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WPP plc (WPP -1.53%)
Q3 2021 Earnings Call
Oct 28, 2021, 9:00 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Mark Read

Good morning, everybody, and welcome to our third quarter call. I'm in London joined here by John Rogers, our CFO; and Peregrine Riviere, who is our investor relations for us. We'll take you quickly through the presentation and leave some time to answer your questions. So before we go, we look at Page 2 and the cautionary statement.

On Page 3, I'll talk very quickly through the highlights before John digs into more detail on the financial performance. We'll have a short business update. On Page 4, to summarizing how we think about the quarter, it was a very strong performance. It goes beyond a cyclical recovery.

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Your really saw a strong growth of 19.3% in the second quarter, followed, through to 15.7% in the third quarter, therefore, driving up our like-for-like growth on 2019 at 6.9%. We had good growth in all of our major markets and a good new business performance. We started the year, I'd say, with probably more business at risk than we did the year before. And we've had a good track record in retaining and expanding and winning new clients.

We continue to make strategic progress in sharpening our offer and investing more in the areas of data and technologies through the merger of Finsbury Glover Hering and SVC and the acquisition of Satalia. Our cash position is strong, and we've taken the opportunity to do around 450 million pounds of share buybacks. We'll get to our 600 million pounds target by the end of the year. And net-net, that means our net debt is down around 1 billion pounds on this time last year.

So I guess, the headline really is that it's a good quarter. It enabled us to raise our guidance for the year overall from 9% to 10% to 11.5% to 12% and also slightly nudge up our margin guidance just above 14%. So good quarter. I think John will take you through that in more detail.

John Rogers -- Chief Financial Officer

So thank you, Mark. Let me take you rapidly through the financial highlights. The revenue less pass-through costs for the third quarter, up 9.9% on a reported basis, 15.7% on a like-for-like basis. And as Mark has already said, 6.9% versus 2019, again demonstrating more than just a cyclical recovery.

Year to date, that means we're up 6.7% on a reported basis, 12.6% on a like-for-like basis and 2.6% versus 2019. So turning now to Slide 7, breaking the performance down into the individual sectors of our business. So looking at global integrated agencies, you'll see growth in the quarter like-for-like of 13.5%, down slightly from the 19.2% seen in Q2. But actually, if you look at the purple bars in the chart, you can see significant progress on a two-year basis, so up 5.9% versus 2019, building momentum as we progress through the year.

Particularly strong performance from GroupM and also continued double-digit like-for-like growth at Hogarth and VMLY&R. And AKQA Group, Ogilvy, Wunderman Thompson all showing an improving two-year trend compared to the second quarter of this year. So turning now to public relations, continues to be high demand for strategic comms. Again, growth in the third quarter of 16%, an increase actually on the second quarter of 12.9% and, again, on a two-year basis 12.6% versus 2019 in the third quarter compared to 4.4% in the second quarter.

So again, demonstrating strong momentum, building through the year, especially with PR agencies such as FGH, continue to be the strongest performers. We're also seeing accelerating growth at both BCW and Hill+Knowlton and showing strong strategic progress with the merger of FGH and SVC. Coming now to the specialist agencies, which is the best-performing sector within our business. We saw very strong growth in Q3 of 41.5%, up from the 27.8% we saw in the second quarter and, again, on a two-year basis, seeing that momentum build.

Our brand consulting is very much in strong demand. We saw great momentum, continued momentum in our healthcare business, CMI. Now the results were, in part, boosted by some COVID-related work contract we have in Germany with one of our businesses, gkk. But even if you strip that out of the quarter results, we'd still be showing similar levels of growth to the second quarter.

Coming on now to how we're performing geographically. Again, looking at our major markets, you'll see continued strong performance in the U.S.A. and, again, on a two-year basis, building momentum, so 6.2% growth versus 2019 compared to 1.8% for the second quarter. A very similar pattern in the U.K.

market. Whilst overall growth is down year on year versus the second quarter, we're seeing building momentum on a two-year basis versus 2019. Again, on Germany, we see very strong growth, again, as I said, already partly through the gkk contract. But again, if we strip out that impact, we'd be seeing similar growth in the second quarter.

So a strong performance in Germany. Again, we're seeing an improving performance in China to 18% growth in the third quarter. Albeit still on a two-year basis, we're still slightly behind 2019, but we are seeing an improving trend through the year. And also in Australia, we're still down about 11% versus 2019, but an improving trend through the year.

