H1: Comfortably Clears Low Bar Ahead Of A Better 2H On NNB And Early Elevate28 Benefits

Research evidence excerpt

J P M O R G A N

Europe Credit Research

06 August 2026

WPP PLC

H1: Comfortably Clears Low Bar Ahead Of A Better 2H

On NNB And Early Elevate28 Benefits

Q2/H1 FY26 print comfortably beats a cautious consensus: WPP’s H126

revenues less pass-through costs declined 4.7% lfl to £4.7bn (2.1% ahead), with a

significant sequential improvement in Q2, which declined 2.8% lfl (css: -6%). The

much better-than-expected result reflects improving trends at WPP Media, easing

comps, improved client retention and much improved Net New Business (NNB)

momentum (see here, here, here). That said, performance remained pressured by

prior-year client losses and overall weaker spending, with notable declines across

North America (-6.0% H1; -4.3% Q2) and EMEA (-4.3% H1; -3.0% Q2), although

APAC (-3.8% H1; +0.3% Q2) and LATAM (-1.2% H1; +0.9% Q2) returned to

growth in Q2. H1 Headline operating profit declined 3.4% to £398m, but again,

well ahead (13.4%) of consensus as cost initiatives and lower severance drove a

20bp improvement in operating margins to 8.4%. WPP reiterated FY26

guidance, expecting revenue less pass-through costs down ‘low-to-mid single

digits’ in H2, headline operating margin of 12-13%, adjusted operating cash

flow before working capital of £800-900m and disposal-related proceeds of

>£200m.

Balance sheet and capital allocation: Asset sales and operational stabilization

to drive deleveraging. Operating cash flow before working capital fell 14.9% to

£309m, while adjusted net debt increased to £2.9bn from £2.2bn at FY25,

reflecting the group’s seasonal H1 working capital outflow. Average adjusted net

debt-to-headline EBITDA was 2.18x, broadly unchanged versus 2.20x at FY25.

Management emphasized a focus on balance sheet strength and disciplined

capital allocation, with the annual dividend maintained at 15p, in line with the

reduced 2025 level. With the FY25 results, management has highlighted the

potential for inorganic deleveraging, with portfolio rationalization underway.

Through 1H26, the company has agreed ~15 non-core asset disposals, on track

to realize the targeted >£200m in FY26, with proceeds earmarked for

…