've got to where we are today. Now back in 2018, we called our strategy radical evolution. That's because we wanted both to be radical in our approach but also to move at the right pace, a pace that our people and client-centric business could absorb. So we can make the changes we needed to without disrupting our business. And our accelerated growth since then shows our success in balancing these objectives. There's really been 2 phases of the strategy to date. The first from 2018 to 2020, where we had to stabilize the business. If I can remind you, Ford, our largest client globally, was up for review. We began by launching our positioning as the creative transformation company to set up our ambition. We've built our client relationship turning forward from a client up for review into the case study that Joanne will share with you later, who our leadership team and established Executive Committee at WPP for the first time, but perhaps the biggest move was the integration of analog and digital assets, both VML and Y&R, that formed VMLY&R and Wunderman and J. Walter Thompson to form Wunderman Thompson. And critically, within not much more than a year, we're able to successfully dispose of our 60% stake in Kantar, which gave us the financial buffer to withstand the impact of COVID that hit just 2 months later. The second phase of our strategy really started in 2020 during COVID. We grew our client relationships, winning the last ever client review in our industry and our unique partnership with the Coca-Cola Company. We continue to strengthen our leadership and build a culture that brought us together during COVID. We invested organically in AI and new capabilities of influencer marketing and commerce. We also took 3 separate companies: Finsbury, Glover Park and Hering Schuppener and with management created what is now the world leader in strategic communications, FGS Global, in which KKR recently invested. All of these changes in investments take where we are today launching the third phase of our strategy that we're calling Innovated to Lead. Because WPP has lots of innovation in its lifeblood and so is our desire to lead our industry. So that's the backdrop to where we are today and let's look more closely at what we've done. So this is where we started. It's hard to see how we can fit any more logos on this chart. And to say our operating model was complex, is something of an understatement. Today, it's a lot simpler. Our revenues today are consolidated in far fewer brands with 60% -- sorry, 90% of our revenue is generated by 6 global networks, and you'll hear directly from the leaders of 5 of them today. We've also been able to build a world-class leadership team. And if you look at the team, each element of our strategy is visible -- [Audio Gap] some like me, Andrew, Andrea, Lindsay, Jane and Michael of WPP, Mel and Richard in our agencies have been with the company for some time. Other great talented leaders came in through acquisitions, Ajaz, Christian, John, Stephan it's just one example of how acquisitions strengthened the company. And we've been able to recruit great talent, Laurent from Publicis, Rob and Devika from McCann; AnnaMaria from DuPont, Joanne from Britvic. And most recently, Corey from Google. And I believe we have a strong, cohesive and motivated team to lead the company. In my view, which may admittedly be biased, the strongest in our industry. Now as well as people, technology is critical to us. And our technology and data capability is strengthened through a mix of organic investment, acquisitions and partnerships. Organically, our focus have been building platforms powered by data and now AI. Our acquisitions have been more disciplined with a healthy emphasis on technology. More than 70% of our acquisition spend has been on technology-powered companies. And finally, while we booked strong strategic partnerships that make a difference to how we deliver to clients, business advantage, data integration, technology integration that help. Now AI is going to be a major focus of today's session, as you'd expect. And it's important to say this is not new to us. We've been using it in our work going back at least 10 years. Back in 2014, we helped Tesco optimize their delivery routes with AI. Our first creative work was in 2016 when J. Walter Thompson had a groundbreaking campaign for ING that used AI to create Rembrandt paintings, a precursor to what we see in Midjourney today. In 2018, I said here in this room and said that AI would be a critical part of our strategy. Most importantly, perhaps, we acquired Satalia, some 2.5 years ago. And you meet Daniel its founder in a few minutes, see his contribution, their contribution to our strategy. Now another area I know that's had a lot of discussion is our transformation program. So I'd like to cover with you what we've done, the impact we've had and show you where we are. To start with, I hope you'll see we've been busy. Over the past 5 years, we've retired around 300 brands. That's more than 1 a week. We've eliminated 1,400 legal entities. That's more than 1 per working day. We switched off 70 ERP systems, closed 840 office locations, that's around 3 a week. Most importantly, while we've invested around GBP 800 million in acquisitions, we've also raised more than GBP 3.8 billion for more than 90 disposals. Now I'll let you look at the progress on the right. But you can see how we made progress in each of the key elements of our strategy. And I'd say that we've really broken the back of our transformation program with a solid plan for finalizing it. So what's this meant financially? Well, actually, if you look at the facts and take, let's say, in 2019, is I think the fairest pivot, you can see our performance has improved. We've achieved accelerated growth to 2.6% in spite of a fair degree of turbulence in the global economy. And if I can remind you, while navigating the structural challenges we faced, a disintermediation by technology companies, in-housing , competition from consultants. In our industry, I think, and WPP is well used to navigating change. We've also grown our margin after a number of years of negative growth. With a lower net debt, we're building a platform to reinvest for the future. We're pleased to say we've done this while returning GBP 4 billion to shareholders. So if that's the past, let's turn to the future and why we believe we're very well positioned for growth. And we take great pride in the market-leading position of our 6 major brands, the #1 brand experience and commerce agency, VML; the global creative giant, that is Ogilvy; AKQA, an iconic brand, celebrating its 30th anniversary this year, but just as fresh in its work today as it was when it was founded; the world's #1 global production company in Hogarth; GroupM, a #1 global media agency; and finally, the newly announced Burson, a top 2 global PR firm with a fantastic leadership team and path to further growth. And we believe these brands are critical. They're important to our people and to our clients. Now we don't need 500, as we used to have but we believe we now have the right number. They allow us to attract the best talent. They're meaningful to clients and they allow us to manage competing clients within WPP, giving them the confidence to work with us. Secondly, we have a client list that is, I think, unique. We work with 3 of the world's 4 most valuable companies. 2 of them are nFord and Google in our top 10 clients. And 1 Microsoft and our relationship with Unilever goes back to 1902. The world's biggest, most demanding company's trust WPP is their partner. As you can see on the right, we strengthen these relationships. After tough year time, 5 years ago, they're now stronger than ever. Now one of the reasons these clients chose WPP is because they've unparalleled global footprint. More than any of our competitors we have the ability to serve them around the world. In markets like India, where we have 11,000 people or Brazil we 6,000. We have the depths and breadths of strategic, creative, and media expertise that global leaders need. And speaking of media, we're also the global leader in media. We manage more than $60 billion in billings globally with the #1 agency group in more than half the world or nearly half the world. And second, in most of the rest. And you'll hear from Christian later on our plans to accelerate our growth and strengthen our position in North America. Media is a critical growth driver for WPP. It's a real strength and in an area where strength and scale matters. Now a lot of talk about data and it's importance to media. And we're firmly of the view that it's critical to embed data in our media offer to deliver value to clients. I'd like to touch briefly on this topic. First, by explaining Choreograph. So Choreograph is a business unit within GroupM that serves GroupM and the rest of WPP. They build data products and technology that offers consulting services to clients. It has around 1,200 people globally and we'd like it to grow faster. It does own meaningful proprietary data but Choreograph's primary role is to make sense of the data and to be build the technology that powers GroupM to media operations with data and connect it to the rest of WPP. This technology and approach is ready and not threatened in a post-cookie world. Now turning to our ability to access the data that we and our clients need. First, I said we do own data in WPP, thanks to the acquisition of KBM back in 1999 and iBehavior in 2010. That data includes 300 million individual profiles in the United States with more than 10,000 new attributes. But as importantly, we have the ability to join together 3 other areas of data: contextual data about the market, our clients' own data that they own and want to protect; and data from platforms like Google and Amazon that we can use to drive marketing plans. Strategically, we've chosen to compete on how we can deliver better data-driven marketing programs for our clients, not in the area of who owns the most data. Simple answer to that question is Google or Meta or Amazon. I don't think its ever like to be WPP or indeed any other holding company. Now today, we also have WPP OPEN. Think of this as our unified technology platform that brings together all of WPP's service offerings, technology, both proprietary from our partners and data in one AI-driven platform. We've been working on OPEN for over 2 years, rolling it out internally. And over the past year, we've been deploying it into some of our largest global clients. It was a critical element in our successful win of the Nestle Media Business, in Europe over the summer. Now OPEN helps WPP agencies integrate our offering, but most critically, it also helps our clients to standardize and automate their marketing operations. In an AI-driven world, it allows us to scale our AI solutions in a safe and secure way across large global marketing organizations. Now earlier, I touched on the importance of culture at WPP and how we're committed to our purpose to build a better future for our people, planet, clients and communities. Most importantly, we want to build our diverse workforce and an inclusive culture, one that represents the societies in which we live. It's important to our clients, and it's important to me. Just one example, WPP was placed sixth in the FTSE for gender diversity as part of the Hampton Alexander Review. We also need to take responsibility for our impact on the planet. And here, not only we're able to do the right thing, but we're able to build our business, launching a media carbon calculator in GroupM and sustainable production in Hogarth. We support many clients in their own sustainability initiatives from H&M's work at AKQA to launching Notpla, a biodegradable packaging that eliminates the need for plastic. And lastly, across WPP, many, many people give up their free time, to use their unique skills to help important causes in their communities and countries. So if these are our competitive strengths, what's our strategy to lead our industry to take advantage of the opportunities ahead to accelerate our growth. So 4 for strategic imperatives really frame how we deliver our strategy. The first centers on AI. The second on creativity and creative transformation. The third is our world-class brands. And the fourth imperative for us is to execute efficiently and with discipline. And I'll briefly run through each of them before some of our fantastic leaders come up here, bring to life and share what we're doing in more detail. So let's start with AI. And our belief is that AI will be as transformative to our business as the Internet was 30 years ago. Our industry, the media will be the most disruptive of any industry recently. First, by the Internet, then by the mobile revolution. But importantly, through this time, WPP has remained relevant to its clients. And our goal is to remain just as relevant through the AI age. Today, AI, and the explosion of generative AI is similarly disruptive because for the first time, computers can do things we thought only people could do. Take pictures, write copy, create images, draft press releases. GenAI will change not just the way we engage with consumers, it's also going to change the way that we work. And why are we confident in what we're building. Well, our approach is comprehensive. And I think this framework will help to explain. So at the bottom, we have to embed AI in the way that we work. It's going to make us more efficient and take out cost, it is what every business must do, what has to be done. It's going to help us reduce cost, which we can reinvest and use to improve our margin. Secondly, we have to embed AI in our products and services, well as create new ones. And we'll show you today some of those products, products that we deployed operationally for our clients. And lastly, we need to use AI to reinvent our whole business, which is the challenge that Stephan and Daniel have taken on. In this, tackling this challenge, we think WPP has a strong set of competitive assets. The first is the technical expertise in Satalia. Think of them as our deep mind. They enable us to build and train sophisticated models. It's a scarce talent. Secondly, and thanks to this, we're able to combine technology expertise with marketing domain knowledge. We're able to trade and build proprietary models for WPP and our clients. Thirdly, we have WPP OPEN, enabling us to deploy our products across different disciplines and into clients. Fourthly, we have a coordinated investment plan across a now simpler WPP. And finally, for us, partnerships are critical. And while investment is important, access to partners is what's some ways, even more important because they allow us to leverage the billions and billions of dollars and investment in major technology companies are making in this area. And you'll hear later from some of the world leaders in AI. And what's most exciting to me is to be able to show you some of these products for the first time. While we've been working on them with clients, we haven't really shown them in public before, nor indeed if we've seen them elsewhere. These are some of the examples. And you've seen some of the examples of our creative work before. But what you won't have seen is the power of the AI tools and products we've built. That's what you'll see later. Now these new products will undoubtedly raise questions for you on the financial impact on WPP. I'm sure we'll get into that in the Q&A. So let's take a look at how we're thinking about that. And net-net, we believe that AI will support our accelerated growth and improve our efficiency. And here are some examples of how we can do this. First its going to allow us to sell new technology solutions through WPP OPEN owning technology license fees that powered by our AI services. Secondly, we can offer AI services consulting, just as we did with the Sherwin-Williams AI-powered commerce platform or the many clients who are currently consulting to on the power of AI and how they enable it in their own organizations. Thirdly, it's going to allow us to augment our creativity, not replace human beings, but enhance them, to improve the ROI that we deliver to our clients. We see an example of how we're already doing this for clients on the Amazon and other shopping platforms. It's also going to help open up new business models, just with the Xaxis and Finecast allow us to move away from hours based pricing to new output and return-based pricing models. And finally, it's going to enable us to work faster, unlocking efficiencies in our back office. So the second element of our strategy hinges on creative transformation. And as I stated at the start, WPP's mission is to be the creative transformation company. And by this, we mean we want to apply creativity to each area of what we do, not just in advertising, but in our media plans, our social campaigns, our design work and public relations advice. We're also in the business of transformation, helping the world's largest companies, both global and domestic to transform how they market in a very different world. And in a world that's changing as fast as ours, the need to transform and integrate our services is even greater. It's not just about AI, it's also about helping clients use influence and figure out TikTok. Its dealing with the proliferation of channels and new advertising opportunities on Amazon and Netflix. We have to help clients navigate the polarization we see in society. To do this successfully, WPP needs to bring together many different skills and integrate them for our clients. We also have to use judgment and experience old-fashioned, but important skills. And if you look at our top 10 clients, that's what we're doing today. It's leading to our top 10 clients growing at 6.6% versus 2.6% for the rest of WPP's business. These global companies come to us for the breadth and depth of our offer. We don't do everything for them, so there's still good growth opportunities ahead. And we're very grateful to have Manolo coming here later to talk to us about the partnership with the Coca-Cola Company and the transformation we've been undertaking together. Now, Rob Reilly, my creative partner and our Chief Credit Officer, will introduce 3 of our 4 leaders later. And together, they'll show you not just the importance of creativity and how it leads to outsized financial returns, I hope they'll have you come to 3 conclusions. The first is that our creative agency is doing a lot more than just the ads. Our forward disclosure was still excellent at doing the ads for the Super Bowl, we're working on 12 creative sports and GroupM is buying 19 ads in the game. Secondly, we want to take away that our production capability is both very strong and also a significant growth opportunity for WPP. Clients spend roughly as much on production as they do on creative fees. And today, we capture only a small part, maybe 20% or 25% of this amount, another growth opportunity for us. And lastly, there's an untapped opportunity we apply technology to the creative process for the first time, just as we've done in media and production. It allows more discipline, automation and value creation for clients. Now the third element of our strategy has been to build more powerful brands. There's really 3 key developments in how we operate in this area that we've made in the last 6 months. The first is the creation of VML. And you'll hear from Jon and Mel later. It has a compelling and broad offer, an exciting growth plan and a depth of resources to serve global clients. The second is the continued process of simplification at GroupM with the launch of Synergy 3.0, the 5-year plan that Christian announced when he became CEO, and he's going to talk to you about how this plan will strengthen our offer and improve our hit rate in the U.S.A. And finally, last week, we earned us the launch of Burson, bringing back one of the most iconic brands in the public relations industry. It's a move that's been very well received by people and clients, and we run an investor update later where Corey and AnnaMaria will share progress and what that really means. Now these 3 companies will improve our overall performance. And I think you'll see from the presentations how we're going to deliver faster growth, be simpler with more scale and agility and also increase our profitability. Now last, and by no means least, let me touch briefly on our financial commitments. So this is our medium-term financial framework and the financial commitments that Joanne will take you through later. As I said, I know we've had our challenges on the top line in 2023. But what we can control directly our margin commitments and our working capital, we've overdelivered on our guidance. We want to accelerate our growth to 3% plus, organically. We think of this as our commitment to you and our ambition is absolutely to exceed it. At the same time, we're committing to deliver to a headline operating margin in a range of 16% to 17%, supported by structural cost savings. And finally, we're aiming to improve our cash generation significantly, we have total alignment on the need to reduce cash restructuring costs. And finally, we'll maintain a strong investment-grade balance sheet. So that's the strategy. Now let's turn to the first element of the plan, to lead our industry through the application of AI, data and technology. In some ways, this is the part I've been looking forward to the most, a chance to show you today how we're using AI to transform marketing. We haven't shared much of what you'll see today in public, so I hope you'll be as impressed as I was when I first saw it. So over to you, Stephan.