Obviously, this market, in particular, has been heavily impacted by the significant lockdowns that we've seen in that part of the world. Coming on now to our other major markets and our focus here on the performance versus 2019. We're seeing good performance in India, up 7.1% in the quarter versus 2019. In France, we are flat versus 2019, but fully recovered versus the impact of COVID.

Canada, we're up 9.2% versus 2019, and Italy up 8.2%. And Spain, were still slightly negative versus 2019, but as you can see from the chart, we have been building momentum through the year. Coming on now to our movement in net debt on Slide 12. You'll see an overall improvement from 2.3 billion pounds this time last year to 1.6 billion pounds.

If we adjusted that 2.3 billion pounds to 2021 exchange rates, that would be 2.6 billion pounds. And hence, a 1 billion improvement year on year. If we looked at the relative movements here in the chart, you'll see our trade working capital outflow is slightly greater than it was for the same time last year. Again, in line with the guidance that we gave you that we expected a small outflow this year adjusting for the very strong performance that we saw last year.

Capex, broadly in line with last year. Acquisitions, obviously ahead of last year driven by Satalia, DTI and the bringing together of our Australian business. Dividends and share buybacks increase, as we've returned to paying out our dividends and also accelerating the share buyback program. But overall, a good reduction in our net debt position, which bodes well for the year-end momentum.

So just coming on to my last slide. As Mark has already highlighted, we're upgrading our guidance for the year. So net sales, we were previously guiding to 9% to 10%. We're now upgrading that to -- expecting to outturn the year at 11.5% to 12%.

Headline operating margin slightly ahead of 14%. We were previously guiding at 13.5% to 14%. So again, an upgrading there and a continuation of our share buyback program. We expect to have roughly 600 million pounds by the year-end, having done 448 million pounds to date.

And we plan to continue the share buyback program through to our premium results in 2021 and at a similar rate, and we will obviously announce our capital allocation plans for 2022 at our prelims in February. So now, I'll hand you back to Mark to take you through the business review.

Mark Read

Thanks very much, John. And I think just a few things briefly to highlight on Page 15. And while we've seen a strong performance in our business, we have continued to focus on sharpening and expanding our offer, as I mentioned. So three highlights.

First, the acquisition of Satalia, an AI business based in London. It's around 80 people, which is significant in this area, and they owned both -- continue to develop the products that they bought so far, but also act as a hub of AI expertise across at WPP. We also brought together Finsbury Glover Hering and SVC during the quarter to create the world's leading strategic communications firm, and it solidifies our position in that part of the market, an area of really rapid growth with our clients as reputation and purpose become increasingly important at the board level. And then lastly, Kantar, which we own a 40% investment, acquired a business Numerator in the U.S., very strong digital panel business, and that will expand our retail offer in a very good position globally.

I think also just to highlight three pieces of work indicates the variety of the type of work that WPP does today. First, on Page 16 is the launch of Sky Glass, where AKQA and their design studio worked very closely with the Sky design team in designing the product. We also worked on the launch campaign and major films and other digital and social media elements to that. On Page 17, indicating the importance of purpose to our clients.

Ogilvy worked with SC Johnson and their leadership to tackle the impact of plastic in the ocean. And this amazing Blue Paradox exhibition was launched in London at Westfield in September attracted international attention. It's an amazing educational experience, got millions of views on TikTok, and 97% of the people that attended it so that they would change their habit in relation to plastics. So another example of a company tackling some of the challenging issues ahead of COP26.

And the last piece that I wanted to highlight takes in a somewhat different direction, page 18, some work from Mondelez for Cadbury in India, building on a successful campaign for Diwali. Last year, they used a combination of data and AI, combined with Shah Rukh Khan, a famous Indian, 27 million followers on Instagram, to launch a campaign that allowed the local retailers to promote themselves after the pandemic. It's a good example of data-driven marketing look. What we show is product innovation, purpose, data-driven marketing, three of the key themes we see from our clients at the moment.

Now, each of this work is actually supported by some of the partnerships we've developed in the future highlights. First, with the growth of acceleration in our consulting business becoming an increasingly important partner to Google on the platform side, we have more than 6,500 people. There's more than 10 companies, Google certified consultants and practitioners also working closely with Snap and TikTok, two of the faster-growing social media platforms. That's resulted in Page 20 in a strong new business performance.

As I said at the start of the call, we did come into this year probably with more of our business up for review primarily on a statutory basis, but up for review and we knew would take place throughout the year. And I think we're pleased with our ability to retain clients like Unilever, expand relationships like Bayer and develop new relationships in the media area with clients like Beiersdorf or Sainsbury's or TD Bank, creating -- it's a good mix of media and creative wins. And then focusing just on the media side, and this is something that we looked back at the first half. If you look at the convergence status on media, you can see the incredible performance of GroupM, both in wins and retention, just there are losses, but a credible performance on Page 21 in terms of media new business that reflects the strength of GroupM's business.

