Td Bank Deposit Slip Reorder

WPP 2012 Preliminary Results.

* Billings of over 44.4 billion

* Revenues up 3.5% at almost 10.4 billion

*
Operating margin

 at historical high of 14.8%, up 0.5 margin points

* Headline profit before interest and tax 1.5 billion, up over 7%

* Headline profit before tax 1.3 billion, up over 7%

* Profit before tax 1.1 billion, up over 8%

* Headline
diluted earnings per share

An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of
 of 73.4p, up over 8%

*
Dividends per share

 of 28.51p, up almost 16%

* Over last two years reported operating margins up 1.6 margin
points; headline diluted earnings per share up almost 30%; dividends per
share up 60%; dividend pay-out ratio up from 31% to 39%

NEW YORK
 Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
 &
LONDON
 city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826.
 —
WPP

WPP Witness Protection Program
WPP Wireless Packet Platform
WPP Work Package Planning
 (
NASDAQ

:WPPGY) today reported its 2012
Preliminary Results.

Full Year highlights

* Reported billings decreased slightly to 44.4bn, primarily
reflecting the strength of the sterling, although up 1.6% in constant
currency driven by leadership position in net new business league
tables

* Revenue growth of 3.5%, with like-for-like growth of 2.9%, 2.9%
growth from acquisitions and minus 2.3% from currency

* Like-for-like revenue growth in all but one region, characterised
by particularly strong growth in Asia Pacific,
Latin America
 the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies.
, Africa and
the Middle East and all but one sector(
public relations
 activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most
 and
public
affairs

), with strong growth in advertising, media investment management
and specialist communications

* Like-for-like gross margin growth at 2.4%, with slower growth in
the Group’s consumer insight businesses in the mature markets of

North America
 third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere.
, the United Kingdom and Western Continental
Europe
 , 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000).
 

* Headline EBITDA growth of 7.0% giving 0.5margin point improvement,
with
operating costs
 npl →  
 (+2.8%) rising less than revenues

* Headline PBIT increase of 7.1% with PBIT margin rising by
0.5points to 14.8%, surpassing the previous historical
pro forma

 high of
14.3%7 achieved in 2011

* Exceptional gains of 102 million on sales of stake in Buddy Media
and New York property

* Exceptional
restructuring

 charges of 93 million taken chiefly in
respect of Western Continental European businesses and IT
infrastructure

* Gross margin margins, a more accurate competitive
comparator

, up
0.6 margin points to an industry leading 16.1%

* Headline diluted EPS up 8.4% and reported diluted EPS down 2.6%
(reflecting last year’sexceptional release of corporate tax
provisions), with 15% higher final ordinary dividend of 19.71p and full
year dividends of 28.51p per share up 15.9%

* Average net debt increased 373m (13%) to 3.203bn reflecting
increased spending on acquisitions (chiefly
AKQA

) and higher dividends,
partly offset by relative improvement in working capital

* Creative excellence recognised by the award, for the second
consecutive year since its inception, of the Cannes Lion for the most
creative Holding Company

* Over last two years alone headline diluted earnings per share up
almost 30%, dividends per share up 60% and the dividend pay-out ratio
increased from 31% to 39%

Current trading and outlook

*
January
 see month.
 2013 | Like-for-like revenues up over 2% for the month,
ahead of budget and similar to the final quarter of 2012; like-for-like
gross margin up the same

* FY 2013 budget | Like-for-like revenue and gross margin growth of
around 3% and headline operating margin target of 15.3% up 0.5 margin
points

* Dual focus in 2013 | 1. Revenue growth from leading position in
faster growing geographic markets and digital, premier parent company
creative position, new business, “horizontality” and
strategically targeted acquisitions; 2. Continued emphasis on balancing
revenue growth with
headcount
 or head·count
n.
1. The act of counting people in a particular group.

2. The number of people counted in this way.

Noun 1.
 increases and improvement in staff
costs/revenue ratio to enhance operating margins

* Long-term targets reaffirmed | Above industry revenue growth due
to geographically superior position in new markets and functional
strength in new media and consumer insight, including data analytics and
application of new technology; improvement in staff costs/revenue ratio
of 0.3to 0.6 margin points p.a. depending on revenue and gross margin
growth; operating margin expansion of 0.5margin points or more; and PBIT
growth of 10% to 15% p.a. from margin expansion and from strategically
targeted small and medium-sized acquisitions

In this press release not all of the figures and ratios used are
readily available from the unaudited preliminary results included in
Appendix 1. Where required, details of how these have been arrived at
are shown in the
Appendices
  
n.
A plural of appendix.
.

Review of group results

Revenues

Billings were down slightly at 44.4 billion, primarily reflecting
the strength of the sterling. Billings were up 1.6% in constant
currency. Estimated net new business billings of 3.894 billion ($6.231
billion) were won in the year, up almost 21% on last year, placing the
Group first in all leading net new business tables. The Group continues
to benefit from consolidation trends in the industry, winning
assignments from existing and new clients. These wins continued into the
second half of the year and the first two months of 2013 with several
very large industry-leading advertising, digital and media assignments,
the full benefit of which will be seen in Group revenues in 2013. There
have been several recent significant gains, for example, in the
pharmaceutical and healthcare industry.

