WPP PLC

LSE:WPP

Earnings Call Transcript 2018-Q3

[Operator]

Good day, and welcome to the WPP Third Quarter Trading Update Conference Call. This conference is being recorded. At this time, I would like to turn the conference over to WPP CEO, Mark Read. Please go ahead.

[Mark Read, CEO & Executive Director]

Good morning, everyone, and thank you for joining the call. I'm here with Paul Richardson, and we're actually in our new office in Sea Containers House. Paul and I will really take you through the charts, and I'll start with an introduction and then hand over to Paul. I think as we said in the statement, turning around WPP really will require decisive action and radical thinking, and what you see in our performance in Q3 really reinforces our belief that, that's necessary. If you look at the Q3 slowdown, it really reflects issues that we've identified previously in North America and in our creative agencies, but also in other areas and I think that we'll get into the detail of that, I'm sure, in the charts and in the questioning. But I think it's disappointing both in terms of timing and also in terms of quantum, and really looking at it reinforces our determination, as I said, to address the issues that we see, many actions that we've already taken over the past 6 months and 8 weeks what we need to do in the future. I think if you look at WPP, we do have very strong agencies, fantastic people. We have clients who have been supportive of what we need to do and partners. But the reality is that there's a lot of work to do. The slowdown that you've seen in this quarter really started at the beginning of last year. And if I look objectively at what we need to do and what we've done, we have been too slow to adapt to some of the changes that have been going on in our industry. We have been too -- we have become too complex. And we have under invested in some core parts of our business, primarily in our creative agencies and bringing in the best creative talent and in some of the technology areas that need to drive our process. So we've got a lot of work to do, and we just have to get on with it.So turning to really the strategy and the vision. And back in April, when Andrew and I took over as COOs, we really started to work at looking at what the right strategy was for the group in terms of simplifying the organization, better positioning our companies for growth and eliminating the silos and start them working together and collaborating around clients. We need to invest more in our creative talent and really build a common technology and data strategy for the group, all of which should make it easier for clients to access many of the strengths that we do have within the company. And at the heart of that new strategy will be a vision for the group, supported by a culture that brings us together and makes us the most attractive destination for the best talent to lead the industry in the future.We've already begun to implement the strategy, and I think we started really very quickly back in April both looking at the balance sheet. And the key goal was really to move very quickly to strengthen the balance sheet and I think we made excellent progress there, and Andrew has really driven with his team pretty rapid action in that respect. We've had 16 disposals since April, raised GBP 704 million. And as a result, together with the renewed focus on working capital, our net debt at the end of the quarter is down GBP 925 million compared to last year. And I know that really strengthening the balance sheet and improving our cash position has been a key focus for many of our investors and it's something that we've really been focused on. But we've also started really laying the plans for the new WPP. And since I was appointed 6 or 7 weeks ago, we've really begun to move more of these plans into action to focus on really with the creation of VMLY&R, which we announced a month ago, that brings together the technology and creative skills at VML with really more of the creative and storytelling and brand-building skills of Y&R. And I think the people in both of those companies that have come together can see the advantages of that, both in terms of bringing complementary skills and much stronger offer to their clients. And it's also enabled us to focus more of our investment in the things that clients really value and less of our investment in some of the, let's say, the overhead or back office functions. Yesterday, we announced really further simplification with the integration of our health care agencies back into the lead, say, creative agency, so Ogilvy CommonHealth becoming OgilvyHealth, Sudler moving to become VMLY&R Health and [ GHG ] being integrated with Wunderman Health. And I think that should allow us both to eliminate a sub-holding company within the group, but it will also give those agencies and clients access to a much broader range of skills, both special skills that reside within those agencies and in other schools within the agencies with which they've been aligned. And I think it will strengthen our health care offer, and we do see some weakness in Q3 in health care and this is designed to address some of those issues. And then, lastly, we have started to strengthen the team with Andrew moving more formally into the COO role, Lindsay Pattison taking over the role of Chief Client Officer and Stephan Pretorius becoming WPP's first Chief Technology Officer.Just turning quickly to Kantar. We announced in the statement that the board have approved a formal process to review strategic options to maximize its value to our shareholders from Kantar. We do believe that Kantar is a strong company and there is an opportunity to turn it into the world's leading data insight and consulting company. But given what we need to do, we felt that the best way to do that was with a strategic or financial partner or perhaps both a strategic and a financial partner, that's something we need to look at as we go through the process. We envisaged WPP will remain a shareholder so that those clients of Kantar will continue to have strong strategic links into WPP and WPP clients will continue to have strong links into Kantar. And by remaining a shareholder, the shareholders of WPP will continue to see strategic and financial benefit from the actions we do. We need to build value in Kantar.Just turning quickly to new business because I think it's important given the news over the last 2 or 3 weeks, really just to put that in some context and understand really what's happened. I think if I go back to April, a number of analysts wrote reviews that did identify WPP as the company with the most business at risk from publicly announced client reviews and it certainly has felt like that. If I look at Ford, we had notification from Ford. I think we announced publicly back in November 2017 that they would be reviewing all of their business with us and we have been through an intense process with Ford looking at our relationships with them, both from a creative, but also from activation and media and other areas. The result of that is that we did lose the creative business, which obviously is disappointing, but I think highlights the need for us to invest more in creative and put creative to even more at the heart of WPP than it is together. But we did retain our global activation and the majority of work that we do for Ford and Ford, I think, is likely still to be WPP's largest client in 2019. And if I look at the recent pitches that we've lost, primarily they are media pitches. It's important to note that we do retain substantial relationships with those clients. We have not lost all of our business with those clients. And we also won a number of pitches in the future. Look back 2 months ago, you would have said we had a get very good run winning business from adidas, Mars, Hilton, Mondelez. So I think if taken as a whole, although I'm disappointed with the pitches that we've lost, I think we need to put this exactly as we've had and look into those few things as what we need to do in the future. And the lessons I would draw is we have to make it simpler for clients to get access to the best talent in WPP. We have to invest more in common data and technology platform. And we have to blend that expertise seamlessly together for clients. So just turning to the strategy update in December. It's clear that WPP, as a group, we have grown into a very large and complex organization. We have tremendous strengths within the group. And when I talk to clients, they can all see those strengths and want WPP to succeed. But we do have our challenges. And while the slowdown this quarter is disappointing, I have to remind ourselves that our growth in Q2 of 2017, so 18 months ago, was minus 1.7 is worse than it is in this quarter. So this is not a new event, and I think we have been challenged for the last 2 years. So it's going to take time to turn around the performance of the group. And I think we need to be realistic about the short-term issues that we face, also what we do. Our top 150 got together in Brooklyn 2 weeks ago. And I think we had a good meeting where we started to outline the new strategy and work with them on developing it and getting their feedback on it that we'll share with the market in December. I think we did come away excited by the future, united by a sense of common purpose and really committed to working together to build the new WPP. So I was certainly and I think our top team are very reassured by that. And when we come back to you in December, we would update you really on what we see the growth opportunities are for the business, how we can best capture them through the initiatives that we talked about and that we're already implementing in terms of simplifying our structure, investing in technology and talent and really building a new culture that draws the best and brightest to WPP. I think one last word before I hand over is really to say thank you to Paul on behalf of the board and the company as a whole for his contribution to our success over the last 26 years with WPP, 22 of them he's been our Group Finance Director. As you've seen in the statement, Paul decided to retire from the company next year and he'll work with us to ensure a smooth transition during the quarter next year as we appoint his successor. And he's really played a central role in building WPP since joining the company. He's been a fantastic colleague to me and many others and a friend to many of the people inside the business. And from a personal note, I'd like to thank him for his support, particularly over the last 6 months, which have not been easy. Paul?