So to summarize in Page 22, it is a very strong quarter. We're raising our guidance into the third time this year, reflects continuing execution of the strategy we set out three years ago and refined at the end of last year, targeted acquisitions, creating global leaders, and we have good momentum going into 2021. I'm sure that would be a major area of focus for your questions, but I think a combination of our strong new business performance, the way that we can leverage our technology partnerships and also the fact that some parts of the world are still not recovered to 2019. We have good momentum going into next year.

So those are our sort of formal opening remarks and now we'll take questions, please.

Questions & Answers:


[Operator instructions] We will now take our first question from Omar Sheikh from Morgan Stanley. Please ask your question.

Omar Sheikh -- Morgan Stanley -- Analyst

Good morning, everyone. So I've got three, if I could. Maybe to start off on GroupM. You -- obviously, a big driver of the growth in the first nine months of the year, I think, 18% for the first nine months overall.

Could you maybe talk a little bit about what's driving the growth? I mean, you called out Choreograph in the presentation, but can you maybe talk about how it's performing relative to perhaps global ad spend or relative to some of its media agency peers that would be helpful to start? And then secondly, I do want to ask the obvious question about supply chain into Q4. Obviously, lots of kind of investor focus about the impact on supply chain disruption on advertiser spend in Q4 going into Q1. Could you maybe just give us some commentary about how that might be impacting you guys or not? And how -- what you baked in and what you're assuming on supply chain disruption potentially in some verticals in your Q4 guidance? And then finally, you've done quite a bit of work on restructuring agencies, reorganizing yourself internally most recently with the PR agencies as you discussed. Do you see any further scope for reorganization, kind of consolidation within the group going into '22? That's it.

Thanks very much.

Mark Read

OK. Well, I'll tackle the first, and then John and I will both tackle the second, and then we'll talk about the third. Look, I think from a GroupM perspective, I think the performance of GroupM reflects, first, the fact that it's an excellent business, that clients need help immediate in an increasing amount. It reflects the strength that they have in data and in Choreograph and the investments that we've made in technology.

It does -- it's hard to compare with our peers because I think we give more disclosure than our peers in terms of the performance of the media business alone. I can't really make that comparison, but I think there's no doubt that advertising spend has bounced back strongly this year, and that's reflected in GroupM's performance. In terms of Q4, I'll let John give you more detailed guidance on how we think about Q4. But I'd say, to date, we haven't seen an impact of supply chain disruption in our numbers.

In fact, on a two-year basis, our CPG clients increased their spend from Q2 into Q3, perhaps seen a little bit of weakness in automotive in Q3 based on semiconductor shortages, but I saw the CEO of VW say today that he expected that to start to ease in the future. And then in terms of sort of reorganization, I think -- if you think about the sort of the front end and the back end of our business, I think we're comfortable, broadly speaking, with our offer to clients. But we are, as you know, working on the back end of the business, and maybe John can talk about that. So John, do you want to?

John Rogers -- Chief Financial Officer

Yeah. I mean, just coming back to Q4, if you took the upper end of our guidance that we've given today, it would imply double-digit growth in Q4 of around 10%, which, in fact, is -- in reality, is an upgrade on where we were in August, roughly 8%. So we're effectively upgrading our numbers for Q4 today. So we do see strong momentum in the business.

And if you look half on half, we see in the first half, of course, our two-year growth first in 2019 at about 0.5%, and we're expecting our second half to be somewhere between 4% and 5%. So we do see growth coming through as definitively momentum in the business. And in effect, we are upgrading our numbers for the fourth quarter today from where we were back in August. In relation to your question about restructuring the market, no sort of major consolidations -- further major consolidations.

But we've done a lot of work in simplifying our business and continue to do work in simplifying our business. Say for example, within our creative agencies, we've greatly simplified our country model, and we've actually consolidated agencies in certain markets where there isn't a critical mass in those markets to support multiple agencies. So we've done a great exercise across some of our smaller markets to simplify our business. Equally, for example, within GroupM, we're also doing some work internally within GroupM as to how to looking at the structure there and how we can eliminate and take out duplication within GroupM itself.

And so there's a lot of work going on, not so much at the headline operating agency level, but within the operating agencies, we're doing a great deal of work to simplify our business and how we show up to our clients.

