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 looks after Investor Relations for us. We'll take you quickly through the presentation, leave some time to answer your questions. Before we go, I want you to look at page two and the cautionary statement. On page three, 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 four, to summarize, I think how we think about the quarter, it was a very strong performance. It goes beyond a cyclical recovery.
You really saw a strong growth of 19.3% in the second quarter follow through to 15.7% in the third quarter, therefore driving up our like-for-like growth on 2019 at 6.9%. Had good growth in all of our major markets and a good new business performance. You know, 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 FGH, SVC, and the acquisition of Satalia.
Our cash position is strong, and we've taken the opportunity to do around GBP 450 million of share buybacks. We'll get to our GBP 600 million target by the end of the year. Net- net, that means our net debt is down around GBP 1 billion on this time last year. I guess the headline really is that it's a good quarter, enabled us to raise our guidance for the year overall from 9%-10% to 11.5%-12%, and also slightly nudge up our margin guidance just above 14%. A good quarter, and John will take you through that in more detail.
Thank you, Mark. Let me take you rapidly through the financial highlights. Revenue less pass-through costs for the third quarter, up 9.9% on a reported basis, 15.7% on a like-for-like basis. As Mark's 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. Turning now to slide seven, breaking the performance down into the individual sectors of our business. 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.
Actually, if you look at the purple bars in the chart, you can see significant progress on a two-year basis. 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. AKQA, Ogilvy, Wunderman Thompson, all showing an improving two-year trend compared to the second quarter of this year. 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%. Again, on a two-year basis, 12.6% versus 2019 in the third quarter compared to 4.4% in the second quarter. Again, demonstrating strong momentum building through the year.
The specialist 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 51.5%, up on the 27.8% we saw in the second quarter, and again on a two-year basis, seeing that momentum build. 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, a contract we have in Germany with one of our businesses, GKK.
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 UK market. While 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. Again, if we stripped out that impact, we'd be seeing similar growth to the second quarter, so strong performance in Germany.
Again, we're seeing an improving performance in China, so 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. 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 a 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%. In Spain, we're still slightly negative versus 2019, but we, 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 GBP 2.3 billion this time last year to GBP 1.6 billion. If we adjusted that GBP 2.3 billion to 2021 exchange rates, that would be GBP 2.6 billion, hence a GBP 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 at 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 increased as we return to paying out our dividends, and also accelerating the share buyback program. Overall, a good reduction in our net debt position, which bodes well for the year-end momentum. Just coming onto my last slide. As Mark's already highlighted, we're upgrading our guidance for the year.
Net sales, we were previously guiding to 9%-10%. We're now upgrading that to expecting to outturn the year at 11.5%-12%. Headline operating margin slightly ahead of 14%. We were previously guiding at 13.5%-14%. Again, an upgrading there. A continuation of our share buyback program. We expect to outturn roughly GBP 600 million by the year-end, having done GBP 448 million to date. We plan to continue the share buyback program through to our prelim results in 2021 at a similar rate. We will obviously announce our capital allocation plans for 2022 at our prelims in February. Now I'll hand you back to Mark to take you through the business review.
Thanks very much, John. I think just a few things briefly to highlight. On page 15, while we've seen strong performance in our business, we have continued to focus on sharpening and expanding our offer, as I mentioned. Three highlights. First, the acquisition of Satalia, an AI business based in London. It's around 80 people, which is significant in this area. They're going to both continue to develop the products that they've built so far, but also act as the hub of AI expertise, you know, across WPP.
We also brought together Finsbury Glover Hering and SVC during the quarter to really 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. Then lastly, Kantar, you know, which we own a 40% investment, acquired a business, Numerator, in the U.S., a very strong digital panel business, and that will expand their retail offer in a very good position globally. I think also just to highlight three pieces of work, indicate the variety of the type of work that WPP does today. The first on page 16 is the launch of Sky Glass, where AKQA and their design studio worked very closely with the Sky design studio on design, designing the product.
We also worked on the launch campaign and the 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. This amazing Blue Paradox exhibition, which 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 said that they would change their habit in relation to plastics. Another example of a company tackling some of the challenging issues ahead of COP26. The last piece of work I wanted to highlight takes it in a somewhat different direction. Page 18, some work for 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 local retailers to promote themselves after the pandemic. A good example of data-driven marketing. If you look at what we showed you, it's a product innovation, purpose, data-driven marketing. You know, three of the key themes we see from our clients at the moment. Now, each of this work actually is supported by some of the partnerships we've developed, and a few to highlight. First, with the growth and acceleration of our consulting business, we've become an increasingly important partner to Google on the platform side. We have more than 6,500 people, you know, more than some companies, Google-certified consultants and practitioners.