[Paul W. G. Richardson, Group Finance Director & Executive Director]

Okay. So thank you, Mark. Unfortunately, I do have a disappointing quarter to report, I'll take you through it. The third quarter showed like-for-like revenue less pass-through costs down 1.5%. Changes in performance, particularly in North American creative agencies, accelerated our decline in the quarter. And so, therefore, year-to-date, we're down 0.3%. North America saw further continued pressure with like-for-like revenue less pass-through costs down 5.3% in quarter 3, having been down 3.3% in quarter 2 and down 2.4% in quarter 1. In addition, the U.K. and Western Continental Europe both fell back after the second quarter of growth in those regions with third quarter down 2% in U.K. and 0.4%, respectively, in Western Continental Europe. Asia Pacific, Latin America, Africa and Middle East and Central and Eastern Europe was relatively stable with third quarter growth of 2.4%. As Mark has mentioned, we made very good progress on the asset disposal plan, raising so far year-to-date GBP 704 million of cash proceeds from the 16 disposals and we'll continue to look for other disposals to continue the disposal program. Additionally, the board has approved a formal process to review strategic options for Kantar to maximize shareholder value. So the net debt at the point of 30th September 2018 was GBP 925 million better at constant exchange rate, reflecting the asset disposals so far and an improved working capital performance in the second half of this year compared to second half of last year. The net new business record for the first 9 months is at $4 billion after 9 months date. A further $900 million were added in the third quarter.The full year guidance has been updated to reflect disappointing third quarter results and initial indications in the third quarter on our preliminary revised forecast received over the weekend. So taking you through on Slide 5, the revenue less pass-through costs versus prior year. So here, you could see visually the like-for-like growth for each quarter, so you saw there minus 0.1% for quarter 1 plus 0.7% for quarter 2. Then when we stood up at the half year, we were running at plus 0.3%. As, again, all of you will know, at the half year, we raised our guidance on the full year to plus 0.3% for the full year. We were expecting a flattish quarter 3 and a positive quarter 4. What has turned out was July was on track with our expectations, August missed slightly, but September missed heavily our forecast. So instead of the quarter being broadly flat in the third quarter as we expected, it's down 1.5% in quarter 3. You'll understand from working through the numbers that we're expecting a similar pattern now to arise in quarter 4. A significant delta from our original half year forecast for what was growth to be in the fourth quarter will now be a decline in the fourth quarter. So with that change, we broadly moved our guidance for both revenues and margins, and I'll come into that later on a full year basis. So year-to-date, coming back to the details on Slide 5, like-for-like growth is down 0.3%; acquisitions have added 1%; foreign exchanges, 4% negative. And therefore, on a reported basis year-to-date, net sales or revenue less pass-through costs are down 3.3%. Turning now to Slide 6, showing the impact of foreign exchange. So last year, foreign exchange was positive for the group by plus 4.6%. September year-to-date headwind is minus 4%. And on a full year basis, we're expecting it to be around 3% or 3.3% as shown on this particular slide.Taking you now on Slide 7 to the revenues by regions for the third quarter, and you can see here 3 of the regions slowed versus the first half in the third quarter. So North America, which is 36% of our group had like-for-like decline in revenue less pass-through costs in the third quarter of minus 5.3% having been down at the half year 2.9%. In the U.K., which did see a change in performance they're having -- the U.K., which is 13% of our business, was up 1.5% at the half year, was down 2% in the quarter, and I'll come back to the reason. Most sectors were affected here in the U.K. In this particular marketplace, media investment management was slightly soft in the quarter. Data investment management was soft and our direct business and consulting business were also soft in the third quarter. In Western Continental Europe, which is 20% of our business, hasn't been growing at 1.9% for the half year, was down 0.4% in the quarter. We saw weakness coming through in Austria, Germany, Norway, Spain, Sweden, Turkey compared to their trend rate in the first half.And in Asia Pacific, Latin America, Africa and Middle East and Central and Eastern Europe, which is around 31% of the group, overall, a consistent pattern with the first half growth of 2.6%, growing in the third quarter 2.4%, but understandably unfortunately Australia and New Zealand was down around 5% for us in quarter 3. So overall for the group then, in the quarter, we were down 1.5% in quarter 3 having been positive 0.3% after the first half.Turning now to Slide 8, just giving you the year-to-date performance for each of the regions. So with that third quarter performance: North America overall is down 3.7%, United Kingdom is basically flat at plus 0.3%, Western Continental Europe is still positive at plus 1.1% and Asia Pacific, Latin America, Africa and Middle East is positive at plus 2.5%. If you turn to Slide 9, you'll see broken out in the various sub-regions quarter-by-quarter performance of each of the major regions. So North America, you can clearly see the trend decelerating, the minus 2.4% in quarter 1, minus 3.3% in quarter 2, the minus 5.3% in quarter 3, making the first 9 months down 3.7%. Pleasingly, in Latin America, our strong growth continues at around 8.2% for the first 9 months. It's a solid region coming through. Turning now towards Europe. U.K., you can see there positive in the first 2 quarters, down 2% in quarter 3, and positive overall for 9 months at 0.3%. Western Continental Europe has been a bit choppy, so it was down 0.2% in quarter 1, up nearly 4% in the second quarter and down 0.4% in quarter 3, but overall for the 9 months is up 1.1%. Central and Eastern Europe seems to be relatively strong. Nine months year-to-date growth of 4.5%, in the final quarter growing at 4.9%. In Asia Pacific, in total, in the quarter is growing at 1.5% and overall after 9 months is growing 1.4%. If you look down the bottom of the slide, you see there in the mature market, it has been soft all year. So in quarter 1, we were down 1%; quarter 2, down 0.3%; and quarter 3, down 3.3% in the mature markets. So year-to-date, therefore, was down 1.5%. However, in the faster-growth markets, we have seen consistent growth and are growing overall year-to-date plus 2.5%. The 2 combined, therefore, making minus 0.3%. So turning now to Slide 10. Again, more details on the major markets showing you both the full year number for last year in 2017, which indicates the U.S.A. was minus 3.2%, the quarter-by-quarter trends and the year-to-date performance after 9 months like-for-like U.S.A. is minus 3.6%. U.K. has had a strong year last year, so we are lapping some quite strong numbers. And despite the minus 2% in quarter 3, we are expecting to be flat in quarter 4 against a very strong performance last year in the U.K. of close to 9% or 10%. Germany, however, again a choppy market overall: minus 1.3% last year, minus 5.7% in quarter 1, plus 5.5% in quarter 2, minus 1.0% in quarter 3. Overall, year-to-date basically flat at minus 0.4%. Greater China, a good strong story year-to-date. So last year, we were down 3.2%. With good growth particularly in the second quarter, we're seeing 9 months growth at 3.5% in Greater China. France has weakened for us in the third quarter and you can see that last year we were plus 0.4% overall. This year, we were trending well