Reportable revenue was up 3.5% at 10.373 billion. Revenue on a
constant currency basis was up 5.8% compared with last year, but changes
in exchange rates, chiefly reflecting the strength of the sterling
primarily against the euro, reduced revenue by 2.3%. As a number of our
competitors report in US dollars and in euros, appendices 2 and 3 show
WPP’s Preliminary results in reportable US dollars and euros
respectively. This shows that US dollar reportable revenues were up 2.5%
to $16.459 billion and
earnings before interest and taxes

 up 6.9% to
$2.439 billion, which compares with the $14.219 billion and $1.90510
billion respectively of our closest competitor and that euro reportable
revenues were up 10.8% to [euro]12.796 billion and earnings before
interest and taxes up 14.8% to [euro]1.892 billion, which compares with
[euro]6.610 billion and [euro]1.064 billion respectively of our nearest
European-based competitor.

On a like-for-like basis, which excludes the impact of currency and
acquisitions, revenues were up 2.9%, with gross margin up 2.4%,
reflecting pressure on gross margins in the Group’s consumer
insight custom businesses in the mature markets of North America, the
United Kingdom and Western Continental Europe. In the fourth quarter,
like-for-like revenues were up 2.5%, an improvement on the third quarter
of 1.9%, due to stronger growth in all regions except North America.
This reflects a reversal of the declining quarterly like-for-like
revenue growth trend which went from 4% in quarter one, to 3% in quarter
two and to 2% in quarter three in 2012.

Operating profitability

Headline EBITDA was up 7.0% to 1.756 billion from 1.640 billion and
up 10.7% in constant currencies. Group revenues are more weighted to the
second half of the year across all regions and functions and
particularly in the faster growing markets of Asia Pacific and Latin
America. As a result, the Group’s profitability continues to be

skewed
 Epidemiology adjective Referring to an asymmetrical distribution of a population or of data
 to the second half of the year. Headline
operating profit

See operating income.
 for
2012 was up 7.1% to 1.531 billion from 1.429 billion and up 11.1% in
constant currencies.

Headline operating margins were up 0.5 margin points to 14.8%, in
line with the Group’s margin target, compared to 14.3% in 2011,
surpassing the previous pre-Lehman pro forma high equalled in 2011. The
headline margin of 14.8% is after charging 51 million or $82 million of

severance

 costs compared with 54 million or $84 million in 2011. In 2012
the impact of exchange rates reduced reported margins and like-for-like
operating margins actually improved 0.7 margin points. Over the last two
years, reported operating margins have improved by 1.6 margin points and
by 1.8 margin points like-for-like.

Given the significance of consumer insight revenues to the Group,
with none of our parent company competitors present in that sector,
gross margin and gross margin margins are a more meaningful measure of
comparative margin performance. This is because consumer insight
revenues include pass-through costs, principally for data collection, on
which no margin is charged and with the growth of the
internet, the
 international computer network linking together thousands of individual networks at military and government agencies, educational institutions, nonprofit organizations, industrial and financial corporations of all sizes, and commercial enterprises
 process of data collection is more efficient. Headline gross margin
margins were up 0.6 margin points to 16.1%, achieving the highest
reported level in the industry.

On a reported basis, operating margins, before all incentives11 and
income from associates, were 16.9%, down 0.1 margin points, compared
with 17.0% last year. The Group’s staff cost to revenue ratio,
including incentives, increased by 0.3 margin points to 58.9% compared
with 58.6% in 2011. Following
intentional
  
adj.
1. Done deliberately; intended:  See Synonyms at voluntary.

2. Having to do with intention.
 reductions in 2009 and 2010
after the
Lehman

 crisis, the Group increased its investment in human
capital, particularly in the latter part of 2011 and in early 2012,
mainly in the faster growing geographic and functional markets (such as
media investment management and digital) as like-for-like revenues and
gross margin increased.

Operating costs

During 2012, the Group continued to reap the benefits of containing
operating costs, with improvements across most cost categories,
particularly property, commercial and office costs.

Reported operating costs12, rose by 3.0% and by 5.0% in constant
currency. On a like-for-like basis, total operating and direct costs
rose 2.1%. Reported staff costs, excluding incentives, rose by 5.1% and
by 7.1% in constant currency. Incentive payments amounted to 291 million
or over $465 million, which was 16.6% of headline operating profit
before incentives and income from associates, compared with 338 million
or 19.9% in 2011. Performance in parts of the Group’s custom
research, public relations and public affairs, healthcare and direct,
digital and interactive businesses fell short of the maximum performance
objectives agreed for 2012, as the like-for-like revenue growth rate
slowed in quarters two and three in 2012. This followed the record
profit and margin performance in 2011, when most of the Group’s
operating companies achieved maximum incentive levels.

On a like-for-like basis, the average number of people in the Group,
excluding associates, in 2012 was 114,490, compared to 112,717 in 2011,
an increase of 1.6%. On the same basis, the total number of people in
the Group, excluding associates, at 31
December
 see month.
 2012 was 115,711
compared to 116,230 at 31 December 2011, a decrease of over 500 or 0.4%.
This point-to-point data reflects the adjustments in staff costs made
later in 2012, as like-for-like revenues slowed after the first quarter
of the same year. On the same basis revenues increased 2.9% and gross
margin 2.4%.