Working closely with Snap and TikTok, two of the faster-growing social media platforms. You know, that's resulted, 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, you know, primarily on a statutory basis, but up for review, you know, we knew would take place throughout the year. I think we're pleased with our ability to, you know, retain clients like Unilever, expand relationships like Bayer, and develop new relationships in the media with clients like Beiersdorf or Sainsbury's or TD Bank, creatively. A good mix of media and creative wins. Focusing just on the media side, and this is something that, you know, was looked at back at the first half.
If you look at the COMvergence data for media, you can see, you know, the credible performance of GroupM both in wins and retentions. You know, it's 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. To summarize on page 22, this is a very strong quarter. We're raising our guidance for the third time this year, reflecting continuing execution of the strategy we set out three years ago and refined at the end of last year, targeted acquisitions creating global leaders. We have good momentum going into 2021. I'm sure that will be a major area of focus for your questions.
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 have still not recovered to 2019, we have good momentum going into next year. I think those are sort of formal opening remarks. Now we'll take questions, please.
Thank you, sir. If you would like to ask a question at this time, please press star one on your telephone. Please ensure that the mute function on your telephone is switched off to allow your signals to reach our equipment. If you're also watching the webcast, please make sure to mute the computer's volume to prevent feedback through the phone while asking a question. If you find that your question has already been answered, you may remove yourself from the queue by pressing the pound or hash key. Once again, it's star one to ask a question. We will pause for a moment to allow everyone to signal. Thank you. We will now take our first questions from Omar Sheikh from Morgan Stanley. Please ask your question.
Morning, everyone. I've got three, if I could.
Yeah.
Maybe to start off on GroupM. 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
Yeah
Helpful to start. Secondly, I do wanna 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? You know, how what you've baked in and what you're assuming on supply chain disruption, potentially in some verticals in your Q4 guidance. 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 2022? That's it. Thanks very much.
Okay. 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 in media 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'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.
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. 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 seeing a little bit of weakness in automotive in Q3 based on semiconductor shortages. I saw the CEO of VW say today that he expected that to start to ease in the future.
Then in terms of sort of reorganization, I think if you think about the sort of front end and the back end of our business, I think we're comfortable speaking with our offer to clients. We are, as you know, working on the back end of the business, and maybe John can talk about that. John, do you want to?
I mean, just coming back to Q4. If you took the upper end of our guidance that we've given today would imply double-digit growth in Q4 of around 10%, which in fact is an upgrade on where we were in August, at roughly 8%. We're effectively upgrading our numbers for Q4 today. We do see, you know, strong momentum in the business. Half- on- half. We see in the first half, of course, our two-year growth versus 2019 at about 0.5%, and we're expecting our second half to be somewhere between 4% and 5%. We do see growth coming through. There's definitively momentum in the business. In fact, 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. You know, 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 the critical mass in those markets to support multiple agencies. 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 we're looking at the structures there and how we can eliminate and take out duplication within GroupM itself.
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.
Super. It's very clear. Thanks very much.
We have the next questions coming from the line of Julien Roch from Barclays. Please ask your question.
Yes. Good morning, Mark. Good morning, John.
Good morning.
Good morning, everyone. It's Julien Roch with Barclays. First, quick question. How much was Germany of net sales in either full year 2020 or Q3 2020, please? Second question, echoing one of the questions from Omar and John's answer. 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 is a slowdown Q3 to Q4 of about 4 points versus 2019. 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.
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 Snap blamed partly their 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?
Okay. Why don't I start at the end and let John take you through questions 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 gonna become a more complex world from a data and privacy perspective. I think that makes the advice we 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 happen to have sort of a big app download business, you know, which is linked very carefully to, you know, the ability to track what's happening. That's not part of the business in which we really operate.
I think accounts for perhaps the surprises that you saw there. John, do you want to tackle the Germany and Q4 again?
Of course, yeah. 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. I'll give you a little bit of breakdown and flavor on that. Germany reflected about just over 8% of our business in the third quarter. Year to date, it's about 7.5% of our overall business. That gives you a view as to the scale of Germany. 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 of the quarter is just over 1%.
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 conservatism? 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 it. It's certainly difficult to break anything on a month-by-month basis and even on a quarter-by-quarter basis. Actually we really look at the trending on a half-on-half basis. As I said, the first half up about 0.5% versus 2019, the second half up about 4%-5% versus 2019. We think that reflects, you know, strong momentum in the business.
