WPP plc (WPP) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining us at our WPP 2024 Annual General Meeting. I'm Roberto Quarta, Chairman of the company. I'm pleased to welcome shareholders, both virtually and in person here today. As ever, please do let us have your feedback about your experience. We always enjoy having that feedback. I hope this one will be enjoyable. Time is now just past 11 a.m., and I can confirm that a quorum is present, and I declare our AGM open. So in order to begin the meeting, first and foremost, I'd like to introduce my fellow Board members, all of whom are here in our offices today. So turning to our immediate right. I'm sure you will all recognize our CEO, Mark Read. Next to him is our CFO, Joanne Wilson. And to her right is Sandrine Dufour, Chair of our Audit Committee. Next to Sandrine, we have Cindy Rose. And next to Cindy is Ya-Qin Zhang; followed by Simon Dingemans at the end. To my immediate left, we have our Company Secretary, Balbir KellyBisla. And next to her is Angela Ahrendts, our Senior Independent Director. Alongside Angela, we have Jasmine Whitbread, Chair of our Compensation Committee; followed by Keith Weed, Chair of the Sustainability Committee. And next to Keith, we have Tom Ilube. Alongside Tom, we have Andrew Scott, our Chief Operating Officer. Now before we turn to the formal business of the meeting, I'd like to say a few words and then ask Mark to present an update on our company's business performance and strategy. So starting with the Board, and we continue to proactively evaluate the compensation of both the Board and the executive team, and preparing for the future remained a top priority for 2023. One of the main goals of such planning is to ensure that we have the diversity of representation that we know underpins strong performance at both -- at the Board and executive levels. Now WPP continues to exceed the recommended targets for both diversity set by the FTSE Women Leaders and Parker Review as well as the listing rules. We're very proud that in 2023, 43% of the Executive Committee members and their direct reports were women compared to the FTSE 100 average of 35%. 42% of WPP Board Directors are women. Since 2021, leadership incentive plans have been directly linked to diversity, equity and inclusion. And we remain committed to driving continued progress in this vital area. Now as we set out in the annual report and notice of AGM, a new member was appointed since our last AGM. Andrew Scott joined the Board on the 7th of September 2023. Now Andrew is responsible for operational performance and implementing the ongoing simplification of our company's portfolio. Andrew is also responsible for the company's mergers and acquisitions activity, and has played a critical role in building WPP's capabilities in technology and AI. In addition, he oversees WPP's network of country leaders who connect and strengthen the talent and resources of the company's agencies in the local markets to deliver growth for our clients. Andrew's appointment recognizes the key role that he plays in the company and the importance of continuously improving operational effectiveness. As we have set out and explained in the annual report, I have now exceeded the recommended maximum tenure of 9 years as a nonexecutive under the U.K. Corporate Governance Code. Now the Board does intend to appoint a Chair-designate to the Board in due course. And in order to ensure a smooth transition, I have agreed to remain until my successor is appointed and transitioned into the role. So on this basis, as you've seen, I'm putting myself up for reelection today. I would like to assure you that I remain committed to the company and to delivering strong leadership on behalf of all of our stakeholders throughout this additional appointment until the Nonexecutive Chair is appointed. Now I'd like to turn to the company's performance, its progress over the recent years and its plans for the future. Now after 2 years of very strong growth, 2023 was much more challenging, largely due to the impact of reduced spending in the United States from technology clients, to which WPP has much greater exposures than most of its peers. This held back our growth to [ 0.91% ] in 2023, now though we were pleased to achieve a slight increase in headline operating margin in constant currency. Now as anticipated, earlier this year, the opening months of 2024 have also been challenging, with a fall in revenue less pass-through costs in the first quarter. Now the company's performance reflected the toughest quarterly comparison of the year, with declines in the United States and China and the impact of a health care client loss in 2023, and continued lower spending from technology companies. Now we do expect to return to growth in the balance of the year, and the company has reiterated its guidance of 0% to 1% growth in 2024 and continued improvement in headline operating margins. At the Capital Markets Day earlier this year, the executive team laid out plans to address the challenges and opportunities before the company through a strategy for accelerated growth, further margin expansion and improved cash flow over the medium term. Now Mark will talk about this strategy and WPP performance in greater detail during his presentation. But as I near the end of my tenure as Chairman of WPP, I would like to reflect for a moment on the transformation the company has undergone since the change in executive leadership in 2018. In early 2018, WPP was confronted with several major strategic hurdles. Our biggest client was reevaluating their partnership with us; debt levels were at a historical high; there had been no growth since the first quarter of 2017; and in the crucial U.S. market, which is our largest, no growth since the third quarter of 2016. Now in the face of these and other pressures, the new executive team brought stability and a fresh vision to WPP, transforming its culture and revitalizing its offerings to clients. Now this is exemplified by new partnerships that we forge with major global brands, such as The Coca-Cola Company. This team has navigated a highly complex business landscape, investing in creativity, technology, talent and evolving the company to meet the rapidly changing demands of our industry. And we do not underestimate the task ahead. But however, it is important to acknowledge that today's WPP is significantly a stronger company, one with a modern integrated client proposition, leading positions in a growing market and many promises in the strategic opportunities on the horizon. Now I'd like to extend my sincere thanks to the executive team for their tireless effort to bring success to WPP and its employees, clients and shareholders. Now before I hand over to Mark, I'd like to share one final thought. During the Capital Markets Day, the leadership team presented a clear and compelling strategy for WPP's future, which has the full backing of this Board. The event also served as a showcase for the company's leading capabilities and its incredibly talented people. I was reminded that WPP is truly an exceptional organization, as we heard from the industry's foremost minds in the application of AI to marketing, the world's top media investment specialists and award-winning creative leaders and more. Now I feel very fortunate to have Chaired this company for the last 9 years, and look forward to seeing it thrive in the years ahead. So I'd like to thank my WPP colleagues, my fellow Board members, past and present, and of course, our shareholders for their tremendous support throughout my time with the company. It's been an honor to serve as your Chair. Over to Mark.

