Good morning, everyone, and welcome to Sea Containers, and welcome to WPP's 2019 Premium Results. So I'm going to give you an overview. And then, Paul take you through the numbers, introduce John Rogers, our new CFO, who is with us today. And then I'll come back into a strategy overview, and then we'll take questions.

So we have to go through the obligatory safe harbor statement, which is up. So what I thought I'd do is we start by looking at how we think about the year in the context of what WPP needs to do in a 3-year turnaround plan. I think it's important for all of us to focus on those 3 years in stages. And we really see 2019 as a sort of foundational year.

And I say, if we look back and tried objectively as we can, look at what we've done, we say that solid foundation is built on track to deliver our 2021 targets. But obviously, there's more work to do. And we've sort of split out what we've done during this year in terms of strategic goals and financial goals.

And strategically, I'd say we've made significant progress on simplifying WPP on creating fewer, stronger agency brands. We've gone from 9 -- effectively 9 creative networks to 5. We brought together VML Y&R and Wunderman Thompson.

I remind you, as said in the statement, the VML Y&R grew in second half of the year, Wunderman Thompson had much better second half than they did in the first half. So I think that those process simplification and bringing the company together worked. We've made investments in technology, in our people, in clients and new business teams.

Jackie Kenny joined us from Walmart as our Chief People Officer; Leron joined us from Publicis as our Chief Growth Officer; Lindsay, our Chief Client Officer; Stefan running Technology. We made investments at the center of the company to enable us to grow faster. We had a good performance in terms of new business wins during the year.

I wouldn't say we won anything massive in 2019. We had a good, solid new business performance. I think what's particularly important is we had good retention. And if you think about where we started in 2018, we had around $4 billion of billings, not revenue, of billings under review at the beginning of 2018.

That number at the beginning of 2019 was around $1 billion. And at the beginning of this year, as best as we can estimate, it's around half of what it was in 2019. And a lot of the commentary from the industry is on a number of pictures taking place at the beginning of this year. And I'd say that our new business pipeline is very solid.

And very little of that business under review is currently at WPP, which I think is good news. And we have had good wins. And in Instagram and Mondelez, CreativeLee AXA, eBay, Hasbro in media, Centrica, Vodafone, as you go, sort of, on an integrated basis. I think our performance with clients is good. We completed the Kantar transaction.

If I take you back 18 months, 1 of the concerns around WPP was our leverage. And we completed the Kantar transaction 1 year ahead of schedule. We've got a very good price for the business.

We have a strong partner in Bain Capital, and we leave with a 40% shareholding that, I think, enables us to get the right balance between returning cash to our shareholders and giving the shareholders the benefit of upside from the future performance of the company where we've made significant progress in turning sort of reducing the debt that we see financially.

And I think also, we've set out the new vision and purpose for the company. We formed an Executive Committee. Our campuses, such as here, helping to rebuild the culture of WPP that we're strengthening. I think strategically, we've made good solid progress.

And I'd say the same is true, financially, if I remind you, so December 2018, standing in this room, we set our guidance for the year, including Kantar, at minus 1.5% to minus 2%. And in the year, we delivered minus 1.2% on a, including Kantar basis. And the year fell, excluding Kantar, minus 2.5% in the first half, minus 0.7% in the second half.

Now when we gave the third quarter guidance, we did have, I'd say, a strong third quarter and slightly stronger third quarter than perhaps we expected, we maintained our guidance for the year.

And I think you see that the fourth quarter, it will be slightly weaker, I think, than maybe you expected, but it's broadly in line with what we expected, partially due to the tougher comparatives that we pointed out in the third quarter to the fourth quarter.

I think we were clear to people that we did expect the fourth quarter this year to be negative. But if you look at our organic growth performance, North America, we were minus at 7.7% in the first half, minus 4.4% in the second half. So we've made good progress.

And if you look at the company internationally, our business actually accelerated from plus 0.5% in the first half to plus 1.3% in the second. I think the issues that we're dealing with are getting smaller, and the business is growing faster organically. We had strong working capital performance.

So over £300 million working capital generated during the year. And we significantly reduced the leverage in the business. We started 2018, sorry, 2019 with around £4 billion of net debt. We ended the year at minus £1.5 billion.

So I think that net-net, looking at the year overall in as unbiased a way as it's possible to do as the management team in the company, that we have done a good job. We start 2020 in a much better place than we started 2019. And we'll come on to the guidance for the year later, and I'm sure you'll have questions around that.

But I think we feel that the guidance puts us on track to deliver the 2021 targets, which I think after is what this is all about. So good work, lots more to do. And having done most of Paul's presentation, I'll let him cover it again and take you through the numbers. Paul..

On a full year basis, our like-for-like revenues less pass-through costs were down 1.6%. If you were to include Kantar for the year, our revenue less pass-through costs would have been down 1.2%. In the fourth quarter, we were down 1.9% on a continued basis. And Including Kantar, we would have been down 1.6%.

On a full-year operating margin, on a continued basis, we were 14.4%, down 1.2 margin points on a like-for-like basis. It reflects the challenges faced by the specialist agencies as well as investing for future growth with increased investments in technology, HR, client and new business teams.

We did have a stronger balance sheet, and we've commenced our share buyback program. Our first completion of the sale of 90% of Kantar was in December 2019, with net cash proceeds to date of $2.8 billion out of a total of $3.1 billion. With debt to be reduced by approximately 60% of proceeds, i.e.

$2.1 billion and a share buyback of around 40% of proceeds, i.e., around $1.2 billion, of which about an quarter has been completed already so far. So turning now to the statutory income statement. This includes all the sort of statutory items.

And in terms of the difference of the continuing operations, £707 million, reported for this year compared to the £1.02 billion last year, there were differences in '18 such as pretty significant exceptional gain of around £73 million in 2018 and a significant gain on revaluation of financial instruments in 2018 that did not occur.

But putting that to 1 side, we've then shown here the discontinued operations added for Kantar, only adding £11 million to the statutory profit after tax.

When you compare that to the PAT of last year of £138 million, there is a reconciling item in the back of the numbers, which shows that the actual profit after tax for Kantar, for this year, was £189 million. But when you adjust the 3 items, which are goodwill, the gain on the sale and the tax on the disposal, those 3 net down to £11 million.

So on a reported basis, the Kantar only added £11 million to PAT. We then generated the £0.495 versus £0.843 last year. When I turn now on a headline basis, it is now on a comparable basis, just WPP alone, in 2019 with revenues of £13.2 billion, and revenue less pass-through costs of £10.8 billion compared to 2018, also on WPP alone.

So on a revenue basis, we were like-for-like flat. And on revenue less pass-through cost basis, we were down 1.6%. On EBITDA, which was benefited by the IFRS 16 adjustment, we were down 5.3% at £1,829 million.

And as I mentioned before, our operating profit margin of 14.4%, compared to 15.2% last year on a reported basis, was only down 0.8% because of the benefit we got this year of IFRS. But on a like-for-like basis, we were down 1.2%. You then flow through to the diluted EPS on WPP on a continued basis, £0.781.

You then add to that, the Kantar earnings for 2018 that we've had to remove, of 14.6%. You then had a comparison of the 927 this year compared to what we actually reported last year of £1.08. So that helps you bridge the gap. And as you know, we've declared or declared a dividend of £0.60 for 2019.

So just turning now to like-for-like revenue growth by quarter, these are the 4 quarters shown down below. We were minus 3.3% in quarter 1, we were minus 1.7% in quarter 2, making minus 2.5% for the first half of the year, on a continuing stand-alone basis. If we had included Kantar on the half year, the decline would be slightly less at minus 2%.

In quarter 3, the group grew 0.5%. And in quarter 4, we saw a decline of 1.9%. So in the second half, the decline was 0.7% on a continuing basis. Hence, on a full-year basis, we were down 1.6% on a continued basis. And if you were to include Kantar, we'd be down 1.2%. Currency did have an impact throughout the year.

And ended up being slightly positive of 1.2%, being strongly positive in the first three quarters and then swung in the fourth quarter.

If we were to run our budgets in 2020 at the end of the year exchange rates, which in dollar/pound was £1.3250, we could see up to a 3% headwind in our budgeted numbers for 2020, although there's probably quite a conservative number. On the pound dollar exchange rate.