Great. So today, WPP is the clear leader in the application of AI to the marketing and advertising industry. That's quite a bold statement. But to back up that bold statement, I'm going to tell you through examples of work we're doing with actual clients today, tools that we've built and the innovation we're doing with some of the world's largest technology companies, why that is true. Applying AI to marketing is not a trivial task. Making good, plausible content with AI is not that difficult. And many of you have done that in ChatGPT and other tools over the last year. But making plausible good content is not what marketing is about. Marketing is about making correct content. Content that is true to the brand of our clients. Content that is correct for the channels where we want to distribute them. Content that distributes or represents the products that we're selling accurately in the high fidelity and ultimately, content that resonates with consumers and turns consumers into customers. This is an altogether harder task and something that we've been investing a lot of time in engine over the last year. So the 5 pillars of our strategy are really the following. Firstly, WPP OPEN. So WPP OPEN is our end-to-end AI-driven marketing operating system that brings together all WPP's proprietary tools, technologies, data and services in one operating system. This is key to scaling AI and I will show you more detail about that in a minute. Secondly, as we started building solutions and doing our own projects with AI back in 2018, 2019, we realized that leadership in AI required highly specialized, very arcane skills. Leadership in AI, particularly today, does not come from tens of thousands of people in offshore engineering centers. AI leadership is being driven by a handful of incredibly specialized individuals, largely coming out of academia and out of research labs. We've been doing work with Satalia as a partner on a couple of clients for a number of years. And so we were delighted when Daniel and his team agreed to join WPP in 2021. And again, Daniel will show you in a minute how we are applying that R&D to the marketing process. The third pillar of success in AI is to organize your data and to have a variety and breadth of data that you can push through the AI -- Choreograph and now led by Evan Hanlon. And again, the second part of today, you will hear from Evan, why we have, not only the right strategy to lead in an AI-driven world in terms of data, but also why we believe that our products and our strategy is correct for a post-cookie world and a world where consumer data is increasingly limited in terms of its use within marketing. One has to look beyond consumer records to a wider variety of data in order to drive relevance. The fourth element is our investment in training and workforce transformation. Back in 2018 already, we kicked off a number of programs to ensure that our workforce has the right skill set and are upskilled in new techniques, new technologies at a scaled level. We sent a large cohort of executives to the Oxford, a Business School for a post-grad diploma in AI. Turned out to be a lot more work than I expected. We created a future readiness academy, large-scale training program for all our people to train them on AI, more than 50,000 people have gone through that to date. And increasingly, we are bringing in new fresh talent through our creative technology apprenticeship program, bringing in young, diverse talent from across the world into this incredible merger of technology and creativity into a new skill set. And in many ways, that experience is teaching us the new pathways for training young people in the future of our technology, industry. Lastly, partnerships. And it's clear, all of you follow these companies the amount of money that these large technology companies today are investing in infrastructure, product development and research to drive the AI revolution forward is absolutely immense. And at WPP, again, 5 years ago, we formed a very strong central partner organization that partners with all these large companies as well as many smaller ones like Salesforce, Sitecore, Shopify, Sprinklr and the like to not only build new products with them, to train our people on how to use their technology, but also to go to market jointly with them to deliver for our largest clients. So let's hear from our partners, what it's like to partner with WPP and what it means to their organizations. [Presentation]

That's great. And you can imagine, as a technologist, how exciting that must be for me to work with companies like this and leaders like Satya, Jensen and [ TK ] on developing new solutions for our clients. The automotive example that Jensen referred to is a combination of the NVIDIA Omniverse platform. It's a 3D rendering solution with generative AI that is completely revolutionizing the automotive content supply chain. And the example that Satya showed at Ignite last year that was in the video. That was a solution we built in our Satalia team within about 2 weeks of getting access to their GPTV, their GPT with revision model. And Satya was so impressed with the result that he put it on his keynote presentation. So you can see how important this symbiosis between our application, of this technology and marketing and industry and content is with the research work that our partners are doing. Switching gears quickly. One of the most important challenges that all of our clients are now facing in terms of adopting AI in their organizations is how do you empower a workforce? How do you power an organization to adopt AI in a structured, methodical way, connecting the right data to the right systems, the right processes, in order to change how you work. WPP's answers to that problem is WPP OPEN, our AI-driven end-to-end marketing operating system. And so allow me just to step you through the layers of that platform quickly, so you understand how fundamental this is, not just from a technology perspective, but also from an operating model perspective in the marketing and advertising industry. At the heart of the platform or a whole series of platform features, functionality, for identity and role management, security, so people know what they're allowed to do and we can control who's got access to what. And workflow and orchestration tool that allows us to not only combine how we work for clients, but also how they work, a design system to create new applications, a marketplace of both proprietary and third-party applications and an API framework to allow us to build new tools and connect to outside services. So everything you would imagine in a kind of a standard modern platform as a service. The second critical layer is the data layer. And here, we have to emphasize, and you'll see this again when Evan presents in a minute. Is the variety of data from proprietary WPP data assets, data that we licensed from third parties, everything from weather to events to locations to clients' data. At WPP, we believe that our clients own their consumer data. Our clients own their content and our clients own their campaign data. But we have to be able to connect to this in sophisticated ways to connect with our data to deliver new solutions. And again, Evan will touch on that. And then ultimately, public data because there's a lot of that and often it's very useful. The data is then connected into our AI layer. Daniel will explain in more detail exactly what these brains are. But effectively, it's the marketing algorithm. We sat down together and understood that marketing is effectively a 4-part algorithm. You're connecting consumers to brands through content and channels. And so by encoding those 4 concepts into custom AI agents or brains as we call them, we are now able to bring the power of AI to the entire marketing supply chain in a very structured way. The next layer is our client workspace layer. And I think from a philosophy perspective, from a position relative to our clients' perspective, this is arguably the most important layer of the entire platform. The client workspaces are branded with -- clients' brands and their colors and their attributes. But critically, the client workspaces encompasses each of these clients' marketing methodologies and processes so that the way that we work with them is the way that they work internally. In other words, OPEN does not only organize WPP internally with us, with each other. Will also use it to help our clients to organize and standardize the way they work within their marketing teams across multiple markets and brand organizations. This is a key challenge for many of our largest clients. And then ultimately, we connect all this infrastructure to a rationalized set of applications that we now call studios to cover everything from creativity, ideation, to production of content, to media management, commerce optimization, experience management and PR as well as our third-party applications. This is a significant body of work. And through the day, you will see many examples of that. The piece to be reminded, if you say for drinks, there will be live demo sessions in the drinks area so you can see these tools live. So if you apply this framework to a single client, I'm going to illustrate it through one of our early adopters of OPEN, Nestle, just to show you how the data flows through the entire ecosystem. So that on one platform as a service infrastructure, we're now able to configure for a single client like Nestle all the data assets we need through the brands architecture, into their workspace and then the tools that we use to do their work, creating an end-to-end operating system driven by AI. All right. So enough theory. Let me show you some demos. So the first thing I want to show you is a product we call our Creative studio. This is a product that we started developing early last year really in response to the enormous explosion of generative AI as a category in the marketplace. We've been working with AI for many years, but what happened in November of '22 is that suddenly generative AI became a popular culture moment, right? It became a dinner table topic. Your kids started talking to you about it, your grandparents started to talk to you about it, it's kind of amazing. And so we decided that we wanted to democratize access to generative AI in WPP. Our people were using it organically, and we wanted to give more structure and control over how they use it and adopt within the business. So we created the Creative Studio, which is effectively an interface of workflows and tools and prompt engineering that sits on top of all the base foundation models in the marketplace. And the beauty of this platform now is that, we can put in new foundation models as they come to market. We're about to add Gemini and as this industry continues to evolve, you're able to increase the capability with the underlying engine as it were, while keeping the interface and the front-end similar or at least as you evolve it independently. This has been an absolute runaway success in WPP. With hardly any internal promotion, organically, since we went into general availability in September, we now have 28,000 users on this platform. We've generated more than 1.5 million LLM prompts and more than 1.6 million image prompts. This has been -- and we've not had to demand the people to do it. We've not had to go on road shows. It completely, organically driven throughout the organization. And I think it speaks to the curiosity and the innate sort of sense of curiosity and creativity that our people have to explore new tools and to see generative AI really as complementary to people not as a replacement for their jobs. So let me give you just a little bit of a sneak peek on what it looks like. Again, come and see the live demos later. There's a lot here, so I can only show a few of the features. But let me show you a number of them. So as we go from the WPP OPEN home page, we're going to enter the Creative Studio. And as we go into our landing page here, we can now create a project based on [ my permissions ]. And as you can see here, we now have access to a number of foundation models but also more structured tools. So in the chat feature, you can see the models we have available on the drop down there. But let's go and create some image content. So we're going to use DALL·E 3, the OpenAI model. It's latest model from them and put in a very simple prompt, perfume bottle packshot, which is not a good prompt. So let's enhance it. And here, we're using prompt engineering to create a far more elaborate prompt that teaches people not only how to prompt, but also get better results by itself. You can then add artistic styles, design styles. We're going to choose 3D rendering here and you press imagine and you get your results, and you can upscale your -- the one that you like. So fine, that's great. Let's create some more content. Let's create some headlines. So we go into the headline generator, and we're going to select a number of elements. So Coca-Cola is the brand. We're going to say, the turn of voice is, let's say, inspirational. We're going to target music lovers because of the Coke Studio product, and we're going to say the objective is conversion. Again, you can see the prompt engineering built into the tool to generate the content. You get to 5 headlines, they all look plausible, They'll look fine, usable, they're linguistically correct. But how do you know if they're good. Now the easiest way to train LLMs to make good content is to feed it with other good content. So what we're going to do here is we're going to upload a very elaborate Coca-Cola shopper and experience retail design document. It's 26 megs, 81 pages. You upload the document, and this was not -- it is do Fastrack, by the way. The system uploads the PDF, reads it and is now able to answer very specific questions based on that document. And so here, we're going to say, create 5 more headlines, give it a second to read the document. We're going to say, create 5 more headlines, but tell me why it's good and tell me why it complies with the shop and retail design principles. And so you can see here now, it takes slightly longer because there's a lot more data to manage. The context we know is much bigger. But you can see that not only are the headlines much better, but in each case, it tells you why it is good. Teaching people best practice through the interface, right? So this is really becoming super powerful, as you can see. And just the ability to consume that amount of data is quite impressive. Last thing I want to show you is sort of a chain generative AI process. This is something for -- to create mood boards. This is just for ideation, not for actual production work. We're going to create a mood board for a Ford F-150 Christmas campaign for Instagram in the U.S. And the axis of the mood board are either audiences or occasions where their time of day, we're going to choose audiences and occasions. And when you then press on imagine, the system itself is generating not only the audiences and occasion definitions, but also headlines, cause to action and the actual images for the mood board, right? Now this is not production-grade work that we would put in market. This is for ideation. This is to get into a room with a bunch of creative people and say, I have an idea, let me show you what it looks like. Let's explore something. Let's go from inspiration to representation much faster. And so you can immediately see how these things are? Why they're exciting to creative people and why they've been adopted so vigorously. So as I said in the beginning, this is all fine and well, very impressive. But the real battleground for AI and marketing and advertising is to make brand-specific, accurate content, to have a machine trained on a brand's tone of voice, brand element and to be able to speak and create like the brand would. And so to tell you how we are doing that, I'm going to hand over to my friend and colleague, Dr. Daniel Hulme from Satalia, who's going to show you how the research Satalia has been doing, feeds into that problem statement.

I'm very excited today to talk to you about a subject I've been passionate about for the majority of my life, AI, and how these emerging technologies are reinventing and disrupting the marketing media communication industry. So I've been involved in AI for over 25 years. My undergraduate PhD post-doc are all in AI from UCL. I run a master's program for 4 years where I had 100 students going out there applying these technologies to solving problems across a whole range of different industries. And I'm currently Entrepreneur in Residence, UCL helping them commercialize deep technology. UCL is one of the world's leading AI institutes spinning out companies like DeepMind and Satalia. I started Satalia in 2008, and over the past 14 to 15 years, I have been building AI solutions for some of the biggest companies in the world. In 2014, we helped build Tesco's last mile delivery solution and continue to work with Tesco solving problems across their supply chain. In 2017, we worked with PwC to build a workforce solution that allocates thousands of staff, a scale never been solved before. And in 2021, we joined WPP, where I continue to lead Satalia, but I'm also very honored to take on the Chief AI Officer role. So we joined WPP for 3 reasons. The first is to amplify and accelerate bringing AI to the thousands of brands that we represent around the world. And actually, for many years before the acquisition, we've been working with Stephan and Neil Stewart to bring AI to organizations like DFS, a light thing we've been doing AI before it was cool. And we can now do that at the scale of WPP. The second reason is to really enhance the creative capacity of over 100,000 people across the organization. I'm really passionate about this subject. And of course, we're using the productivity tools to increase productivity like Copilot and DUET and Firefly, which have had a really positive impact on the business. But we've also been looking at how can we utilize AI to completely optimize end-to-end marketing, which is really what I want to focus on today. And the third reason was to really work with an incredible leadership team and have the once in a lifetime opportunity to completely reinvent an industry. We are very early on and lucky that Mark gave us a task to figure out how can AI be used to change and transform our operating business and commercial model. So new advances in algorithms over the past decade plus data, plus compute allow us to do some incredible things. And Satalia's expertise is really understanding how to apply the right technologies to solving the right problems. And we've been building methodologies and tooling and frameworks that enable us to do this at scale. And if you look across our value chain, like Stephan said, we take brands to customers through channels with the right content. What emerged whilst working with Stephan's team and the domain experts across the WPP was a very elegant way of applying AI to marketing. And we believe there are 4 underpinning AI services that when combined together can solve the majority of problems across that supply chain. We call these brains. So the first brain is called the Brand Brain. Now large language models are really good at knowing things about the world. They're regularly telling you what they know about the world through imagery and text and soon, video and soon sound. But large language models give everybody their ability to create generic content. But the battleground for organizations is not creating the generic content. The battleground is creating brand-specific, production grade, differentiated content. This is very difficult. And this last mile is actually very hard. So we take lots of different data sources from brand guidelines, the tone of voice to brand assets, and we couple that with the deep expertise we have in branding to now create almost production-grade brand-specific content. Now I just want to kind of geek out for one moment. There are broadly 2 ways of making Brain smart. A large language model is a bit like a graduate brain. And one way to make that graduate brain smart is called, unfortunately, ragging. So what you can do is you can give that graduate brain a book or some materials. You can ask it questions and it answers the questions elegantly from the book. And this is easy, it can be done in seconds or minutes, and it allows you to create very nice proof of concepts and demos. But to create a brain that truly is a professor of your brand, you need to have deep expertise in training and tuning neural networks. And so we use bleeding-edge techniques from academia. We develop our own techniques as well as accessing early technologies from our partners to build brains that produce brand-specific content. So I want to show you some of the incredible work we've been doing with [ Mondelez ] in cooperation with the branding geniuses in Ogilvy. [Presentation]

