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WPP Sets Out Three-year Plan To Deliver Improved Performance - Quick Facts

Advertising giant WPP Group plc (WPP.L,WPPGY) on Tuesday announced the results of its strategic review, setting out a new three-year plan to return the business to growth.

WPP noted that its strategy reflects new vision incorporates a simpler, improved offer designed to capture the opportunities of a changing marketplace, and a streamlined structure built around the needs of clients. The strategy also includes additional investments by WPP in creativity, technology and talent to enhance WPP's proposition to clients and drive top-line growth.

WPP said it expects to deliver organic growth, defined as like-for-like revenue less pass-through costs growth, in line with its peers at a headline operating profit margin (excluding associates) of at least 15 percent by the end of 2021 as a result of the strategy.

The company noted that it will incur cash costs for restructuring of 300 million pounds over the next three years to deliver estimated annual savings of 275 million pounds by the end of 2021, about half of which will be reinvested in the business.

WPP is hosting a presentation for investors and analysts later today at its new headquarters in London. Key points of the presentation, which will also be webcast, include: opportunities in a changing industry; the company's vision, purpose and identity; and simpler, improved offer, among others.

Further, WPP said it expects to report full-year results in line with consensus expectations, with full-year like-for-like revenue less pass-through costs growth now expected to be closer to minus 0.5 percent.

The company is beginning a multi-year improvement program, and 2019 will be a year of investment in the business with the execution of cost-savings program and further actions to return the company to long-term sustainable growth. Previously announced account losses will create the anticipated headwind, particularly in the first half of the year, the company said.

WPP noted that it has made good progress on its divestment of non-core assets, raising 704 million pounds from 16 disposals to date.

Over the next three years, WPP will prioritize the dividend over share buy-backs and will balance targeted M&A with divestments. The company's board anticipates declaring a final dividend of 37.3 pence at the preliminary results to deliver a full-year dividend for the current financial year of 60 pence, which it intends to maintain.

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