An update on WPP AUNZ's program to simplify its business

By Chris Pash | 23 August 2019
Getty

WPP AUNZ reports progress in simplifying its business, by reducing the number of agencies and bringing more people together, to meet the challenge of structural change in the advertising industry. 

John Steedman, interim CEO, today released half year results showing a $253.55 million loss on the back of almost $300 million in impairments, including $65.8 million from the value of brands. 

"We are progressing our strategy to simplify the business," says Steedman.   

The idea is to "ensure a more integrated offering to clients, greater operational efficiencies and collaborative working environments for our people".  

The strategy mean the sale of some assets, closing underperforming businesses and merging others to deliver enhanced services to clients and cut costs. 

Since January, the company has entered into agreements to reduce the portfolio by 20 businesses through closure, merger or sale. 

This includes the sale of WPP AUNZ's part of Kantar, which is expected to bring in $150 million in cash.

WPP AUNZ is working on a campus strategy.

"Our goal is to integrate operations, facilitate collaboration amongst our people and present the best of WPP to clients in one place," he says.

In the first half of the year, the company piloted One Kent Street which formalises a working relationship across 12 businesses and more than 500 people working within a campus.

Steedman says this is already delivering net sales growth.

The company also has a Brisbane Campus, bringing together four agencies and 110 people.

"Further consolidation will take place in the Sydney market in 2019," he says.

Steedman says the global repositioning of WPP's creative agencies VMLY&R and Wunderman Thompson have seen new business performance despite being in the early stages of integration.

"The full benefit of these mergers will develop over time. The strongest performing businesses in this segment are where there is a true end-to-end offer to their clients, and this is the model we will continue to extend across the segment," he says

Progress has been made in restructuring businesses in the Large Format Production segment. Net sales were down 15.9% to $8.9  million in the half yera to June.

"While earnings are behind the prior half year as a results of weaker net sales, restructuring actions have been taken in the first half of the year that will deliver cost and operational efficiencies in the second half of the year," says Steedman. 

WPP AUNZ, at its AGM this year outlined its key challenges:

  • Role of “traditional” creative agencies challenged
  • Clients are being disrupted
  • Consultants competing for technology and talent
  • Facebook, Google etc vying for talent and attention
  • Trust paramount

WPP AUNZ is also putting resources into people, recognising that more investmnet needs to be made in creativity and talent. 

"As I’ve said before, attracting and retaining the best people in our industry is vital," says Steadman.

"To achieve this, we know our workplaces must be open, inclusive, respectful, collaborative and diverse in every sense.

"To this end, we have set a goal to have an equal gender representation in senior leadership roles by 2021. We have also established a Diversity and Inclusion Council comprising a cross section of representatives from around the company whose objective is to drive cultural change. I’m also very pleased that we committed to an industry leading parental leave policy as part of a revamped talent and retention plan.“

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