Thank you, Roberto, from me and everybody else. And let me add my welcome to those of you in the room as well as you joining us on the webcast. I'll start my comments. At this age, I'm looking back at the Capital Markets Day that Roberto mentioned, we held in January, where we laid out our strategy for the next 5 years. And then I'll give a review of our performance in 2023 and the first quarter of 2024 before Rob Reilly, our Chief Creative Officer and my creative partner, show you how the power of creative transformation is helping our clients connect with their customers and grow. Before I do that, please note you should read this important statement. Hopefully, the font is big enough. We began our CMD in January, setting out our journey to date, what we've achieved and our plan for the future. And back in 2018, we called our strategy radical evolution. That's because we both wanted to be radical in our approach, but also move at the right pace, a pace that a people- and client-centric business could absorb, so we can make the changes that we need to do without disruption. And there's really been 2 phases of this strategy to date, the first from 2018 to 2020. And we began by launching our position as the creative transformation company to set out the new ambition. We integrated analog and digital assets, both VML and Y&R to form VMLY&R, and Wunderman and J. Walter Thompson to form Wunderman Thompson. And critically, we are able to dispose successfully of our 6% stake in Kantar, which gave us the financial buffer to withstand the impact of COVID, which hit just 2 months later. The second phase of our strategy we started in 2020 during COVID. In that period, we grew our client relationships, winning the largest ever client review in our industry in our unique partnership with the Coca-Cola Company. We continue to strengthen our leadership and build a culture that brought us together, particularly during the pandemic. We invested in AI and new capabilities in influencer and marketing and commerce. And all of these investments have taken us to the third phase of our strategy today that we're calling innovating to lead because WPP has both innovation and the ambition to lead our industry at its heart. So turning to that, there are really 4 strategic imperatives frame how we deliver the strategy. The first centers on AI; the second on creativity and creative transformation; the third, our world-class brands; and the fourth, an imperative for us to execute efficiently and with discipline. We believe that AI will drive a new age of creativity, marketing and media, and be as transformative to our business and industry as the Internet was just some 30 years ago. Our industry, the media industry, may be the most disrupted of any over this time. First, by the Internet, then by the mobile revolution and now by AI. However, importantly, through this time, WPP has remained relevant to its clients, and our goal is to remain just as relevant in this new AI age. At our CMD, we looked at how WPP will achieve this and deliver results to our clients. Now first, AI is going to make us more efficient. We can reinvest that and use it to improve our margins. Secondly, we have to embed AI in our products and services as well as create new ones. We showed many of those at our CMD. Now tackling this challenge, we think that WPP has a very strong set of competitive assets. The first is the technical expertise in Satalia, our AI technology company that we acquired 2.5 years ago. Think of them as our DeepMind, if you like. They enable us to build and train sophisticated AI models, and it's a scarce talent. Secondly, usually AI capabilities, we're able to connect this technology expertise with marketing domain knowledge. We're able to train and build proprietary models for WPP and our clients. Thirdly, we have WPP Open, our intelligent marketing operating system, powered by AI, enabling us to deploy our products across different clients and disciplines. Fourthly, we have a coordinated investment plan across WPP as a simple company and a much simpler WPP. And finally, for us, partnerships are critical. While investment is important, access to partners such as Google and Microsoft is, in some ways, even more important because they allow us to leverage the billions and billions of dollars of investment these major technology companies are investing in this area. And we believe that AI will support our accelerated growth and improve our efficiency. And here are some examples of how we can do this in practice. First, it's going to allow us to augment our creativity, not to replace human beings, but enhance their work to deliver stronger ROI to our clients. Secondly, we can offer AI services, just as we did with U.S. paint giant Sherwin-Williams to develop an AI-powered commerce platform, or for the many clients who we're currently consulting with us on how to use AI and enable it in their own organizations. Third is enable us to sell new technology solutions through WPP Open, earning technology-based license fees that are powered by our AI services. It's also going to help