until the third quarter where we're down 4.5%, making the year-to-date number minus 1.3%.Likewise, just turning to the BRIC markets on Slide 11. You can see that actually for us, our Mainland China business is strongest of the Greater China region. And overall year-to-date, in Mainland China, we're growing at over 5% at 5.1% compared to Greater China growing at 3.5%. Brazil as part of Latin America is having a good performance growing at 7% year-to-date, having grown at just under 2% last year. India has accelerated pleasingly in quarter 3. It was affected badly by the goods and services tax last year in the third quarter '17, so there is a little bit of a bounce back. And we have seen 12.9% growth in India in quarter 3, making 4.7% for the year. Russia remains choppy, basically minus 0.8% in quarter 3 and minus 3.3% in the 9 months year-to-date.Turning now to revenue less pass-through costs by sector for the third quarter. So our advertising and media investment management business is just 42% of the business, so overall decline for the quarter of minus 4%. That was significantly poorer -- or worse than the first quarter decline of minus 0.9% and a second quarter decline of 0.7%. And we did see some weakness, as Mark mentioned, particularly in the U.S.A. in our advertising business, in Continental Europe and in Asia in the quarter. And in the U.K., we did see some media weakness coming through. In data investment management, which is 15% of our business, we did see very slight improvement in the quarter relative to other quarters. So quarter 1, we were down 1.7%; in quarter 2, 1.3% we were down; and in quarter 3, we were down 1.2%. So basically, broadly flat at the run rate of minus 1.2% for the 9 months. Public relations and public affairs was our strongest sector again. This had good growth in this quarter, 2.5%, following growth of 1.1% in quarter 1 and 5.8% in quarter 2, particularly strong performance in our financial public relations business and in Asia and in Germany. In our brand consulting, health & wellness and specialist communications business, which is 33.7% of the group, overall, we were plus 0.4% in the quarter. We saw good growth with digital and health & wellness up in the quarter, but brand consulting was challenging in quarter 3.So overall, then for the group, by discipline, the quarter growth was minus 1.5%. And if I look at the year-to-date performance of the same disciplines overall where we are minus 0.3% after 9 months, you see advertising, media investment management overall for the 9 months down 1.8%; data investment management after 9 months, down 1.4%; public relations public affairs after 9 months, up 3.1%; and brand consulting, health & wellness and specialist communications overall up 1.4% after 9 months.So turning now to Slide 14 on the trade estimates of major client wins. Again, just for the -- for those that aren't familiar with our slide, the shaded wins are those that have been won or lost since the end of the second quarter, i.e., since the half year. And those that are underlined have been announcements that have occurred since the 1st of October. These estimates of wins from the Trade Press and they do tend to focus on the media wins, the North America wins and the global account changes as a general. So you could see here we have had some good news, as Mark has mentioned, in terms of wins, more recently our media businesses in Mars and Mondelez, a nice win globally for adidas, et cetera, coming through in our numbers. Likewise, as Mark has also mentioned on Slide 15, we've had some disappointments more recently in this quarter with the announcements of Ford, GlaxoSmithKline and American Express, to name 3. And you see, overall, our picture of wins and losses both global and media coming through for year-to-date.Turning now to net debt and the balance sheet on Slide 16. I'm pleased to say that the year-to-date average, again, with the 9 months average, has now equaled where we were year-to-date last year at GBP 4.9 billion or basically GBP 10 million difference. This difference as at the half year on the averages was minus GBP 273 million. So the averages are now beginning to move and basically cross over, and that is because of the following. So when you look down below, the net debt we reported on constant-currency basis at 30th of June was GBP 4.6 billion. It was GBP 84 million better than the previous year. When we reported the same at the 31st of July, that's GBP 5 billion. It was GBP 508 million better than it was the previous year. And you look now at the 30 September we're at GBP 4.8 billion of net debt compared to GBP 5.8 billion or GBP 925 million better than we were a year ago. So we are pleased with that performance in terms of the year-on-year reduction and point-to-point of the net debt.On Slide 17 and the uses of cash flow. This really brought it together for you in terms of where we were this year versus last year. So with acquisitions, we are still spending and have spent so far GBP 260 million on the year-to-date, having spent GBP 136 million at the half-year point. In disposals, again, as Mark has mentioned, proceeds now received at GBP 704 million, having received GBP 469 million at the half-year point. So the net benefit of acquisitions less disposals after 9 months is a positive GBP 444 million, having been a positive GBP 333 million after the half year. Share buybacks. We have not purchased any further shares in the third quarter whilst debt reduction remains a priority, but we have bought in 1.3% of the shares in the first 9 months of the year, which more than matches dilution of shares throughout the year.And again, down below, the closing net debt, as I mentioned, is GBP 4.9 billion compared to GBP 5.8 billion a year ago, and undrawn facilities and surplus cash total around GBP 3.4 billion currently on our balance sheet. Again, the revised target range remain. Something we're seeking to achieve and net debt-to-EBITDA ratio of 1.5 to 1.75x.So in terms of outlook. Again, with the disappointment that we saw in the revenue line, we are having to bring down with a more cautious view of the rest of the year, our like-for-like revenue less pass-through costs growth is likely to be down between 0.5% and 1%. And our forecast headline PBIT margin to revenue less pass-through costs is likely to be down between 1 and 1.5 margin points. So having been at 17.2% last year, we're expecting the group to be somewhere between 16.2% and 15.7% on a full year margin basis. Again, this is in line with the very steep deceleration of revenues we've experienced in the second half of this year, we expect to experience in the fourth quarter following the third quarter and the adjustments we're trying to take in the time doesn't allow us to maintain the margins that we expect to maintain, which only was 0.4% down at the half year is now going to have to be somewhere between 1 to 1.5 margin points.So in conclusion, the slowdown in the third quarter reflects the weaker performance in North America and the creative agencies, the issues we highlighted at the interim results. Decisive action and radical thinking are needed to address legacy issues and improve our performance. The new vision for WPP was supported by strong culture that binds us together and makes us the best destination for talent, allowing us to lead our industry in the future. Actions so far include the creation of VMLY&R, the integration of health care agencies with Ogilvy, VMLY&R and Wunderman and the key appointments in operations, clients and technology. Strengthening the balance sheet with the disposal of noncore investments raising GBP 704 million and the review of strategic options for Kantar with a greater attention to capital discipline and focused acquisition spending so far this year. And there will be a strategy update from the company in December to the investors. And with that, Mark and I are happy to take questions.