Omar Sheikh -- Morgan Stanley -- Analyst

Super. That's very clear. Thanks very much.


We have the next question coming from the line of Julien Roch from Barclays. Please ask your question.

Julien Roch -- Barclays Investment Bank -- Analyst

Yes. Good morning, Mark. Good morning, John. Good morning, Peregrine. 

Mark Read

Good morning. 

John Rogers -- Chief Financial Officer

Good morning.

Julien Roch -- Barclays Investment Bank -- Analyst

It's Julien Roch with Barclays. First, a quick question. How much was Germany of net sales in either full year '20 or 3Q '20, please? Second question, echoing one of the question from Omar and John's answer, so yes, if you use the upper end of your guidance, you get 10% growth in Q4. And yes, that's an acceleration half on half.

But it's a slowdown Q3 to Q4 of about 4 points versus 2019. So how much of that slowdown is conservatism? Because you still don't know, I suppose, the impact of the supply chain problem, and you don't know the Q4 budget adjustment from clients after all. So if there's no supply chain impact on advertising and if clients behave normally in Q4, where would that 10% go to in an ideal world? And then the last question is not blamed partly the low Q4 guidance on the fallout from IDFA, impact on GroupM, is it a negative as well or actually, could it be a positive for you because clients need even more advice than before?

Mark Read

OK. So why don't I start at the end and let John take you through question one and question two. Again, look, I think from our perspective, we haven't really seen a negative impact of the Apple changes. As we said before, it's beginning to become a more complex world from a data and privacy perspective.

I think that makes the advice to give our clients more important. It will have an impact on individual media owners, depending on their business model. And I think those that have been impacted have been those companies that tend to have sort of a big app download business, which is linked very carefully to the ability to track what's happening. That's not part of the business in which we really operate, so I think accounts for the -- perhaps the surprises that you saw there.

John, do you want to tackle Germany and Q4 again?

John Rogers -- Chief Financial Officer

Of course, yes. Certainly, on Germany, and I guess what you're probably trying to allude to, Julien, is the impact of the one-off COVID increase that we talked about, so I'll give you a little bit of breakdown and flavor on that. So Germany reflected about just over 8% of our business in the third quarter. Year to date, it's about seven and half percent of our overall business.

That gives you a view as to the scale of Germany. And in terms of the impact of the one-off COVID contract that we secured in Germany in the third quarter, its impact on the overall growth for the quarter is just over 1%, so that gives you a little bit of a feel for the sort of adjustment that we'll need to make this time next year, assuming that contract is a one-off. In terms of Q3 to Q4 and is it conservative, I don't think we really look at it that way. I mean, I think we really are looking at the half on half story.

I mean, it's always difficult to break anything on a month-by-month basis and even on a quarter-by-quarter basis. And actually, we really look at the trending on a half on half basis. Now as I said, the half 1, up about 0.5% versus 2019; the second half, up about 4% to 5% versus 2019. We think that reflects strong momentum in the business.

We're certainly not -- it doesn't feel like we're looking at Q4 sort of slowing down in any way, and we're certainly not seeing any evidence among our clients. But the supply chain issues that you referred to are causing them to rethink their spend. So I continue to be -- we seem to be reasonably positive as we go into Q4, and we think actually that bodes well in terms of momentum going into 2022.

Julien Roch -- Barclays Investment Bank -- Analyst

Great. Thank you very much for that and well done on those pleasing results.

John Rogers -- Chief Financial Officer

Thank you, Julien.


We have the next questions coming from the line of Tom Singlehurst from Citi. Please ask your question.

Tom Singlehurst -- Citi -- Analyst

Good morning. It's Tom here from Citi here. Yeah, I've got three questions as well, so sorry about that. The first one is on drop-through.

I mean, obviously, very pleasing to see both revenue upgrade for guidance and a slight margin sort of upgrade as well. So historically, we would have normally expected about 30% of incremental revenue to drop through. And the margin guidance, obviously, it's different -- it's difficult because you're -- it's a qualitative guidance in a way, but it does feel like it could have gone up more. I'm just wondering whether you can give us a bit more color on the moving parts.

Are you injecting more cushion in the form of bonus accruals and things like that? That was the first question. The second question was Kantar. It had its own bullet point in the press release and its own box in the presentation. I think a lot of us have slightly lost sight of Kantar.