So again, just revising again and we gave this detail out at the third quarter, we've shown you each quarter on both basis the continuing basis of WPP, the box that are circled. The half year, being down 2.5%. After nine months, we were down 1.5%. And with the final quarter for the full year, we were down 1.6%.

As Mark mentioned, in the first half, we're down 2.5%, in the second half were down 0.7%. So turning now to revenue less pass-through costs by region. And overall, we had a better second half, as I'll come to explain in each of the regions. And on a full year basis, three out of the four regions grew.

So North America, which is 30% of our business, kind of revenues less pass-through costs of just over £4 billion. And on a full-year basis, was down 5.7%. The first half being down 7.3%, the second half being down 4%. The fourth quarter was weaker in North America than quarter 3.

And whilst our global integrated agencies did have better performance in quarter 4 than quarter 3, our public relations and specialist agencies were weaker in the fourth quarter than the third quarter in the U.S.A.

In the UK, which represents 13% of the business or £1.39 billion of revenue, we were positive for the year, overall, a plus 0.3%, having started strongly in the first half with a growth of 1.2%, and in the second half, we were minus 0.5%. Again, in quarter 4, the global integrated agencies had had a very strong 9 months.

We're up almost 4% in the UK, but had a weaker fourth quarter, including some weakness coming through in GroupM, who had a strong prior year. We were supported in the UK by a very strong performance in our Specialist Public Relations business in the fourth quarter coming through.

In Western Continental Europe, which is 20% of our business, just over £2 billion of revenue less pass-through costs. Overall, the region grew at 0.7%. Having been down 0.2% in the first half, we grew at 1.5% in the second half with strong growth in the fourth quarter coming through in Germany and in Spain.

In Asia Pacific, Latin America, Africa, Middle East and Central and Eastern Europe as a region overall, which is 30%, of which, our Asia Pacific business is approximately 18% of our business.

Revenues in total of £3.2 billion grew overall by 1.4% for the year on a like-for-like basis, having grown 1.1% in the first half, and growing at 1.8% in the second half.

So overall, the group with £10.8 billion of revenue less pass-through costs, was down 1.6% on the full-year basis having been down 2.5% in the first half and down 0.7% in the second half. So turning now to revenue less pass-through costs by sector.

If you look at the global integrated agencies, which is around 75% of our business or £8.1 billion of the £10.8 billion of revenue less pass-through costs in total. On a like-for-like basis, this group is disciplined, had a like-for-like decline of 0.7%. Having been down 1.8% in the first half, we grew 0.3% in the second half in these businesses.

And GroupM continued to perform strongly. And all networks had a better second half than the first half. And in particular, VML Y&R returning to growth in the second half of the year globally. In public Relations, which now represents 8% of our business or £898 million of revenue.

Overall, we were down 1% for the year, having been down 1.5% in the first half, we were down 0.2%, sorry, 0.4% in the second half, helped by that strong specialist public relations performance in the fourth quarter.

The specialist agencies, which does include especially for the, you see GTB, which had loss the omnichannel work in the second half of last year did affect the overall results of this discipline. In total, it's 17% of the group at £1.8 billion of revenue less pass-through costs. It was down 5.6% in the full year.

Having been down 5.7% in the first half, it was down 5.5% in the second half. So turning now to a margin bridge to help you move from the actual reported margin in 2018 of 15.2%. We do get a benefit at the operating margin line, from the IFRS 16 of 0.6 margin points.

We did have a margin deficit or loss from the non Kantar acquisitions, disposals and foreign exchange impact on margin in total of minus 0.2%. So that takes us from the reported 15.2% to revise based for 2018 of 15.6%. That was a drop from there to 14.4% or 1.2%.

We did have a higher staff cost ratio, higher by 1.3%, which includes a higher severance, pension and social security costs as well as wage inflation. We did have an improvement in establishments and in the establishment ratio by 0.3 margin points. And with that investment in technology and IT, we did have a margin of 0.2% impact as a result of that.

Those 3 elements combined bring or constitute the 1.2 like-for-like margin declined from 15.6% to 14.4%. If I now turn to headline operating margin by geography. The U.S. remains our strongest margin region and generates around 40%, 42% of the group's profit at £662 million. Its margin declined from 17.5% last year to 16.4% this year.

In the UK, which is £188 million of operating profit, the margins improved in all 3 disciplines and the margins moved up from 12.9% to 13.6% this year. In Western Continental Europe, we saw margins decline from 13.3% to 12%. We saw some softness in margins in 3 markets, in Italy, in Holland and Portugal in Western Continental Europe this year.

And in Asia Pacific, Latin America, Africa, Middle East and Central Eastern Europe, again, margins declined from 14.6% to 13.8%. And we saw some softness in margins coming through in Japan, Korea and Australia. Overall, then, margins at 14.4% were down 1.2% geographically across the networks. Turning now to the disciplines.

Looking at the global integrated agencies, which is £1.2 billion of the operating profit. Margins are basically flat, moving down from 15.2% to 15.0%. Public Relations, the same story, margins broadly flat, moving from 15.8%, down to 15.7%.

And the Specialist Agencies, in which, obviously, GTB sits, the main driver of the margin change was moving down from 14.7% to 10.9%. Turning now to trade estimates of new wins and losses. Since the third quarter trading update, there's been a modest amount of new business, both won and lost.

Most recently, 2 media wins coming through for GroupM on 2 clients, Hasbro and AXA and 1 global creative win for 1 of our companies or some of our companies in Mondelez in Europe. No more than the usual rhythm of winter losses so far year-to-date. Turning now to free cash flow and cash flow conversion.

This is the 1 area of the reports where both companies' cash flows are included for the 12 months of WPP and the 11 months of Kantar in these numbers. So you can see here in terms of the operating profit number, the £1,580 million feet. You've got the continuing operations being WPP, £1.296 billion.

And the discontinued operations at an operating profit level for Kantar of £284 million. You then have the various adjustments for adding back depreciation and amortization, you then see here the total working capital improvement of £350 million , both trade and nontrade.

In fact, the trade was closer to £500 million improvement in working capital year-on-year. And also note here in the tax paid, this also includes £157 million of the gain on the disposal, we have to pay the taxes there on £157 million as part of that £536 million. The earn-outs payments this year were £130 million.

And in total on the balance sheet remaining, we only now have £254 million of earn-outs to pay on all future acquisitions on the balance sheet. So free cash inflow for the year was £1.044 billion, pretty similar to that we achieved in 2018 at £1.093 billion.

And in terms of a conversion number, based on the profits, the attributable to shareholders to both Kantar and WPP would have been 89% conversion, well within our target range of 80% to 90%. So turning now to the uses of free cash flow.

So first of all, in terms of new acquisitions, just £94 million of spend year-to-date or in 2019 on new acquisitions. And obviously, the disposals proceeds came through of £2.3 billion in total, which I will go through and itemize this.

So if we look at the net cash available for distribution of the free cash inflow of £1,044 million, less acquisitions, it would have been £950 million, but with the disposal proceeds, it's £3.2 billion. What we have spent or distributed to shareowners in 2019 was £750 million of dividend added £44 million of share buybacks in December of last year.

So in total, net cash generation £2.47 billion. When I look at the constitution of the disposal proceeds. You have the Kantar consideration received £2.3 billion, then the cash that was on our balance sheet has really gone on to their balance sheet as part of the sale program, lesser transaction costs totaling a net £1.97 billion.

We then did the sale and leaseback of our freehold property that three Columbus Circle generating around £159 million. And the sum of the 4 other disposals listed out here totals £185 million. So in total for the year, we generated about £2.3 billion of disposal proceeds, of which the vast majority was from the Kantar disposal.

In total over the last two years, where we have now substantially completed our disposal program and over 50 disposals have taken place, generating about £1.2 billion from these assets sold which had a modest contribution to profit of around £19 million to £20 million in 2018.

But including Kantar with these disposals, we've raised around £3.5 billion over the last 2 years. As Mark has mentioned, and I've mentioned already as well. On the Kantar transaction, we have now successfully executed the transaction, resulting in simplification and deleverage.

Proceeds in total will be around $3.1 billion net of tax and disposal costs. The first completion stage was the 5th of December, around 90% of the transaction has now completed, raising £2.8 billion. And subsequent completions will be this year, raising around another $300 million.

This will take our leverage to the low end of our targeted range, well ahead of our plan. Our plan was to bring the leverage to the 1.5 to 1.75 average net debt-to-EBITDA target by the end of 2021. We should achieve this by the end of 2020. And again, this measure is without lease liabilities included.