[Operator]

[Operator Instructions] We'll now take our first question from Brian Wieser from Pivotal Research.

[Brian W. Wieser]

I was wondering do you think that clients have permanently reduced spending on creative services as much as they can? Or is it that they've reduced spending on agencies or what they're spending with you when you're seeing this slowdown that you're seeing? And I'd love to hear your thoughts on the degree to which you think it's in-housing or work with the likes of OLIVER or it's just is there reduced demand at this point and it just happens to be impacting you more than others? And maybe a separate question, I was wondering if you could, apologies if I missed it, but if you could quantify the impact of the Ford loss on 2019 to the extent that you can.

[Mark Read, CEO & Executive Director]

So I think if we look at what clients are saying about creative services, I think that clients, first, still believe that creativity is critical and that is what they're saying in meetings that I have with them. I think they are reducing demand for creative assets in traditional media channels, so television, print, outdoors, to some extent, radio, newspapers. And part of the challenge we face is that we have agencies that are focused on traditional channels and agencies that are focused on digital channels. I think that if you look over all of that, the growth in demand for creative and content, I think that, that is still growing. So I think that the pressure we see is really pressure for creative in traditional channels, I think that's the first point. I think that on in-housing, I don't think that, that's had an impact. I think that, that's a marginal impact, certainly in our numbers. I think the third realization I've made is clients are changing the way in which they buy creative services. I think that's particularly huge in North America where they're moving from kind of more standard agency record-type relationships and putting more of their business into ad hoc or project based that has, to some extent, made the visibility in our creative agencies shorter and I think we have seen some of that in the results in Q3. So I'd say those are really the key points creatively. In terms of Ford, obviously it's hard for us to sort of quantify for an individual client the impact. Because it's a matter between us and the client. But I think if you were to look at the losses sort of in a vertical, exceptional losses, we probably have a headwind with maybe up to 1.5% going into next year.

[Operator]

We'll take the next question from Charles Bedouelle from Exane.

[Charles Bedouelle]

A couple of questions. One is on Kantar. When you think about the strategic review and the potential partnership with the majority new owner, do you have kind of price consideration in mind? Or is this something you want to do almost whatever happens? I'm saying this because it seems to me that the recent transaction and market research have been relatively low, I mean, with low multiple. So I'm just kind of gauging your price sensitivity here. The second question, I guess, is there's been a lot of talks and a lot of pain in the U.S. and you've described what happened very well. What is your view at this stage of what could happen in Europe and maybe other regions in the near or midterm future? Is this something that you think will remain just a U.S. or North America issue? Or do you -- are you getting ready for maybe this trend to also move on to other regions? And the third question is...

[Mark Read, CEO & Executive Director]

You mean in creative?

[Charles Bedouelle]

Yes, in creative, yes, absolutely creative. Absolutely creative, sorry. And the third question is you talked about the sharp deterioration in September and I was curious to what extent this could be, maybe a bit of a blip into what is obviously a difficult trend? Or if you really think something has changed because on a monthly basis things can move fast. But do you have strong signals that actually Q4 is going to be the same? Or are you kind of leaning on the cautious side after being burned, if I may say, with the September performance? Just trying to see where things are.

[Mark Read, CEO & Executive Director]

I think taking it through. So on Kantar, clearly, we've received a lot of inbound interest and it is an attractive asset, I think, for many private equity companies, at least that's what they say to us. I don't want to discuss our price sensitivity on a conference call, but I think that we'll do it at the right price and we're really just getting started with the process. On the creative in Europe. I think that the U.S. has probably been slower to adjust to the new creative way of working than we have in Europe. And you've got to remember, Europe, 2008, 2009, clients had been under a lot of pressure. And I think to some extent are the challenges in the U.S. in terms of packaged goods moving to the types of AOR relationships have actually, to some extent, happened there after they happened in Continental Europe. And I think some of the issues, if we're honest with ourselves, are because we need to invest more in our creative agencies in North America, make our creative agencies stronger and we don't see those issues in all of our competitors. And then on your last point in terms of deterioration in September, I think that's all in Q3. And whether it's a blip or a trend, I think we have to remember that we had a decline of minus 1.7% in Q2 of 2017, so this is not a new factor. We have been underperforming for the last 18 months. And I think that we are rightly cautious given what we've seen going into Q4. So I think we've given you our guidance and we will do our best to beat it.

[Charles Bedouelle]

Okay, that's great. And if I can have a quick follow-up? A very quick follow-up on the bright side, I mean think how much better in China and APAC in general. What has changed for you -- I mean, for you and for the market in general, performances have been better in China. Has anything changed there for the better versus last year, for example?