It doesn't feel like we're looking at Q4 as a sort of slowing down in any way. We're certainly not seeing any evidence among our clients that the supply chain issues that you refer to are causing them to rethink their spend. I continue to be, you know, we seem to be reasonably positive as we go into Q4. We think actually that bodes well in terms of momentum going into 2022.
Great. Thank you very much for that, and well done on those pleasing results.
Thank you, Julien.
We have the next questions coming from the line of Tom Singlehurst from Citi. Please ask your question.
Yeah. Good morning.
Hi, Tom.
Morning. Morning. It's Tom here from Citi. 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 upgrades for guidance and a slight margin sort of upgrade as well. Historically, we would've normally expected about 30% of incremental revenue to drop through, and the margin guidance obviously is different, difficult because 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 re 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 in a line in the associate income. Can you just talk a bit more about the growth rate of Kantar and where we are in the sort of restructuring program? The final question, actually more of a, I suppose a high level one. We're seeing an increasing amount of publicity and news flow around retail media by sort of, you know, 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 threat for you guys? Thank you.
Okay. I think we'll do two and three then to go back to the guidance. Look, I think from our perspective, we said at the time, you know, Kantar is a very strong business. We felt that the right thing to do for WPP, given our leverage, you know, three years ago, remind you, was I think our debt peaked at GBP 5.4 billion. You know, 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 was to do the transaction with Bain Capital. We remain 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 is some disclosure on their website if you're more interested in having a look at that. I think that the company has done well. You know, the Numerator acquisition is exactly the type of transaction that we'd like to see placed to modernize their offer and make it more relevant. We work with Bain Capital and leadership there, and it remains, I think, as you say, you know, a valuable part of the company. We'll see how it develops. You know, there's always going to be a five-year view, and they're sort of two and a half years into the five years.
On the retail media point, you know, I mean, retailers have always attracted, you know, media dollars, and it may historically have been, you know, in the form of, you know, shelf wobblers, if you 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 to WPP because it, I think that, you know, 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. From our perspective, I think bringing that together gives us more access.
You know, 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. I think that's a really strong point in favor of GroupM and the investments that we've made in Amazon. John, do you wanna tackle the guidance part?
Yeah, 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, you know, really pleasing performance so far. It's quite interesting. I'm often trying to compare WPP's transformation program with Kantar side by side to see how we fare. 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. From a cash perspective, actually slightly behind where WPP is in terms of extracting cash from the business, improving working capital. Overall, as Mark highlighted, I think almost parallel tracking our own performance, which I think has been very positive.
In terms of your question on drop-through, you know, as we, you know, 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. You know, partly because we've seen obviously salary increases come through. As we've said, we had some catch up in relation to increases versus 2019. We didn't put many increases through in 2020, so there's a little bit of catch up coming through there. We are having to recruit, of course. You know, we're delivering this quarter 6.9% ahead of 2019, and actually our head count pretty much matches where we were this same quarter in 2019.
We are delivering efficiencies, but we are having to add to our head count in order to meet with our growing clients requirements. Of course, we're seeing, as you rightly highlight, bonus and also travel starting to come back in again. I'm very comfortable with the level of drop-through that we're seeing, albeit as expected, it is increasing as we progress through the year for the reasons I've just highlighted.
That's very clear. Thank you.
We have the next questions coming from the line of Sarah Simon from Berenberg. Please ask your question.
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 is the German contract like fully encompassed in Q3 or will there be any spillover into Q4? Second one was on PR because we spent a lot of time talking about kind of media and creative. Can you just give us a quick insight into what's driving this huge growth in PR? Because, you know, it's not saying right now we're ready to market, there's economic growth and so on. I'd be interested in that.
Final one was, there's kind of more noise coming from people about brands wanting to de-emphasize their reliance on Facebook and Google. Obviously, we know they want to try and establish direct relationships, first-party data, blah, blah. Are you actually seeing that in your business? Or do you think this is kind of wishful thinking, but actually, you know, they're still getting the vast majority of the incremental dollars? Anything you can say on that would be helpful. Thanks.
Yeah. Okay. On public relations, I think we did see an acceleration in our PR business from the second quarter to the third quarter. Which is interesting because I think, you know, in previous times, you know, 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, you know, coming out of COVID. Look, I think if you read the newspapers, frankly, it shouldn't be any surprise. You know, topics of purpose, reputation, employee activism, political polarization, you know, racial challenges are all front of people's minds and issues that companies are increasingly expected to, you know, wrestle with and have a point of view on.