us open up new business models, just as we did with Xaxis and Finecast in the past, to move away from an hours-based pricing model to new output and return-based pricing models. And finally, it's going to enable us to work faster, more efficiently, unlocking efficiencies in our back office in areas such as finance and HR. So that's our first objective, AI. Our second is to drive growth through the power of creative transformation. And here, we continue to see strong demand from clients for a simpler, more integrated solutions. We believe as a company we have a very well-balanced offer with the leading positions in media, creative, production, public relations as well as an unparalleled global footprint, and these strengths are shown by the continued recognition and awards won by our agencies. In a few moments, Rob Reilly, our Chief Creative Officer, will show you some examples of how we're doing this, how we're bringing creative transformation to life for our clients. Now the third element of our strategy is to build world-class brands. We're doing a lot of work now in this area. We've created a new powerhouse creative agency in VML. GroupM, the world's leading media agency, is transforming itself to grow faster and create more scale. Along with the creation of Burson, the world's second largest public relations company, this now means that 6 brands represent 90% of WPP's business, a radical shift from the company back in 2018 that Roberto mentioned, a simpler, more effective strategy. So together, these first 3 objectives contributed to the fourth, to drive stronger financial performance, both in terms of margin and cash conversion. We want to accelerate our growth to 3% plus organically. At the same time, we're committed to deliver a headline operating profit margin in the range of 16% to 17%, supported by the structural cost savings from our restructuring. And finally, we're able to improve -- aiming to improve our cash generation significantly. Together, this will allow us to maintain a strong investment-grade balance sheet. So turning to our results in 2023 in the first quarter of this year. I'd say we had a resilient performance in 2023 with like-for-like growth of 0.9% and a headline operating margin of 14.8%, up 0.2% on a constant currency basis that showed strong cost control and continued margin progression, which is important. We had strong growth outside the U.S. But with our non-U.S. business growing 3.3%, U.K. and India actually doing particularly well, and some challenges in China. However, the U.S. market did decline 2.8%, as strong growth in our CPG clients was outweighed by lower revenues from technology clients and in the retail sector. Our performance in the first quarter 2024, while not as strong as we would like, was very much in line with our expectations and budgets for the year, against the toughest quarterly comparison of the year really being driven by continued pressure from technology clients and the impact of a regrettable loss of a health care client. That said, we do see momentum improving over the rest of this year. We expect technology clients to turn from a negative in Q1 to positive over the course of the year, and to be important long-term strategic partners for us. And the impacts of budget cuts will tail off. We also have a strong new business pipeline and are very focused on converting it. In addition, our new structure is making us more agile and more competitive, and the impact of AI is starting to be seen across the business. We had a good series of client wins in Q1, particularly in media with Nestle, but also in health care, where we now have the ability to work with clients in sectors where we may not have been able to work with them before. So that all led us to reiterate our guidance for the year on the first quarter announcement. I'd finally like to cover our returns to shareholders. These amount to some GBP 4 billion over the last 5 years, reflecting a mix of share purchases and dividends. We continue to invest in our business and to maintain a strong investment-grade balance sheet, while supporting our dividend policy is around 40% of headline earnings. So for 2023, the proposed 24.4p final dividend, together with the interim dividend paid in November, gives a full year dividend of 39.4p per share, stable with last year. So to summarize, I think we have every confidence in our strategy which is working well with clients and across the business. We delivered a first quarter very much as we expected, and we expect to see momentum improving throughout the balance of this year. As a result, we reiterated our guidance for the year. Our confidence in the future is underpinned by our faith in the many talented individuals who make up the 114,000 people who work for your company around the world. I'd like to close by thanking each of them very much for their efforts and commitment and to the company. And thank you all very much for listening. So Rob, I'll hand over to our Chief Creative Officer to show the impact that creativity is having on some of our most important clients. Over to you, Rob.