So Brand Brains are incredible at creating almost production-grade content. And as I said, that last mile is extremely difficult, which is where our partnership with NVIDIA and the work that Hogarth do is so important. But large language models are not just good at creating content. They're really good at -- recreating how people perceive content. I want to say that again, it's such an important concept. For the first time ever, we can build brains that are able to recreate or simulate how people perceive content. And we can use those signals that we've never been able to access before to be able to create better content and also much more accurately predict activation. I guess historically if I showed you an ad or a policy or promotional material, I never really knew what goes in your mind unless you people and people are not necessarily very good at reporting on what goes in their minds and bodies. But for the first time ever, we can recreate those signals. And I just want to be clear about one thing. Brand -- sorry, ID data, so e-mails, names, addresses are not helpful in understanding audience behavior. How you perceive a piece of content will depend on the time of the day, whether how well your sports team performed on the weekend, whether there's an election happening. And it's that breadth and variance of data that we have across WPP, again coupled with our deep domain expertise of understanding human behavior that allows us to create audience brains are truly representative. So actually, this is the data that we use to create one of the audience brains for one of the biggest brands in the world. And now their marketing team can not only validate the audiences that they now exist. They're able to surface new audiences that didn't exist and engage with those audiences to try to understand how to best activate them. And what blew my brain about the Milka project is that we actually built an audience for Milka. We asked that brain, what ad would you want to see to get you to buy Milka. The audience brain created the prompt that we gave to the Brand Brain. So I hope that you see that in isolation, these brains are not just incredibly powerful, but when combined, they are truly transformational. Machine learning is what people called AI before generative AI. And then this family of algorithms is really good at making predictions about the world. Our performance brain uses the signals from the audience brains coupled again with the performance data that we have to much more accurately predict activations or clicks, likes, sales. But the power of machine learning is not in making predictions. The power in machine learning is explaining those predictions. So again, if I showed you an ad. I had a black cat. I can predict the clicks and likes and sales. But what machine learning can do is tell me if you change that from a black cat to a ginger cat and get more activation because that audience likes Garfield. Now that's a terrible example, but it gives you an insight that just making predictions actually is not so powerful, but explaining those predictions allow us to make much, much better decisions. And one of the things that we're doing with Google, our Performance Brain looks at the various different assets associated with the video. So like the like button and subscribe and the subtitles. And it explains what you need to do to change those assets to increase brand lift. So finally, now that we can more accurately predict activation. What we need to do is push that content across channels to maximize the return on investment and this is a large-scale decision-making problem. And Satalia, for many years, have been building these large-scale systems for organizations. Decision-making is a completely different feeling from beta science. If you're held in field, we call operational research. It's discrete mathematics, it's constrained programming. It's nonlinear optimization. So let me just geek out for one last time. Imagine if I -- if you have 5 pieces of content that you need to push across 5 channels. There are 5x, 4x, 3x, 2x, 1 possible way to allocate 5 pieces of content across 5 channels. There's 120 possible solutions. If I have 15 pieces of content across 15 channels, there are 1 trillion possible solutions. If I have 60 pieces of content across 60 channels, there are more possible solutions than there are atoms in the universe. We have to push thousands of pieces of content across thousands of channels every second of every day. And so utilizing the bleeding-edge technologies from academia to be able to make these decisions is really what differentiates our business, particularly when it comes to media planning and buying. So these brains when combined really do solve what we believe to be end-to-end marketing. They get more content and more customers much more rapidly. But of course, all of this is underpinned by the rigorous, ethical and responsible frameworks that we've been using across WPP for many years as well as the AI technologies allow us to create safe and ethical content. So the reason why I love this architecture is because it gives our clients a scientific and objective way of measuring our solutions, our output against generic models and those of our competitors. This is not theory, it's in production across the WPP and already in the hands of our clients. Handing back to Stephan now to tell you even more.

Brilliant. So to show you one more practical example of what Daniel was talking about. I'm going to show you an example from the e-commerce optimization space, for short because everything needs an acronym. Product detail pages are the lifeblood of e-retailing. It's the page where you go where you find the product on the platform, you're reading about the product, you're looking at the imaging, you're looking at the sales points and you decide whether to buy the product or not. Now it is, again, like Daniel was saying, a mathematical problem. When you have thousands of SKUs across tens of maybe 100 markets across all the e-retailers in every single one of those markets, you have a massive factorial problem, not only because you have to create many, many hundreds of thousands of PDPs, but how do you know how to customize them and edit them for that particular market, for that particular marketplace, and for that product? And then how do you keep up to date with change in consumer perceptions. The style might change. The objectives might change. They might be competitor with a new product and market. How do you update all that content to generate an optimal outcome. So we solve this through Open Commerce Studio, combining 3 different brains in one solution. Firstly, a Brand Brain to ingest the product detail, product description, images, the proof points as well as their tone of voice, how do they speak about the product, what's the tone of voice when they market to consumers. The second one is that we look at the reviews largely posted on e-retailer websites to understand the shopper barriers. Shopper barriers are those objections that consumers have to buying a product. Oh, I don't like that much, oh I don't like the shape. This is going to clump, this is going to make my eyelashes look thin and whatever the objective is. But shopper barriers and understanding shopper barriers at scale and continuously is an enormously important part of the solution. So that's the Audience Brain part of it. And then lastly, a channel brain because -- each of the e-retailers that we work with have slightly different layouts, slightly different ways that they present content and the way that you customize it for each e-retailer makes the difference. Some you have to be more textual, some of the headlines matter more, some of the images matter more. So combining all 3 of these solutions into a single product, we can now guarantee our clients a 25% conversion increase within 3 months of using the solution with -- as a contractual guarantee. And in reality, we're getting between 40% and 50% conversion increase using the solution. So we've been piloting this over the last year with L'Oreal. And the demo, I'm about to show you is the L'Oreal Commerce Studio Solution. So it's going to be a very short demo, not as long as the previous one. We've already created the tone of voice of the brand. I'm just going to show you how to create a new project and how the content is generated. I'm creating new project. And this is going to be for volume, million lashes, Mascara from L'Oreal. We upload the product detail from their PIM system. So this updates the product information into the system. And now we're ready to create content. So firstly, we choose the market. We're going to choose the U.K. and Germany. And critically, again, the content we produce is not going to be translated. It's going to be customized and built for that particular market. We are using the L'Oreal Mascara Million Lashes tone of voice, and we extract the shopper barriers from the Mascara category. So we understand what elements are going to drive conversion. We then select the e-retailers where we want to deliver. So boots look fantastic in Douglas and we generate the content. And so now, immediately, you can see the content being generated here along the left, you've got all the content fragments. Here's the example for boots. And -- but we always keep a human in the loop. So if you don't like the content, you're a retail expert. You think that should be a shorter fragment. You can either edit it yourself or indeed, you can use generative AI. We're just going to say, take that selection and shorten it, apply the changes and the content has been updated. So you can see how generative AI is not only being used to optimize the end-to-end system, but also the operations in between, it's making people's work more effective. So that's the example for boots we're now going to use. And if you now look at the solution for Douglas, you can see that the text is entirely different. This is not a translation. This is customized to the German market, to the German shopper barriers for this product, right? So hopefully, this gives you a sort of a sense of the power of this technology to really supercharge what we already know about marketing, what we've known for years, what we've been doing manually and analytics and research work for years but can now really scale using technology. And we've been doing this for some of the world's largest and most sophisticated marketers for a number of years now. For the Coca-Cola Company, the operating model that you will hear Laurent and Manolo speak about later, in of itself is revolutionary, but we cannot run the global operating model for the Coca-Cola Company without OPEN as its operational foundation. We're also for the Coca-Cola Company delivering AI content engines that will scale Coke and meals content, production-grade Coke and meals content to all their bottlers around the world and we're busy rolling that out solution as we speak. For Google, we are completely revolutionizing the end-to-end media planning and buying process, helping them to predict what content will perform in which channels before the first impression is even served. For Mondelez, you saw the wonderful work around the Milka Brand Brain, which is really at heart a solution to scale their proprietary empathy at scale personalization technology. This is at the heart of their marketing strategy and the solution will enable them to scale that. For Ford, we supplied the NVIDIA Omniverse 3D rendering plus generative AI solution, and you'll see some examples of that later in Jon and Mel and Richard's presentations about how we're using generative AI and 3D modeling to create high-fidelity car configurators and marketing content for products before they're even produced. None of these cars roll off to production lines before we have our content in market. Nestle, you saw the example of deploying OPEN, which is really at its heart for them, an enormous exercise in standardizing and optimizing their marketing methodology across all their markets and their brands, L'Oreal -- Nestle has more than 2,000 brands and operating more than 130 markets. And for L'Oreal, like with Coca-Cola, we are innovating the cutting-edge of generative AI content generation through generative AI lab that we set up with them in Paris and are now scaling that across a larger set of solutions and OPEN. So you can see all of these examples are real scale projects that all of our clients are investing a lot of money and time with us in to drive forward, to adopting their businesses and to really change the way that they market in a very fundamental way. So in summary, these are the 5 elements that I've taken you through, our platform, our investment in AI, our investment in data, training and partnerships. But there's a sixth element that is absolutely critical. We announced this morning that we will continue to invest around GBP 250 million per year in our proprietary technology, data and AI capabilities. [Presentation]

Okay. Ready to talk creativity. No, not the right slide. I am Rob Reilly. I am the Chief Creative Officer of WPP. And this phrase the best job in the world. Now while Mark is the CEO of the largest media and marketing company, it's an impossible job, by the way, a job, I definitely do not want. I have the luxury of being the Chief Creative Officer, which means I get to obsess over the creative work of every one of our companies. What an incredible job that is to do. Now I left McCann 3 years ago for one very compelling reason. That reason being Mark's creative transformation mission. Now we use the power of creativity to build better futures for our people, the planet, clients and communities, but why does the creativity matter? So let's talk about creativity a bit, right? So to me, creativity is not a Hollywood word or a music word or an art world word, it's frankly how the world solves really difficult problems and challenges, right? To me, it's the world's most valuable asset, but more importantly, creativity is good for business, right? So there's a small startup company called McKinsey. And they did a study a couple of years ago, which is companies with the highest quality creativity outperformed their peers in organic revenue growth and shareholder returns. I know my audience. I know what I'm doing, right? So I brought that for you. But pretty amazing that this is a study, and they're actually doing the study again this year, which is great. So there's no surprise why we believe creativity should connect everything we do. And it goes way beyond traditional advertising. Now we do a ton of it, as Mark said, we do -- we're doing 12 Super Bowl commercials and GroupM is putting out 19 Super Bowl commercials. That's a lot of commercials. And there's some crazy ones. I promise you, I've been in an edit room myself, and I want to kill myself because it's so difficult to make them, but I think we've got some great things. So look out for those if you're over there. But certainly, we go -- we do things way beyond the traditional advertising. I'm going to give you one example, corona Extra. And what I'm about to show you is not advertising. This is a business-changing idea from AB InBev that our agency David, part of Ogilvy was a big partner in bringing this to life. And it pretty much turned around their business in China in a very unexpected way. I wanted to play. [Presentation]

So in a normal situation, you would have applied for that because it's an incredible idea and done for China. But -- so it's okay. That's all right. But it's a great idea and a genius move from AB InBev. But let's talk about Coca-Cola, right? Now what they're doing in our relationship with Coca-Cola, that's an all-in network partner, all in, which means we're putting creativity at the center of everything we do, advertising, experience and design, data, media, production, social and PR, AI and technology. Let's just be clear, like Coca-Cola is deep into AI themselves. We're a great collaborator with them. So it's not us bringing them everything. They are actually giving us a lot of ideas and giving us a lot of inspiration to make great work. And the work we're doing is bold ideas that lead to widely successful business results. So while there's many factors why Coca-Cola ended up here as the most valuable food and beverage brand last year, we think marketing and advertising, and our relationship with Coca-Cola has a little bit to do with that, too. And by the way, last year, it was the only top 10 brand to see an increase in value in 2023. So a brand that is fully jumped in to creativity and every one of its forms ends up here. Wendy's, another example. And you've heard about Wendy's in the past, like what's amazing about Wendy's is it's a 10-year journey with VML and Wendy's. And frankly, it was an old tired fast food brand that VML helped with them in collaboration, turn into the hottest social brand in America. My favorite part is Wendy's is now a giant part of the gaming community, the place where fast food consumers live. But let's talk the language you all love, results. Dethroned Burger King become the #2 burger restaurant chain in America, 12th consecutive year positive sales growth and nearly 25% average unit volume growth since 2019. So again, I don't show anything that doesn't have amazing results. Now this is called the One Show Penta Pencil. Does anybody know what the One Show Penta Pencil is? Yes [indiscernible] for us. Of course, this is an important award. The One Show is one of the premier awards shows, creative award shows in the world. This award, the Penta Pencil represents the relationship between an agency and a client over 5 years of creative excellence has led to exponential growth. So Wendy's won this last year with VML. So pretty amazing. Now there's been a lot of talk about AI, a lot of talk. From us, from other people, but the reality is, AI is incredible. Of course, we are using AI, We've been using it for, I don't know, how many years, 7 years, 8 years, 10 years, but we're deep into it. And it's got to do a lot of amazing things. And there's a lot of the advertising we're doing that is going to be enhanced by AI, made more efficient. But here's the reality. This is the world. These are all the [ apps ] you can use to create work. Anybody can do it. We talked about -- your grandmother knows about AI now, like you can make a lot of stuff. So the reality is there's been a lot of mediocrity flooded into the market. So AI-generated content doesn't guarantee audience engagement. So while others are in the business of just AI creativity and maybe they'll get rid of creative agencies, right? We're in the business of human creativity, enhanced by AI. And again, we've been doing it 4 years for our largest global clients. Now as you could see, I don't know -- everybody knows this idea, Serena versus Serena never stopped evolving for the brilliant [ mines ] of AKQA and Nike. That collaboration led to this. This was how we put Serena through the magic of AI, put Serena in 1999 against modern-day Serena to commemorate Nike's 50th anniversary. Amazing idea. Yes, won a lot of awards, but it drove engagement for them like they've never seen before. But this is [indiscernible]. I brought a prop up here. So this is an idea called Access Codes. How hard is to read the instructions? Maybe we got eyesight issues, maybe visually impaired here. I mean I cannot read this, and I'm pretty decent in my eyes. But what the Haleon has done, which is brilliant, is actually -- the packaging has braille on it. So if you're visually impaired, it has braille. You can read it. But how do you read the instructions? Sometimes you're putting medicine in your body that's so dangerous. You don't necessarily know or could be -- if it's overused or use them properly. Like so the instructions are important. Well, this idea, it was from Grey, part of AKQA Group. It's Haleon and Microsoft working together. So we partnered with Microsoft and their Seeing AI app and created this thing called Access Codes, where now you can just scan the barcode and all that pertinent information comes up. So if you're visually impaired, you don't have to worry anymore. That's the kind of work we're doing. This came out last year. But the most awarded idea of 2022 and the most effective idea of 2023 now. So it's the most effective idea. So yes, awards are important -- by the way, awards are the byproduct of doing the right thing for our clients, but they are important. They prove that we're landing in culture, it proves that we're driving business and it attracts talent. People want to work at companies that are doing well. So Devika is going to talk about Shah Rukh Khan-My-Ad, the Cadbury ad in a couple of minutes. But the last thing I want to talk about is the fact that it takes special people to make special things. All this talk about AI and technology, without special people, you cannot make these special things. And the best creative people want to work at a company committed to creativity. Mark Read has publicly said I want to be the most creative company in the world. And [indiscernible] that sounds that ambition is exciting. We have attracted more talent because they want to work at creative companies. So it's no surprise that work, which is an aggregation of the #1 shows in the world, whether it's Cannes Lions, the One Show, D&AD, the EFFIE award for creative effectiveness. The work is very important to us, but really important to our clients. So what you'll see is not only we're attracting the best [ creative ] people, we're attracting the best media people. So we were #1 in media last year, #1 in effectiveness, yes, #1 in creative. So it's important that we're doing the kind of work that is being recognized in the industry is attracting talent that is also driving growth. Lastly, before I hand it over to Devika, CEOs make creativity happen. It doesn't matter if you hire Rob Reilly, you hire Debbi Vandeven, you hire Gabriel Schmitt or Andrew Keller or Liz Taylor, if you don't have a CEO who cares about creativity, being the main ingredient for driving growth, you won't win. So I'd love to hand it over to Devika, who not only is one of those people, she knows how to help a lot of business with creativity.