[Mark Read, CEO & Executive Director]

Yes, I think we've had some stronger businesses and some stronger performance and we're -- in that market, we're winning more than we're losing. We do have a very strong competitive position in China. And I think if you look at the group, we do have very strong competitive positions in China, Brazil, India. But one of the great strengths of WPP is the breadth of our business around the world. That's something that is valued by clients. So it's not all gloomy, if you like. So I think that our performance in China reflects sort of the competitive strength, the investment that we've made historically over a large number of years. And hence, we're doing better. So I think we need to draw the lessons from that what we need to do elsewhere.

[Operator]

We will now take the next question from Tim Nollen from Macquarie.

[Timothy Wilson Nollen, Senior Media Analyst]

I wonder if I could check in on the net new business figures, please? I think Paul you said post Q3 and it was $900 million. I assume that's a positive number, which is somewhat surprising given the losses. I wonder if you could clarify that. And help us understand within the guidance, if that is correct, meaning $4.9 billion positive year-to-date, you would have a positive contribution from the account wins, meaning the underlying growth must be, I guess, even worse than it looks. I wonder if you could help me clarify that, please. And secondly, given the divestitures you've done, no share buybacks to date. You've said before -- although you didn't say today anything about the dividend. Just curious what your use of cash from this point on, may be having done some good work to bring down debt.

[Paul W. G. Richardson, Group Finance Director & Executive Director]

Okay. First, just to clarify on the net new business number. So the year-to-date number, Tim, was $4 billion. The half year figure was $3.1 billion. So in the quarter, we only won $900 million. So that -- it's actually slightly lower run rate than we traditionally done quarter-by-quarter. So in one sense, we had a reasonable half year but a weaker new business [ assessorated ] in the third quarter. That's actually was getting fairly public in various issues. So this all feeds into it. And all these items, this is what sort of people find it difficult to correlate. Many of these items do not kick in for a further 3 to 6 months, both on a positive and negative side. So what is happening with the underlying business is much more about the day-to-day wins and losses that occurred 12 -- 6 to 12 months ago and whatever client actions are happening given their business outlook and their business performance in the current year. So that's really why there is a -- always a disconnect between the new business, which again are always quantified in the billings number. So again, it seemed bigger than the actual changes that flow through in later years. On the share buyback and the dividends, I think we are very pleased with the progress we've made on a net debt reduction, both the dividends and the debt reduction are high priority. What I said very clearly to investors that have asked is the 60p is something we want to maintain. We know that if earnings fall below where they were last year of 120p, which they're likely to do. The payout ratio will go up. But it is something that we can both fund and afford in the medium term. And therefore I'm not concerned, in any way, in services maintaining that 60p dividend. We will be flexible about the share buyback for acquisitions, depending on the speed of disposal proceeds to happen. So that's my view, our view as a company that where we want to be flexible is on the share buyback acquisitions where we have -- we wish there to be no flexibility is maintaining a 60p dividend and obviously that will grow once we return to above 120p of earnings.

[Timothy Wilson Nollen, Senior Media Analyst]

Okay, understood on that. Sorry to be a bit thick on the net new business. Is there a figure for the period up until, say, yesterday that you can give us?

[Paul W. G. Richardson, Group Finance Director & Executive Director]

We haven't got that available, Tim. Or you can calculate it.

[Operator]

The next question comes from Ian Whittaker from Liberum.

[Ian Richard Whittaker, Head of European Media Research]

Just a few questions. First of all, just on your guidance. I mean, the decline that you've taken back into your margins seems sharp when you look at the sort of decline in the guidance to your revenues. So you wouldn't expect that sort of margin take back given the revenue declines. Is it fair to say that essentially, sort of it is because of high margin work such as media has been disproportionately impacted, and that's why you've given quite sharp reductions in your margin guidance. The second question is if you look at your peers so far in Q3, they've all actually come out with statements that have been reassuring well received. No one has talked about sort of clients reducing their spending. So as you mentioned in the statement, no one have actually talked about sort of some of the -- or not talked about as much as maybe some of the issues you've highlighted. So therefore, would it be fair to say that sort of you see your problems as probably been more driven by company-specific issues rather than necessarily sort of sector-specific issues, and that you've already gone sort of a long way to explain some of the issues that you have, but that may make it sort of -- better first to understand just in terms of a longer-term direction sort of how things could change around. And then the third thing is, and apologies if you sort of did mention it, but missed it. What was the growth rate of Zaxus in Q3? I think before, you've talked about high single-digit growth.

[Paul W. G. Richardson, Group Finance Director & Executive Director]

Okay, let me deal with one and 3. But turning first -- actually -- so the trend that you saw in the half year has continued to the 9 months. So we're dealing with that one. So that continues to do well, particularly in the fast-growing market. In terms of margin decline that we're now forecasting, I think we do accept it, it's a very big margin decline compared to our traditional model, and it's, yes, I think -- there's 2 factors, I think, we've had, relatively tough times the last 18 months in the businesses, and they've been taking cost action. So if you remember last year, we were down 0.9% and -- sort of held our margin, although be it with some benefit from the associate income. It's really -- unfortunately, the speed of decline -- I've tried to portray that the delta of change in both coming through in September and the final forecast is very significant for us. And in some ways we hope we are wrong. But given the trend that we saw in quarter 3 of minus 1.5%, given the fact that we know that the new business still to be achieved that both this year and last year the final quarter are similar amounts. And given they originally had a forecast in the final quarter that was positive is now obviously going to be negative. It's that speed of change that we are finding it very difficult to address. Some of our businesses that are declining don't have the bonus cushions that they've had in previous years to deal with this to sort of mitigate the financial/impact in the final quarter. And as you recall, we've been actually very active about trying to make sure the businesses do take all the steps necessary to address their issues and not to hold back anything in terms of actions they need to take. So it is not specifically about any one discipline. If you go to the countries, we still have very good margin in a number of major markets. We were running at a relatively strong rate versus our competition a year ago. So when we were looking at our business last year, say, full year '17 on a preassociate basis, we're running at 16.4%. Our competitors were sort of very much in that range. So -- I see a number of competitors, one at 16.1%, one at 13.5%, one at 12.6%, one at 10.9% and even Accenture at 14.8%. So we are bringing it back, unfortunately, to a range that it was more consistent with the median of our competitors in terms of margins. But yes, it is disappointing. We're not happy about it, but unfortunately, it's the speed of decline in the final quarter that's really causing us to lower the guidance on margin.

[Ian Richard Whittaker, Head of European Media Research]

And just on the second question?