As noted in the Third Quarter Trading Update in
October
 see month.
 2012, the
proceeds from the sale of the company’s stake in Buddy Media were
received and, in addition, conditional contracts exchanged for the sale
of the
freehold
 borough (1990 pop. 10,742), seat of Monmouth co., E central N.J.; settled c.1650, called Monmouth Courthouse (1715–1801), inc. as a town 1869, as a borough 1919.
 of 285
Madison Avenue
 celebrated street of Manhattan, borough of New York City. It runs from Madison Square (23d St.) to the Madison Bridge over the Harlem River (138th St.). In the 1940s and 50s, some of the major U.S.
, the New York headquarters of
Young & Rubicam Inc. The sale of 285 Madison Avenue was completed in
December 2012 and these two transactions combined resulted in an
exceptional gain of 102 million.

Offsetting this gain, an exceptional
restructuring charge

The expense of reorganizing a company’s operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings.
 of 93
million was taken, the majority of which is to address certain
structural issues within businesses primarily in Western Continental
Europe and to balance staffing levels and
align
,
v to move the teeth into their proper positions to conform to the line of occlusion.
 staff costs given
anticipated levels of revenue. Although,
Mario Draghi

, as President of
the
ECB

, has certainly improved the prospects of the
Eurozone

Noun

same as Euroland

 n → ,

 n →  
 in the
last year or so, it seems that, slow or
stagnant
 /stag·nant/ ()
1. motionless; not flowing or moving.

2. inactive; not developing or progressing.
 growth in Western
Continental Europe is likely to continue for some time. We may well only
be half way through a lost decade, post-Lehman. In addition, the

devastating
  
tr.v. dev·as·tat·ed, dev·as·tat·ing, dev·as·tates
1. To lay waste; destroy.

2. To overwhelm; confound; stun:
 effects of Hurricane Sandy, the significant loss of power in
New York and the subsequent flooding which occurred, had some impact on
the operational effectiveness of certain of the Group’s IT
infrastructure and the Group has reviewed its back-office systems and
made provision for the
write-off

 of IT equipment. This will accelerate
the Group’s overhaul of its approach to
centralising

 IT
services.

Interest and taxes

Net finance costs (excluding the
revaluation

 of financial
instruments) were up 7.0% at 213.9 million, compared with 199.9 million
in 2011, an increase of 14.0 million, reflecting higher average net
debt, offset by lower funding costs.

The tax rate on headline profit before tax was 21.2% (2011 22.0%)
and on reported profit before tax was 18.1% (2011 9.1%). The difference
in the reported tax rate is primarily due to the exceptional release in
2011 of prior year corporate tax provisions following the resolution of
a number of open tax matters.

Earnings and dividend

Headline profit before tax was up 7.2% to 1.317 billion from 1.229
billion, or up 12.3% in constant currencies.

Reported profit before tax rose by 8.3%, to 1.092 billion from 1.008
billion. In constant currencies, reported profit before tax rose by
14.6%.

Profits attributable to share owners fell by 2.1% to 823 million
from 840 million, due to the exceptional release of prior year tax
provisions in 2011. Excluding the impact of the exceptional tax credit
attributable profits would have risen by 12.1% to 823 million from 734
million.

Headline diluted earnings per share rose by 8.4% to 73.4p from
67.7p. In constant currencies, earnings per share on the same basis rose
by 13.1%. Reported diluted earnings per share decreased by 2.6% to 62.8p
from 64.5p, again reflecting the release of prior year tax provisions in
2011 and increased 1.9% in constant currencies.

In line with the statement made with the Group’s 2010
Preliminary Results, announcing the intention to raise the dividend
pay-out ratio from around a third to 40%, the Board declares an increase
of 15% in the final ordinary dividend to 19.71p per share, which
together with the first interim dividend of 8.80p per share, makes a
total of 28.51p per share for 2012, an overall increase of 15.9%. The
record date for the final dividend is 7 June 2013, payable on 8
July
 see month.
 2013. This represents a dividend pay-out ratio of 39% on headline
diluted earnings per share, compared to a pay-out ratio of 36% in 2011.
The Board has now largely achieved its objective of increasing the
dividend pay-out ratio to approximately 40% and the Board will be

continually
  
adj.
1. Recurring regularly or frequently:

2.
 reviewing whether the dividend pay-out ratio should be
further increased in the range of 45% to 50%.

On 2 January 2013, the Scheme of Arrangement between WPP 2012
Limited and its share owners, in relation to the introduction of a new
Jersey incorporated and United Kingdom tax resident parent company,
became effective and new WPP, which has adopted the same name, WPP plc,
became the new parent company of the
WPP Group

. As a consequence of the
Group returning its tax residence to the United Kingdom, the dividend
access plan and
scrip dividend

An unusual type of dividend involving the distribution of promissory notes that call for some type of payment at a future date. Scrip dividends generally signal that a firm is short of cash. Compare liability dividend.
 have been terminated.

Further details of WPP’s financial performance are provided in
Appendices 1, 2 and 3.

Regional review

The pattern of revenue growth differed regionally. The tables below
give details of revenue and revenue growth by region for 2012, as well
as the proportion of Group revenues and operating profit and operating
margin by region;

* Like-for-like gross margin growth of 3.0% in the UK and 2.4% for
the Group

North America, with constant currency growth of 3.0% in the final
quarter and like-for-like growth of -0.6%, was lower than the third
quarter and first half, with relatively strong growth in the
Group’s advertising and media investment management businesses,
more than offset by parts of the Group’s consumer insight, public
relations and public affairs and branding & identity, healthcare and
specialist communications businesses. This seems to be indicative of
continued pressure on discretionary client spending.