So our mission at Ogilvy is quite simple. You saw that data point that Rob showed you with McKinsey. We want to be living proof of that, living proof that the most effective creative work unlocks growth for our clients. The truth is simple today, right? There isn't a single client of ours that has actually any product differentiation. We're living in a hyper-commoditized world. And in that hyper-commoditized world, creativity becomes the force multiplier. Creativity becomes the thing that differentiates them that unlocks new markets, new target audiences and new opportunities for growth. It's earnings season, right? And our mission -- we do watch our awards, and I'm going to talk about that in a minute. But this is what we look at. This is what we sweat. We sweat the fact that we can take Dove from a being a $1 billion brand to a multibillion-dollar brand. Corona with 29% increase in sales. Samsung foldables, one of the fastest introductions of a new product in the marketplace. Getting new subscribers for Verizon, helping IBM grow their business. This is the value of creativity. And this is our obsession at Ogilvy. And it's this obsession, frankly, with using creativity to unlock value for our clients that's put us on the top of our game here. We're #1 in creative excellence according to WARC reports that Rob just talked about and #1 in effectiveness. This, by the way, would be the second place you clap, but I'll keep moving. All right. So I want to use one case to show you exactly how we do this, right? And let's talk a little bit about Mondelez who -- and if you think about Mondelez pre-2019, the world of 3G Capital, right? We've also heard this phrase, right, buy, squeeze, repeat, we're familiar with that. It goes with zero-based budgeting, and it goes with cost cutting. But Dirk Van de Put came at the end of 2017 and actually had a growth agenda to grow the company and return it to being vibrant and vital for its consumers and from a business perspective. He hired Martin Renaud, who made brand innovation and creative transformation, the agenda of how to get the growth. And this is why we, as WPP came in around the end of 2018, early 2019. So how do we do it? What was our creative transformation journey with them? Actually quite simple. And Daniel took you through what I'd say, the second bit of it is the cutting-edge side of intelligence. But our mission really was to take imagination and intelligence and make them come together. And I know, I know what you're all thinking right now. You think creative people sit in the room with their hair flying, sorry, Rob -- with their hair flying and imagining things that nobody has ever imagined before and becoming hyper-passionate about that. That, by the way, is true. But the creative process also requires intelligence today. And what is the form of intelligence that we look at? It's really important for us to be intelligent about culture. When we look in sort of -- when we're sitting in these corporate environments, we often talk about categories. This brand lives in so and so category and here are the category dynamics. Consumers do not live in categories. They live out in culture, the culture of sports, the culture of entertainment, the culture of music, the culture of food. So we're being really intelligent about that culture, having that cultural insight is of supreme importance. Data, personalization at scale is very, very important for Mondelez, and it's becoming increasingly important for most of our clients. So how do we target the right person at the right time with the right message and make it meaningful, becoming increasingly important. AI and tech, and we've talked a lot about it, and I'm going to show you another example of how we use it. But today, human beings in the human imagination can imagine new realities that they couldn't earlier. But by the way, technology alone couldn't do that. And media, we talked about personalization at scale. So if we don't work with Christian Juhl and all his teams to figure out where we put that message, not simply just broadcast it, but where do we put it at the right time, again, becomes mission-critical. And this is the formula that we've been using for Mondelez, and it has led to a piece of work... [Presentation]

Anybody knows Shah Rukh Khan here? So I've been trying to think of like how would I describe who Shah Rukh Khan is and it's almost like you take Tom Cruise, Brad Pitt, Leonardo DiCaprio and you sort of put them all 3 together. Actually, that still doesn't give you Shah Rukh Khan. I think if you put a little bit of Daniel Craig, then we've got Shah Rukh Khan here. The biggest star, not just in Bollywood, but I'd say one of the biggest stars all over the world. And it took imagination and intelligence. For somebody to imagine we could get the biggest star in the world to help the smallest person on the streets in a moment of COVID, where the brand grew 35%, but the business at the local guy also grew dramatically. That is the value of creativity. Now we don't just do this for Cadbury in India with Mondelez. We do it with Milka in EMEA, as you've seen, and the amazing sort of example that Daniel talked about. We do it with Lacta in Greece. We do it with PHILADELPHIA Cream Cheese in the U.K., and we do it with TANG in Brazil, and we do it with a whole lot of other brands, using the same formula, using the same kind of creative thinking to make sure that we're driving that business forward. This has led to some incredible results for Mondelez. They've gone from the #19 most creative brand in the world to #7. They've gone from #8 effectiveness to #4 and #20 in media excellence to #2. But what's most important, they've seen a [ 30% ] lift in their ROI when it comes to personalization at scale and they're investing more there. They've seen a 36% ROI overall in their marketing spend, and they're looking at a 10.1% revenue CAGR as they look at the overall business. Now that is the value of creativity. And that is a perfect marriage of imagination and intelligence, which has been our formula for success, a perfect marriage of a client and an agency. And it's when we can take -- I'm going back to the 3G thing. If we can take this model and do a rinse and repeat as opposed to a zero-based budgeting and a cost-cutting model, right? And we can do it in China, and we can do it in the 75 markets that we exist in. We can do it for big brands, and we can do it for smaller brands, right? That's when this happens. And no, I'm not announcing that Ogilvy is entering the NHL with a team and nor is this a branded hockey stick. This is 11 quarters of growth using that formula that we've been working with Mondelez on. I'm now going to hand it to Ajaz, let's say one of the leaders in the visionaries in taking creativity, technology and design and putting it to work in ways that we've never seen before. Come on, my friend.

Every now and then, if you're really lucky, you get the chance to create work that helps you shape the future. That's why the privilege of my life has been the opportunity to serve as AKQA's Founder and CEO for the last 30 years. In that time, we won Agency of the Year honors and unrivaled 81x across multiple AKQA studios and disciplines, reflecting the strength of our network and AKQA's pioneering spirit of breakthrough innovation. It's not just the work, but our culture that's also recognized. Just last year, AKQA is named the ninth Most Loved Workplace in the World by Newsweek. Another example of AKQA is an employer of choice is that we also receive between 12,500 and 20,000 job applications a quarter from people who would like a career at AKQA. AI can do a lot of amazing things, but it can't quite yet create a culture. The reason for this recognition is we have the best team we've ever had at AKQA and the most diverse. We have 5,500 people and a 5-person global leadership team. 3 are women, 2 are men and 2 are people of color, making AKQA one of the most diverse leadership teams across our industry. In the last 30 years, we've all witnessed the massive and incredible transitions in the business and marketing landscape, which has expanded the canvas for agencies and the significant opportunities for clients. Some big evolutions include the transition from broadcast and interruption to the creation of indispensable services and, therefore, greater customer engagement. The maturity from transactions to relationships fueled by data and predictive analytics. Customers have become members due to personalization, brand ecosystems, services to anticipate people's needs. And the most exciting and the most disruptive is where mechanistic mundane, repetitive labor-intensive work has become optimized and automated by machine learning, enabling humans to do the high-level thinking and provide more space for ideas. We've been in the fortunate position to help our clients navigate and embrace and maximize the opportunity. This increases our relevance and expands our connection with clients. Not only has AKQA been in business 30 years, but we've proudly built relationships that also span decades contributing to their growth as well as our own. This is our 25th year working with Nike, and we've collaborated on many world first and thousands of projects including designing NTC, the world's most popular fitness app that gets billions of minutes of connection every year. It's based on the simple and democratic idea that not everyone has a personal trainer, but everyone has a mobile phone. Like diversity, sustainability is another priority for all stakeholders. We were delighted to collaborate with H&M to create the in-store experience to transform old clothes into new pieces. We teamed up with Disney to create the [indiscernible] for the happiest place on earth, which apart from Finland is, of course, Disneyland. We've proudly worked for Rolls-Royce Motor Cars for 10 [ of their ] 118 years on a variety of projects, including their digital design system. Luxury is a category specialization for AKQA, and we've had the honor to work with LVMH for a decade of collaboration across multiple masons. Clearly, AKQA are the most important [ initials ] to me. But for our industry, it's AI, of course. And instead of artificial intelligence, we think of AI as being augmented intelligence as it's a great productivity partner for our people, and it's become the perfect partner to help us maximize the productivity of our client investments, too. Over many years, we've applied AI in myriad ways, but the application I'm most excited about is we've recently helped a retail fashion client grow their revenue by 33% over the last 12 months with 98% accuracy in where and how to invest using our proprietary model. What this demonstrates is that AKQA has innovation in its DNA, continually being at the forefront of many of the revolutions and disruptions that are transforming our industry and the operating environment of our clients. The reason our work connects is because the defining characteristics of everything we do is the mandative application of art where we focus on craft, story, beauty, vocabulary; science, where we focus on new technologies, experiments, data, analytics, methodologies and best practices. And so we focus on emotion, intuition, humanity, generosity and vibe. In a world where AI and new technologies are powering ahead at unrelenting speed, it's our belief that human creativity be even more important and even more valued. And that the most powerful force in the universe isn't technology, it's imagination. When you're in the business of helping clients to create the future, there really are no limits to opportunity and growth. Speaking of growth, I'm delighted to introduce Richard Glasson, who has [ lead ] Hogarth to remarkable growth for WPP.

So I'm delighted to talk to you today about Hogarth, which is one of the companies within WPP that you might be less familiar with. We're the making part of Hogarth, the production business. And whilst when you think about making, you think about production, you might immediately think about shooting and editing TV commercials. Actually, it goes -- all of our clients have much wider content needs than that. And so thinking about what that looks like, here, you can see some work that we do with Apple, which is a client that we've had for 13 years now. The reason I think production is such an exciting place to be at the moment is because all of our clients have to think about how they can produce work every hour of every day. They have to produce work across every channel. They have to think about their different audiences. They have to think about different markets, different cultures. You can respond to things that are going on in the real world. You can take real-time data coming back from various queues. You can respond to changes in weather, you can respond to the time of day. So what that means is that all of our clients have a virtually limitless need for data -- for work across every channel. And that creates a huge opportunity for us. We're also helping our clients to innovate into the future to think about different ways of making work, to use emerging tools and technology, to ensure that their work is capable of addressing the changing needs of their consumers. We can now talk to consumers and engage with consumers on behalf of our clients in a way that simply wasn't possible in the very recent past. And again, that's what's creating the big opportunity for us. And that's why we believe that production is an area that everybody should be taking very seriously as a business and why Hogarth represents such a large growth opportunity in the [indiscernible] in a way which I don't think is replicated elsewhere in the industry. And it's that sort of integration, combined with our incredibly strong direct-to-market offer, which, again, I believe, differentiates us, which has driven our extraordinary growth. So Hogarth was a start-up just 15 years ago. When WPP invested in the business in 2010, there were fewer than 100 people in the company. I joined the company just a few months after that. And from that point to the end of 2023, we grew by over 60x in every key measure. So we've had a compound growth rate of over 10% for our entire life within WPP, and we expect that to continue as we move into the future. And in scale terms, as a business, we anticipate that growth really driving us forward because scale matters in production. We recently completed the consolidation of various other parts of WPP, various production entities, which existed within WPP into Hogarth, which now means that we're 7,500 people globally, which is -- actually makes us probably more than twice the size of our nearest competitor. It means that we're very clearly the market leader in the world of production. And the reason that I believe that matters is that production up to this point has been a highly fragmented market. It's been a market with a lot of boutique suppliers in there. And actually, the consolidation is really starting to happen because the consolidation is necessary for our clients because they need to have access to the best innovation. They need to have access to the tools and technologies which we're developing and to the partnerships, which we're embedding within WPP and within Hogarth. And if we conservatively estimate the global production market for advertising, and I think this is a very conservative estimate is $50 billion. And then you look at the size of Hogarth and so carrying on existing growth rates and taking where we are today, we should expect to be about $1 billion of net sales in the next 2 to 3 years. And so we're looking at maybe 2% of that $50 billion. And if you look at the market share that WPP has, then actually that creates a huge opportunity for us, particularly given that I believe that the tools that we're building and the ways that we're working with our clients is driving genuine differentiation and genuine competitive advantage. And so an example of that could be this, some work that we're doing with our partners at VML on Ford. This is a real-time configurator that we built using NVIDIA Omniverse and AI technology to build an end-to-end CG pipeline. So our craft experts in the world of VFX using these cutting-edge tools and technology now are creating real-time configuration, which completely changes the way the Ford can talk to its clients. It connects engineering to our advertising. It connects advertising to commerce. It allows for completely bespoken unique experiences and then working with VML, working with GroupM, all of whom are obviously key partners of Ford. We're able to bring this to life and create engagements that have never been seen before. So my message is really simple. My message is very straightforward. We think that Hogarth is a very strong growth story for WPP and in the industry. We've got completely unmatched scale. We've got unmatched breadth of capabilities, the differentiated model, whereby we work very -- in a very integrated manner with all of our partners here at WPP. We have access to all of the WPP clients, but we also, as I say, have a very strong direct-to-market offer. And we've got a huge runway ahead of us in terms of the foundations we've laid in the business and the growth that's ahead of us, and we strongly believe that we'll be an engine for growth for WPP in 2024 and beyond. And you've got my word for that, Mark.