I think that as a result, there's been a lot of demand from clients for guidance and counsel and programs on how to address those, you know, in the run-up to, you know, COP26. That's more evident than ever. You know, you look at the work that we did with SC Johnson and the Blue Paradox, we highlighted in the presentation. You know, look, I think the degree of growth is perhaps a little bit of a surprise. It is really very strong. I think the fact that it's become more important shouldn't be a surprise. I think it was one of the reasons why we're very excited by the opportunity we have bringing Finsbury Glover Hering and SVC together.
You know, 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. The combination of those two companies, you know, is unparalleled. There are, you know, very few, you know, 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. It's not just in Investor Relations, it's in crisis communications, it's in corporate advice. That senior level of advice is really important. I think we've really got a fantastic portfolio now between, you know, that merger with BCW and Hill & Knowlton.
You know, Hill & Knowlton is another company where actually hadn't grown. Let me tell you this, it hadn't grown in the U.S. for nine years. Under, you know, AnnaMaria DeSalva's leadership over the last, you know, 18 months to two years, she's really turned that business around in the U.S. We're seeing good growth. I think that, you know, 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, you know, 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 have to use it. You know, clearly that's changed. 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. As data privacy standards become stricter and platforms like Apple. You know, Apple really cuts across those platforms' ability to link their data out into the outside world. You've really got, you know, two businesses, Facebook and Google, who have really rich platforms, but, you know, Apple has stopped them activating that data off of those platforms.
Ironically, it's gonna have a dual effect on clients. You know, at one level, it's gonna make them think harder about, well, how do we collect data and how do we build our own set of data? The sort of first-party data question. If anything, though, it's gonna drive more of their spend onto Facebook and Google because it's harder for them to activate that data off of those two platforms. You know, I don't think it's gonna lead to spend moving away from Facebook and Google. If anything, it's going to direct more spend to those platforms and strengthen their position in the overall ecosystem. I think that's all we said. John, do you want to talk about the
Yeah. In terms of your question around any other COVID related contracts that have driven sales in Q1 and Q2, I would say nothing of material nature. No, no major impact.
In the first couple of quarters, COVID-related work. In terms of your question on whether the German contract will sort of extend 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. Most of the upside that we've talked about today, we've seen come through in Q3.
Great. That's really helpful. Thanks.
We have the next questions coming from the line of Matti Littunen from Bernstein. Please ask your question.
Hello, good morning.
Morning.
Two questions left for me, one on the Q3 project-based work. 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? Then the second following up on Sarah's question on PR and comms, still quite a fragmented market, I understand. Do you think there's gonna be further consolidation in that space globally? You know, related to that, can you describe the benefits to scale at you know, your group level that you see in PR and comms? Thank you.
Look, I think on the PR and comms question, look, I think it's somewhat fragmented, but I think there are a small number of big global players, and I wouldn't expect necessarily to see further consolidation amongst them. We have now within WPP, you know, three really strong global offers. You know, 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. You know, if you're running, you know, a company in Silicon Valley, what happens in, you know, in India or the EU is as important to you, but more important to you now than it ever has been. I think clients need partners with broad global reach.
They need those partners to have real depth of local relationships, which is why, you know, these companies are so important. I think that, you know, they are strong businesses and have excellent talent, and that's what clients, you know, really are looking for. John, do you want a question on it?
Yeah, I think. 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 at the start of the impact of COVID. You know, obviously, project-related work was arguably the first revenue stream to be cut by clients because it was relatively easy to do 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. I wouldn't ascribe much more of a trend to it than that. You know, 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. I think the biggest quarter-on-quarter impact would have been seen in Q2, frankly, not Q3.
This question has been answered. We have the next question coming from the line of Matthew Walker from Credit Suisse. Please ask your question.
Hi, Mark. Hi, John. Well done.
Hi, Matt.
...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 or momentum to be good going into next year. Thinking back to the capital markets that you did a while back, you were going for, I think it was 5% in 2021 and then another 5% in 2022. Now the shape has changed a bit and you've done much better in 2021. Is it still possible to get to 5% in 2022? The second question was around growth rates on a two-year stack for some of those creative businesses.
You said that VMLY&R now is 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? Final question for John is on the balance sheet and the buyback. It looks to me like if you stuck to the lower end of your net debt target of 1.5, you could easily do, let's say, GBP 1.5 billion of buyback in 2022. Does the math on that sound right?