Now it's only a line in the associate income. Can you just talk a bit more about the growth rates of Kantar and where we are in the sort of restructuring program? And then the final question, actually, more of, I suppose, a high level one. We're seeing an increasing amount of publicity and news flow around retail media, i.e., sort of e-commerce platforms sort of taking in ad dollars. Just can you talk conceptually about whether this is new money coming in from promotional budgets or is it cannibalizing traditional digital media spend and how we should think about this as an opportunity or a threat for you guys? Thank you.

Mark Read

OK. So I think we'll do two and three, then go back to the guidance. Look, I think from our perspective, and we said at the time that Kantar is a very strong business. We felt that the right thing to do for WPP, given our leverage three years ago, and mind you, was our debt peaked at 5.4 billion pounds given our leverage, and we didn't have a perfect foresight about COVID.

But given what happened there, I think the right thing to do is to do the transaction with Bain Capital. We remain a 40% shareholder, very happy with our investment. I think the business has done well. It's, frankly, broadly tracked WPP's performance during the pandemic, both in revenue and profit terms.

And I think there was some disclosure on their website, if you're more interested in having a look at that. I think the company has done well. The Numerator acquisition is exactly the type of transaction that we'd like to see place to modernize their offer and make it more relevant. So we worked with Bain Capital leadership there.

And it remains, I think, as you say, a valuable part of the company. We'll see how it develops. There's always going to be a five-year view and a sort of 2.5 years into the five years. On the retail media point, I mean, retailers have always attracted media dollars.

It may historically been in the form of shelf wobblers issue like and is now more in the form of retail media online. Part of that budget comes out of the trade budget, but they're increasingly trying to access the brand budget as well. I think, if anything, it's positive for WPP. You could say I think that clients, particularly packaged goods clients, would increasingly want to look at their media budgets, both brand and trade together, and have that managed by one place.

So from our perspective, I think bringing that together gives us more access. A critical part of our Unilever media review was not just data and the work we did with Choreograph, but was also demonstrating our credibility and capability with them with Amazon with other retail media. So I think it's a really strong point in favor of GroupM and the investments that we've made in Amazon. John will tackle the guidance.

John Rogers -- Chief Financial Officer

Yes. Just to build first on Mark's response on Kantar, in terms of your question on the transformation program being undertaken there, I think really, really pleasing performance so far. It's quite interesting. I'm often trying to compare WPP transformation program with Kantar side by side to see how we fare.

And actually, when we're looking at cost savings, I would say that Kantar is ever so slightly ahead of WPP in terms of its progress on taking out cost within the business and, from a cash perspective, actually, slightly behind where WPP is in terms of extracting cash from the business, improving working capital. But overall, as Mark highlighted, I think almost a parallel tracking our own performance, which I think has been very positive. In terms of the -- your question on drop-through, as we clearly signaled at the interim results, we continue to see a healthy drop-through on revenue increases, but it is decreasing as we progress through the year. And it's decreasing for a number of reasons, partly because we've seen, obviously, salary increases come through.

As we said, we had some catch-up in relation to increases versus 2019. We didn't put many increases there in 2020, so there's a little bit of catch-up coming through there. We are having to recruit, of course. We're delivering this quarter 6.9% ahead of 2019.

And actually, our head count pretty much matches where we were the same quarter in 2019. So we are delivering efficiencies, but we are having to add to our head count in order to meet with our growing client requirements. And of course, we're seeing, as you rightly highlight, bonus and also travel starting to come back in the game. So I'm very comfortable with the level of drop-through that we're seeing, albeit, as expected, it is decreasing as we progress through the year for the reasons I've just highlighted.

Tom Singlehurst -- Citi -- Analyst

Very clear. Thank you.


We have the next questions coming from the line of Sarah Simon from Berenberg. Please ask your question.

Sarah Simon -- Berenberg Bank -- Analyst

Yes. Hi. I have a few questions as well, please. First one was just back to Germany.

Are there any other kind of COVID-related contracts that we need to think about in terms of either Q1 or Q2? And does the German contract, is that like fully encompassed Q3 or will there be any spillover into Q4? Second one was on PR. We spent a lot of time talking about kind of media and creative. But can you just give us a quick insight to what's driving this huge growth in PR? Because it's not going -- you're saying right now we're ready to market, there's economic growth concerns. So I'd be interested in that.

And then final one was there's kind of more noise coming from people about brands wanting to deemphasize their reliance on Facebook and Google. Obviously, we know they want to try and establish direct relationships, first-party data, blah, blah, blah. But are you actually seeing that in your business or do you think this is kind of wishful thinking, but actually, they're still getting the vast, vast majority of the incremental dollars? Anything you can say on that would be helpful. Thanks.