Very good. I'm sure we do. Thank you, Richard. So look, I think it was worth spending a little bit of time on the creative part of our business. I think if you think about [ getting to ] 3% plus, we're going to get there if we can get our creative agencies growing more strongly. And I'm sure we'll come on to that a little bit in the Q&A. And I hope you took away from that session into the 3 things we wanted you to do. We do a lot more than just the ads. Production is a big growth opportunity. And thirdly, the AI is going to transform how we work creatively, largely in a positive way. So that's sort of the second stage. The third stage is really around building world-class powerful brand, and we're delighted to have both VML and GroupM show you what they're doing. Jon and Mel come up and talk to us about what's going on at VML and why you're excited to lead it and get the VML name back.

We are excited to talk about it. It's a good word. But Mark said, VML is a new company, you said that earlier, Mark, and we're still getting used to that being a new company because VML is certainly, as you know, born from some very established companies, VMLY&R and Wunderman Thompson, the companies that we come from. So getting used to that being new is true, but it certainly is, and we can't wait to talk about it. I'm Jon Cook, I'm the CEO of VML, and Mark showed that chart of our executive team up earlier, and I had 28 years on there, maybe feel really old. I'm really not. But at 28 years, and you get a lot of people asking you, is that's a long time to be one place. But honestly, the chance to reinvent the opportunities that WPP has given me and all of us, it's the reason I'm here, and I couldn't be more excited now in my 28th year than I've ever been to be part of things.

I'm Mel Edwards. I'm the President of VML. I came from the Wunderman Thompson world. But we are super excited to tell you a little bit about the company today. So we announced VML on October 17, and we launched VML on the 1st of January. So in 3 months, we've been a bit busy. We've definitely got a few gray hairs now between us, but we have spent that time really going to our clients and talking about the power of VML and what we can now bring. But similarly, we've also been announcing our leadership team and as well as integrating a company, we have put together a fantastic diverse leadership team, globally, regionally at a capability level and also, we've announced every CEO across every market, and we have 60 markets.

Yes, Mel mentioned October 17, that seems like a long time ago, it really wasn't that long ago. It's been a busy couple of months merging VML. And we thought we'd start with -- there's lots of reasons. The simplicity, the scale, a lot of the headlines were certainly about the scale of VML to the point where it's like, please stop with the scale when those headlines came out, those are -- we're going to talk about the power of scale, the power of simplicity and certainly the plan for growth. But where we're going to start is to give you a little insight on why VML was born, the opportunity we saw to create something special. If you look at, as we mentioned, we both merged companies these last 5 years, they've both grown, both Wunderman Thompson and VMLY&R have grown well since 2018. And one of the reasons, including those COVID years that we both created growth was we went beyond advertising with our creativity to go into advertising, customer experience, commerce, deeper into technology. It created a diverse set of capabilities that let us grow with our clients in unique ways. And so when we looked at the fact we both have that and if we could combine that, they're something powerful. We looked at CMOs, CEOs, our clients that were wanting their brand advertising to be closer to their commerce. Even if those were different organizations internally, that connectivity was something they wanted closer to their customer experience. We looked at our competition. If we looked at consultant competition, we have a lot of respect for that competition, but all certainly trying to acquire creativity by building it, hiring it, buying it to mixed success. And we look at our advertising agency competition outside of WPP and a lot of fantastic creative agencies like we are but adding -- trying to rationalize how to add technology, commerce, et cetera, to make success. We had the chance at WPP because of what we've built and how we've grown these last 5 years to do that right from the jump at scale around the world. So that's -- and what that now looks like in the new VML, we call it connected creativity and a lot going on in VML, but a very simple chart that describes what we do. And it's creative to build brand -- creative agency to build brands that combines brand experience or advertising, customer experience and commerce. And that, in a lot of our competition might be something that there's one person doing this or a small group. It might be 3 different companies for some of our clients. Our secret sauce is the ability to do that together, all as one harmoniously with the creativity. So what that might look like? We're using a lot of terms there really quickly. But brand experience is what you'd expect from an advertising agency, advertising campaigns, content, storytelling, customer experience, which is simply put the way that you bring customers and a brand closer together through experiences, whether those be digital experiences, applications, custom content, it can take a lot of forms, that's customer experience; and then commerce, which is now end-to-end, the ability to invite people to a transaction creatively all the way to the systems that power commerce, we do all 3 of those things. And it's not 3 different companies within VML, but 3 practices working together, creates a good growth on ramp for us because we can go in through any of those doors, a lot of the opportunities present themselves in those doors. We come through one door and then we can expand. We've had a good track record of doing that. Or as the future becomes continuously one, we can come in as one. Either way, it creates a good growth pattern for VML. So this is -- there's a lot happening in this chart, but a quick way to look at that. This is what happens in some of our opportunities. There may be a situation where we're doing fantastic customer experience or product work for someone, but the brand experience, the advertising doesn't make the right promise for that. We're able to then create that brand experience to bring that on par with the customer experience of the product. Or we're doing fantastic storytelling about a brand. But when you get to the product, it's a subpar experience, VML can then bring that customer experience up to par and create that expectation on equal measure. This is what VML was built for, to create fantastic stories about brands, to unite the products and the experiences you have with brands and then because of all that, to create the transactional situation to buy and spend more money with those brands. And to do that, we have to have creativity through all of it. I think may be some of our outside WPP competition that would consider creativity just on the advertising, it has to go through all of it. And so VMLY&R and Wunderman Thompson, both highly awarded creative companies, just last year alone, the #1 agency in the year in all of these shows. And then just in December, The Drum named us the Creative Agency of the Year. The same show that WPP was named Network of the Year. Creativity, world-class creativity has to power all of it.

And the second reason we formed VML was simplicity. If we -- we actually took our top 30 clients and 85% of those we shared between the 2 previous companies. And now we are showing up to those clients and every single client around the world as one brand as VML. And the reaction from our clients has been fantastic. They are super excited. They want to see the value of VML and the power that VML can bring. And we had to hold our [ hat ] behind one brand. And we stand behind these amazing advertising giants. JWT, it was founded in 1896, Wunderman in 1958. And VML is the baby, would you believe. It founded in 1992. But we thought we needed one name, and we could have smashed all those together to create a brand, but [indiscernible] as mel.edwards@wundermanthompson.com going to mel.edwards@vml.com. It changed my life. So we have gone with VML. We think it's the forward-facing brand, and we think it's the brand that can take us forward in the future with the amazing capabilities that Jon has already set out. But we have also simplified it for our people as well. So we have 30 -- over 30,000 people globally, but now they are all sitting behind this one brand with these 3 practices showing up to our clients just with this one single name VML, and that's super powerful. And we're seeing that already coming through. Third reason, power of scale. And yes, we are big, but there are also -- what also comes with power of scale is efficiencies and savings. Now this is our integration playbook, and you might look at that and go, but Mel, there's lots of latin on this slide, and you would be correct, there is. Just purely down to the fact that there's lots of confidentialities that sits behind it. But this is the playbook that we have used to integrate our business. But one of the key reasons with scale brings efficiencies and savings. One of the things that we have been doing is looking at how we drive efficiencies through regional and global synergies from a back office perspective, how we are using our nearshore and offshore hubs to send more work to make more efficiencies. And similarly, from a real estate perspective, if you think we're in 60 markets, we're now sort of consolidating from however many offices down to a more slim line version. So here, even in the U.K., we're going from 2 offices down to 1 and all of those efficiencies are going to drive GBP 50 million of savings. I'm not going to go into any more detail. Joanne is going to pick that up in the next presentation on finance, but that's what we'll be able to deliver from an efficiency perspective and a savings perspective coming together as VML.

Yes. And all this designed to create a better growth platform to kind of repeat the success we've had from growth in the years to come. So we will talk about our future growth, but there's a lot we can learn about what we've done these last 5 years that will help guide us to the future. Okay. So a lot on this chart, but this is the 4 years after each of us merged in 2018. This is a combined annual growth rate of each of the 2 companies that come together on one page. And so a couple of things that I'll point out here. And first of all, that growth rate is strong in both companies through those 4 years. Now we both -- the industry hit a lot of headwinds in the second half of 2023. It seems like a long time ago. We were not immune to that. We have a lot of tech clients, and we certainly felt that as agencies as well. But it's part of a story of the last 5 years of growth for sure. Second thing I'd point out is as we created growth, we also created simplicity and made brands that were losing relevance or losing [ team ] from a growth standpoint gain acceleration. In the red, you can see brands that both became part of these new companies that had subpar track records come together into an aggregated set of growth. And it's -- the third point I'll make is there's a lot of lessons learned from how to do this because creating the work that goes into a merger, both culturally, operationally and in an offering to do that work while creating growth has been something we're really proud of. And that's our expectation for what we'll do next with VML. So lots of reasons we created. I hope that gives you a good behind the scenes of the concept of VML. I shouldn't say concept. It's very real as we stand here. But I think simply put, the reason we're doing is to do better, simpler work for our clients. And Ford has been mentioned a lot. You heard from Andrew Frick quickly in the video, 80 years, as Mark said, of relationship with Ford. These are the kind of clients we built VML, Ford, simply a more powerful offering. And we'll talk about what VML does for Ford specifically. But before we do that, this is a large WPP client, a large relationship. And we want to show you just a schematic of how WPP works for Ford. It helps define Ford, but I think it's a good proxy for the way we work with a lot of big brands at WPP, always a global client leader or a GCL uniting the entire group of us behind one relationship. A set of agencies working together to deliver creativity and everything we've just talked about. In a lot of cases, like in Ford, VML plays a lead role, that could be different agencies in WPP. But usually, all of us are working in some sort of harmony on a large client, but always working in concert with the media part of WPP, GroupM. So that's -- that's it then, as you heard from Richard, completely supported by global production. That's how we work everything with Ford. We do as an agency. It's produced then by Hogarth and then AI-driven tool set, WPP Open that lets us -- you saw a lot of charts and demos. At the end of the day, this lets us do our jobs better and create better work. And I can tell you in that history of time that as maybe 2018, 2019, this would have been a lot messier. Because a lot of us were repeating a lot of these things at WPP in these last 5, 6 years to have that singular, simple and have great relationships between the individuals involved. I can't tell you how much easier and more powerful that makes our job. So that's the WPP landscape on Ford. From a VML standpoint, it's a good microcosm of the offering that Mel and I are describing to you. The idea of these 3 things working together. It's not just what we do, it's the expectation of Ford that these connect. So sometimes we'll start with advertising. In this case, we want to show you customer experience first because I think that it's maybe one of my favorite parts of what we do. At Ford, it's all the experiences we're creating around the world to unite dealers and consumers to take Ford owners and make them closer to their car or to take Ford prospective customers and get them closer to a buying situation. This is what customer experience looks like at Ford. [Presentation]

So VML is very much responsible for the ownership cycle, that customer cycle, CRM programs, loyalty programs, but we also help drive that transactional process for the customer with the consumer as well. So we are heavily embedded in commerce with Ford. And what I mean by that is we are creating services like the pickup and collection and delivery service from Ford. We have created and built the mobile payment platform at Ford as well as the configurator that you heard Richard talked about. But we are also transforming their supply chain as well. So we are really deeply rooted with our capabilities into one of our largest clients.

Customer experience, commerce and there is, yes, still advertising. So as part of the equation, advertising for Ford is fantastic, and it's a great opportunity to not only do great work, but to tell the stories about those products that we just showed you. We're going to show you a TV spot that we did for a product called YouMode. It's a personalized set of services that Ford owners have access to. Within YouMode, there's a product called BlueCruise. It's a self-guided driving program, a lot of technology behind it, a lot of customer experience. It's also part of the commerce. But at the end of the day, something that beautiful doesn't need a lot of words to tell you what that means at Ford. [Presentation]

And everything we do with Ford is powered and enabled through data, technology and AI through the amazing configurator we've built with millions of pieces of content. I said trillions the other day everyone's like -- it's million. But all of the personalization we can do with the work that you heard that Daniel spoke about, that personalization that can go to a customer level and engage them further is all driven through data technology and AI. And I think this is the power of VML. This is the secret sauce that we have created with being able to go to one of our largest clients at WPP and VML and be able to deliver brand experiences through to customer experiences and all the way through to a transaction and a purchase with commerce.

Yes. And you said it Mel, secret sauce. We've been spending a lot of time together these last months. And one of the conversations we had is what is our role as agency leaders in WPP. And it's a challenging job. It's a great job, and the job is to not only create relevance as an advertising agency, but to sustain relevance. And it's been choices about capability to make that sustain relevance, something we're proud of and excited about. Now we're going to do that in creating VML and at the same time as creating that offering, we're going to save a lot of money through efficiencies and we're going to create a great future for growth. We're excited about VML. Now as mentioned earlier that VML as with all the WPP agencies and every large client we connect with GroupM and our media offering, it's a fantastic relationship. Nobody better to talk about than Global CEO of GroupM, Christian Juhl.