The United Kingdom, against market trends, showed continued strong
growth in the fourth quarter with constant currency growth of 10.4% and
like-for-like growth of 5.1%, with particularly strong growth in
advertising and media investment management, partly offset by slower
growth in consumer insight, branding & identity and healthcare
communications.

Western Continental Europe, although relatively more difficult,
showed some improvement in the fourth quarter, with constant currency
revenues up 1.5% and like-for-like revenues down 0.7%, compared with
-2.1% in quarter three.
Italy
 , Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe.
, Turkey and (surprisingly) Greece grew,
but Spain, Portugal, Scandinavia, France, the Netherlands and
Switzerland were tougher, with the continuing effects of the Eurozone
crisis impacting parts of Western Continental Europe.

In Asia Pacific, Latin America, Africa & the Middle East and

Central and Eastern Europe

, revenue growth in the fourth quarter was
strongest, as it has been throughout 2012, up 8.1% in constant currency
and up 7.3% like-for-like and stronger than quarter three. Growth in the
fourth quarter was driven principally by the Middle East and Africa,
Latin America, the BRICs(16) and Next 11(17) parts of Asia Pacific, the
CIVETS(18) and the
MIST
 see fog.
(19). Central and Eastern Europe, after a
difficult third quarter, improved significantly in the final quarter,
with like-for-like growth of over 12% in Russia.

Latin America showed the strongest growth of all of our sub-regions
in the year, with constant currency revenues up almost 13% and up well
over 11% like-for-like. The Middle East & Africa showed the
strongest growth of our sub-regions in the fourth quarter, with
like-for-like revenues up almost 10%, with all sectors improving. In
Central and Eastern Europe, like-for-like revenues were up 0.1% in the
fourth quarter, compared with -6.1% in quarter three, with strong growth
in Russia, Kazakhstan, the Ukraine and Romania but Poland, Hungary, the

Czech Republic
 Czech Česká Republika (2005 est. pop. 10,241,000), republic, 29,677 sq mi (78,864 sq km), central Europe. It is bordered by Slovakia on the east, Austria on the south, Germany on the west, and Poland on the north.
 and Serbia remained more challenging. Full year revenues
for the BRICs, which account for almost $2 billion of revenue, were up
over 11%, on a like-for-like basis, with the Next 11 and CIVETS up
almost 12% and over 11% respectively. The MIST was up over 11%.

In 2012, 30% of the Group’s revenues came from Asia Pacific,
Latin America, Africa and the Middle East and Central and Eastern Europe
– 0.6 percentage points higher compared with the previous year and
against the Group’s strategic objective of 35-40% in the next two
to three years.

Business sector review

The pattern of revenue growth also varied by communications services
sector and operating brand. The tables below give details of revenue,
revenue growth by communications services sector as well as the
proportion of Group revenues and operating profit and operating margin
by communications services sector;

* Like-for-like gross margin growth of -1.1% in Consumer Insight and
2.4% for the Group

In 2012, over 32% of the Group’s revenues came from direct,
digital and interactive, up over 1.0 percentage point from the previous
year and growing 6.7% like-for-like over 2011.

Advertising and Media Investment Management

In constant currencies, advertising and media investment management
remained the strongest performing sector with constant currency revenues
up 4.0% in the final quarter and like-for-like up 5.4%, considerably
stronger than the third quarter like-for-like growth of 2.9%. Full year
revenues were up 5.1% like-for-like.

Of the Group’s advertising networks, Ogilvy & Mather, which
was named Network of the Year at Cannes, performed especially well in
North America, the United Kingdom and Latin America, with Grey in North
America even stronger. However, the Group’s advertising businesses
in Western Continental Europe generally remained under pressure with
like-for-like revenues down. Growth in the Group’s media investment
management businesses has been very consistent throughout the year, with
constant currency revenues up over 12% for the year and like-for-like
growth up 11.0%. tenthavenue, the “engagement” network focused
on out-of-home media, was established towards the end of 2010 and in
2012 showed strong revenue growth, with like-for-like revenues up over
7% following over 14% growth in 2011. The strong revenue growth across
most of the Group’s businesses, together with good cost control,
resulted in the combined reported operating margin of this sector
improving by 1.6 margin points to 17.7%.

In 2012, Ogilvy & Mather,
JWT

JWT Java Windows Terminal
JWT Just War Theory
JWT Jim Wolf Technology
JWT Java Workflow Tooling
JWT John Wayne Trail
JWT Justified War Theory
, Y&R, Grey and United
generated net new business billings of 1.087 billion ($1.740
billion).

In the same year, GroupM, the Group’s media investment
management company, which includes Mindshare,
MEC

MEC Ministerio de Educación y Ciencia
MEC Mountain Equipment Co-Op
, MediaCom, Maxus,
GroupM Search and Xaxis, together with tenthavenue, generated net new
business billings of 2.148 billion ($3.437 billion).

Consumer Insight

On a constant currency basis, consumer insight revenues grew 2.8%,
with gross margin up 0.8%. On a like-for-like basis revenues were up
0.8% with gross margin down 1.1%. The pattern of revenue growth seen in
the first nine months, continued into the final quarter, with the mature
markets of North America and Continental Europe difficult but
counterbalanced by strong growth in the faster growing markets of Asia
Pacific, Latin America, Africa & the Middle East. In the fourth
quarter the United Kingdom also slowed. Reported operating margins fell
0.5 margin points to 10.0% (reported gross margin margins fell 0.4
margin points to 13.9%). The central issue continues to be like-for-like
revenue growth in the custom businesses in mature markets, where
discretionary spending remains under review by clients. Custom
businesses in faster growth markets and syndicated and semi-syndicated
businesses in all markets, remain robust, with strong like-for-like
revenue growth.