[Mark Read, CEO & Executive Director]

So clearly, Ian, we've underperformed our competition in Q3. I can't -- we're not going to sugarcoat the reality. And I think there are issues in our sector, but I think the reasons we've underperformed clearly relates to WPP. And we're determined to fix them.

[Operator]

The next question comes from Julien Roch from Barclays.

[Julien Roch, MD & European Media Analyst]

My first question is on Kantar. How can you avoid Kantar being dilutive with customer that being very low in most acquisition, these days, are accretive and most sales are dilutive, so some color on that. It's my first question. My second question is on margins. Your first half release stated that your long-term target was improvement in headline PBIT margin of between 0 and 30 basis points. As a long-term target, there's no reference on margin this release. So what can you tell us about margin next year and into second year? That's my second question. And then the last one is, can you explain specifically why you missed significantly versus budget in September? Which country or businesses has to be project-based I guess? Put some color on the September miss and identifying what went wrong there.

[Mark Read, CEO & Executive Director]

Okay, so I'll do the first 2 and Paul will take the third question. On Kantar, clearly, we've had a lot of interest in the business to date, and I think the reason to be more explicit is that it will allow us to get going in the next few weeks but we don't expect an outcome until next year. I think we need to look at the -- clearly look at the price and the use of cash that we receive between reducing leverage, which is a priority for us and many of our shareholders, protecting earnings in terms of managing the dilution. I think we'll have to get to the right balance between those 2 factors, depending on the price. And we are looking at retaining a significant stake in the business as well. So I think that we'll have to come to that at the right time. In terms of margins, I think we've felt that with the update coming in December, it wasn't right to put something specific about margins in this release. And that we'll come to that in December taking things in the round to give you the guidance that we can at that point. I think Paul will have some comments on September.

[Paul W. G. Richardson, Group Finance Director & Executive Director]

So looking at it sort of rather broadly. Now, I'm comparing what the businesses had forecast to achieve in September compared to what they actually did achieve in September. And I think, 3 of our disciplines did miss their expectations in December. And the only discipline that was ahead of where they thought it would be in the month of September was our public relations business. So when I look at geographies, actually, the miss was greater internationally. And despite still very good performance in Asia Pacific and Latin America, they are at around 2.5%, they were expecting an even stronger third quarter that didn't materialize. And our Continental European business underperformed quite considerably what they were expecting to do in the third quarter. So it's actually surprisingly slightly more international impact than U.S. impact in terms of missing the revenue forecast, and that's a trend that we then, obviously, have looked very carefully. We actually haven't had a chance to have our reviews of our businesses yet and about what that fourth quarter will be. But it's fair to say 3 of our 4 disciplines again have brought down quite significantly the outlook that they were expecting early 3 months ago for the final quarter. So and fairly -- it is fairly broad based. And I -- I'm fully conscious that last year, the third quarter performance and the fourth quarter performance were disappointing i.e., third quarter's down 1.1% and fourth quarter's down 1.4%. So that would indicate that should be a slight pickup in the fourth quarter in our run rate. But as you see, it's been a significant step-down from where we were at the half year. And I don't think we're seeing a significant change in the trend that we've experienced in quarter 3 in -- to change in quarter 4. So in summary, it's fairly broadly based. But specifically in September, it was more international than it was U.S.A. And by discipline, it was 3 of our disciplines missing versus one growing or one beating.

[Operator]

And I'll take the next question from Adrien de Saint Hilaire from Bank of America Merrill Lynch.

[Adrien de Saint Hilaire, VP & Head of Media Research]

A couple of them, please. First of all, if you look at your competitors, it seems that the fastest-growing ones are also the ones with the lowest margin. Is that the kind of model that you aspire to? The first one. And the second point, it's a bit of a follow-up to the questions that were asked before, I mean, how much of the weakness of the WPP do you think comes from company-specific issues as opposed to perhaps the macro environment getting a bit tougher, the point about trade wars and rising commodity cost perhaps? And lastly, obviously, you have a lot of businesses in consulting, but do you feel that you need to beef up your capabilities, perhaps invest a bit more organically or inorganically in the areas of consulting and business transformation like some of your competitors have done?

[Mark Read, CEO & Executive Director]

So I think on the first question you're on, margin versus growth. I think there are some things that we can look at from our faster-growing competitors in terms of how they structure their companies that may help clients get a simpler solution, and we have -- and we do study in detail what our competition does to understand what we can learn from that. I don't think that there is a simple trade-off in the long term between margin and growth. But I think we do need to be -- we do need to look at the right balance between those 2 factors, particularly ensuring in the short term that we can invest in the business, reward our people appropriately and bring the best people into WPP, and we'll come back in December with what we think the right balance is between those 2 things. I think on your second question about how much of the weaknesses is company specific? I think as I said in the statement, I think we have been -- the market is moving quickly. And if you look at every industry, every industry is being disrupted; the tobacco industry by vaping, the car industry by electrification, the retail industry by Amazon and e-commerce. And WPP is no different in that regard and what we need to do is shift our resources from what clients want less of to what clients more of -- want more of and integrate them more effectively. And I think to some extent, we have been slow over the last 18 months to do that. So that's really what we're focused on. And to the extent that, that's not -- I think the issues we see our company specific, to some extent. And I think that if you look at our peer group results, they have got a bit stronger in Q3, which reinforces our determination to do what we need to do. In terms of your last question in terms of consulting, I just remind people -- I think we said in the past, we were Adobe's Partner of the Year in 2017, which means that, to be specific, we drove more business to Adobe as a technology company than any of our competition. We do have very strong capabilities in terms of marketing technology. I think that they have been, to some extent, too siloed within the organization. We may need to make it more available across the group in the right way. And there will be further investment that we need to make in that area. And I think we need to really focus our acquisition spend on those areas that are most strategic and that will give the group as a whole the biggest bang for the buck, if you like. We have strong capability, we got a very strong businesses in Spain, called The Cocktail, in the area of digital transformation business. We got a strong business called Gorilla, the e-commerce company. A few months ago, in the United States have very good -- Magento which is now Adobe commerce experience, we bought a business called Emark in Holland, which is a very strong sales force marketing cloud partner. I think we may actually be Salesforce's largest marketing cloud partner today as well. So we do have good growth working with the technology companies, and there will be further areas we need to invest to build this around the world, but I think we start from a very strong base in that area.

[Operator]

We will now take the next question from Chris Collett from Deutsche Bank.