Thanks, Mel. Thanks, Jon. Hello, everybody. My name is Christian Juhl. I'm a Global CEO at GroupM. The last time I was here, and I think I talked to you guys about the profound effect of technology on media and advertising. And I tried to explain to you how we were doing search campaigns that used to take 2 weeks in about 20 minutes. Does anybody remember that? Okay. Jon remembers it. I talked a few of you at lunch, [ you said ] you did. But nothing has been more true since that time. The technology has absolutely changed the face of the way we think about marketing and advertising and media, and you've seen so much of that today. I've been asked to sort of explain sort of what GroupM does before we even really get into the mechanics of it. So let me give you a quick 20 seconds on media. There's really 3 different components to it. There's our customers, of course, you've heard from many of those today. There's the supply side. And these are the folks that actually make all the content in the world that advertising runs adjacent to. This could be everything from TikTok to [ out-of-homes ], to newspapers, to the television spots, to the wonderful Super Bowl with my hometown, San Francisco 49ers, anybody? Figured wrong audience. And then there's actually the brands that want to connect with all these consumers through that. And what we do is play the most important role in the world for connecting those media owners with the brands and consumers so that we can shape what those experiences look like. That has never been more complex than it is today. And I want to spend just a couple of minutes talking about the industry and where that is. Once I finish about the industry, we'll talk about GroupM's place within it and how we look at that. And then in my quick conversations with many of you, I want -- I know that you guys want to hear how we are planning to grow and what that looks like specifically around the world. So first, a second on the actual marketplace right now. There's a $900 billion media marketplace out there. And when I predicted technology, I was going to have this profound effect upon it, I probably even underestimated it at that point. So when you look at what's actually happened in this, there's digitization that's happened at an incredible rate. So you hear all about everything that's happened in that space. We're now at a spot where about 50% of all the advertising revenue that's out there is digital. Of that 50% that sits within there, the vast majority of that is being bought programmatically. And in your world, that's like a high-frequency trader. So if you think about what we're doing, we have shifted the role of planners, they used to sit there with fax machines and actually putting in insertion orders, calling your local papers or your publishers to those that sit with hands on keyboards, have to understand algorithms, artificial intelligence, all the technology systems to get the exact impression into the right consumers at the right time. It's an incredibly complex job when we do that across 82 markets globally and for the likes of brands like likes of brands like Coke and Google and Ford. Now if you look at the space, you're going to see probably less opportunity as they reduce ad loads to increase competitiveness in the streaming service, which is going to mean more emphasis on ways that brands can interact as the amount of available ad time, if you think about it that way, comes down. Now you're seeing some of the people in the [indiscernible] Netflix, they talk about ad-supported models, less ads per hour. That means that things like events where culture, music, live, these types of things are going to become really important. Mark mentioned earlier, we have 19 spots in the Super Bowl this year. That's great. It's an all-time record for us, but that only speaks to the strength of live and sport and what needs to happen is people are looking to make mass connections in that space. You're looking at that free model still. So I just talked about the shrinkage of time that we have available to connect with consumers. We have to make more of that time as that comes down. I still think we have to look at the government as well in this space. We're seeing regulation come in. We're seeing a lot of potential challenges for some of the strength in the marketplace. So we have to keep our eye on that as well as outlooks of complexity. And then finally, and I think this is an important part, consolidation of ad revenue into global platforms. So this takes a look at our own forecast we put out for this year and next year, [indiscernible] by 2030, the top 2 players will account for about 47% of ad revenue. I mean that's remarkable. The earlier part when Mark was talking about how much data can any one holding company have, nobody can beat the amount of data that Google and Meta are going to have. It's just impossible. So you look at that amount of revenue that sits within there. What that means on our side is we sit between them and brands is that we have to be masters in these universes. We've got first to market with Google, first to market with meta, first to market with Amazon. Our scale as GroupM has meant that we have access to this that really nobody else in the space does, and that's really important for us to be able to make the meaningful connections between brands and platforms that our customers rely on us for. So where do we sit within that space? I want to shift and talk about GroupM specifically a bit. So GroupM does almost $64 billion in worldwide ad revenue. Our closest competitor is $45 billion. And that's important. There's a lot of different reasons that scale matters. First, our global footprint. That allows us to service in the 84 markets around the world in the hundreds and hundreds of cities that we service to be able to take campaigns and put them out locally. It's tempting to think that with the advent of all these big platforms and how globally consolidated everything is that you could run all those through hubs. And trust me, I ran a digital-only agency for a while, and used to talk about the power of hubs. The truth is, we're still 50-50 analog digital. To be able to run local newspaper, local television and to be able to create those brands in a full holistic manner, you need to be in the markets where these brands want to win. And most of the growth comes out of Asia right now where we're by far the #1 market, and we have an incredible footprint there to be able to land the brands where we need them to be. Second point, and this is also very, very important. So one is scale. But the second one is around how do you have collective intelligence. And I think about this in terms of collective intelligence being, we do $64 billion around the world. That sounds great. It's a big number. The difference between $64 billion and $40 billion, the #2 person is trillions of daily campaign data points that we get in order to understand through our systems that Stephan talked about earlier, how to predict performance and how to deliver higher overall return on ad spend than anybody else in the industry. That is the scale. That's the flywheel that we start to get into. Pricing advantage, of course, you come to GroupM, we're big. We get great pricing. That's really important. We continue to provide them on the world, leadership AI and data, you saw a bit on Choreograph. Evan is over here, my friend and the CEO of Choreograph, he's going to come up and give you a demo in a second. Talent. I mean, GroupM builds great careers. We have multiple brands. We have an incredible company. We are leading in the space. People come to Group M and they stay at GroupM. Those global giants, we talked about we're the #1 customer for all of those platforms. So we get to meet with Sundar. We get to go through and look at where the road maps are going. We have incredible influence. We talk to them. We are the leaders in talking about privacy, viewability, carbon neutrality, all the different issues that affect the media industry, we are at the table helping to drive that agenda. We have global CMO relationships with all the top brands, and we basically get included in every global review that goes out. That's what scale gets you. That's what I'm a GroupM that's why I love it and that's why our 44,000 people here. I mentioned our clients. We're really proud of them. I wouldn't be up here without them. So I just want to take a second to say thank you. These clients are the ones that trust us with all of that money. You think about the way that they actually connect with their consumers and what it takes to make sure that you get the right out, at the right time in the right place, it is no trivial responsibility that we set, I thank them for everything that they've done. And it's an incredible roster. I'd like to say, I kind of get to work on a new job every day, and that's because of this. And when you look at the variance, what we have, the types of clients that have been challenging in the industry and defining the industry for so long, it's a great job. And our agencies, we're incredibly lucky to have 3 of the top 5 agencies in the world. You've got EssenceMediaCom with almost $25 billion, you got Mindshare of $22 billion and Wavemaker sitting at $15 billion. Each one of these agencies wins numerous awards every year in different categories for being the #1 in their space. And our work is quite simply the best in the industry. I had the honor of being the President of the Media Alliance share camp. I say honor. It's kind of the responsibility and honor and job you go in about a week early and you sit in a windowless conference room, and you look at thousands of pieces of work with your -- basically other people from the industry that don't work with you or your competitors in many cases. The piece of work I'm going to show you is actually from Dove that has the benefit of being both a Mindshare client and a [indiscernible] client, but it won the Grand Prix and without Mindshare, won Agency Network of the Year, the year in '23 and [indiscernible] and one, we sat down as a media and we say, what makes great media work. We really want to be specific about media in itself. We said it's an emotional campaign, and you'll see that as I share it with you. But really, when you look at it, the use of technology, the global scale of it, the localization of it, the integration across all different media channels, we were able to put over 1 billion views of this worldwide when we did the campaign. And when you look at the ability to actually look at how we manage it over time, so to continue to sustain and build and wane and come back through all of the different channels that we used, it's a really impressive piece of work and help drive significant sales for Dove. [Presentation]

How is that to look away after seeing this for, by the way, hundreds of times at this point. I think like that last moment really gets me because you think about the kids what's happening and how the social media filters and what it can do and how it distorts our own self image. It's a powerful message although we nailed it well. We're just happy to be a partner to contribute that message around the world and help amplify it to those platforms. So that's a bit on the industry, and that's a bit on GroupM and our place within it. Let's talk a little bit about what our ambition is and how we're going to deliver that for you. So as I said, we're #1 in EMEA. We're #1 in APAC, we're #2 in the U.S., #2 in Latin America, and we need to do a little bit better on that. So we're going to come on to exactly the U.S. plan. It's about our investment priorities. So I think by executing this, we'll be able to deliver where we're already at and expand our growth rates. So one, simplification; two, industry-leading talent; three, specifically win in the U.S. because if we do that well there, the rest of the world will follow. And then four, Evan is going to come up and show you the AI and technology platform that's going to drive a lot of this for us. So Mark mentioned earlier, when I took this job about 5 years ago now, I told him that I think technology was changing the face of this industry that I think we need to simplify the overall GroupM business, and we launched a program called Synergy. And in March of 2020, for the first time in GroupM's history, I brought the top 250 people together and said, we are going to get to a spot where we are one company, one product and one culture. And technology is going to force us to make this change. You can't have multiple operating companies with multiple different operating systems, multiple different planning tools, multiple different ways to go to market generally around the world. It's simply too complex. It's too expensive. And most importantly, we won't win. Because the likes of Google and Facebook and the earlier transformation that took you through what's happening in our industry, requires us to think like a software company. It requires us to develop systems thinking processes and technology that means we train all 44,000 people to say, today is Media 1.0. In 6 months, we're going to be at Media 1.5, in 2 years, we're going to be at Media 3.0, and that's going to be powered through AI and programmatic and all the different transformations that are happening in our industry. So we started this path back in 2020. We created a different operating model. We've looked at the businesses that weren't going to perform for us and they were complicating our business and divested those. We took our investment strategy, made that a single voice on a global basis. We actually created a world-class people proposition to start recruiting engineers and technologists and programmatic specialists. We created the responsible media investment framework because what really matters is purpose in this space. And when we look at what GroupM is and our scale and our size, we wanted to actually make sure that we made this industry a better place. So you saw us talk about things like sustainability, carbon neutrality, our data ethics, responsible use of AI and taking leadership positions in that space. We created Choreograph, our technology and data company and then we really looked at how we use AI from strategy all the way through to execution. One of the earliest uses of that was our Copilot AI optimization system that we could apply against the DSPs that we created 5 years ago and have had in market since then. We started moving towards offshore and automation, and we're expanding that, but knew that, that would be a required piece. We created Nexus, which is really creating all the addressable and digital media groups into one organization. GroupM has by far the largest performance media organization in the world. That's [indiscernible] we went through the steps that we have here. We created EssenceMediacom, bringing those 2 brands together to further simplify the portfolio, and we've created a large amount of global practices, commerce being one of them, retail media being another one. So when we come into 2023 and '24 and where we're at now, we're going to further simplify the business, to continue with this plan. We're going to eliminate a lot of the mid and back office. It's been supporting multiple finance systems, multiple P&Ls. And we're going to reinvest a lot of that in the talent, data and technology we need to continue to lead in this space. I know you have a lot of questions about specifics for the simplification plan that Joanne and Mark talked about. So here's really how we lay it out for our employees. Our agencies continue to be very important for us. That's how we manage portfolios. That's how we manage conflict, as Mark talked about earlier, it's how we build category expertise. So we'll take our agencies and they are going to be focused on growing their clients' business. They will be the growth architects for their clients, say, how do we think about new products, new markets, new media types, how do I build my marketing organizations so that I'm ready to deliver for the future. Importantly, in that, they will not be in there talking about search strategies or programmatic or applications of AI or picking the technology platforms in Turkey, or any of the other countries around the world because that is a single codified process at GroupM at this point. We will go to market the same way in every country, in every market for all of our clients. And we have codified that to such an extent that we have written books and pads actually just sitting through a meeting here earlier, like people literally have the books. We actually still printing sadly, but they're saying, this is how we're going to do this. So when you want to learn marketing and advertising at GroupM, when you want to run programmatic search or social or think about the application of AI this is it. Here's 200 steps, and we've written this with Google or Meta or any of the other partners in there to say that this is not only the way we do it, but it defines the industry in the right way to run media in the business. We'll get efficiencies from all of that. So there'll be cost savings within this and Joanne will walk you through the numbers. But naturally, when we go from doing things in a myriad of ways to a single way, we can reduce all those things that we don't need to do any longer. We'll also move to a single P&L in every market around the world. So instead of looking at big global P&Ls and local market P&Ls and all the infrastructure that comes with that will report on a country-by-country basis, and we can optimize against specific countries in that sense. The second thing I talked about talent. Over 90% of our employees say they love working at GroupM. It's an important number for us. We spent a lot of time talking about talent. We spent a lot of time developing our talent. We spend a lot of money on it. And for us, that's really important that we keep that number as high as we can possibly get it. In the last 4 years, we've reduced churn by 32%. Again, really important for us. Not only do we want to attract this great talent, we want to hold on to it. We win tons of awards for DE&I for the best places to work. Our campus strategy has worked really, really well. The ability to work with all these great creative partners and technology partners means that people feel proud about working at GroupM and WPP and they want to stay. And we continue to create a global culture of innovation and creativity. Now it's not surprising, but I sit up here as the CEO of GroupM and I think Media sets the one everybody believes that we are the greater transformation company and that we have a part to play in that. In the U.S. specifically, we've done a lot of things already in this space. We've refreshed our leadership just last week, I was in New York, announced [ Shar Pergamy, ] one of our most winningest CEOs in the U.S. that came out of Wavemaker as the new North American CEO. We've looked at more client-facing expertise. We've hired a bunch of different client leaders in that space. We have stronger technology deployment, heavier focus on commerce and retail media because it's been so important in that marketplace. We've looked at taking the scale in our media position. We're #2 in that U.S. How do we take that so that we can use that for advantage against our clients. We've simplified the go-to-market narrative. We've reduced them in back office and we've actually integrated to a great degree with a lot of WPP so that we can have greater strength in that space. Now I already know in passing, that I've bumped into many of you, when like I want to talk more about the U.S. So there's going to be a Q&A for it, we can do that. But I want to address 2023. Despite we still grew at over 3% in 2023. GroupM as a whole, Joanne will talk about it did over 5% on the year. We had some losses that we shouldn't have had in 2023 and it is not a capability gap that we have in the U.S. When I walk through all those things we've been working on for years, we have the right technology story. We have the right data story. We have the right people, we have the right talent. We've simply failed to get as simple as we need to do and tell that story every time at every opportunity that we had. And we had some clients that had high turnover on their side. So a lot of the pitches that you read about. We had a new CMO come in and wanted to relook at the relationship and when we did that, we should have taken that opportunity to come in and tell the GroupM story that I'm telling you today, and that didn't happen in all cases. And that's the honest truth. So when you look at that sometimes it's just we need to be stronger about making the change going in bringing in the technology story, talking about AI, forcing the change for clients that sometimes that they themselves don't know they need to make. But it's not a capability problem. We just failed to tell the right story at the right time. With that, I'm going to turn it over to Evan Hanlon, who's going to come up our Global CEO of Choreograph, and I will come and close with you guys in a minute. Thank you.