Public Relations and Public Affairs

In constant currencies the Group’s public relations and public
affairs businesses had a more difficult year with full year growth of
4.2% and like-for-like revenues down 1.0%, with continuing pressure in
North America and Continental Europe across most of the Group’s
brands, only partly offset by strong growth in the United Kingdom, Latin
America and the Middle East & Africa. Operating margins fell by 1.2
margin points to 14.9%.

Branding and Identity, Healthcare and Specialist Communications

At the Group’s branding and identity, healthcare and specialist
communications businesses (including direct, digital and interactive)
constant currency revenues grew strongly at 10.2% with like-for-like
growth of 2.6%. Like-for-like revenue growth slipped slightly in quarter
four, due primarily to slower growth in parts of the Group’s
branding & identity and healthcare communications businesses, but
remained close to 2%. AKQA, the leading digital agency acquired in July
2012 performed well with full year like-for-like revenues up 10%.
Operating margins, for the sector as a whole, improved slightly, up 0.1
margin points to 14.4%.

Client review

Including associates, the Group currently employs over 165,000
full-time people (up almost 7,000, from over 158,000 the previous year)
in over 3,000 offices in 110 countries. It services 350 of the Fortune
Global 500 companies, all 30 of the
Dow Jones

 30, 63 of the NASDAQ 100,
31 of the Fortune e-50 and 757 national or multi-national clients in
three or more disciplines. 479 clients are served in four disciplines
and these clients account for over 57% of Group revenues. This reflects
the increasing opportunities for co-ordination and co-operation or
“horizontality” between activities both nationally and
internationally and at a client and country level. The Group also works
with 357 clients in 6 or more countries. The Group estimates that well
over a third of new assignments in the year were generated through the
joint development of opportunities by two or more Group companies.

Cash flow highlights

In 2012, operating profit was 1.241 billion, depreciation,
amortisation and goodwill impairment 429 million, non-cash share-based
incentive charges 93 million, net interest paid 172 million, tax paid
257 million, capital expenditure 330 million and other net cash inflows
90 million. Free cash flow available for working
capital requirements

,
debt repayment, acquisitions, share re-purchases and dividends was,
therefore, 1.094 billion.

This free cash flow was absorbed by 587 million in net cash
acquisition payments and investments (of which 87 million was for

earnout

 payments and loan note redemptions with the balance of 500
million for investments and new acquisition payments net of disposal
proceeds), 134 million in share repurchases and 307 million in
dividends, a total outflow of 1.028 billion. This resulted in a net cash

inflow
  
n.
1. The act or process of flowing in or into:

2.
 of 66 million, before any changes in working capital.

A summary of the Group’s unaudited cash flow statement and
notes as at 31 December 2012 is provided in Appendix 1.

Acquisitions

In line with the Group’s strategic focus on new markets, new
media and consumer insight the Group completed 65 acquisitions in 2012,
28 acquisitions and investments were classified in new markets (of which
20 were in new media), 27 in consumer insight, including data analytics
and the application of technology, with the balance of 10 driven by
individual client or agency needs.

Specifically, in 2012 acquisitions and increased equity stakes have
been completed in advertising and media investment management in the

United States
 officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world’s third largest country in population and the fourth largest country in area.
, Germany, the
Netherlands, the

 Slovak Republic, Turkey,
Israel, Jordan, Brazil, Colombia, Mexico, Australia, China, South Korea,
Thailand and Vietnam; in consumer insight in the United States, France,
Germany, Turkey, UAE, Chile, China and Pakistan; in public relations and
public affairs in the United States, Canada, the United Kingdom,
Denmark, Finland, France, Russia and Australia; in direct, digital and
interactive in the United States, the United Kingdom, Germany, Hungary,
Russia, South Africa, Turkey, Australia, China, Indonesia, Pakistan and
Singapore; and in healthcare in
Hong Kong
 , Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov.
.

Balance sheet highlights

Average net debt in 2012 increased by 373 million to 3.203 billion,
compared to 2.830 billion in 2011, at 2012 exchange rates. On 31
December 2012 net debt was 2.821 billion, against 2.465 billion on 31
December 2011, an increase of 356 million, reflecting increased spending
on acquisitions (chiefly AKQA) and higher dividends, partly offset by
relative improvements in working capital.

Your Board continues to examine ways of deploying its EBITDA of over
1.7 billion or over $2.8 billion and substantial free cash flow of
almost 1.1 billion or over $1.7 billion
per annum

, to enhance share
owner value. The Group’s current market value of 13.3 billion
implies an EBITDA multiple of 7.6 times, on the basis of the full year
2012 results. Including year end net debt of 2.8 billion, the
Group’s enterprise value to EBITDA multiple is 9.2 times.

A summary of the Group’s unaudited balance sheet and notes as
at 31 December 2012 is provided in Appendix 1.

Capital markets

During September 2012, the Group successfully issued $500 million of
10 year bonds at a coupon of 3.625%, together with $300 million of 30
year bonds at 5.125%. This was the first time a company in our industry
has issued 30 year debt and the bonds were well received by investors
with strong demand for both. These bonds have improved the maturity
profile of the Group’s debt.