Mark Read

Yeah. OK. On public relations, I think we did see an acceleration in our PR business in the second quarter to the third quarter and -- which is interesting because I think, in previous times, public relations has often been the first part of our business to be cut. That wasn't the case during COVID.

But the scope of the services has continued to increase coming out of the -- coming out of COVID. Look, I think if you read the newspapers, frankly, it shouldn't be any surprise. Topics of purpose, reputation, employee activism, political polarization, racial challenges are all on top of people's minds and issues that companies are increasingly expected to wrestle with and have a point of view. And I think that as a result, there's been a lot of demand from clients for guidance and counseling programs on how to address those.

They run up to COP26 that's more evident than ever. You look at the work that we did with SC Johnson, Blue Paradox, we highlighted in the presentation. So look, I think the degree of growth is perhaps a little bit of a surprise. It's really very strong.

But I think the fact that it's become more important shouldn't be a surprise. And I think it was one of the reasons why we're very excited by the opportunity we're having in Finsbury Glover Hering and SVC to get in there. I think those of us in the U.K. may not know SVC as well as people in the U.S., but it's a fantastically strong business, and the combination of those two companies is unparalleled.

And there are very few -- you can count them on less than the fingers of one hand businesses, that will have the geographic reach, the scale, the breadth of expertise that those businesses have. And it's not just in investor relations. It's in crisis, communications. It's in corporate advice, and that senior level of advice is really important.

So I think we've really got a fantastic portfolio now between that merger with BCW and Hill+Knowlton, and Hill+Knowlton is another company where actually haven't grown -- I tell you this, it hasn't grown in the U.S. for nine years. Under AnnaMaria DeSalva's leadership over the last 18 months to two years, she's really turned that business around in the U.S., and we're seeing good growth. So I think that the strength of our PR business is both underlying demand for clients, the strength of our offer and strong leadership by the people that run those companies.

Turning to the question about brand, look, I think that the third-party cookie in a way that data was treated meant that clients could operate in a very data-rich environment without thinking too hard about where the data has come from or what permissioning they needed to use -- to have to use it. Clearly, that's changed. And they look at platforms like Facebook and Google and see them both as ways to reach consumers, but also very data-rich ways to reach consumers. And as data privacy standards become stricter, and platforms like Apple, Apple really cuts across those platforms' ability to link their data out into the outside world.

So you've really got two businesses, Facebook and Google, who have really rich platforms, but Apple has stopped them activating that data off of those platforms. So ironically, it's going to have a dual effect on plan. At one level, it is going to make you think harder about well how do we collect data and how do we build our own set of data. This is sort of first-party data question.

If anything, though, it's going to drive more of their spend on to Facebook and Google because it's harder for them to activate that data off of those two platforms. So I don't think it's going to lead to spend moving away from it. If anything, it's going to direct more spend to those platforms and strengthen their position in the overall ecosystem. John, do you want to talk about that?

John Rogers -- Chief Financial Officer

Yes. So in terms of your question around any other COVID-related contracts that have driven spend from Q1 and Q2, I would say nothing of material nature, so no major impacts in the first couple of quarters COVID-related work. And in terms of your question on whether the German contract will sort of transcend into Q4, well, the contract itself actually ends in November, but the vast majority of the work has actually been completed at the end of September. So there won't be a material impact on the Q4 numbers.

So most of that upside that we've talked about today, we've seen come through in Q3.

Sarah Simon -- Berenberg Bank -- Analyst

Great. That's really helpful. Thanks.


We have the next questions coming from the line of Matti Littunen from Bernstein. Please ask your question.

Matti Littunen -- AllianceBernstein -- Analyst

Hello. Good morning.

Mark Read

Good morning. 

Matti Littunen -- AllianceBernstein -- Analyst

Two questions left for me. One on the Q3 project-based work. So that COVID contract aside, do you see the quarter as a bit of a bumper one in terms of how the pacing of project-based work ended up being this year or did not stand out from the kind of baseline? And then the second, following up on Sarah's question on PR and comms, still quite a fragmented market, I understand. So do you think there's going to be further consolidation in that space globally? And then related to that, can you describe the benefits to scale at your group level that you see in PR and comms?

Mark Read

I think on the PR and comms question, look, I think it's somewhat fragmented, but I think there are a number of -- a small number of big global players, and I wouldn't expect necessarily to see further consolidation among them. And we have now within WPP three really strong global offers. I think the benefit of that is less about sort of scale and efficiency, but more about helping clients deal with issues in a much more connected world. So if you're running a company in Silicon Valley, what happens in India or the EU, it is important to you, but more important to you now than it ever has been.