And this is resulting from using 60% of proceeds to pay down debt and 40% of the proceeds as a share buyback program. In terms of why this transaction has been somewhat difficult to report. Obviously, we've removed the earnings from the P&L in '19. We just received the cash in December. We've had a very limited impact on interest in 2019.

If I look forward to 2020 on the interest savings we should generate from the disposal proceeds at the rate we've retired bonds. That's around £37 million in total. When I then add back the accelerated bond fees we had to pay in 2019 that won't reoccur.

We should see an interest saving around £50 million of hearing in the 2020 interest line as a result of this transaction. And then with the full execution of the share buyback program it should generate between somewhere between 7% and 9% reduction in share count throughout 2020.

So when those things all take into account, that sends the full picture from an earnings perspective of the Kantar transaction. So following through on the net debt for the year, whilst we had other disposals going on, that did generate a reduction in net debt.

So on the average for the year, the £743 million took our net debt from £5 billion down to £4.2 billion, and only at the year-end, with the full proceeds coming in, you see the change in the year-on-year number from £4 billion last year to £1.5 billion this year. Interest cover remains strong at around 9.7 times.

And when I look at the year-end net debt to the EBITDA, which is not the way we normally measure it. But you can see a significant difference at this time being year-end at 0.8 times compared to last year-end, with the year-end net debt at over 2 times.

When I look at the uses of our free cash flow, the metric in terms of acquisitions is we like to spend, what we can, generate in disposals. This year we have obviously generated significant amount of disposals and few modest amount of £94 million.

The share buyback program, in total, will be £950 million from the disposal of proceeds from Kantar, of which £44 million was spent in December. In 2019. And there's strong headroom on facilities in our banking and bond group. Finally for me, just include on what happened on IFRS 16.

We adopted this during 2019, it has resulted in a gross up on our balance sheet as we anticipated of £1.7 billion of right-of-use assets. And £2.2 billion of leased liabilities because this is all primarily real estate-related for ourselves. We also mentioned a year ago that actually there is an EPS impact which will probably be neutral in 2023, 2024.

But if I turn the page, this really shows the 2 key impacts that have affected on us this year. So the margin has been benefited by 0.6 margin points, but the EPS has been impacted by £0.18, which is actually worse than what I first predicted of a decline of GPB 0.13 to £0.16 as a result of IFRS 16. So with this, I'd like to hand over to John.

I think he is best placed to take you through his CV..

Thank you, Paul. Good morning, everyone. I'm pleased to be here for my first set of results for WPP. I thought I'd just, I've been in the business now for 4 weeks. So it's still relatively early days. But I thought I'd share with you a little bit of my background, my CV the and how that's relevant, I think, for what we have going forward is in WPP.

So in reverse chronological order, before I joined WPP, I was actually the CEO of Argos and also looked after Sainsbury's General Merchandise and Clothing business. We bought the Argos business back in 2016. And actually, I led, as part of the management team, a major digital transformation of that business.

And for those of you that don't know today, it's 1 of the most digital retailers in the UK, with about 65% of sales coming online. So I do know a little bit about digital marketing. Not only that, but we also took the business through a major transformation.

So we actually integrated it with the Sainsbury's business, delivering £260 million of cost savings through doing so. And actually, we did that 10 months ahead of our 3-year plan. So again, I've got some experience in understanding how we can transform businesses, which I think will be relevant to WPP going forward.

Prior to being CEO, I was the CFO of Sainsbury's, as I call it broad remit as CFO, looking after not only the core finance functions, but I looked after our online food business, procurement, property, also responsible for Sainsbury's bank as well as our operational efficiency areas.

So quite a broad remit as CFO and then had a number of roles in the finance team prior to that. For those of you that don't know actually started my life out as a missile design engineer for British Aerospace. So it's amazing how your career takes different terms. But it's. It's a fantastic time actually to be joining WPP. It's an amazing business.

One of the reasons why I joined was really the combination of the fantastic creative talent within WPP. But also the investments that we're making in technology. And I think some of you would have come along to the technology Investor Day that we ran 3 or 4 weeks ago, I would have seen evidence of how we're taking the business forward.

And I think giving us lots of opportunity for future growth. It's also, obviously, the sector is going through huge amount of change at the moment. And WPP itself is going through a lot of change in year 1 of a 3-year transformation plan.

I think one of the things that also appeals to me was the great progress that management has made in delivering against that 3-year transformational plan.

So simplifying the business changing the culture to a more collaborative one and also significantly strengthened the balance sheet, I think, are 3 great areas that the business has made progress on over the last year. But there is clearly, I think, more to come. And I've only been in the business for 4 weeks.

So it's early days, but I think Mark and Andrew, in the past, have talked about the opportunity that we have to make the business more efficient and simpler still.

And my observations in my first 4 weeks is whether you look across finance for, and the ability to make the finance processes simpler, we indeed looking at HR in the way that we recruit to attract, retain and develop our talent or the way we buy in procurement or indeed our IT systems.

There are plenty of opportunities to make things simpler, bring things together and deliver cost savings going forward. Now, obviously, I'm not going to talk into much detail about that today. But hopefully, once I've had the chance to get my feet under the table, then we can bring those plants back to you in a little bit more detail.

But it's my job today to set out for you the guidance for the year ahead. And as we said in our statement, we do meet this guidance without reflecting any impact from the Corona virus. And the reason for that is just simply because at this stage, it's almost impossible to tell what the financial impact of that will be.

So we thought it was sensible to base our guidance, assuming no reflection of any impact. And of course, we will come back to you at our trading statement, our Q1 trading statement, we will update you in a little bit more detail. But in essence, the guidance for the year is like-for-like revenue less pass-through costs are flat.

Albeit, we do expect the performance of the business to improve throughout the year. And the headline operating margin to revenue less pass-through costs also being flat. So that's a guidance for 2020. But in so doing, we're also reiterating the guidance that we gave in relation to 2021.

So we believe we're on track to deliver our financial targets by the end of 2021. And just to remind you what those are. That's organic growth, in line with our peers. Headline operating margin of at least 15% and free cash flow conversion of 80% to 90%. So we're comfortable today to reiterate that guidance for you for those medium-term targets.

So that was relatively short and sweet for me. I look forward to getting to know all of you better over the coming weeks and months ahead. I'll now hand over to Mark to take us through the strategic update. Thank you..

All right. Thank you, John, and it's great to have you on board. So I think we'll take just a few minutes really to go through the strategy and the process the progress that we've made in the last year and how we see it really 1 year in. And I think and to start with the market overall.

I'd say that the structural changes that we talked about 15 months ago, really have developed, I'd say, pretty much as we expected, they continue. It's important to state that creativity, innovation, growth, the things that WPP do best, remain critical to our clients.

Our conversations I have with the Chief Executives and Chief market office of our clients say that, that is critical to their business. And I think you see with the results from some companies and emphasis shifting from sort of cost reduction to growth.

it so little or no doubt about it technology disruption in our business continues unabated, not only to analog media channels continue to decline, but there's continued innovation in the digital media challenge, the growth of SVOD and AVOD, so subscribing advertiser funded channels and the launch of Netflix, Disney+, PeaCock, et cetera, are changing the media landscape.

I think it's interesting, particularly in the case of Peacock, you'll see a more advertiser funded channels, and I think we would actually see a balance between advertiser funded and subscriber funded media channels. And then if you look to the retail sector, all of the growth is in e-commerce.

Direct-to-consumer brands are growing, and our clients are concerned about the growth of Amazon and Alibaba and what it means for how they can reach the consumers, both in terms of threat, but also in terms of opportunity, and all these areas are areas where we are advising our clients.

At the same time, clients in a more complicated world are looking for simplicity, how do they work more easily with WPP, speed, how can we work faster in a more agile way, cost efficiency, where do we do the work? How do we it? How can do it more cheaply? And more flexible models, do they do it with us.

Do they do it in-house? Or is it a balance where actually our people sit in their offices, which is increasing, it is to give them what they need with us as their partner. The competitive landscape continues to shift.

Technology companies, I think, are changing the world for everybody, but particularly for WPP, I'd say in good ways, more than in bad ways. And many of the companies that I will come on to our partners and consultants are entering our business or have entered our business.