Return of funds to share owners

Following the strong first-half results, your Board raised the
interim dividend by 18%, around 5.0 percentage points higher than the
growth in headline diluted earnings per share, a pay-out ratio in the
first half of 34%. For the full year, headline diluted earnings per
share rose by 8.4% and the final dividend has been increased by 15%,
bringing the total dividend for the year to 28.51p per share, up 15.9%,
7.5 percentage points higher than the growth in headline diluted
earnings per share. As indicated in the
AGM
 annual general meeting

 n abbr (= annual general meeting) →

 n abbr (= annual general meeting) →  
 statement in June 2012, the
Board’s objective remains to increase the dividend pay-out ratio to
approximately 40% over time compared to the 2010 ratio of 31%. In 2011,
it reached 36% on headline diluted earnings per share and in 2012 this
has risen to 39%. Dividends paid in respect of 2012 will total almost
360 million for the year.

In 2012, 16.2 million shares, or 1.3% of the issued share capital,
were purchased at an average price of 8.30 per share, of which 6.7
million shares were cancelled.

Having largely achieved its target of a dividend pay-out ratio of
40%, as mentioned before, your Board will give consideration to the
merits of increasing the pay-out ratio further.

Current trading

January 2013 revenues were ahead of budget and on a like-for-like
basis were up 2% with gross margin up similarly. All regions, except
North America were up, with Asia Pacific, Latin America and Africa and
the Middle East up the strongest. All sectors, except public relations
and public affairs and branding & identity were up with media
investment management, consumer insight and healthcare communications,
up the strongest.

Outlook

Macroeconomic
  
n. (used with a sing. verb)
The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors.
 and industry context

2012, the Group’s twenty seventh year, was like the previous
year, a record year, but it felt very different. We reached our targets,
but we got there ugly. Having budgeted 4% like-for-like revenue growth
at the beginning of 2012, the first quarter started well on budget, if
not ahead and with the quarter one revised forecast strengthening,
investment in talent continued following the additions made at the end
of 2011. However, as the like-for-like revenue growth rate started to
slow in quarter two to 3% and, in turn, to 2% in quarter three, we did
not start to make the cost adjustments quickly enough to counter the
increased staff investment until quarters three and four, although we
are now much better balanced for 2013, with the like-for-like number of
people in the business slightly down at the end of the year compared
with the beginning of 2012.

So why was 2012 such a difficult year? Clients were certainly in
stronger shape with profits at an all-time high as a proportion of
GDP
 (guanosine diphosphate): see guanine.
,
margins generally stronger, share prices rising as institutional
investors
rotated

 out of government securities and sitting on, in the
case of US-based multi-nationals, over $2
trillion

 in cash with
relatively unleveraged balance sheets. But, whilst clients were
certainly in better shape than pre-Lehman in September 2008, they still
lacked the necessary confidence given the “grey swans”, or
known unknowns. Black swans are the unknown unknowns which by definition
we do not know what they are.

There are at least four, perhaps five now in the case of the United
Kingdom. Firstly, the fragility of the Eurozone, certainly better since
one of the Super Marios, Mario Draghi, took over as the President of the
ECB, but still subject to potential shocks, for example, from
elections
in Italy

 or potential corruption problems in Spain. The Eurozone has
also been aided by others stressing the need to reduce unemployment and
surrendering the inflation rate
constraint

A restriction on the natural degrees of freedom of a system. If n and m are the numbers of the natural and actual degrees of freedom, the difference n – m is the number of constraints.
, for example, by the
Chairman
of the Federal Reserve

 Bank in the United States, the re-elected Prime
Minister Abe in Japan and perhaps the new
Governor of the Bank of
England

 in the United Kingdom. This has certainly helped equity
securities too.

Second, the problems of the Middle-East, are probably now, if
anything, worse than a year ago, with heightened conflicts and tensions
in Tunisia, Libya, Egypt, Gaza, Syria and above all, potential conflicts
between Israel and Iran.

Third, a China or BRICs hard or soft landing, although all the
evidence we have seems to point to a soft landing in China and continued
growth in Brazil and India, and even stronger growth in Russia. The rise
of the hundreds of millions in the new middle-classes in all these
countries seems to be the real economic
motive
 or  , in music, a short phrase or passage of two or more notes and repeated or elaborated throughout the composition. The term is usually used synonymously with figure.
 force, particularly for
the
fast moving consumer goods

 industries. Certainly, in the case of
China, the West seems to have fundamentally
misunderstood
  
v.
Past tense and past participle of misunderstand.

adj.
1. Incorrectly understood or interpreted.

2.
 the
significance of the 12th Five-Year Plan. That plan looks for lower
quantum, but higher quality growth at around 7.5% p.a. compound (which
we would kill for), combined with higher consumption, lower savings, a
social security safety net and stronger services sector (almost a
charter for WPP). The new
politburo
 the former central policy-making and governing body of the Communist party of the Soviet Union and, with minor variations, of other Communist parties.
 leadership seems to be another bull
market signal.

Fourth, and
most importantly

, dealing with the US deficit and a
record level of $16 trillion of debt in the most effective way. This
remains the
elephant in the room

, as the United States is still twice
the size of the Chinese economy at around $16 trillion GDP versus over
$8 trillion out of a global total of around $65 trillion. The last
minute attempts to deal with the problem in the US Congress on New
Year’s Eve in 2012 only succeeded in kicking the can further down
the road and the
sequester
 v. to keep separate or apart. In so-called “high-profile” criminal prosecutions (involving major crimes, events, or persons given wide publicity) the jury is sometimes “sequestered” in a hotel without access to news media, the general public or their
 is ill-equipped to help, having been really
devised as a compromise measure in June 2011 never to be used. Neither
will the sequester help growth in the first half of 2013 in the United
States.