So I think clients need partners with broad global reach, and they need those partners to have real depth of local relationships, which is why these companies are so important. But look, I think that they are strong businesses and have excellent talent, and that's what clients really are looking for. And John, do you want to answer the question on...

John Rogers -- Chief Financial Officer

Yeah. Look, I think on sort of project-related work, I mean, I think it's fair to say that the most impacted quarter of last year would have been the start of the impact of COVID. Obviously, project-related work was arguably the first revenue stream to be cut by clients because it was relatively easy to do so. So we would have seen the biggest impact from project-related work come through in Q2 of last year.

And therefore, Q2 of this year, we saw a degree of bounce back, but I wouldn't ascribe much more a trend to it than that. I think we've continued to see strong performance in Q3, and I'd expect that trend to continue into Q4 as we continue to recover coming out of COVID. So I think the biggest quarter-on-quarter impact would have been seen in Q2, frankly not Q3.


We have the next questions coming from the line of Matthew Walker from Credit Suisse. Please ask your question.

Matthew Walker -- Credit Suisse -- Analyst

Hi, Mark. Hi, John, congratulations on the results. Very impressive. I've got three questions, actually.

You indicated at the beginning, you thought there'd be a lot of questions on growth in next year, and you've kind of hinted already on the call that you expect growth to be more momentum to be good going into next year. Thinking back to the capital markets day you did a while back, you were going for, I think it was, 5% in '21 and then another 5% in '22. Now the shape has changed a bit, and you've done much better in '21. Is it still possible to get to 5% in '22? The second question was around growth rates on a two-year stack for some of those creative businesses.

You said that VMLY&R was double digits. Can you give us an idea about how well the other creative businesses like AKQA, Ogilvy, Wunderman Thompson are doing on a two-year stack, either for the nine months or for the Q3? And then final question for John is on the balance sheet and the buyback. It looks to me like if you stack to the lower end of your net debt target of 1.5, you could easily do, let's say, $1.5 billion of buyback in '22. Does that sound -- does the math on that sound right?

Mark Read

OK. I think I'll let John answer all three questions except to say -- not to steal his thunder, except to say, look, I think our media business did do particularly well in Q3. But actually, our creative business did well as well. And I don't think that we should forget that at what we call creative.

To remind you, we're not just people that produce TV ads to include -- encompasses everything, all the services offered by those integrated agencies from branding to communications to e-commerce to marketing technology, and those are the areas in which we're seeing growth. John, do you want to...

John Rogers -- Chief Financial Officer

Yes. So Matthew, maybe I'll answer those questions in reverse order, if I may. Look, in relation to the buyback, I think if you applied our guidance and given our current reported net debt position, you would expect to see that net debt position improve toward the year-end, obviously, subject to working capital movements, but you'd expect to see that improve, which would put us way below our net debt to EBITDA guidance. And therefore, the inference would be, all else being equal, of course, that there would be a continuation of the share buyback program into 2022, in line with the capital allocation policy set out at our capital markets day.

So now, of course, there's a big caveat there, which is all else being equal, and we don't know what we don't know, but I think it would be reasonably sensible to assume, and we'll obviously provide more detail in February of next year. But as the math would have it, you'd expect to see a continuation of the share buyback program. I'm not going to comment on the quantum figure that you drew out. I won't be drawn on that other than to say that all else being equal, you would expect to see a continuation of the program.

In terms of the two-year stack that you highlighted for the different global integrated agencies, as we've already given the numbers for GroupM, obviously, double-digit great growth. Again, VMLY&R double-digit growth in the quarter on a two-year basis. The implications, therefore, that Ogilvy, Wunderman Thompson and the AKQA Group are slightly negative on a two-year basis, albeit I think, in all cases, we are seeing an improving momentum. So you've got Wunderman Thompson, which is almost getting back to 2019 levels, certainly improving Q2 on Q3 -- or Q3 on Q2.

You've got Ogilvy, which is just into single-digit negative decline versus 2019. But again, it's improving quarter on quarter. And again, you've got AKQA, which is in roughly mid-single-digit decline versus 2019, but again improving quarter on quarter. So we're seeing positive momentum, but still more work to do to get back to 2019 levels in those agencies that I've described.

So that's a two-year stack. And then in relation to -- I love the way you phrased your question. In relation to growth into 2022, look, you're absolutely right, of course. As previously said, it would take us two years to recover back to 2019.