Good morning.

Good to see you in a suit today.

Yes. I'm here. I guess you can tell from the black shirt that I'm the creative guy, but it's a pleasure to be here. Hopefully, you can all see me from the back. I'd like to say I have the best job in the world. I've been at WPP for 3 years. And unlike Mark and maybe some other CEOs on the Board, it's a hard job being a CEO, a job that I actually don't want because my job is to work on the product 100% of the time. What an amazing job to wake up to. Now the reason I joined WPP is because of the mission, creative transformation. We use the power of creativity to build better futures for our people, the planet, clients and communities. What an incredible thing to do. 115,000 people wake up every day with that mission. What an incredible thing to do. So I'm going to show a lot of work in the 10 minutes I have. So no better example, I think, proves out our mission than Corona. Now anybody like Corona the beer, had a Corona beer in the past? I think so, right? With a lime, right, a lime. Well, in China, one of the biggest problems is they don't have limes. So this is what our company, DAVID, partnered with AB InBev to do. [Presentation]

It's a mind-blowing idea. Usually, people can clap after that. That's a mind-blowing idea. So yes. There we go. There we go. It's one of my favorite ideas. Doing good for the world, but also doing good for business, that's what we're about. But let's talk about why creativity matters, right? Now we know it as an art word or a music word or a Hollywood word or an award show word. But to me, creativity is how the world solves really hard problems. Think about it, we're here today because someone figured out how to sell the governments of the world on a product that didn't exist. And that was a COVID vaccine, right? So think about how creativity has really helped us over the last few years. But it's also good for business. There's a little company start-up called McKinsey. I don't know if anybody's heard of McKinsey. Well, they partner with Cannes Lions, a big award show, and did a study that companies with the highest quality creativity outperform their peers in organic revenue growth and shareholder return. So again, this isn't just Rob Reilly talking about creativity. This is McKinsey saying, better creativity works. The only metric that matters to me is bold work that leads to great business results. So just like the case you saw, I don't show anything that doesn't have amazing results. And probably our best example of a company that has bet heavily on creativity is Coca-Cola. And we've had Coca-Cola for about 2 years now. We don't just do the advertising for them. We do the PR and the social and the media, and creativity is infused in everything they do. And the results are incredible. So the ideas are incredible. Everything from CRM programs to doing long-form shows on Amazon, Coca-Cola has bet fully on it, especially AI. And this is one of my favorite examples. You may have heard about this. It's a recycling campaign. Now if you would have asked me 5 years ago, would Coca-Cola ever crush their can to prove a point? Well they did for the Recycle Me campaign, and it's brilliant. So these are all Coca-Cola logo crushed, and this is here in Times Square. So what a brilliant campaign from a brilliant company and a great partner for us. But again, it doesn't matter if we do wildly, incredibly, bold work if we don't have great business results. So in 2023, Coca-Cola was 9% year-over-year growth. The only top 10 company to grow in that year. So we're very proud to do the work, but also that the results are also yielded. But we do things way beyond traditional advertising. So anybody watch the Super Bowl? I know you probably get it over here, but just like the holiday commercials in London and the U.K., like the Super Bowl is our holiday commercial time. It's the biggest thing. And it's usually a place where traditional advertising is really on display. WPP, last year, had 4 of the top 5. So that's an impressive stat. So beyond the things we're doing with like Corona Lime, we're also really good at still making things like television commercials. But this is one of my favorite. And this is Mark Read, I think, your favorite idea. Every presentation I do, can you show the FitChix? So again, these are the kinds of ideas we are doing way beyond advertising. And this is called FitChix. You'll have a smile. [Presentation]