Finally, the decision to launch a
referendum
 referral of proposed laws or constitutional amendments to the electorate for final approval. This direct form of legislation, along with the initiative, was known in Greece and other early democracies.
 for Britain’s
European Union membership, whilst no doubt being an
astute
  
adj.
Having or showing shrewdness and discernment, especially with respect to one’s own concerns. See Synonyms at shrewd.


[Latin ast
 political
move, adds further uncertainty to the United Kingdom economy until after
the
next United Kingdom General Election

 in 2015.

So all in all, whilst clients may be more confident than they were
in September 2008 pre-Lehman, with stronger balance sheets, these
increased levels of uncertainty combined with strengthened
corporate
governance

 scrutiny make them unwilling to take further risks. They
remain focussed on a strategy of adding capacity and brand building in
both fast growth geographic markets and functional markets like digital
and containing or reducing capacity, perhaps with brand building to
maintain or increase market share, in the mature, slow growth markets.
This approach also has the apparent virtue of limiting fixed cost
increases and increasing variable costs, although we naturally believe
that marketing is an investment not a cost. We see little reason if any
for this pattern of behaviour to change in 2013, with continued caution
being the watchwords. There is certainly no evidence to suggest any such
change in behaviour so far in 2013.

The pattern for 2013 looks very similar to 2012, perhaps with
increased client confidence balancing the lack of maxi- or
mini-quadrennial events. Forecasts of worldwide real GDP growth still

hover

 around 3%, with inflation of 2% giving
nominal GDP

 growth of
around 5% for 2013, although they have been reduced recently and may be
reduced further in due course. Advertising as a proportion of GDP should
at least remain constant overall, although it is still at relatively
depressed historical levels, particularly in mature markets, post-Lehman
and advertising should grow at least at a similar rate as GDP. The three
maxi-quadrennial events of 2012, the
UEFA
 Union of European Football Associations

 n abbr (= Union of European Football Associations) →
 Football Championships in
Central and Eastern Europe, the Summer Olympics and
Paralympics
 Sports medicine An international sports competition in which participants are elite athletes with physical or visual impairments, representing 4 intl federations for the blind, paraplegics and quadriplegics, amputees, people with cerebral palsy.
 in
London and last, but not least, the US Presidential elections in
November did underpin industry growth but not, perhaps, as much as was
thought, with money being switched from existing budgets, particularly
in the cases of the UEFA Championships and Olympics. Although both
consumers and corporates seem to be increasingly cautious and
risk
averse

, they should continue to purchase or invest in brands in both
fast and slow growth markets to stimulate top line sales growth. As a
leading Chief Investment Officer of one of the largest investment
institutions said recently, companies may be running out of ways of
reducing costs and have to focus more on top line growth. Merger and
acquisition activity may be another way of doing this, but maybe a more
risky way than investing in marketing and brand and hence market
share.

2013 looks to be another demanding year. There will be no maxi- or
mini-
quadrennial
  
adj.
1. Happening once in four years.

2. Lasting for four years.


quad·renni·al n.
 events and, as mentioned above, the United States
deficit and debt remain ignored.

2014 looks a better prospect, however, with the World Cup in Brazil,
the Winter Olympics in Sochi and, would you believe, another United
States election – the mid-term Congressionals. The first two events will
continue to reposition Brazil and Latin America and Russia and Central
and Eastern Europe in the world’s mind, just like the Beijing
Olympics did for China and Asia and the World Cup did for South Africa
and the continent of Africa – and, possibly, London 2012 did for the UK
.

Financial guidance

The budgets for 2013 have been prepared on a somewhat more
conservative basis than usual (hopefully) following the slowing
like-for-like revenue growth rate in the middle two quarters of 2012,
but continue to reflect the faster growing geographical markets of Asia
Pacific, Latin America, Africa and Central and Eastern Europe and faster
growing functional sectors of advertising, media investment management
and direct, digital and interactive to some extent moderated by the
slower growth in the mature markets of the United States and
Western
Europe

The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO).
. Our 2013 budgets show the following;

* Like-for-like revenue and gross margin growth of around 3%

* Target operating margin improvement of 0.5 margin points

In 2013, our prime focus will remain on growing revenues and gross
margin faster than the industry average, driven by our leading position
in the new markets, in new media, in consumer insight, including data
analytics and the application of technology, creativity and
“horizontality”. At the same time, we will concentrate on
meeting our operating margin objectives by managing absolute levels of
costs and increasing our flexibility in order to adapt our cost
structure to significant market changes and by ensuring that the
benefits of the restructuring investments taken in 2012 are realised.
The initiatives taken by the parent company in the areas of
human
resources

, property,
procurement

, information technology and practice
development continue to improve the flexibility of the Group’s cost
base. Flexible staff costs (including incentives, freelance and
consultants) remain close to historical highs of around 7% of revenues
and continue to position the Group extremely well should current market
conditions change.