So when I joined WPP in 2023, we were just figuring out how to run the first programmatic ad on Facebook. Today, they compete for the #1 slot on every single media plan from every single one of our clients. In that span, I've had the opportunity not only to lead technology teams, but also to be a global client leader and be on the front lines of facing down what that amount of change ultimately looks like every single day. And what it really comes down to is that our clients need a partner to help them navigate changing technology standards on a near daily basis. That's what we help to deliver at Choreograph. And the way that we do that is by focusing on connecting our clients with the world's data. That means using our own data as both a calibrator as well as a connector into the sort of vast wellsprings of data that all of these different platforms and media partners that Christian just walked you through ultimately look like. It's also a focus on a connection to activation and optimization. We are ruthless in our pursuit of connecting insights to media directly because if we can't buy against it, ultimately, it's worthless. And that connection also helps us create compound intelligence across all of our marketplace activities, which we ultimately are able to use to inform the wider WPP open ecosystem and connect not only to media, but to creative in production, as you've seen before. So the way that we are ultimately able to deliver that is across 3 key pillars within Choreograph. The first is AI. The second is data. And the third is the platform experience that's in the hands of all 44,000 of our employees around the world. Now AI for us has been something that we've been working on for quite some time. We focused first on that optimization space where algorithms had governed how we bought and how we generated new value for our clients on a day-to-day basis. Now the really sort of different piece in the sort of supercharging component of this is the brain work that you've seen coming out of WPP Open and Satalia before this. What that helps us do is take not only sort of very narrow and specific data sets around consumers. But also start to marry it against other disparate data sets that are not so easily joined instead of having to spend an enormous amount of time of structuring a database, adding new rows and columns, which can take sometimes months, we're able to use the power of the brains that we have available to us to actually smash this data together on a near real-time basis to start to put into the hands of everybody developing insights, developing media plans and ultimately buying and optimizing. Just one audience brain is able to manage not only 220 million different psycho-demographic profile that we own but start to converge and merge all of the sales data that is available to us in the United States, for example, to start to answer one single fundamental client for -- a fundamental question for all of our clients, which is how do we grow. So let's talk about the data piece for a moment. We have the largest and most connected data graph. This means that we not only own and hold our own customer database in the United States of 300 million profiles with 10,000 unique attributes as large as competitive as any in the market, but we're also able to further contextualize and enrich that with data that we generate from planning, optimization and campaigns. Further contextualizing an incredibly sort of unique and specific edge that only we have from the trillions of additional impressions that we are able to run every single year. The other important piece of it is that, that data that we own becomes a connection into the most important and deepest sources of data within platforms like Google. Just this month, we announced that we were the first agency holding company and the first of any of our clients to integrate with Google's Audience Insights API, which gives us access to more than 1.5 billion real-time signals on a daily basis to enrich and calibrate and start to buy and activate within the Google ecosystem and inform media plans beyond the walls of that platform itself. And speaking of platform, none of this works if we aren't able to get this out of a spreadsheet out of a code base and into the hands of the people who are doing the incredibly difficult creative work of identifying where our clients' problems come from and how they ultimately solve them, not only with media, but with creative and the joining of that together. And so I want to take a moment to walk you through what that experience looks like and what a day and the life of our teams are to really be able to accomplish that. So everything we do starts with our client data, right? It is their competitive edge, and it is the single thing that they own that no one else has access to. And what we're going to walk you through is the sort of real workflow of the platform for a sample technology client. In this case, what we're ultimately looking at is a database of their best customers that they've got a tremendous amount of knowledge, but some reticence about sharing with us, right? So we do this through a clean room, which lets us match this on an anonymous basis and process in near real time for ingestion first into our insights platform. Now once we've onboarded that data, we can start to dig in deep to understand what do these best customers look like. We're starting to see now what segments and enthusiasm these people have within that, what products they should ultimately be focused on selling them and looking at things like geographic distribution and predictive performance that we can accomplish with that. We also can start to contextualize and dimensionalize this with not only geographics, but lifestyles and media consumption, which is the bridge then into the sort of really sort of hard-working part of the process, which is planning. This is where we start to take things like budget like campaign flighting and start to understand how do we put this media to work and what media partners do we really need to start thinking about placing our hard working dollars against. It also helps us understand things like task, is it's about branding or performance. Should we be thinking about social or television more and starting to look at what the predictive reach curves and what the ROI ultimately looks like. Importantly, we can start to input different sort of real-world factors to give us lots of different scenarios. From there, we move into what is arguably the most important piece of what we do, which is optimization. You've seen a lot from both the creative studio and the production studio that helps us start to break down the single biggest bottleneck in media optimization, which is creative availability. You're seeing real-time assembly of lots of different creative variations in the thousands that we are then automatically determining or matching to combinations of audiences, channels and platforms and using insights generated from that to swap that out in real time. This is all informed by data from our longest running AI program, which is focused on media optimization, which for the past 7 years has gone from being able to optimize just one platform to many different platforms to now being able to think and consider lots of different AI algorithms across things like Google, Facebook, the Trade Desk and beyond, uniting a media plan into sort of one big optimizable campaign. So a lot of this is really focused on data in and what that sort of flow works coming out of it. But the learnings that we achieve by standardizing, normalizing and combining all of this performance data that we're able to collect from individual platforms is really what gives us that competitive edge when it comes to a view on the marketplace more broadly. Not only does this data allow our clients, for example, to see how their media is performing and where to make large strategic decisions about where they should be spending but it also allows us to aggregate the broader marketplace activity to understand what trends ultimately look like within the market more broadly. This is what we mean when we talk about the power of the data that we generate from the scale of our media investment, and this is what Choreograph is focused on in terms of not only powering what our media planners are able to do, but also with our creative partners across WPP do as well.

You get a sense of the transformation the GroupM has gone through when I talk about the shift in the technology-enabled services and what that looks like that's the platforms, those are the types of people that we're bringing into this company. That's the engineering group that we're building. I want to close with just 3 points for you guys. One, the scale of GroupM, #1 in Europe, #1 in APAC, #2 in the U.S., a clear plan to be #1 in every market that we are around the world. Incredible success across Europe right now, great wins across the board there, the same in APAC. We had our share of challenges in the U.S., but we also won still continued our track record of growth there. We've got a simple operating model. It's been in progress for 5 years. This is not something new. There's no big bump that's going to hit along the road for that. This is something that I told our people in March of 2020, we were going to move to, and we've been moving very systematically and strategically to not disrupt the business. We've grown every year through that time period and continue to lead [indiscernible] industry. And then finally, we have a vision for this industry. We have an obligation to lead. We have responsibility to lead, and we will continue to do so. We love advertising. We love creativity. I'm on record a ton talking about the fact that I want to make advertising earn its place in people's lives, be less annoying, less pollutive. And we can do that through the power of WPP and the company that we've built here. Now we have a break. So 10 minutes.

I think we should call it a stretch. Five minutes? We'll get back on time. So only leave the room if you have to, otherwise stand up, chat, grab something, and we'll start getting 5 minutes. [Break]

Okay. Welcome back, and good afternoon, everyone. I hope you've enjoyed the day so far. It's really been a great opportunity for us to dive a little bit deeper into some of our talent and capabilities. And really, what remains for me to do is to explain how we're going to harness all of that to deliver our financial objectives. First, I wanted to spend a little bit of time on our near-term performance. As we shared in our release this morning, we expect our full year results for 2023 to be in line with the guidance that we shared during our Q3 trading update in October. Our organic net sales grew 0.9% in 2023, and we expect a reported operating margin to be 14.8%. But that translates to 15% on a constant currency basis which is equivalent to an underlying margin improvement of 20 basis points year-on-year. We also expect our free cash flow to be in line with consensus expectations at around GBP 600 million. Now whilst our top line reflects a more challenging year than we had anticipated this time 12 months ago, we are pleased that the disciplined cost actions that we took this year enabled us to grow our margin at the same time as continuing to invest in the business. And turning to 2024. We are forecasting organic revenue less pass-through costs of 0% to 1%, with headline operating margin improving by 20 to 40 basis points. We also expect some continued upward pressure on our tax and finance costs. Now our top line guidance reflects the headwind from 2023 client losses, which will impact really our growth from Q1 onwards and also the continuing uncertain macro environment. It is our assumption that client spending in the first half of 2024 will be similar to the trends that we saw in the second half of 2023. And with regards to phasing across the year, Q1 is our toughest comp and Q3 is our easiest comp, and so we'd expect organic growth to be weighted towards the second half. Now we will provide further detail, of course, on both our 2023 performance and our 2024 outlook at our full set of results on the 22nd of February. Before turning to our plans for the next 3 to 5 years, I wanted to share some of my reflections since joining the business last year and also some of my priorities. To start, I'm really delighted to be part of this team. What's been really apparent to me since joining is just the relentless focus on the excellence with which everyone from our client leads to our creative talent to our data and tech experts really creates value for our clients. Now the team have brought some of this to life for you today, and you've heard also from some of our partners and clients. The value that we create is really undisputed and I think we have a real opportunity to turn that into even greater returns for our business and for our stakeholders. We have a powerful combination of smart, highly motivated and diverse individuals together with a culture, we're creativity and innovation really thrives. And that is going to be really critical for us as we unleash the opportunities that generative AI presents. A final reflection is just how much has been achieved culturally, operationally and in transforming high and what we do. Now we all know that transformation and change is not easy, but it is necessary. And I believe that the foundations that we have laid in the past 3 to 5 years will enable us to achieve even more in the next 3 to 5 years. As part of that, we will seek to execute more efficiently to drive better productivity and returns from our business. We are ambitious to do so, and we are confident that we can. And that brings me on to my priorities, which really will follow what I will talk to you about today. The first one is driving more profitable growth. The second is unlocking operating efficiencies, we also want to generate and focus on our cash generation and execute all of that within a disciplined capital allocation framework. I'm very excited to be part of this team and of what we are going to achieve together. So now just touching briefly on our financial journey to here. And we set out in 2018 and 2020 to accelerate our growth. We achieved that with a CAGR of 2.6%, in the 4 years since 2019. And that was really driven by an improved creativity offer and continued growth in media. That period includes a challenging 2023 during which our relatively higher exposure to the tech sector resulted in a drag on our top line performance. In the same period, we have grown our margin 40 basis points to 14.8%, but that does remain lower than our historic margin in the years prior to 2019, and it partly reflects the past underinvestment in our offer and in some of our back office, which we have focused on addressing in recent years. And finally, our cash generation has been mixed across the period. Between 2019 and 2021, we delivered a strong cash performance, benefiting from significant trade working capital inflows. In 2022, the unwinding of some of that working capital and also higher cash restructuring costs weighed on our cash generation. We expect an improved performance in 2023 and moving on to our transformation. At our CMD in 2020, we set out a plan to deliver GBP 600 million of gross savings versus our 2019 cost base. We are pleased with the progress that we have made and at the end of 2023, we had delivered around GBP 470 million of gross savings. My savings have come from 3 buckets. Firstly, our operating model, where we have delivered around GBP 150 million of savings from a simpler WPP and lower travel costs. A further GBP 236 million has been delivered from our category-led and global approach to procurement and also our campus strategy, which as well as realizing significant cost savings for us as also culturally brought our agencies together. Our final area of savings minting to approximately GBP 87 million is from our back office transformation. And that's really made up of 2 key pillars. Our enterprise IT transformation and our finance transformation, which has been centered around the consolidation of our ERPs and also our finance operating model. We've made good progress on our enterprise IT road map including our migration to the cloud, enhancing our cybersecurity and really investing in our digital workplace. Gross savings have been delivered from offshoring with approximately 25% of our IT colleagues today located in IT centers of excellence and from our cloud migration. We've also made progress on our ERP consolidation. Now given where we started and the fragmented nature of our organization, this is a complex program and it is taking longer than we had originally anticipated. We are encouraged by the business benefits that we are starting to realize from the deployment of Workday in North America. These include efficiencies from improved and more systemized staff planning and utilization. And we've also seen improved working capital management as a result of better and more timely data, integrated systems and standardized processes. We've evolved our ERP road map to reflect some of the learnings from the past few years, and we now expect the bulk of our ERP consolidation to be completed by 2026 with restructuring costs reducing accordingly. Alongside our ERP consolidation, we have continued to build out our finance shared services, and around 25% of our finance colleagues are now based in the shared service center. And just to wrap up on our journey to here, I've included a margin bridge from 2019 to 2023 expected headline margin. Now the first 3 blocks reflect the gross savings I have just shared. And some of these savings have been reinvested back into our business with investment in our talent, most notably in our creative and our capabilities talent and in rebuilding our incentive pool from 2.7% in 2019 to 3.2% of net sales in 2023. We have also invested across both our client tech including WPP OPEN, AI and Choreograph, which, of course, you've all seen today and in our enterprise IT to address some of that historic under-investment. And now moving on to our medium-term financial framework, which really built around 4 key pillars. The first is accelerating our organic growth through scale and through innovation. And alongside that, we will seek to deliver this growth more profitably from simplification and efficiencies. [Audio Gap] plans. In the 4 years to 2023, our compound annual growth rate was 2.6%. We are increasing our target growth rate across the medium term to at least 3%. We are guiding for growth from our integrated creative agencies to accelerate from 0.5% CAGR over the last 4 years. to at least 2% across the medium term. This reflects what we expect to be a more challenging year in 2024 for the reasons I've already outlined, with growth accelerating in the other years of the forecast period. And for media, which has grown at 5.3% over the last 4 years, we expect continued growth at that level or better. And finally, across our PR and our specialist agencies, we are guiding to growth of at least 4% and at least 2%, respectively, which is consistent with the historic levels we've delivered. In today's presentation, you've really seen the strength of our creative agency capabilities across brand, across customer experience, commerce and production. And how all of that translates into creating significant value for our clients. You see how the powerful combination of those capabilities are underpinned by our world-class leading creative talent and amplified by technology and AI tools all delivered through WPP open. With 3 differentiated creative agency brands, we have a simpler go-to-market proposition that offers clients skilled end-to-end solutions. Alongside this, our addressable market for both our creative and production agencies continues to grow, and there's significant headroom within our across our top 50 clients. If we look across our creative agencies, the amount will benefit from revenue synergies. Ogilvy has strong momentum from new business and AKQA's strong reputation across customer experience and innovation is more relevant than ever. In production, Hogarth strong track record of growth, will benefit further from its scaled AI-enabled offer. And all of that strongly underpins our target compound annual growth of above 2% over the medium term. And moving on to GroupM and our media proposition GroupM is a strong track record, benefiting from its global scale and is powerful and proprietary media platform. Scale is critical in media. And combining that with our industry-leading talent, data capabilities and technology augmented by AI means that we are confident GroupM can offer all of our clients the best return on their marketing investment across a fast, ever-changing and a more complex landscape. GroupM simpler structure and a unified global platform will enhance our go-to-market proposition and help drive stronger new business conversion. Recent global wins at PayPal and Alliance and our win with Nestle in Europe all contribute to delivering on our long-term ambition to lead in every major media market. We also see opportunities to accelerate growth across commerce, influencer channels and consulting. And we bring both our media and creative together. We are really excited by the opportunity to capture growth from both existing and new clients. More and more of these clients are seeking integrated solutions and scaled solutions, which is something we're already delivering globally for some of the world's largest brands. And finally, that takes me to PR. Companies are facing an increasingly complex media landscape in which managing corporate reputation across varied groups of stakeholders has become more difficult and more complex. This has increased the value that our PR agencies are offering to their clients. Burson brings together BCW and Hill+Knowlton to create a top 3 global PR company with leading positions in critical markets and across global practices, equipping it to better service clients. FGS Global, which itself was created from the consolidation of several specialist financial PR agencies will continue to build on its strong growth as it further leverages its global leadership. We are confident that our PR agencies can deliver growth approaching mid-single digits over the medium term benefiting from enhanced scale, client demand and access to the world's largest brands through WPP. And further underpinning this growth is our unrivaled geographic footprint with strong representation across the largest developing and developing markets. In the U.S., cuts and client tech spend and weaker new business performance has impacted our growth. The actions we are taking the ML and the GroupM will strengthen the position of those agencies in the U.S. not leased through greater scale and consolidated capabilities. Ogilvy has built strong momentum in the U.S. over the past 12 to 18 months with this investment in creative talent paying off with strong new business wins. If we turn to China, it's one of the largest and the most digital advertising markets in the world. And we work with both international and local clients in that market. We expect the drag and top line growth in recent years to stabilize in the near term and accelerate growth in that market over the medium term. We expect continued strong growth across the U.K. and India, and we have a very strong footprint as well in other fast-growing markets, including Brazil, which is a top 10 market for us. As well as our diversified geographic footprint, we have a strong and attractive representation across client sectors, which offer us further growth opportunities. Our largest sector, CPG has seen strong growth, benefiting from CPG clients' commitments to investing behind their brands, and we expect that to continue. We consider our strengthen and our exposure to the technology sector to be an asset for us. Over the medium term, we expect to see a rebound in spend from our tech clients, driven by their investment in AI products and services. And our third largest sector, health, will see an impact in the near term from the loss of the Pfizer creative business, but we see an opportunity to expand our presence across this sector, and we'll continue to leverage key assets, including CMI media, which is partner to the world's largest pharma and health care companies. We will also seek to take more of our fair share in sectors where we have a smaller footprint today and that includes financial services and telecoms, where we have won large new clients in the past year. And now moving on to share how we're going to deliver that growth more profitably. We believe that over the medium term, our business can and should operate within a margin range of 16% to 17%. The strategic actions we are taking to deliver structural cost savings will underpin margin expansion, and we have identified further efficiency opportunities, which we will use to continue to invest in our business and support delivery of our medium-term margin target of 16% to 17%. We expect accelerated margin progression in 2024 and 2025 with further improvements from 2026, and I will share how we plan to achieve this. Now there are 2 key areas of savings, the first is structural savings from the strategic initiatives we have announced the mergers of VMLY, Y&R and Wunderman Thompson to create VML, and a BCW and Hill+Knowlton to create Burson and of course, the simplification of GroupM. The second bucket of savings is from efficiencies across both our back office and our front office commercial delivery. Now let me dig a little bit deeper into how we will deliver the structural savings. VML and GroupM plans, as you've heard today, are already well underway and have been executed. For VML, we expect around GBP 15 million of savings delivered from realizing cost synergies across global and regional headquarters, finance and HR simplification, leveraging global production and tech hubs and other areas, including real estate. GroupM savings will come from the removal of duplication overhead across our 3 media agencies and GroupM. This will enable us to consolidate our back-office teams and markets removed duplication where it exists in the front office and unlock efficiencies from a common tech platform and product and data management. We expect the simplification of GroupM to deliver annualized net savings of around GBP 60 million. My Burson's plans are at an earlier stage, but we are confident that we can deliver cost savings from combining BCW and Hill+Knowlton's back office infrastructure in each market and also streamlining the front office at the same time as scaling and enhancing our global practices. In total, we're estimating net savings of around GBP 125 million from all of these actions with 40% to 50% of those realized in 2024. It is our intention that the majority of cash restructuring costs associated with these initiatives will be incurred in 2024, and we estimate the 2024 charge from those to be around GBP 125 million. And turning to the back office. Now the structural initiatives we are taking will reduce the cost of our back office across VML, across GroupM and BCW. But we see further opportunities for efficiencies across our finance under IT functions, in particular. These will come from continued progress against our enterprise IT road map. And we will also deliver benefits from our workforce optimization across finance and IT to ensure that we have the right people in the right place doing the right activities. And this is all supported by a continuous improvement program which is focused on process optimization, automation and further systems integration. AI tools will augment and accelerate our efforts, and we are already using AI and parts of our back office today. including automation of coding across our cybersecurity operations and adoption of tools, including Microsoft CoPilot and Power platform to really improve our productivity. In addition to finance and IT, we will deliver further savings from our category-led approach to procurement and also from our campus consolidation. We are now targeting 47 campuses by 2025 which is a lower level than our original target and really reflects our adoption to the evolving needs of the business. Overall, we are targeting at least GBP 75 million of efficiency savings from our back office over the medium term. And moving on now to our front office commercial delivery. There's an opportunity for us to execute the great work that we do even more effectively. Now this will partly be enabled by the investment we've already made. Better systems and better tools and our data and from the application of AI. With WPP open and AI, we are already benefiting from faster ideation, reduction in time spent and nonrevenue-generating tasks and significantly faster deployment times. We will also deliver efficiencies from scaling up our global delivery centers, our GDCs, as we call them, which today are home to approximately 10,000 of our employees. The GDC support delivery across CX, technology, media, commerce, content and production, and we see an opportunity to scale these further in the next 3 years, increasing the number of offshore colleagues by at least 50%. We are prioritizing moving up the value chain in our production capabilities, scaling our content capabilities and building on our already strong technology and engineering offshore talent. We will also continue to optimize our resource utilization, reducing non-billable time and benefiting from systemized management of our freelancers. I spoke earlier about some of the benefits that we are seeing from Workday and that is giving us the foundations to bring AI in the element to our resource management and our staff planning. And this is something which Satalia is working in partnership with VML to unlock. Overall, we are targeting at least GBP 150 million of efficiency savings over the medium term. And bringing all of that together, we expect our margin to grow 20 to 40 basis points in 2024. And that's benefiting from part realization of the structural cost savings, which we anticipate will be partially offset by an increased incentive costs as a percent of net sales in 2024. Now beyond 2024, we expect to realize further structural and efficiency savings and greater operating leverage as our top line grows towards our medium-term target. Some of these savings will support continued investment in our business, prioritizing our industry-leading capabilities, including AI, Choreograph and WPP OPEN. Our plans include annual cash investment of around GBP 250 million in proprietary technology to support our AI and data strategy. Taking all of this together, we are confident we can both deliver our medium-term margin target of 16% to 17% and invest in our business to accelerate our growth. And now moving on to our cash generation. The fundamentals of our business mean that we can deliver consistent and stronger cash generation. And we are introducing a target for 85% or higher headline -- our conversion of headline operating profit into operating cash flow. Using this metric will enable us to set specific targets for each of our agency businesses and to show that we have the right focus on this. We're introducing a cash element [Audio Gap] to the profit metric on which our drive improvement in that metric over time. We've included a slide in the appendix, which provides greater detail on each of these metrics. Our cross both operating and free cash flow, we expect to see an improved year-on-year performance in 2023, but there is more to go for here. Improvement in our cash generation will be supported by more profitable growth an annual CapEx normalizing to around GBP 200 million from 2025, which compares to an average of GBP 280 million between 2019 and 2023. We will, of course, continue to focus on tight working capital management and reducing our restructuring costs, both of which I'll talk more to in a moment. And partially offsetting some of these benefits for free cash flow where we expected higher cash interest and higher cash tax charges. And so digging a bit deeper into working capital. Since 2019, we have delivered in aggregate an improvement in working capital of over GBP 1 billion, all driven by trade working capital with some offset from outflows across our nontrade working capital. These fluctuations in nontrade working capital have been driven by variability in our annual incentives, our campus funding structures, increases in some prepaid contracts and taxes relating to our media billings. Our working capital management is a key focus area for us. And for 2024, we are targeting flat total working capital. And finally, our cash restructuring costs have been elevated in recent years. driven by costs associated with our transformation. In 2024, we expect restructuring costs to be around GBP 285 million, reflecting costs associated with the VML and Burson mergers and GroupM simplification. Other cash restructuring costs relating to our ERP and our IT programs as well as property-related costs are expected to reduce from around GBP 190 million in 2023 and to around GBP 160 million. And from 2025, we expect restructuring costs to reduce significantly to less than GBP 30 million in 2027. And those GBP 30 million of costs will relate to legacy leases, which we have impaired and they will reduce as these properties are either subleased or the leases. And finally, that takes us to our capital allocation framework. We will continue to adopt a consistent and a disciplined approach to our capital allocation. Our first priority is continuing to invest to drive organic growth in our business particularly in the areas that we have shared today, technology, AI and in our talent. We will also follow a progressive dividend policy, which targets a 40% payout of headline EPS. To complement our organic investment, we will invest in targeted M&A opportunities that strengthen and accelerate our capabilities in high-growth areas, and I'll come back to that in a moment. And finally, while we have excess cash, we will return it to shareholders, as we have demonstrated in recent years. We are focused on maintaining our investment-grade balance sheet and a target leverage ratio of 1.5x to 1.75x our average net debt, which excludes lease liabilities to headline EBITDA. As expected, we'll have finished 2023 slightly above the upper end of that range, but we do expect to move back within the range in 2024. And finally, on capital allocation, I just wanted to spend a little time on our approach to M&A and our track record. Our industry is dynamic, and it is constantly evolving. And we believe this creates opportunities to add value through targeted M&A. When we look back over the last 4 years, we are pleased with the impact that our M&A activity has had on our business. We have bought many great businesses that have enhanced our existing capabilities. And we've been able to fund that M&A investment from recycling a small proportion of the proceeds that we've realized from our mini disposals since 2018. Acquisitions made between 2020 and 2023 are expected to be accretive to growth on margin in 2024 and they are on track to exceed our cost of capital and add shareholder value over time. We focus our M&A on businesses that build on and accelerate our existing capabilities and therefore, our ability to grow, to retain and also to win new business. The Satalia, the obvious name to call out here as a particularly successful acquisition for us. And so to wrap up, we are very confident in our medium-term financial plan and in our ability to deliver strong and sustained shareholder value. We have a very strong foundation to accelerate growth and returns with an unrivaled global reach and scale. Today, we have the #1 media agency globally, the #1 creative agency globally, the #1 production agency globally and leading specialist PR agencies. We offer it in an attractive and a growing addressable market. We have deep client relationships across diverse and growing sectors. As we brought to life for you today, hopefully, we've been investing in our AI and our technology platform. And we've been deploying this extensively across our business. We are very excited by the opportunity this presents both in terms of growth and in terms of productivity. We have a strong financial foundation which we are confident that we can continue to strengthen. And finally, we attract and we retain world-leading talent, talent that is ambitious for the future and focused on creating value for all of our stakeholders. And so with that, we will hear from Laurent, our Chief Marketing Officer, who will be joined by a very special guest. [Presentation]