It's taken us in effect less than one year, and the guidance implied this year will be -- there will be certainly 2%, 3% ahead of 2019 at the year-end. So much more positive performance than we thought. In terms of -- we're not going to give guidance now for 2022. We are in the midst of our budgeting process as you would expect, as we speak, and we will give much more detailed guidance at our premiums in February.

Other than to say, as we've already made the point on the call, that we see positive momentum coming through in the second half of this year, and we would expect to see that momentum continue into 2022. But I'm always the one getting drawn at this stage as to what the level of growth we expect to see in 2022, 5% or otherwise, I won't get drawn on that today, but we will give you more detailed guidance come the prelims in February. Thank you.

Matthew Walker -- Credit Suisse -- Analyst

OK. That's great. Thank you very much.


We have the next questions coming from the line of Richard Eary from UBS. Please ask your question.

Richard Eary -- UBS -- Analyst

Many thanks. Good morning, Mark, John. Thanks for the call and again, great set of results. A number of questions have been answered, but maybe a couple of questions for myself.

The first thing, is there any other sort of potential reviews that you can think about in terms of unlocking value in the portfolio similar to what you're doing with SVC and Finsbury Glover, particularly looking at maybe some of the specialist agencies and what you can expand on that or not? The second thing just is on -- we had record account wins last year. Year to date, momentum has been pretty good. I just wonder whether you can quantify any impact coming from those in these results already. And lastly, as we go into '22, this year has been obviously being quite a big year for retention accounts.

I'm just trying to get a feel for how we think about '22 in terms of big accounts can be up for review and whether it's an opportunity or a hedge foot win for you next year.

Mark Read

Look, I think on the portfolio, we look at it. There may be things at the margin, but I think that we're broadly comfortable with the portfolio as it stands. I think we did 55-plus disposals in the first two years, both to reduce our debt and to reshape it into what we wanted. And I think broadly speaking, we're comfortable with where we are, maybe a little bit of tidying up on the associate and investment line that will happen naturally, but I don't think we're in a great rush.

On the account wins, the -- as you say, I think we came into this year with a little bit more risk. I think we benefited a little bit this year from the wins we had last year, and we do well, and there's still quite a lot to go. It will impact us next year. I think what -- to be honest, what really drives our results are probably the things that are less visible than these sort of big media wins one way or another.

I think GroupM is an excellent business and will continue to be so. And our creative agencies win a tremendous amount of work from clients that never hits the pages of a campaign or isn't reported in the same way or covered in the same way. I think that's increasingly the case, which is why there's such a focus on the media wins, but that's really about 35% of our business. And so I think we have to look elsewhere.

So I think if we do well, and I think we've got good momentum, our client satisfaction scores continue to be high. I think that bodes well for organic growth next year. But I think it's sort of a little bit at the margin. And what was your last question? We got other things coming up.

Richard Eary -- UBS -- Analyst

Yes. It was more as we look into '22, I mean, if this year has been a more business at risk, despite obviously good retention from people like there, how do we think about '22? Is there more opportunities or are there more threats?

Mark Read

I think, if anything, there's more opportunities. I mean, this was a particularly tough year coming into this year. Media clients tend to review on a three or four-year basis. Unilever hadn't reviewed for seven years.

I think we knew it was coming up this year, and these things are competitive. But I think probably going into the balance of this year and next year, we probably got more opportunity than we've got risk. And I would say that I think one we've seen coming out of COVID is, and this is important, a desire by clients to look at their partners, look at who they want to work with, consider their data and technology strengths. I'd point out, at WPP, we have, I think, more than 120 clients with more than $20 million of revenue.

We've got substantial big clients with whom we can expand our relationships, so there's a tremendous amount of organic growth opportunity. And often, that's as interesting as the sort of new business pitches that hit campaign. 

Richard Eary -- UBS -- Analyst

Thanks, Mark.


There are no further questions at this time. I would like to hand the call over to Mr. Mark Read for further closing remarks.

Mark Read

Well, thanks, everybody, and thanks very much for your questions. It's a good quarter. There's more work to do to finish the year, and look forward to talking to you soon. Thanks, everyone.

Duration: 73 minutes

Call participants:

Mark Read

John Rogers -- Chief Financial Officer

Omar Sheikh -- Morgan Stanley -- Analyst

Julien Roch -- Barclays Investment Bank -- Analyst

Tom Singlehurst -- Citi -- Analyst

Sarah Simon -- Berenberg Bank -- Analyst

Matti Littunen -- AllianceBernstein -- Analyst

Matthew Walker -- Credit Suisse -- Analyst

Richard Eary -- UBS -- Analyst

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