I think we've been quite clear for the last 18 months, that we do see the challenge to us from consultants. But I would say that it shows the dynamism and opportunity that exists in our business and that WPP, we're well able to compete with them as they do that. And there's no doubt that privacy is rising out the agenda.

We can talk a bit about in the Q&A, if you like, the cookiepocalypse is coming and what that means. Now our response to that that we set out here December 2018 was a strategy that we called a radical evolution. And we talked about it being radical in the sense that there were no sacred cows.

And I think we've demonstrated that by the Kantar transaction by bringing VML and Y&R together, by bringing Wallmart a JWT together, so there have been those sacred cows at WPP. And it's a process of evolution. And we said at the time that we do this at the speed at which the business could absorb the changes.

And I think that we've moved probably faster than most people would have expected. So evolution is not a slow process. It's as fast as the business going to achieve, and I think that's what we've done.

We really set out five areas we want to tackle the vision and offer for the company, investing in creativity, putting data technology at the heart of WPP, simplifying what have become quite an unreal structure and really brooding for the first time a culture at WPP for the company overall.

And the vision that we set out for WPP was to be a creative transformation company. And in each of those words is important. Creativity, talks to ideas, innovation growth and what clients want and what makes WPP special.

Transformation, talked to how we help our clients move from how they used to market in the past, whether they to market in the future, but we need to be a company 1 group. The company does things the same way, not different ways.

We have 1 IT function, 1 HR function, 1 Finance function, as John said, not only does that simplify the organization, it should, in time, let us take out costs from the business.

But within that sort of new vision for WPP, we also laid out a new offer, and that offer opens new growth opportunities for the new WPP, allowing us to expand into the faster-growing areas of experience, commerce and technology.

And I think the communications business is a good business, but it's a business that WPP needs to break out of, if you like.

And I think that actually, CMOs of large and small clients need a much broader set of challenges, not only is WPP being disrupted, but the lives of our clients is being disrupted, and they need a partner that can help them not just figure out how to communicate with their customers, but how to experience, how to create experiences that they value, how to sell online and how technology is changing and powering marketing.

And I think you can see some of those growth opportunities in the more encouraging growth areas within our business. If we look at our technology clients, they grew 10% in 2019.

Our luxury goods accounts grew 15% and actually packaged goods companies that many people have been under pressure, for the CPG clients in our top 200 actually grew at 3% in 2019. So you can see some return to spending during the year. In India and Brazil are both strongly performing companies.

I think it's important to sort of contextualize the situation at WPP. The reality is that the issues in our business are primarily in the United States and primarily within the sort of Specialist Agency division. And if you look at the numbers, they reflect that.

And I think consistently during 2019 and during 2020 and 2021, we will continue to address those issues. We did have problems with client retention. We started 2018 with our largest client under review, and there were a number of, what I call, sort of one-off client losses during 2018.

As I said in my introduction, we had about $4 billion of business under review at the beginning of 2018. That number was about $1 billion in 2019. And this year, especially we can estimate, it's around half of what it was a year ago. But we did have a solid track record of wins during 2019 and reduced losses.

If you look at the wins on the left-hand side of the page, you can see this with 9 wins of $100 million or more. And we do lose, unfortunately, business in our industry.

One of the things that makes it fun, as well as challenging, are pictures and something I'd like to go to, to see how we perform and how we perform with our best and also what clients want. So it's a great thing that it's competitive.

But I think WPP is now today a much more competitive company than it was 2 years ago and will be even more competitive in 2 years' time than it is today. Now we talk a lot about creativity. And important to take some time to show you some work. And we shows really 3 pieces of work to symbolize what we're doing that we're running to.

So the first piece of work is for BT it comes from Wunderman Thompson here in London. And we chose it, I think, because not only is BT a big brand, but because it shows what we can do when we bring a traditional sort of so-called traditional creative agency together with a so-called digital agency.

And BT was a client actually of Wunderman, historically. We run the business about 3 or 4 years ago, we're helping them really more with their CMO and other areas, and we started to work with BT sport. But bringing the creative talent of J Thompson into the company, enabled us to do this type of work.

So if we could run the BT swap, please? [Audio/Video Presentation].

All right. So you can see that what you can bring together and we'll report back at the end of the year how the AI did producing in the season. Second piece of works for the Super Bowl. It's for Budweiser, was done by David, an agency in the U.S. And I think that whilst creativity is changing.

It's clearly still a role in our business as sort of big for creative idea, particularly at sort of events like the Super Bowl, which is as much a television advertising event or marketing event as is a sporting event these days. Can we run the Bedweiser spot, please? [Audio-Video presentation].

And so the last 1 I talked to you about is for Burger King, and this is a piece of work, actually, it's been 3 years in the making came out of Ingo in Sweden, which is a joint venture between Gray and Ogilvy, David, in the U.S., and actually interestingly, as a purpose agency involved in its creation as well in the idea.

So hopefully, it put you all off your breakfast, but we'll run the Burger King spot, please. [Audio-Video presentation].

All right. So he mentioned there's a lot of people talking for some media budget. And also you see across that work, one, how Creative is changing, that some media event is still important. And also how long and tortuous sometimes the Creative process could be. But I think it really is that what we do is important for our clients.

Ultimately, people succeed as they engage with other people creatively. Now, the prices is changing because of technology. And 1 thing we've been trying to do is really put technology much more at the heart of our business.

And I think we like to think of sort of three phases of technology at and I think that if you look at where we are, objectively, we made the acquisition of 24/7 Real Media in 2007. So we have been investing in technology for a long time within our company.

And I think, particularly in sort of Martech and AdTech area, we started around 10 years ago to acquire companies. Then we started in the last sort of three years to integrate them into our businesses what we need to do really now is transform WPP by making -- having a much more coordinated approach to technology and scaled global programs.

And I touched really on 2 of the things that we're doing, we've made progress on this year. The first rule is driving growth with our strategic technology partners who really sit in the area of sort of media and commerce partners like the sort of Google or Twitter or Snap. Marketing and ad tech partners and then software and cloud vendor partners.

And with each of them, we have a sort of holistic partner strategy, developing joint products and solutions, getting access on a preferential basis to their technology. We developed joint go-to-market opportunities with them. So for example, with Adobe or Salesforce.

We have a very clear plan for each of our major clients, how they can embrace and adopt their technologies and be important, we are investing on scale, global sort of training and enablement programs, much of which is done with our partners who provide a lot of the training to our people.

And I think that in a world that's being -- where, I think, 7 of the top 10 companies by market cap and our technology companies being transformed by technology. Few companies are in the position that WPP is to help our clients understand how those companies are changing the world and how they should adopt.

So partners, I think, are a critical part of our strategy. The second is really also to invest and optimize innovation across the group. And as part of being a company of the group is to have a single technology platform.

Which we're calling WPP open, so open as 1 of the company's new core values that will connect the application stage institute historically, we've generated sort of individually across the group into 1 platform. It should simplify and coordinate what we want to do and surface and stimulate organic innovations.

We're not going to centralize technology development within WPP. We're going to leave it close to the business where innovation really happens, but centrally coordinated and integrated together.

So really, the goal is to sort of accelerate our knowledge sharing and collaboration as well as sort of illuminate inefficiencies from duplicated efforts that can take place when things are not properly coordinated. So the other element of a simple WPP is our organizational structure. We talked a bit about bringing the agencies together.

And I think that integration is critical to eliminate sort of the digital signal eliminate those silos within the company. We also made a lot of progress on rationalizing the structure of the group and reducing any sport.

I think that we have a simpler organization now focused around our clients around our companies and around our countries with people responsible for each one of those areas. And then the last thing I want to touch on really is culture. And one of the questions that we had to ask ourselves is why does WPP exist, and provide that answer to our people.

And I think we set out a purpose for WPP, really to use the power of creativity, to build a better future for our people, for our clients and for our communities.

For our people, we want to attract, retain the best people in a culture that we define as being open, opened collaboration, optimistic, optimistic about the future and extraordinary in terms of the work that we do. It's also important for our clients.

And we want WPP to be the destination for clients and to book purpose, increasingly and correctly at the heart of the Gendarmerie won't double Fed destination for clients want to put purpose at the heart of their marketing and really deliver better work against that objective. I also want that were to help in our communities.

I mean, as a company, we're responsible in some way that the media or creative for 1 in 5, 1 in 6 of the world's creative messages. And I think our commercial buses, I think it's really motivating to the people inside the company to see how we can use that power to make the world a better place and put a worst place.