[Christopher Anton Giles Collett, Research Analyst]

Just had 2 left. One was just coming back on the topic of margins. You mentioned a number of times the need to invest in the business, both on the creative side and mentioning there also on the consulting and technology side. So just wondering, you'd previously said that you hope to keep margins flat in 2019. Just wondering whether or not we should still think that, that's the case or should we now disregard that comment. And then second question was just regarding the disposals. I think you're -- you still got revenues from acquisitions coming in, but your sort of net disposals. So just wondering what is the run rate now in terms of revenues and profits of the businesses that you've disposed.

[Paul W. G. Richardson, Group Finance Director & Executive Director]

I think, that might fall into my lap. So I think on '19, it's actually too early to say. I think the Strategy Day is going to be very key, because we only -- we'd like to lay out a 3-year horizon for you. Obviously, a lot of work is going on in the business now to reshape the business for the size of revenues we have. So I think, I'd prefer -- everyone would prefer to give you a much better feel of what charges we may have to take, how those will be reinvested back into margin incentives and the technology of the business over the next 3 years. And I think it's best to wait for them if you can. We, obviously, haven't received any budgets yet from any of our businesses to '19. And obviously, we have this overlay about what we want to do at the center to improve the growth prospects of the group. So on margins in '19, I really would sort of further say no comment.

[Mark Read, CEO & Executive Director]

In terms of acquisitions, I mean, the disposals we've made had really very little impact on earnings so far, and -- which is why we've been focused on sort of the investment side of the business. I think in the future, in terms of acquisition spend, and I think we're comfortable with what we've done in the past. But we're going to proceed cautiously and really focus the spend on those parts of the business that most critical to growth, and that we can integrate well into the company that don't add to complexity.

[Paul W. G. Richardson, Group Finance Director & Executive Director]

So I think the only one -- just to help everybody that had any impact at all, obviously, was the disposal of our 20% stake in the start of -- back in December '17 and most people have adjusted their associate income for that impact and globally. Thank you, [David], which will have more of an impact in '19 than it did in '18. So those are the only 2 that will get into the associate line that are being impacted so far.

[Operator]

The next question comes from Matthew Walker from Credit Suisse.

[Matthew John Walker, Research Analyst]

Two questions, please. The first is you mentioned in terms of the impact of recent account losses, you mentioned something around exceptional losses of up to 150 basis points for next year. Could you just clarify which accounts are actually in that so-called exceptional bucket or if it's just Ford, it wasn't clear. And on health care, you've also mentioned, there was a bit of a dip in the health care business I think in the U.S. Could you just sort of explain what actually is going on in the health care business and whether you think that weakness will sort of persist for a while anyway?

[Mark Read, CEO & Executive Director]

So I think on the account losses, I think we expect to -- we win lots of business across the group and we have businesses that we [lose]. So it's hard to point to -- if you pulled up all the losses and ignored the wins or pulled up all the wins, ignored the losses, it would be an unfair comparison. I think what we're trying to say is we did have a difficult period the last 4 to 6 weeks. The culmination of reviews remind people that started some back in November and many back in April and some in May and June, so we have had a very busy summer of pitches. And I think taken together focusing on the more negative elements of that. It's around up to 150 basis points starting [ borders ] was the majority of that. In terms of the second question, which is -- what was the second question, Matt? Sorry.

[Matthew John Walker, Research Analyst]

It was just on the health care. What's happening -- what's actually happening in health care and whether the weakness is likely to persist? Is it something that seems to be particularly impacted this quarter, but could you give me kind of a color on what's happening in...

[Mark Read, CEO & Executive Director]

Yes, I think we had a specific account loss in health care that will take some time to run through the business until we replace the business that we particularly want, and I think there's not a specific issue in the health care industry. I think in general, there's continued and growing demand from health care companies for our services, and we need to really know like a common data expenses benefiting from that. And so I don't think that there is a structural issue in health care. I think there was a WPP-specific issue.

[Operator]

The next question comes from Richard Eary from UBS.

[Richard Eary]

Three questions from myself. The first one is just -- I don't know, Mark, whether you're going to say this at Strategy Day but whether you can help us today just in terms of how you actually intend to turn around creative. I mean, there seems to be obviously the biggest drag for you. You obviously underperformed peers last year and this year. So just trying to sense, is it just hiring better talent? Do you have -- are you going to buy businesses or just that a key idea of actually how you expect to turn out that business, and particularly how long you think that will take? The second issue just in terms of as we look forward into next year, I know you haven't cut budgets, but you've talked about headwinds for the business. And based on current momentum, are we now thinking or should assume that '19 is now going to be a negative organic number or am I missing something? And then the last question just comes on restructuring cost. I think, Paul, you just mentioned that you're going to give us an update in December. But given the issues in the business and the deterioration that we're seeing this quarter, are we right to assume that restructuring cost could be larger than what was previously expected by the market?

[Mark Read, CEO & Executive Director]

Okay, if I do the first and Paul do the second 2. So I think in terms of creative. So sort of all of the things that you mentioned, really, I think we need to reinvest in stronger creative talent in the business. I think about what you saw with us do with VMLY&R, which is designed to sort of provide a broader more integrated creative solution across traditional and new channels, we try not to use the word digital at WPP. To invest across that, I think it's important. So I think that we're looking at how we can best invest and organize our creative assets. And it will take some time, and I think there may be some areas where acquisitions are appropriate as well. And we need to give the clients what they need from us creatively. Paul, you want to take the second 2?

[Paul W. G. Richardson, Group Finance Director & Executive Director]

So I think we have outlined the headwind for next year. I think we are -- we've been clear about trends in the second half. I think you will have to do your own mathematics as we did on the back of the envelope for next year. So I think next year will remain a challenging year for WPP in 2019, to be honest. I think -- sorry [ that's all I can ] definitively to say about '19 at the moment. In terms of restructuring, I think whilst not having given a figure, it's quite hard to say whether I'm going to be more than the figure I haven't given. But I gave a general indication of what company's traditionally do at this time of around 2% to 3% of cost. So I think what I would say is that we are looking at all the various projects that need to be actioned. We will restrict the spend to the most key and the most important. And I think the other factor that is beginning to sort of dawn on us this week -- there is -- some of these things are going to be affected in 2019 and not affected in the final quarter 2018. So as we have done, as we've integrated agencies, it takes us a while to work through what the full financial impact and opportunities are at each of those integrations. And we've mentioned the ones that has happened already and one was obviously announced yesterday in putting the health care businesses back into various agencies. There will be more to follow. I'm sure there will be more to follow in '19. So I think the general shape of how I portray it is we don't expect to be outside the traditional ranges. It may take longer as a part of the process. And so it won't all happen actively or actually in 2018. There will be the most -- majority in '18, some in '19 and maybe a tiny bit in 2020. So I think it's -- the more graduated approach we're still going to be going through the projects and cut off with a certain amount. We're very conscious of the cash cost, the impact on the debt and therefore, continue to make disposals to ensure that the impact we're having will hopefully not have an adverse view on our ratings and our performance in terms of that area. So I think all those factors would bring into consideration. So net-net, don't expect to be outside the traditional ranges of exceptional charge, that it may be over a longer period.