Okay. I think I'll let John answer all three questions except to say, not to steal his thunder, look, I think our media business did do particularly well in Q3, but actually, our creative business did well as well. I don't think that we should forget that. What we call creative, you know, to remind people are not just people that produce TV ads. It encompasses, you know, 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 they're seeing growth. John, do you want to?
Matthew, maybe I'll answer those questions in reverse order if I may. In relation to the buyback, you know, 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 towards the year end, obviously subject to working capital movements, but you'd expect to see that improve, which would put us, you know, way below our net debt to EBITDA guidance. 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. Now of course there's a big caveat there, which is all else being equal and, you know, we don't know what we don't know.
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 gonna comment on the quantum figure that you threw 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, you know, obviously double-digit great growth. Again, VMLY&R, double-digit growth in the quarter on a two-year basis.
The implications therefore are 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. 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. Again, you've got AKQA, which is in roughly mid single digit decline versus 2019, but again, improving quarter- on- quarter. We're seeing positive momentum, but still more work to do to get back to 2019 levels in those agencies that I've described. That's the two-year stack.
In relation to, you know, I love the way you phrased your question, in relation to growth into 2022. Look, you're absolutely right. Of course, we 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 that we'll be certainly 2%-3% ahead of 2019, at the year end. You know, much more positive performance than we thought. In terms of, you know, we're not gonna give guidance now for 2022. We're in the midst of our budgeting process as you would expect as we speak. We will give much more detailed guidance at our prelims in February.
Other than to say, as we've already made the point on the call, that we see, you know, positive momentum coming through in the second half of this year, and we would expect to see that momentum continue into 2022. I, apologies, I won't get 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.
Okay. That's great. Thank you very much.
Thanks.
We have the next question coming from the line of Richard Eary from UBS. Please ask your question.
Many thanks. Good morning, Mark, John.
Hi.
Thanks for the call and again, a great set of results. Number of questions have been answered, but maybe a couple of questions from myself. The first thing is that, is there any other sort of potential reviews that you can think about in terms of unlocking value in the portfolio to similar to what you're doing with SVC and Finsbury Glover Hering, particularly looking at maybe some of the specialist agencies, and whether you can expand on that or not? The second thing just is on, we had record account wins last year. Year to date momentum's been pretty good. I just wonder whether you can quantify any impact coming from those in these results already. Lastly, as we go into 2022, this year's been obviously quite a big year for retention accounts.
I'm just trying to get a feel for how we think about 2022 in terms of big accounts coming up for review and whether it's an opportunity or a headwind for you next year.
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+ disposals, you know, in the first two years. You know, both to reduce our debt and to reshape the offering to what we wanted. I think broadly speaking, we're comfortable with where we are. You know, 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. You know, on the account wins, you know, the.
As you say, I think we came into this year with a little bit more at risk. I think we benefited a little bit this year from the wins we had last year, and we do well, you know, and there's still quite a lot to go.
It will impact us next year. I think, yeah, to be honest, what really drives our results are probably the things that are less visible than just these sort of big media wins one way or another. I think, you know, Group M is an excellent business and will continue to be so. Our creative agencies win, you know, tremendous amount of work from clients that never hits the pages of 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. You know, that's really about 35% of our business. I think we have to look elsewhere.
I think if we do well, and I think we've got good momentum, you know, our client satisfaction scores continue to be high. I think that bodes well, you know, for organic growth next year. You know, I think it's sort of a little bit at the margin. What was your last question? Have we got other things coming up?
Yeah. It was more as we look into 2022. I mean, if this year's been a more business at risk, despite obviously good retention from people like Bayer, how do we think about 2022? Is there more opportunities or are there more threats?
I think if anything is more, there's more opportunities. I mean, this was a particularly tough year coming into this year. You know, media clients tend to review on a three or four-year basis. You know, Unilever hadn't reviewed for seven years. I think we knew it was coming up this year. You know, 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. I would say that I think one of the things we've seen coming out of COVID is, and this is important, you know, a desire by clients to look at their partners, look at who they want to work with, consider their data and technology strengths.
You know, I point out, you know, at WPP we have, I think more than 120 clients with more than $20 million of revenue. We've got substantial big clients, you know, with whom we can, you know, expand our relationships. There's a tremendous amount of organic growth opportunity and often that's, you know, as interesting as the sort of new business pitches that hit Campaign.
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.
Well, thanks, everybody, and thanks very much for your questions. It's been, you know, a good quarter. There's more work to do to finish the year and look forward to talking to you soon. Thanks, everyone.