And we talked in the statement about some of the work that we've been doing. We ban single-use plastic within all of our WPP's offices opens up a number of conversations that we have with our clients around the world about how they can do the same thing.

As you know, this is increasingly on the minds of not just our people and our clients and but also our investors. And we set out here some of the recognition that we've had, both in terms of inclusivity and diversity. And in the environment and in social goals for WPP overall.

We're very pleased to be ranked by Tortoise at number 9 in their Responsibility, 100 Index, which looks overall at the activities that we're doing. So that's the strategy and the process. How would I or how would we evaluate the progress on the key metrics? I think that we've made a lot of progress on simplifying WPP.

We've met all the targets we laid out 13 months ago for closures, disposals and mergers. And the company today feels a lot simpler, easier to manage and easier for our trying to navigate than it did 13 months ago. We've made progress in returning the company to growth.

And I think that setting out guidance for 2020 of flat revenues and margins puts us on the path to deliver what we need to deliver in 2021, and we had a stronger performance, as I said, in the second half of the year that we did in the first half.

In terms of margin, I think we are reinvesting for growth, and we did reset the margin target to 15% for the long run. We have some work to do in that area. We've made, if we're candid somewhat slower progress on shared services. But with John joining, I think that, that will accelerate.

And in the long run, will put us in a really good place from a finance and cost perspective. And lastly, I'd give us 3 ticks in terms of leverage, we have a really excellent progress, I think, particularly important the current time to get our leverage to lower end of the target, really a year ahead of plan.

So that's sort of how we're doing strategically. Now quickly to touch on our priorities for 2020 before we go to the Q&A. I think we really see 5 priorities for the year.

Continue to invest in client and new business teams for growth are important to me; returning WPP to growth is the most important thing; We can get the company growing, all else will follow, and while the year is flat overall, we have said we expect the business performance to improve during the course of the year.

We need to continue to work to bring new creative talent into the organization and lead our work with stronger ideas for our clients. We have to continue to strengthen the collaboration and build the culture within WPP.

In a technology investment, and we had an Investor Day here a month ago that I think a number of you came to, and I think you can see the power of what we can do from a technology perspective.

And I think industrializing WPP open and really putting technology more at the heart of what we do will open up new growth opportunities for our clients and sort of enable us to break out of the sort of the communications market or break out further from that into new areas.

And then, and this is a longer-term than just 2020, but I think we need to really to get started in a very firm way in 2020 to tackle sort of duplication and inefficiency in much of the back office and shared services in the company, and I know John is keen to do that. So in closing, I think we've done a lot, but there's a lot still to do.

The core team is in place. And I'd say that we're optimistic about the future. We're motivated about the opportunity for WPP and ready to get on with it. So thank you for listening. And now is the time, we'll take your questions. Right. Before Investors Day, here's the first question? Adrien..

It's Adrien from Bank of America. So I've got a few questions, please. Start off with your 2020 guidance, I think you're calling for an improvement throughout the year. So second half being better than the first half.

Why would that be the case given that the comparatives are quite significantly easier in the first half than the second half?.

Well, yes, I think it's the case because that's what -- when we look at the businesses and look at what the business are saying, that's what our budget call for. I think comparators are only 1 of the things that matter. And 2019 was impacted by a number of client losses.

One, the forward impact rolls over a little bit into 2020, not very much but a little bit in the first quarter. So I think overall, that's what -- when we look at the businesses and how the revenues fall through the year, what they say..

Second question. There was an interview of Brian Whipple from Accenture into the FTE, two days ago, doesn't want to enter traditional media buying, but he says is quite keen to go into Programmatic advertising.

Can you remind us maybe what your exposure to programmatic advertising is at the group level or may be at the GroupM level? How much did it grow at for you in 2018 2019?.

So I think the first thing to say is that our media businesses are fantastic businesses. All of the evidence to date suggests that clients want to buy media on an integrated and not disintegrated business. And actually, if you look at the creative business, there's been a lot of digital, creative agencies and traditional creative agencies.

The same is not true on the media side of the business. I mean, I challenge you to name very manly digital-only media businesses of any size. I mean, there are none, none within, let's say, 5% the size of GroupM.

So I don't think that clients, yet, I would say, never, I don't think clients yet want to buy media on a digital-only basis, and then we see that media -- their media integrated.

I think the second thing to say is that if you look at GroupM, $50 billion of media around, let's say, $20 million of that is digital, and the bulk of which is search and social and sort of the display bit will be probably about four, of which half would be perhaps half would be programmatic.

I think in a world without cookies, programmatic becomes a little bit more difficult than a world with cookies. And so you don't have to think about what you do in that area.

And I think that actually, in some respects, the shifts that are taking place in media give incremental value to scale to relationships with premium publishers to the ability to take data and integrate it into those media channels. And I think that it's not quite so straightforward.

The other observation I make is that GroupM, with Christian Juhl, joining as CEO, who ran Essence, and Essence, I mind you, buy Google's media for Google. I think Christian has set out in his strategy for GroupM. And it's very clearly positioned sort of collective intelligence at the heart of GroupM's strength.

I think the benefit of our media business is not just scale in terms of buying power, it's scale in terms of data and insights into the performance of media across different channels. And I don't think those are easily replicated either by in-house media capability or, to be honest, people going into it on a sort of single outsourced only basis.

GroupM is not immediate outsourcer. They run a media business that buys media on behalf of clients. It's a very different thing from for taking individual client only media approach. So I'm not in any way complacent. Accenture is an excellent company, with very strong technology capability.

But I do think that our media business has a number of advantages. And not least of which is that it buys media across all of the channels, not just the so-called digital ones..

One last financial action maybe for John and Paul.

What would be the sensitivity of your 2020 operating margin to organic sales growth, i.e., if we start pricing in maybe slightly weaker organic sales growth then flat, would you be able to hold the margin? Is there any flex in the P&L?.

Well, it's really about anticipating the trends in revenue. I mean, our business is not that complicated once you understand where the revenue is going.

And so the worst scenario is if you get, a very late in the year, dramatic reduction in revenues, and you've really had your cost build up for the first 9 months, I mean, the one beauty of what's going on right now is we, everyone is very nervous about what will happen. And so actions will be taken pretty early.

I think if you can see even where we've had difficult territories before, we've actually been pretty good at maintaining our margin across the board. So I think it's more about the surprise element. And we've always said we have strong margin countries across the world.

There's no regions where it is money, there's actually no countries where there is money. So it's all relative to how we perform and the speed of action. That's really the key to this in my view..

Alright, go ahead, Patrick..

Patrick Wellington Morgan Stanley. You've reiterated your guidance for 2021. But you have had 60 basis points benefit from IFRS 16 in that time. You probably had a bit offset from Kantar. In fact, it's not really a reiteration on the same basis.

Is that right?.

Well, I think we had half to 0.6% of a margin point on IFRS 16 and 0.3% on Kantar. And Kantar had a little bit,had a slightly higher margin in the rest of WPP. So we could have made it 15.2%. I think we felt that 15% was a good approximation of 15.2%. I don't think we feel like we're changing it..

And the second one is, what gives you what are the levers, if you like, for an organic revenue growth upturn in 2021? We can see that, obviously, the GTV effect drops out a bit in 2020. But if I look at the wins on Page 36, there's nothing in the top 10 from VML Y&R, and there's one from Wunderman Thompson.

So what gives you confidence in the acceleration in '21?.

Yes, I think,look. There's 2 ways to think about it. One is the wins that you've outlined are what we're able to either reported in the press or that we're allowed to say. And there are other wins, many wins that we're not allowed to talk about.

Increasingly, as you get out of the sort of traditional advertising, things aren't as well talked about which is why a number of commentated that the wins that we reported in the press, don't always translate into net sales growth. I think that's one thing. And there are some things in the pipeline that hopefully should be quite positive for WPP.

I think the other way to look at it is, if you look at our performance, we have a sales decline in the U.S. and we had growth outside the U.S. and if we could get, if in 2019, the U.S. were flat and not where it was, we would have had an incremental 2.4 percentage points of growth. We'll be growing at 0.8% for that.

So we have issues that we're aware of that we need to fix. And if you look internationally, we were plus 0.5% in the first half, plus 1.3% in the second half. So I think we just take, we look at that. There's things that are going better. There's things that we need to fix that we are fixing.

