Mike ConnaghanChief Executive OfficerWPP AUNZ Limited
Annual General Meeting23 May 2017
CEO Update
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1. 2016 Review
2. Strategic pillars and purpose
3. Some work
4. 2017 progress
2016 Review
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• Merger of STW Group and WPP Australia/New Zealand complete April 8 2016.
• Shareholders approved re-branding to WPP AUNZ May 25.
• Merger has future proofed our business in Australia and New Zealand:
a) Clear market leader.
b) Created business of double the scale→ $850m revenue.
c) Support and backing of No. 1 Global partner→ 5th largest WPP market.
d) Pound for pound = Best Marketing Content and Communications Group.
Bringing together the best knowledge, thinking and talent to meet our clients’ challenges with bigger, better and smarter ideas.
Harnessing the knowledge and expertise of our 5,000 people who collectively work across multiple disciplines for every major client and category in the market.
Our companies and people are able to play on a bigger stage –accessing opportunities, and realising ideas that are only possible when you’re part of something bigger.
The scale and diversity of our group creates unlimited opportunities for growth for our people, our companies and our clients – allowing them to realise their full potential.
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3. Leverage the power of WPP
Leveraging WPP’s IP, tools, expertise in data management, digital and research.
Strategic Pillars
1. Big at home
Maintaining leadership in our core businesses of media, production, research, advertising and PR.
2. Future-proof
Future-proof the group through technology, data, content, mobile and proprietary offerings.
4. Drive horizontality
Driving collaboration and horizontality across our group for the benefit of our people, our companies and our clients.
1. Big at home
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• Mature low growth – Must win market share
• Our capability and scale is unique in the Australian and New Zealand market:
• Blend best of local and global - strong local market knowledge and relationship with iconic brands, tools and global reach
• Capture group production work flowing through to strong production and shopper capabilities
• People drive growth: aligned incentives; internal mobility for employees; internal training and recruitment service to save headhunter and training fees.
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Client touchpoints – Top 10 clients by valueDemonstrating true partnership between agency and client.
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Top 10 clients by value7
Structure to mange and support growth
MediaInvestment
Management
Data Investment
Management
PR and Public Affairs
Specialist Communications
$452.7m Rev $107.4m Rev $62.4m Rev $242.4m Rev
LesterFeintuck
CEO
EduardoDowd
JohnSteedman
RoseHerceg
BenDixon
DavidFox
SvenBaker
KieranMoore
BrianVella
RobCurrie
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PaulRushton-Clarke
Elissa Good-Omozusi
CFO
Graham Adamson
RobMcLachlanSu
ppor
tEX
CO
New business wins -Blue chip clients across Australia & New Zealand
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• Significant lead in the Digital specialists space
• DT AKQA – complimentary merger
• White and Grey – collaboration and engagement
• Invest in data capability and leverage WPP data alliance.
• Consolidating of shopper assets to grow our share of burgeoning customer journey spend.
• Build proprietary tools and partner with clients in helping them transform their business model for the Digital age.
• Focus on Marketing Technology.
2. Future-Proof
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Fewer, Bigger, Better
Local + GlobalCreating CapabilityFuture Opportunity
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WPP AUNZ Analytics
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Driving Data Science Commercialisation
Collective of 25 Data Scientists based primarily at the Kent St and Bond Campuses.
Leveraging WPP AUNZ group scale to drive and deliver commercialiseddata science engagements.
Clients include Optus, Pfizer, Danone, CBA, Stockland, nib and Ladbrokes.
Rob PardiniChief Data Scientist
Turning data into insights for clients and delivering commercial outcomes for the Group.
3. Leverage the power of WPP
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• ANZ serious market for WPP – engagement from Global CEO’s outstanding.
• Iconic international brands in the stable include; Ogilvy, JWT, AKQA. Efficiencies gained through local management oversight and driving of integration as well as collaborations between local and international businesses.
• Access to a global tool box and level of investment AUNZ businesses could never achieve alone.
• Establish the Data Alliance along with access to new proprietary tools to grow our share of data dollars.
• Buchanan - Kantar global collaboration piloting Home Tester Club across global test markets.
Access to a wider pool of tools and proprietary offerings
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4. Drive horizontality
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• Leverage power of group wide resources and relationships.
• Build bespoke client teams/ reduce complexity.
• Better outcomes for clients, our people and our companies.
• New ‘Central Support’ team formed to foster connectivity, collaboration and horizontality.
• Enhanced campus strategy fosters connectivity and collaboration by locating complementary businesses.
• Geographic hub leaders to drive connectivity.
• People drive growth: aligned incentives; internal mobility for employees; internal training and recruitment service to save headhunter and training fees.
Partnership/ Collaboration/ Horizontality
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Decentralised Centralised
• Marketing communications moving fast forward.
• Leverage power of group wide resources and relationships.
• Enhance campus property strategy.
• Build bespoke client teams/ reduce complexity.
• Reward partnership.
• AUNZ = Gold standard in WPP world for horizontality.
• Better outcomes for clients, our people and our companies.
Alliance Coalition Confederation Centralisation Fusion
Enabling horizontality
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• Appointment of Group Chief Talent Officer (internal promotion).
• Creation of compulsory centralised recruitment function.
• All training and development to be offered Group wide <80% of training must be cross functional. Train with others from the Group and learn Who, What, How and for Whom they work.
• Chief Technology Officer (Eduardo Dowd ex GroupM Latam) commenced with Group beginning of 2017. IT infrastructure is a major pain point for the combined Group and the new IT strategy should unlock significant value.
• Annual awards celebrating collaboration across Group (announced at Leadership Conference, August 30)
Property Update –Campus Strategy
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Target savings $2.5m p/a• Achieved $2.6m• Pipeline + $1.95m
• Capex savings $1.4m
MELBOURNE5 SITES
SYDNEY4 SITES
BRISBANE2 SITES
AUCKLAND2 SITES
PERTH1 SITE
Enabling horizontality
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Long Term Incentive Plan (LTIP)• 100% WPP AUNZ performance.• Performance measures - EPS and Net sales. • Performance measures gated and mutually dependent = profitable growth.• 4 year Plan - two year performance period – further 2 year vesting period• WPP AUNZ shares • Small group of senior executives.
Short Term Incentive Plan (STIP)• 50% individual operating company performance.• 50% WPP AUNZ performance.• Performance measures – year on year growth in operating profit and margin
improved.• Combination of cash and shares.• Top 10% of employees.
LEADERS SHARE OWNERSHIP SCHEME • Annual grant of WPP AUNZ shares based on tenure.• 3 year ESCROW.• Total annual pool = circa $1m.
Incentives• Enabling share
ownership.• Senior leaders
Group wide.
2017 Progress
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• Trading conditions across key markets of Australia and New Zealand challenging.
• Q1 client spend restrained:• Media market under pressure.• Retail sector facing head winds.• Year to date trading in line with 2016.• New business gains at end 2016 not yet had material impact on performance.
• We remain confident our leading market position and our strategies for growth will result in WPP AUNZ achieving greater market share.
• Continue to effectively drive cost and revenue synergies from the merger. • Investment still required to capture full value.• Procurement function up and running.• Property savings via campus strategy on track.• Systems integration WIP.• Margin improvement realistic goal.
• FY17 guidance remains unchanged at mid-single digit EPS growth.
Some work
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Ogilvy + AAMI
VML + Ripcurl
Thank You.