I mean, you can clap for that, too, because that's a pretty incredible idea, and you're wondering, are there some crazy people who work at WPP in the creative department? The answer is, yes, 100% there are. So we've talked a lot about AI. Mark just talked about AI. This is a brilliant campaign done for a plant-based food company where we aged through AI, aged animals done by AKQA. So there's been a lot of talk about it. But as Mark said, we're in the business of human creativity enhanced by AI. So AI is going to put a lot of things in the world. A lot of companies are going to be able to put content into the world, but it's going to take great creative people and strategic people to be the curators of that. And we think we have the best talent in the world. And we've been doing AI, and the reality is we've been using AI for years upon years, whether it's using the AI to create Serena versus Serena for Nike, or this idea. So we were debating on who would be the George Clooney of the U.K. I guess Daniel Craig. Is that right? I would say so, Daniel Craig. Well, Shah Rukh Khan is the Daniel Craig of India. He's the biggest action movie star. The Tom Cruise, if you will, of India. And what we did was we actually, for small businesses, for Cadbury, we were able to use AI to create him doing commercials for thousands and thousands of brands for small businesses during the time of Diwali, which is all about generosity. What a genius idea. We did this 2 years ago. So it was the most awarded creatively, but also the most effective ad of 2022. So again, ideas that are widely creative but also widely successful business-wise. This is my favorite idea though. I have a prop. I have a prop. I often don't do props, but this is a prop. Anybody have a hard time reading? Anybody have a hard time reading medical packages? Anybody? I do. I can't see anything right now. I can't see this. Well, we partnered with -- our company, Grey, partnered with Haleon and Microsoft. Again, we're in an age of now this hyper collaboration where Microsoft and Haleon are combining forces with our companies to create something very simple. So while they have put braille on the packaging to say, decide, so you can figure out what the package is, it's Panadol, they've now figured out a way to take these codes. You can scan this bar code and gives you audio cues on the ingredients and the instructions to use them. It's a genius idea. So that's what AI is doing for us and doing for consumers. Listen, I don't like to talk too much about awards, but they still matter. They attract talent for us. They're very important to our clients. WARC is an aggregation of all the top of award shows, things like Cannes Lions, you may have heard of, or The One Show or the Effies. That's what WARC is. And we've been #1 in the last 2 years creatively; also #1 in media; and #1 and #2 the last 2 years in effectiveness. So globally, I think we're one of the best, if not the best creative companies in the world. But what's important is we know how to make locally relevant work. And I'm going to end with this piece. I don't know if you've seen this from the NHS. I'm learning very quickly, this is a giant -- we don't have an NHS in America, but I know how important this is to the people of London, of U.K. So this piece was done and inspired by one of our employees from VML. Her son was suffering with -- needed an organ transplant. So she approached NHS with VML, and WPP support and created this. [Presentation]

So you can see we have the best creative agencies. We partner with GroupM, the creative agency is probably the best media company and biggest media company, and we have the best production in Hogarth. Those 3 things have created this kind of work that is wildly creative, but also incredibly successful business-wise. So thank you.

Okay. Now we'll move on to the formal business of this AGM. You will all have received a copy of the notice of the meeting dated 21 March 2024, which fully explains all agenda items for today's meeting. Now as usual, I will take the notice of the meeting as read.

Now before dealing with the terms of business contained in the notice, we would like to address any questions which are relevant to the business of the meeting. For those shareholders joining us virtually, if you have not already submitted a question in advance and would like to ask a question, you may submit questions via the live webcast. [Operator Instructions] Now for those shareholders here in the room who would like to ask a question, please raise your hand so that a microphone can be brought to you. Please state your name before proceeding with your question. May I remind you that only registered shareholders or duly authorized representatives or registered proxies may ask a question. Now every effort will be made to give shareholders the opportunity to ask a question if they wish to do so. So first, we'll start with questions from those shareholders here in the room. Gentleman on the left.

[ Nick Styler ], a private shareholder. A couple of -- well, I have enjoyed the presentation and particularly the innovations that were videoed. A couple of questions. On Page 6, the report of assignment losses last year. Why were those assignments lost? And what would we learn from that -- from those losses? And the second one really sort of picks up on the innovation which has been shown, and the need to gain and attract talent, and you have this on Page 8, getting those. How you aim to keep the talent? How you aim to sort of drive innovation sensibly, because it can lead to all sorts of ideas and different cultures and things like that. And what is the churn rate of these highly talented people?