And net-net, that gives us the momentum going into 2020 and 2021 to get back to where we need to get to in 2021. And then you've got to remember that '20, 2019, we were impacted by a large number of losses from 2018. So I think that that would be the way I think about what we need to get, what we need to get done..

And just quickly, I know obviously you don't want to talk about coronavirus, but you normally give us a geographic sort of run-through of your territories. China is your fourth largest market. I think it was doing quite well in the fourth quarter because you said in the technology Investor Day that China had grown for the year.

So can you give us some parameters of the potential?.

Well, China was 5.1% of our net sales. It's a very seasonal market. So the second half of the year or it starts off very slow, and gets bigger as the year goes on. And as you know, February is a Chinese New Year. So you can do sort of the mathematics, if you like, on that.

And I think, really, at this time, given that we haven't seen February's numbers, we felt it was premature to try to quantify things.

And particularly, the current environment is going beyond China, I think it's hard to exact to say we're not hiding anything in saying that, we're just telling you in a straightforward way as we like to do normally, how we see things. There's no, there's sort of no mystery behind it, if you know what I mean.

I mean, over the last month, I have been extremely impressed by the work that our people have been doing in China, with helping a number of our clients, manage their own situations, communicate with their people, with their clients, with regulators, with government, all of the activities that they've been doing, they've done quite a lot of that from home.

And they're starting to come back to work in China itself. And depending on what happens, we'll see how the rest of the year balances in China, how quickly things sort themselves out there and what the government would do to the economy. So I think the reason we were not specific was just because I think at the moment, it's really just unknowable.

It's more unknowable today than probably it was Friday, if we had this meeting Friday of last week, we may give you a different answer than we give you today. So there's nothing, there's no, there's nothing mysterious behind what we're saying. I think we just want to be straightforward to say that we'll quantify it as soon as we can.

That, in our view, is with the first quarter trading update. If it's something that we can say earlier, obviously, we will.

I don't think, John, you like to add to that? No?.

Nothing to add..

Yes, let me go to Julien..

Julien Roch with Barclays. Coming back on media, you already gave a bit of an insight. And I know you have limited disclosure on divisional basis. But what can you tell us about media performance in 2019? I think GroupM at the best performance ever. You said that Xaxis grew in line with the first high 17%.

IPG said it was the best-performing assets, well above the 3% organic or probably 5% plus. So what can you tell us? Did you do the same? How strong was media in 2019, is my first question..

Yes, I think the media business performed as well, maybe slightly better than 2018. And I'd say, had a slightly a slightly better year in the U.S. than before. So I think it's pretty much consistent with the performance.

So I think we've always said, contrary to the expectations in some parts that the media business is being disintermediated, it remains a strong business for us on a global basis, both in terms of sort of performance and client retention and quality of management and leadership..

Second question is, do think you Wunderman Thompson will grow in 2020?.

So we're not going to make projections on a company-by-company basis. I think that it was a significantly -- it's a significantly bigger business than VML Y&R and significantly more complex. And really 2019, the team there have done a lot of heavy lifting. It is they've merged around 90 offices around the world, co-located people.

Most of that actually call it 90% percent of that is now completed. I would say that the issues there are primarily, again, in the U.S. and not in the rest of the world. And if we look at the performance, it continues to improve during the year. And at the right time, we'll tell you when it does return to growth..

Next question is, what are the bottom three assets that caused Q4 to be worse than Q3? I know it's twist and turn, but who are the three biggest coverage?.

Well, look, I think we talk about Q4 now, and my colleagues can elaborate. When we gave you when we released our numbers for Q3, we didn't change our guidance for the year. And I think we were explicit that we expected Q4 to be to be negative. And really, the pattern is partly driven by the -- something by the comparisons.

But also, by the way that the business ran during the year, I think if you look at it by region, and -- by region, there were some sort of more weakness in Asia and some more weakness in the UK, potentially that was economic.

But UK was a little bit softer in Q4 than the rest of the year? And Paul, what would you add to that?.

Yes, I think that we went through it sort of region by region, and it was different businesses in different regions. And partly, it was their performance versus prior year comparatives.

So GroupM, which I sort of singled out for having a weaker fourth quarter than Q3 in the UK, had a very strong year-to-date and an exceptionally tough quarter 4 to compete against. So that, really to me, explains why in the UK, we were softer.

In the U.S., as I mentioned, the global integrated agencies actually were better in Q4 than Q3, but our specialists and other agencies had a more challenging time. Likewise, as Mark said, in Asia, we had some softness in some of our bigger markets in the fourth quarter. Much of it wasn't anticipated, to be quite frank with you.

And so it's -- there's no one or two single issues, that said, my god, this is a tremendous miss. We didn't anticipate. This is very much in line with what our businesses were telling us they would deliver. And really, they actually kept to what they said they would do..

I mean, we may have hoped that they have done better, but I think that pretty much as we expected. Now in terms of the budgets, we sat down with the companies before Christmas. And we sat down with them and reviewed the numbers again about 2 to 3 weeks ago.

And the guidance is based on pretty detailed reviews company-by-company and market-by-market over the last month..

And last one, if you succeed admirably in tackling duplication and inefficiency, which is our last priority, what is kind of the impact on margin? Can we see 100 basis points grow as high as Publicis, which on their accounting model, claims it's 200 basis points? And then how much of that will you let go back through the P&L? Are we stuck at 15% forever? Or can we go back to the margin we used to, which were '17?.

I think that in the short term, the priority is growth. I think when we laid out the plan, you or 1 of your colleagues or colleagues asked the same question. I think when we get to 15%, we'll see whether we can go further.

But in our view, at this time, 15% is the number that we can get to that enables us to invest in things we need to invest in and have, have the, and deliver the revenue growth that we need to. I mean, you know the competitive margins, some are lower than WPP. So we're lower than WPP's today, not just lower than 15% and some are higher.

And I think there are some structural reasons why they're higher. And I think that, that's something that we should emulate and get to, and I think we can get to that. Then we'll tell you whether they'll be hardly 15% by the time we see that. But I think for now, 15% is the number that we're aiming for and the savings and structural savings.

They're not quick. So I don't want to promise something that we can't deliver in a realistic timetable. Let me go to Lisa and then Richard and then Tom..

My first question is on your margin guide. So clearly, for this year, you're going to flat margin, but then you expect at least 60 basis points of margin improvement for 2021. So I'm just wondering if you could give us more color in terms of the moving parts there.

How much of those due by operational leverage as opposed to savings and maybe timing of your investments?.

Paul?.

I think we have done the heavy lifting in a number of areas on bringing the businesses together, which can be slight distracting from operational performance. But that really is now behind us. And so I think this year, it is about the focus on the revenue growth. We don't, when we grow revenues, we get good conversion.

I think this,'19 has been a struggle because we've had a number of businesses, they're quite significant reductions in revenue, and we've had to keep pace with that decline, while still aiming to keep margins broadly the same. The vast majority of our business is now vertical well set for growth and that operating leverage will come through.

You then add to that. I said the initiatives on collaboration through the co-locations, through the rollout of the programs that we are doing, we are running as a financial tool, an ERP system for the U.S.A. It's a trial by one of our major networks as soon as it's been adopted by that network.

It's been adopted by the rest of our group in the U.S.A., we're looking at the shared financial service center onshore in the U.S.A. right now to develop it at the same time as rolling out the system. We've got various shared service hubs up and running now in India. We're just coming live this year on China. We've been successful in Spain.

We're going great guns to Australia with a new management team. And that's a big turnaround there aiming for.

So when you look at the individual components, you can see the seeds of the work that we've done and the efficiencies at the moment haven't been fully materialized, partly because the operating companies haven't let go at some of those functions themselves.

As these become stronger in their own right, they will take on more of the duties at operational, let's say, running of the businesses and lead the businesses themselves and just be focused on the commercial and business end.

So the moment there's a hesitancy for the businesses to fully let go of their finance functions even as a shared service center.

As they mature and become more professionalized, and it's much, much easier when you're in the same building with all your other staff in the same place to walk up and down the floor to get the information you need, we will then find the savings that come through, and just in a really practical nature. We're just moving into a building Hong Kong.

We've got 16 units going in there. They've all got their own IT lines going out to third-party providers for data and communications. We're going to have 1 big pipe into that building that will be about 3/4 of the cost of the previous 16 lines. We've got shared facilities, et cetera, et cetera. And that will have a shared financial team.