Good afternoon. I'm Laurent Ezekiel. At the end of 2021, actually, on the 8th of November at 2:00, I remember it well, WPP was appointed global network marketing partner by The Coca-Cola Company in what remains the biggest ever industry pitch, I am still recovering. And as a result, we created WPP OpenX, a bespoke, ambitious agency model that was integrated at its core and unprecedented in scale. In fact, our work spans 200 brands across 195 markets. We have over 5,000 people from the agencies that you've heard from today as part of the team. So I'm delighted to welcome to the stage, my friend, my partner, who built this with us, Manolo Arroyo. Please put your hands together for Manolo. Thanks for joining us, Manolo. We're here to talk about being ambitious for the future. You made an ambitious decision a couple of years ago, why WPP?

So thank you, Laurent and Mark for inviting me over to share our amazing journey together and why we selected WPP. A brief context, we were coming from a place where we had more than 7,000 agencies working in 212 countries around the world. There are only 189 registered in United Nations, for those of you that are curious. And we realized very quickly that the name of the game was about integration. And it was about bringing together something that the whole industry has been trying for more than 20 years but hasn't been able to do that, which was the power of connecting creativity with media, with experiences, with innovation underpinned by the power of data and tech. And it was very clearly through that capability assessment process, not a pitch, at only 170 video conferences in the middle of pandemic, that's a real number. And we very clearly understood that WPP was at a whole different level. And it was not only because of their scale, and it was not only because of their ability to integrate those complex disciplines. I would add 2 components that make a big difference for Coca-Cola to make that decision. One was the notion of open. And it's the fact that you've got to realize that ideas come and should come from anywhere. And WPP was by far the most open network to bring together not only those capabilities, but others that might be in a different place. And that's where the partnerships with open AI, NVIDIA, Microsoft, Adobe play a significant role. It was very important for us. I think ultimately in this whole world of marketing, you talk about the importance of brand perception. And it might surprise you, but after more than 30 years in the Coca-Cola system, I don't believe anymore that much. We don't believe anymore in the power of perceptions. We believe in the power of behavior. And in WPP, Mark, particularly, better than anyone else in the industry understood that we were driving a transformation driven by data and by facts and that metrics matter. And we decided to move from a perception metric to a behavioral metric driven by number of humans, number of people drinking our products, who are really drinking, not saying something and doing something different. And I think what Mark said at some point, your target, your objective, your KPI, your metric, it will be my metric. That really swing significantly that decision.

So if we pick up on the metric, which is a big part of your marketing transformation, Manolo, is to drive that metric, right? How have -- talk a little bit about the last 2 years and how we've accelerated your transformation as WPP.

The results for us are unquestionable. If you read our latest company financial statements and reports in the second and third quarter of the year, very close to the full year results soon, marketing is again the driving force, the engine of the growth for Coca-Cola. And through the partnership with WPP, their support has been instrumental to help us move that metric that we know it since we started the partnership. We were for years struggling to move the needle. We're growing through more frequency and pricing, but not necessarily increasing our consumer base around the world. It might be a coincidence, I don't believe in coincidence or luck, but '22 was a great year. We obviously don't disclose those numbers for confidentiality, but we did increase significantly our consumer base in '22, and that has increased even over and above in '23. But I think more importantly, one of the biggest challenges for a client is that notion of integration. On one side, we want -- I want in Coca-Cola the benefit of the wonderful 200 agencies and 12 different partners networks within WPP. But I don't want to deal with bringing all of that together. That's the role where Laurent and the OpenX model is showing for us that underpinned by technology and data, you can accelerate on real time, the delivery and the integration of those critical capabilities. And I think that for us is what is really showing a very different way of working. It's a peer-to-peer marketing network model, where you see a symmetrical, basically replica of how our network and the WPP network works. All of these comes to life through something we call StudioX. StudioX is in my own words, the Coca-Cola marketing factory. It used to be a factory that was not a physical factory. It was a process that was about TV-centric ads development. Today is a physical place that is set up in a way, in a synergistic manner with our own geographical distribution in the company, symmetrical. And in a co-located physical way you have there all the integrated capabilities that allow you to connect the culture on real time and bringing those capabilities that are more representative of modern marketing. Consumers today are looking for something different. And what they're looking for is not any more TV ads, as you know. It requires a whole set of capabilities around social influencers, experiences, live events, all underpinned by data and AI. And that is a reality for us with close to 2,000 people on those StudioX today working for Coca-Cola.

I just want to go back and confirm, the results are not a coincidence. There is a lot of hard work. Manolo, if I could take it to the industry a larger bit to broaden from our partnership, it's been a long -- it's been a 2-year journey. It's been a lot of work. There's been bumps along the road, of course. What would you say to companies considering a similar approach?

I think we just -- I mean, repeating the obvious one, the consumer, particularly Gen Z, young consumers are very, very different. The old marketing solutions are not relevant any longer. The name of the game is about integration. And the name of the game is about simplicity. So my question to any of the other client would be the question, I don't think it's why would you but actually, why wouldn't you, go for a model like this. I can't think of a different model. I'm convinced this is the model of the future of marketing, not only for Coca-Cola, but definitely for the rest of the CPG industry at large.

Yes. I spoke to our leadership over there and I said the same, how could you not at this scale, do this? It's interesting when you look at it like that. We spoke this morning and earlier today, Rob spoke about some of the work and the agencies have covered their work. At the end of the day, this comes together in the work that we do, that our consumers see, that drive the results that you mentioned. So I'm going to ask you to talk about your favorite work in the last year, a couple of pieces of work that you've enjoyed and we discussed it a little bit beforehand, but tell us about that, the work itself.