[Richard Eary]

Can I just ask a follow-up question with regard to the sale of Kantar and the timing of that. You talked about that being obviously probably a 2019 story, and I presume that the cash cost of restructuring will probably be largely felt in '19. Is the Kantar sale actually needed to fund the restructuring charges and in a year that could particularly could be challenging as you put it? Or is Kantar sale is separate from that?

[Paul W. G. Richardson, Group Finance Director & Executive Director]

No, no. [indiscernible] yet, sorry to cut you off. No, the funding is absolutely -- Kantar funding is absolutely not required in order to do the restructuring. You saw the headroom, you saw the liquidity, the Kantar issue is completely separate in that sense.

[Operator]

We will now take the next question from Matthew Bloxham from Bloomberg Intelligence.

[Matthew Charles Bloxham, Senior Analyst]

I guess, Mark, coming back to something that you said earlier about the pace of change in the industry. Obviously, you've set out and started to implement a strategy to shift how WPP is structured to address the market opportunities. But that takes time, it feels that the market is going away from you a bit in the interim. Are there things you can do to almost kind of create synthetic of your future vision of how the business should be structured to kind of help -- kind of mitigate what's going on in the market right now?

[Mark Read, CEO & Executive Director]

So I didn't totally get -- what is it -- create what a division?

[Paul W. G. Richardson, Group Finance Director & Executive Director]

Synthetic version of...

[Mark Read, CEO & Executive Director]

Synthetic version.

[Matthew Charles Bloxham, Senior Analyst]

Given how you're structured today, what can you do between the different parts of your business to accelerate your ability to adapt to how the market is changing?

[Mark Read, CEO & Executive Director]

I think we do create sort of so-called synthetic versions. I mean we do have a number of leaders that work across our clients, and we do create teams of people and have done for many years. We won -- I think with HSBC, the first integrated holding company pitch in 2000 for an industry. So we have been at this for a number of years. I think that it's both though what we need to do at the client level and team level. And when we won the Mars business, it was a result of integrating the very strong media capabilities of MediaCom with some of the e-commerce and numbers and capabilities we have at -- in other operating companies in the group. So I think if I look at where we win business, we are doing that well. But I think there's a number of things that we can do structurally that made that even simpler. So I think the answer to your question is yes, that is what we can do. And I think that it says both the question of how we work together better as a team; and secondly, what we can do from a structural technology reward cultural perspective to make that happen in a more effectively or systematic basis. So both things I think will help.

[Operator]

We will now take the next question from Katherine Davidson [Katherine Tait] Goldman Sachs.

[Katherine Tait, Associate]

It's Katherine Tait from Goldman Sachs. Just coming back to your full year guidance range on organic growth in margins. I mean, if we look at implied Q4 range from that, it's clearly quite a wide range. So just wondering if you could give us a bit more color in terms of what it would cost for you to sort of on both sides of that range I suppose? What the business seems to do, I suppose, particularly within created in order to swing to the high or the low range -- end of the range? And then secondly, just on margins again, appreciate that with the market moving so quickly as you've mentioned, it's very difficult to adjust the cost base immediately. But if you take a more medium-term view, particularly taking into account the things you've talked about in terms of the evolving shape of your business, can you talk about the sort of scope of cost savings that you see going forward? Appreciate you probably won't want to give to many details from this before the Investor Day, but just anything you can provide in terms of helping us to sort of see where these could come from, will be super helpful.

[Paul W. G. Richardson, Group Finance Director & Executive Director]

Thank you for the questions, Katherine. I think in terms of the best way to think about the range is obviously one tries to give some leeway either side of where we expect to be in the range when we give out a number. The run rate in the third quarter is consistent with what we're expecting to see in the fourth quarter, and there are some quite significant changes in markets, taking into account in that revised guidance. So we suffer like many companies in terms of the way people budget. And December, after the -- the biggest 4 months of the year for us are September, October, November and December. And the biggest month itself within that is December. It's also the month that many people tend to budget less carefully than other months. And yes, because the holiday is obviously are a feature of it. And you hear from other competitors that yes, there's this budget flush that sometimes run through is in the final month. And we said sort of openly what actually in some years, it comes in Europe; some years, it doesn't come at all; some years, it come considerably more than we expect. Even if that was to come, it doesn't make that much difference in the full year run rate. But it obviously does impact us in terms of how we convert and tend to sort of give a strong push to the bonus pools once that incremental revenue comes through in the final month. So we've taken a consistent approach in prior years. I mentioned the new business number is identical almost to the million as it was at this time a year ago. We did slightly overachieve our performance last year, but it was only very [ strife ] nothing to get excited about. The ranges are -- I think what ranges are meant to be one intends you to think of the middle of the ranges and hope that we can do slightly better. But the extremes we hope would -- probably won't go outside the range, because all I can say is we have got some quite negative assumptions already baked into the fourth quarter per region in our forecast. And on the shape and the payback and what is likely to happen on the -- and any [indiscernible] charges we've taken, I think it's truly -- it is too early for us to say and I think you'll get much more color about that soon in December. So if I can hold the excitement to a certain degree, but let's -- we really need to sort of take you through it that piece by piece. Because part of it is it depends on which element we are tackling, sort of the collocation elements, there's [ starting ] elements and then there's sort of other elements that we want to explain, some with a relatively short payback and some with quite lengthy. So it will be a range, and we will trying to lay out bearing in mind you'll need to understand this in the various categories of expenditures that -- the work we focused on. So if you can, again, hold until our Strategy Day, that'd be very helpful.

[Operator]

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

[Mark Read, CEO & Executive Director]

All right. Thanks very much. And I think everyone, as I said, at the beginning of the call, we've got work to do, and that's what we're going to be getting on with. So thank you, and we will see you in due course.

[Paul W. G. Richardson, Group Finance Director & Executive Director]

Thank you.

[Mark Read, CEO & Executive Director]

Thank you.

[Operator]

That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.