So these are the savings and the operating leverage elements of the building that will generate the growth with a little bit of revenue behind us. Growth, it will come through..

And my second question is on, I mean, you talked a lot about your partnership with the tech companies, and you're pretty well placed there, et cetera. But I'm just curious why the U.S.

agencies continue to perform better, especially in the U.S.? And what would cause that performance to ever reverse?.

So why will, what the ....

U.S. agencies just continue to do better, especially in the U.S..

I mean, why we caused that?.

I think in many ways, WPP's challenges are more in the sort of traditional part of the business frankly, than they are in the new part of the business. I think that's something that's important to understand. We said from the beginning that the problems were in the creative agencies in the U.S. And I think that remains the case.

2019, because of the specific losses we had in 2018, it was particularly challenging in the U.S. and that will stop. Those losses will cycle out at the end of this year into the first quarter of 2020, which will lead to a step-up in improvement in the U.S.

I think together with the other actions we're taking, we'll get the business back to, we'll get the business back to growth. I think there's no one single thing that we can do. And I think we told you in 2018, I think that 9 of our top 10 business units in the U.S. were declining. So I think it is it is a big business for us.

I think the return to growth of our packaged goods clients is beneficial. And I think it gives us sort of a better backdrop overall to those companies. But it isn't anyone doing it. It's about leadership, about structure, about creative talent, about investing in new business. And those are all things that people are working on.

And I think we see some of that benefit coming through. I think we'll continue to see that in 2020, and in our budgets in 2020 are for a better performance in the U.S. in 2020 than 2019. I'm not going to give you a sort of specific date for when the -- everything crosses the x-axis, if you would like. But we do expect continued improvement..

And you alluded earlier about the cookie change.

Could you be more specific about the impact, I guess, on the overall advertising ecosystem, and more specific on WPP?.

I think as far as cookie is concerned, I think first thing is important to understand the background. There's increasing concerns from consumers and regulators about data and about data leverage.

And a feeling that a third-party cookies were way for people to hover up data, if you like, across the Internet in a way that wasn't compliant with what people expected. And I think it's right that we're controlling this, and consumers need to consent to what's going on with their data.

And I think what's happened with cookies is symptomatic of a larger trend within society, the people to have greater control over their data and how that's being used. And this is just one example of it. Secondly, we have to understand what's happening. So Google announced that they'll stop supporting third-party cookies inside Chrome.

That's a position that's already even taken by Safari. And if you look at prices in programmatic auctions on Safari, they're lower than they are on Chrome, already, because there's less data, there's less value in those impressions. So I think programmatic media will be negatively impacted by this change.

And that will make life harder for intermediaries, ad networks, affiliate networks, particularly people that rely on conversion tracking and cost per attribution, or cost per click pricing.

Now at the same time, Google has said that they're going to build functionality into the browser that will allow the basic premises of what we need in terms of ad tracking so.

Ad tracking, frequency capping, much of what we need to run a media campaign will be part of the browser, whether that will be an industry standard, a Google standard, we don't know yet. Probably, I think it's most likely to be a Google standard.

Though, we'd like it to be an industry standard, and we're working closely with Google and what these standards will be. So I think in terms of the impact for the industry, clearly, I think it's going to be better for those companies that have logged-in users. So that's Google, Facebook, premium publishers, people with mobile applications.

It will, to some extent, reduce the value of data generally in the ecosystems. It's harder to execute and make life tougher for intermediaries and people that don't have third party relationships. And I think the data owners, particularly those that rely on kind of cookies to value that data. I think it's going to make life sort of tougher.

But what will make that even tougher is sort of the general trend towards regulation of how data we use it. And if for WPP overall, I gave you the figures for what we have in programmatic. Programmatic per se that's heavily cookie dependent is a relatively small part of our business.

And I think for Axis, I think we shared with you the work that we did at the Investor Day on co-pilot, it's a co-pilot, sort of an AI-based system that doesn't use cookies, but use context to track what's going on in media and the context of media.

To some extent, it's sort of turning digital media more back-end to analog media and making the old fashioned skills of context and creative more important. So I think that the work we've done in Zaxus. We have a business inside it can put live panel. They use the surveys to collect data on and context to consumer usage and conversion.

I think that becomes increasingly important. And then we also have in Fine Cast a connected television business and connected television online, he doesn't use cookies and Fine cast is growing strongly in the UK and around the world. And I think actually, as television overall becomes sort of more IP enabled, there's an opportunity there for us.

So I think net-net, I don't think the cookiepocalypse has a major impact on WPP. I think we're pretty well prepared for what will happen. And overall, for clients, I think that we need to focus on sort of attribution, context, creative. I just make one last point.

I think for those clients that are thinking of in housing their media operations, it makes like more complicated, right, because they're all suddenly going to have to figure out how to do this without cookies and lots of sort of the simple forms of ad tech that in-house operations have been using, they're not going to work anymore.

So, again, I think it demonstrates the value of working with a media partner with the scale and capability to invest in the technology and the publisher relationships that we need to deliver results. So apologies for the slightly long answer. But hopefully, it helps. Yes, Matthew and then Tom, and then Richard. We haven't gotten you, Richard..

Just 2 questions from me, please. The first is on the specialist agencies. As you noted, most of the decline came from those agencies, about £1.8 billion.

Can you just give us a little bit of a breakdown of what actually is in the specialist agencies? What sort of companies are in there and how they're performing within that £1.8 billion? And then the second question is on might sound like a strange question, but now the balance sheet is more in shape, what sort of acquisitions, what scale of acquisitions and what type of acquisitions should we be expecting?.

When I tackle the acquisition question, while Paul gives you some context on specialist, from an acquisition perspective, I think we're very much, we don't need to make WPP bigger, if you like. So we don't need a fourth public relations business in Guatemala where we might have 3 already. I think we're focused on differentiating the company.

And what will most differentiate us are, I'd say, primarily technology-related acquisitions that sort of enhance our development skills and understanding of partners.

I think there may be some things we could do creatively, do it enhance what we can do in an interesting way, but in the primary focus will be on sort of the faster-growing parts of our business. Particularly in the technology area, there are a number of small things that we're looking at at the moment that we can talk to about the right time.

Paul?.

So let me go through the component parts. I haven't got something in front of me that I particularly want to look at.

But the elements of the specialist agency is that, better well-known as AKQA is part of the Specialist Agency group, which obviously is a global network in its own right, Geometry, sort of our direct and digital marketing company, is also a part of that group, again, with a worldwide presence.

GTB, the Ford agency, is part of that group, again, with presence principally in the U.S.A., but also, in Europe and Asia as well, lesser in Latin America.

The Brand Consultancies businesses are also nested within there as are some specialists, sort of in-country agencies, 1 in particular that's quite sizable at Camarco in Germany, which, actually this year, is now being merged into VML Y&R. So that's the sort of the group of agencies that are in there.

They've all have their different challenges in different marketplaces, to be quite frank with you. And finally, so the health and wellness business internationally is in that group of companies. And their performances have been either very strong or a little bit mixed.

And that applies to both the revenue line, sometimes the revenue line can be challenging and the profit line is very good or the revenue line is good and the profit line is a little bit disappointing. But that is the mix of businesses in that Specialty Agency group. As I said, the main, it is, GTB is very U.S. weighted.

It's had the most impact in the U.S.A. That's what's really affected the margins overall for the group..

Yes, Tom..

Tom from Citi. I had a couple of questions.

Firstly, I'm obviously encouraging to see FMCG begin to stabilize within your larger clients? I know you're going to be very reluctant to blame your clients for the growth profile, but it does feel like exposure by client segment is still a big factor explaining that differential in growth, in particular, the U.S. agencies.

Is there anything you can do about that other than just sit and wait? There is a scope to win more accounts in areas like health care, which we're clearly doing very well for some of your U.S..

Yes. Look, I think the health care area is an area, I'd say, sort of largely self-inflicted damage. Bringing our health care businesses together in the U.S. did not improve that performance. That's substantially weakened their performance. And we have not done as well as we should do in health care in 2018 and 2019.

And I think can't explain quite a lot of the variance in our performance versus some of our peers. And that's something that we've addressed in part by premiums agencies back into their constituent where they some extent where they came from. And that's starting to have an impact. But again, it will take time.