The Group continues to improve co-operation and co-ordination among
its operating companies in order to add value to our clients’
businesses and our people’s careers, an objective which has been
specifically built into short-term incentive plans.
“Horizontality” has been accelerated through the appointment
of over 30 global client leaders for our major clients, accounting for
about one third of total revenues of $17 billion and country managers in
a growing number of test markets. Emphasis has been laid on the areas of
media investment management, healthcare, sustainability, government, new
technologies, new markets, retailing, shopper marketing,
internal
communications

,
financial services

 and media and entertainment. The
Group continues to lead the industry, in co-ordinating investment
geographically and functionally through parent company initiatives and
winning Group pitches. For example, the Group has been very successful
in the recent wave of consolidation in the pharmaceutical industry and
the resulting “team” pitches.

In the future, our business is, geographically and functionally,
well positioned to compete successfully and to deliver on our long-term
targets:

* Revenue and gross margin growth greater than the industry average
including acquisitions

* Improvement in operating margin of 0.5 margin points or more
depending on revenue growth and staff cost to revenue ratio improvement
of 0.3 margin points or more

* Annual PBIT growth of 10% to 15% p.a. delivered through revenue
growth, margin expansion and acquisitions

Uses of funds

As capital expenditure remains relatively stable, our focus is on
the alternative uses of funds between acquisitions, share buy-backs and
dividends. We have increasingly come to the view, that currently, the
markets favour consistent increases in dividends and higher maintainable
pay-out ratios, along with anti-dilutive buy-backs and, of course,
sensibly-priced strategic acquisitions.

Buy-back strategy

Share buy-backs will continue to be targeted to absorb any share

dilution

 from issues of options or restricted stock, although the
Company does also have considerable free cash flow to take advantage of
any anomalies in market values, as it did last year.

Acquisition strategy

There is a very significant pipeline of reasonably priced small and
medium sized potential acquisitions, with the exception of Brazil and
India and digital in the United States, where prices seem to have got
ahead of themselves because of pressure on competitors to catch up. This
is clearly reflected in some of the operational issues that are starting
to surface elsewhere in the industry, particularly in fast growing
markets like China and Brazil. Transactions will be focused on our
strategy of new markets, new media and consumer insight, including the
application of new technology and big data. Net acquisition spend is
currently targeted at around 300 to 400 million per annum and we will
continue to
seize

v.
To exhibit symptoms of seizure activity, usually with convulsions.
 opportunities in line with our strategy to increase
the Group’s exposure to:

* Faster growing geographic markets and sectors

* Consumer insight, including the application of technology and big
data

So far in 2013, acquisitions have already been made in the first two
months in the United Kingdom, Turkey, South Africa, Argentina, Colombia,
Australia and the Philippines.

Last but not leastOO

All our most successful marketing clients follow marketing’s
most fundamental rules: understand your consumers; know what they want;
anticipate change; provide the answers; be constant in your
delivery.

WPP, too, is a marketing company. Our consumers are our clients. And
we try very hard to follow those same fundamental rules. A significant
change that we were early to identify and first to satisfy has been the
demand among some clients to be served not by a series of specialist
agencies but by a dedicated team; a team made up of specialists from all
relevant communications disciplines, who remain members of their
specialist agencies, while at the same time collaborating on a daily
basis to provide a truly integrated client service with no joins
showing. This (at least in part) is what we mean by horizontality.

Rapid changes in technology, the
fragmentation

 of media and the
acknowledged success of many of the early teams have made this approach
increasingly attractive to certain clients.

As a structure, it is less radical than it probably sounds. In the
far-off days of ‘the full-service agency’, a client’s
working account group – the only unit of real importance to the client –
would be formed from specialists from each department: account
management, planning, creative, media – and any of many others
according
to


prep.
1. As stated or indicated by; on the authority of:

2. In keeping with:

3.
 a specific client’s specific needs.

The team approach is similar; and, much like the agency account
group, expects its members to have something approaching
dual
nationality

. They are at once
paid-up

 members of their specialist
tribe
 [Lat., tribus: the tripartite division of Romans into Latins, Sabines, and Etruscans], a social group bound by common ancestry and ties of consanguinity and affinity; a common language and territory; and characterized by a political and economic
,
be it department or company – and committed members of the dedicated
client team.

The needs of no two clients are the same. The team approach will
never be universal. But seamless
collaboration

 of this kind, with no
compromise on quality, requires high degrees of understanding of the
bigger picture: which, of course, is precisely why the client values it
so highly.

Last year’s Group performance, as detailed in this report, was
made possible by tens of thousands of talented individuals; each with a
particular individual skill; some working entirely in groups within
their companies and some in dedicated client teams; and all contributing
to a greater whole.

They have earned our very public
gratitude

agrimony

traditional symbol for gratitude. [Flower Symbolism: Flora Symbolica, 172]

Androcles

because he had once extracted a thorn from its paw, the lion refrained from attacking Androcles in the arena. [Rom. Lit.
.

To access WPP’s 2012 preliminary results financial tables,
please visit: http://www.wpp.com/investor.

This announcement has been filed at the Company Announcements Office
of the
London Stock Exchange

 and is being distributed to all owners of
Ordinary shares and American
Depository

 Receipts. Copies are available
to the public at the Company’s registered office.

The following cautionary statement is included for safe harbour
purposes in connection with the
Private Securities Litigation Reform Act

 of 1995 introduced in the
United States of America

. This announcement
may contain forward-looking statements within the meaning of the US
federal securities laws. These statements are subject to risks and
uncertainties that could cause actual results to differ materially
including adjustments arising from the annual audit by management and
the Company’s independent auditors. For further information on
factors which could impact the Company and the statements contained
herein, please refer to public filings by the Company with the
Securities and Exchange Commission. The statements in this announcement
should be considered in light of these risks and uncertainties.