Thank you for your questions. I think Mark is best suited for it.

Yes. So look, ours is a very competitive business, and sadly, clients do review work from time to time. I think there were 2 issues we had. The first was Pfizer, which was a major client, put its business up for review. And we're not successful in retaining the business we had. And I think we've had a full and frank discussion with the client and our teams to make sure that we do a better job in other occasions, and I think have learned what we need to do in terms of talent and assembling it and working together more effectively. I think there was also a number of client losses in our U.S. media business, 2 or 3. And there, we've changed the leadership in the U.S. and the program of -- the synergy program, which is the simplification of [indiscernible] designed, again, to create a simpler structure that I think, in some ways, behind what we do. So we do -- and I personally call clients when we're not successful and try to get to the bottom of what happened and why it happened. And by the way, I also call clients when we win and try to find out what we did well. And often, I'm not surprised you're seeing Rob's presentation, it's the quality of the people and the way the people get on that need us to win assignments. I think that takes us to the second question. I think in terms of retaining people, we could always do better. I mean I never like people leaving. Although the fact that people want our people is a reflection of the quality of talent or the people that we do have. But I do think we have a -- do a good job of keeping very different types of people inside our organization. We have creative people, we have technologists, we have data scientists, we have people that are fantastic at finance and HR. So a great diversity of talent inside the company. Our turnover actually was low, as you would imagine, during COVID. It peaked at about 30% in that '22, and has come down significantly since then to just over about 20%. So people stay on average 5 years. I'd say people who are more experienced stay longer. And we're said to have quite a lot of churn in the junior levels of the company, we -- as you would expect in a business where we do recruit a lot of people coming out of universities. So look, it's a big emphasis. I'm pleased to say, Stephan, our CTO, he's been with us now, I think, 10 years. He joined us from an acquisition. And I think about a lot of the talent, Daniel, who is the leader of Satalia, who came in to the business 2.5 years ago, he and all his team are here. So it's a big area of focus for us and something that, as you would expect, we're keen to increase. Thank you.

The next question? Yes, sir.

[ Andrew Gervin ], shareholder. The U.S.A., your billing fell by -- I thought it was about 2.3%, but you've shown 2.8% in 2023. And then in the first quarter of this year, it's already down 4.1%. I mean, can you just explain what's going on to a layman in the advertising business? Are you losing to your competitors? Are clients cutting back? Are the advertising rates getting lower? Or are you just losing clients?

So I'll take that. Look, I think, the first question and your question are very closely related. I mean, the reality is that Pfizer is a global pharmaceutical company. Most of its money is spent, as you would imagine, in health care marketing in the U.S. So 80% of our business with them is in the U.S. And the media issues, the media losses we had were in the U.S. So the challenge for our U.S. business has been partly those client losses. And then partly, as Roberto said and mentioned in his script, technology clients. Now we're very fortunate. We have Google, Microsoft, Dell, Apple, Intel, Salesforce, Adobe, in -- Uber, in our clients. It's been a fantastic portfolio of clients. And from to 2018-'19 to 2022-'23, that was a source of great strength. Unfortunately, as you know, you read about Mark Zuckerberg's year of efficiency. A lot of those companies took a somewhat different approach to marketing over the course of '23 and that folded and went into 2024. So we saw our technology clients reduced their spend last year by between 8% and 9%, and that continued into this year. And again, most of those clients are based in the U.S. and do much of their marketing in the U.S. So I think that it's really a reflection of partially client losses, but partially reduction in spend from technology clients. Now our view is that those technology clients are going to be a real long run source of competitive strength. And Google is our third largest client. And if you look at WPP, we work with 3 of the world's 4 most valuable companies: Google, Microsoft and Apple in a major way. And I think that, that's something that we should be proud of and something that will be, in the long run, a source of great competitive strength for us. I mean we are their single largest marketing partner. Unfortunately, when they capture cold or when they decide to reduce their marketing spend, we're on the receiving end of that. And I think that's the heart, the challenge in the U.S. My view, I think, is they'll come back to marketing. As these new AI products launch in a competitive market, they're going to get back to talking to customers and consumers. So I think that to be a little bit patient -- and I'm an impatient person -- to be both patient and impatient to see that turnaround. But that is really the explanation behind the Q1 performance in the United States.

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