So I think that's the primary sector in health care, I'd say, in automotive because of one client, in particular, where sectorally, we've had challenges. It's in finance we're underweight. And that's a growth opportunity for us in the future.

But I think, really investing more and fixing our healthcare business is something that's on, very much on our agenda..

Second question is on the coronavirus effect. I know you haven't seen the numbers. So it's impossible to comment. But just in terms of how you're thinking about it internally, conversations with big advertisers.

Do you think this will be a V-shaped factor or is there danger will be L-shaped?.

Yes. Look, I think we just can't answer that. I just, we just can't answer that question, unfortunately. I mean, your estimate is as good as mine into what happens. I think we have to think about what happens to the economy overall.

WPP, no doubt, is impacted by developments in the global economy and our ability to control our cost, which I think has been in the past, relatively good in that environment. As Paul mentioned, if we can get ahead of what's happening, we can move relatively quickly.

And we do have quite high staff turnover, which naturally takes some cost out of the business on a month-by-month basis. That helps us, that helps us manage it. But I think that we, we'll see how we have to see how it develops..

And final question, maybe for Paul and/or John.

The buyback, the current £300 million plus program January to March, can we just expect another 1 to be sort of roll forward when that expires?.

Yes..

Right.

Richard?.

I think Tom and Matthew stole some of my questions. Anyway. But ....

I'm sorry..

Just to get back to the Specialist Agencies side. I mean, if we look through 2020, I presume that we've still got a headwind in GTB rolling out first quarter.

Are there any other things that within the specialist agencies, we should really think about, because I would have thought that AKQA is growing positively, Geometry being repositioned the health care businesses have been sort of broken up and put back in.

So is it really just GTB headwinds in the first quarter? And then the next 3 quarters, specialist agencies get back to flattish growth and with the trajectory to grow beyond that.

Is that how we think about it?.

I mean, I wouldn't think about it quite that literally because these things take more time. And Beth Ann started as CEO of Geometry, I think, in April of 2019, so take -- it will take her some time to to work. Now they did actually win, I think, 12 of their 15 pitches in the U.S. in the back half of last year.

So she's done a really fantastic job of from a new business performance basis, but she did inherit quite a complicated, quite a complicated situation as well. The company was sort of a merger of two businesses. They've made a number of acquisitions. And there's just been a lot of moving parts for her to get head around.

So -- but I think that that we expect or hope should sort itself out during the year. We then had Superunion, which is another previous combination and has this challenge -- that has had a better 2019 and goes into 2020 in a better place.

So I think in general, during the course of the year, and that's why when you -- when someone says, is it a sort of second half weighted year, we prefer to say the business performance is improving during the year than thinking about sort of headwinds or tailwinds as things sort themselves out and people get to grips with the management challenges that they have..

But reading between that, so GIA continues where we had left off in the second half, which was slightly positive.

And then specialist agencies start to turn around in second half year, and that's how we get a better performance in the second half?.

In the May..

Right. The second question I had was just looking at the specialist agencies. I mean, it looks that there was like a £80 million, £90 million drop-through negative impact on revenues, but there was the same impact on operating profit..

Yes..

So why do we not get any benefit when you were talking earlier about, I think, 1 of the earlier questions about do you wouldn't have that leverage.

So what was the issue in Specialist Agencies about operating leverage in '19 and why won't that repeat?.

It will. One of the challenges at an agency with 1 client is that it's harder to reduce the cost in that agency when there's a revenue decline, if that answers part of the question..

So that £100 million drop-through from GTB went straight through the bottom?.

No, Not it's in entirety, obviously, and there are mix issues with some things doing best with some things worse. But Comarco lost a significant client and the forward loss picks us the way the agency is structured makes it harder to make adjustments that he would do at an agency that has a larger number of clients..

And just lastly, on healthcare. I mean, healthcare has been an issue this year, it's been repositioned, put back into the original agencies. I mean, if you look at the healthcare, as you mentioned, big outperformance by IPG and Omnicom, big drive of their outperformance.

How do you think about WPP's healthcare assets going forward? And there is obviously a big comp we've got to get through in the first quarter.

So do we see health back to growth in '20 or is this a '21, '22 story? And what were the major differences as well between the assets?.

Yes, I think that, yes, I don't know, there are major sort of strategic differences between the assets. But clearly, I think that bringing of the businesses together letter sort of number of senior executives leaving the company that were not replaced over the last 2 years.

And we need to bring, and we have bought, new leadship into those businesses as part of the realignment, that takes some time to take some time to bed down. So I think the answer to your question is know, we know where we're going in terms of looking for new talent. And that's something in our agenda to bring into the business..

So another tough year this year, up '21 ....

No, we're not seeing another tough year this year. I think I wouldn't see it as a source of growth in this year. But I see things sort of stabilizing this year. I mean, if you think about the example of VML Y&R, 1 of the things that we did with protect Sudler & Hennessey and bring it that into VML Y&R health.

So 1 of the things that John Cook and his team have had to address is bringing Sudler in 2019. They did have a really tough first half in 2019. Things are less tough in overall. Within that context, the business is growing. The same, to a lesser degree, and the same is true to a less degree, Wunderman Thompson that took GHG.

So I wouldn't see it as a source of growth. I wouldn't see it as a major negative source. I think I'd see it as a source of stability in 2020. And I think overall, we are seeing 2020 as a year of stability, notwithstanding the broader economic environment.

Anymore?.

Just the last question. And [indiscernible], BNP Paribas. We've seen in 2018 and back again in 2019, North America not performing so well.

I would like just if you could give some more color around what is being done, what is going to be done moving forward to bring that to or is that flat?.

In North America?.

North America..

So I think that if I take it in order of what we need to do, sorry, I said in 2018, 9 of our 10 businesses were declining in North America for the year overall. So we brought new leadership into those businesses.

So Mel Edwards is now running Wunderman Thompson, Shane Atchison came back to run the business in North America and Jon Cook is now running VML Y&R. Within, over there have been some changes in North America, and we're looking for a new CEO for North America. And Gray, might we use some step much more back into the business in North America.

And in GroupM, similarly there have been management change. So we're interesting sort of the leadership issues inside the business. We've been recruiting new creative talent inside the company. So Taras Wayner joined us from RGA to be the Creative Director at Wunderman Thompson. And that's a pattern that we repeated across the business.

Then there's the sort of the structural change we've made in 2 of our key agencies where we've had problems. And then the repositioning of the health care businesses. Geometry, they also had a tough year, and they have new leadership. As we talked about, GTB in the Ford business, accounts for a significant proportion of the underperformance in the U.S.

in 2019, and that will start to roll away after the first quarter of 2020. So I think we're doing all the steps that we need to take as quickly as we can both to fix the issues and then to capture the opportunities. And I agree with people that asked about health care. That is an opportunity for us.

And I think against what has until now made a good economic environment in the U.S. and we can take the steps that we need to take. Okay? Any more questions? No? So in closing, I'll just say a few things. First, thank Paul.

Can we give him a round of applause? Certainly, I'd like to thank Paul for his contribution to the company over many years, and welcome John to the team. I didn't actually know you're a rocket scientist, John. So clearly, everything will be fixed from now on.

And just sort of reiterate why we're optimistic about the future for WPP and the turnaround, and we're 1 year and we're 2 years to go and steps we need to take you. We are, I'd say, a modern, a hope, you see a modern marketing company in a growth industry and something that clients need to succeed.

We have a fantastic business, particularly in media, which is a scale business, a business where scale magnitude is important. We have unrivaled geographically. Sometimes geographic reach can feel like a weakness but for people or investors looking for broad geographic reach, 1/3 of our business is in the U.S., 2/3 of our business is outside the U.S.

I think that does position us well on a long-term basis for growth. And also growth with clients that also need to grow their businesses around the world. We are closely aligned to the world's leading tech companies who are changing the world. I think no one knows there's companies better or better able to advise our clients what's happening than WPP.

And I hope you've seen from the team, a new strategy that's driving both, sort of, strategic and cultural change within WPP. And I think, particularly, with the Kantar transaction done, well done Andrew and his team. And the disposals that we've made, we are a well-capitalized and a cash-generative company.

So we're not complacent about what we need to do. There's no, there's a lot to do. But I think we've done a lot in a year, have a lot more to do, and we're getting on with it. So thank you all for your questions, and we'll be here for more. Thanks..