Welcome, everyone, and thanks for joining our first quarter update. I'm here in Sea Containers House with John Rogers, our CFO; and Peregrine Riviere, who heads up our Investor Relations activities. So turning to the presentation and before we begin, I'd like to ask you to take note of the cautionary statement on Slide 2. And turning to Page 3, our agenda for today really, I'll briefly go through the highlights of another strong quarter. John will take you through our financial performance and guidance, and we'll come back just quickly to summarize and then take your questions. So on Page 4, I said, we did have a strong start to the year, continuing our momentum from last year with 9.5% growth in Q1, actually 9.2% on a 3-year stack in the first quarter, which, if you look at it, at a compound rate to pretty much exactly 3%, at the top end of our medium-term guidance and it shows what we've done during a period of COVID and some uncertainty. And I think further proof of the continued strong demand for our services across digital media, data commerce and marketing technology underpins our medium-term guidance. We had good growth in all of our business lines despite the strength over the prior period, including 8.6% in our global integrated agencies. We saw a 12.8% growth in GroupM in a strong medium market. Importantly, we saw all of our integrated agencies to grow year-on-year. And together, they grew around 5.6%. And we discussed before, the transformation of our offer within these agencies is key to underpinning our long-term growth and the progress here continues to be very encouraging, and that's a key strategic goal for us as a company. Our public relations activity is up 14.1%, and that reflects the ongoing…

Thank you, Mark. So on to the financials for the first quarter of 2022. You may notice we somewhat streamlined the deck so that we can focus more time on the Q&A. Rest assured, all the usual detail, of course, is in the appendices. So coming first to Slide 7, revenue less pass-through costs. At the reported level, we've seen an increase of 10.3% for the quarter, a small tailwind in relation to FX and obviously a contribution from acquisitions of 0.5% leads to an overall like-for-like growth for the first quarter of 9.5%, and that's on the back of 3.1% this time last year. Moving now on to Slide 8 and business sector performance. Again, we've seen very strong growth across all of our business sectors, starting off with our integrated agencies at 8.6%, which is on the back of a 2.8% growth this time last year. GroupM, in particular, showing strong growth of 12.8%, again on the back of 5.8% growth for the same quarter last year. Taken integrated agencies excluding GroupM, growth of 5.6%. And as Mark said at the very beginning, all of our creative agencies growing in the quarter. PR really strong 14.1% in the quarter, ahead of on the 2% this time last year. And again, our specialist agencies also growing 13% in the quarter on the back of 7.5% this time last year. So really good growth, solid growth across all our different business sectors. And really calling out perhaps PR with BCW, Hill+Knowlton and FGH all growing double digits over the quarter. So turning now to Slide 9 on to our major markets, which also I'm pleased to say, are growing well across the board. So strong growth in the U.S. and the U.K. market around 8.9% and 8.1%, respectively. Germany has…

Brilliant. Thanks very much, John. So we had a strong start to the year, and we have pretty broad-based growth across the business. I think what's important is we continue to invest in the company to expand our offer and drive long-term growth through acquisitions, partnerships and perhaps most importantly, continued investment innovation in Choreograph, in Finecast, and Everymile. I'd say that, [ though ] drive demand from our clients remain strong, but we are very mindful of the broader economic environment. As we said, we're updating our guidance after the first quarter performance. That's just how we see the year. And operator, we're happy to take questions.

Our first question comes from Dan Salmon from BMO Capital Markets.

First, maybe could we -- I did jump upon a little bit late, but I was hoping, I'm sure you touched on it a little bit where the changes announced at GroupM yesterday. I would love to just hear a little bit more about the reasons for those changes. And in particular, the consolidation of Essence and MediaCom and the creation of Nexus. What you're aiming to achieve out of those moves? And then second, obviously, Mark, your own organic revenue guidance here ticks up. We've heard that from your peers as well. We continue to get questions from investors asking about do agency fees typically lag the ad cycle? Does the ad cycle typically lead the economic cycle? Which I think has been the general pattern in the past. And so maybe taking a step back just from WPP's organic growth guidance. Any color you can add to what you're hearing just broadly from clients as they look out over the ecosystem that is relatively volatile right now?

Okay. Look, I think on GroupM, I mean, there were 3 major changes announced maybe in order of significance, perhaps, the merger of Essence and MediaCom, it brings together Essence probably the -- or certainly the world's largest historically pure digital agency with MediaCom, I think Agency of the Year the last 2 years. I think the integration of that digital and I wouldn't describe MediaCom as a traditional media agencies. It's very much not by the integration of those businesses talked to continued simplification of WPP, continued demand for scale and a continued drive for clients in integrated solution. I think the same is true of Mindshare and Neo, when -- Neo and Mindshare were sort of working together under one management but it's now more integration. And I think that builds -- Neo was historically an outcome-based media actually started as the digital media arm of OgilvyOne about 25 years ago, if you want to go back into ancient history. And it's sort of the integration of outcome-based media with a broader media offer. So I think both of those always talked about. And then GroupM Nexus is really bringing together the more technology and operational elements of digital media into one company that can both drive Finecast and Xaxis, but also support the agencies in analytics and technology and operations. So we're looking really for scale where scale matters in data, technology, volume -- media volume but then agencies where they master to provide client service, strategy and conflict management. Turning to what we're hearing from clients. And I think that it's a very different story from where we were probably exactly 2 years ago. I think clients were looking to cut their spend in the face of what the new will be a very weakened demand.…

Yes, I'm not sure there's much I can add to that. Obviously, when we set our guidance, we look forward at the range of forecasts that the business could experience over the rest of this year. And I think it's fair to say, if you look forward, if you carry the momentum of Q1 into the rest of the year, we would expect to see some upticks in guidance over time. Equally to Mark's point, if you're a bit more bearish and you thought that inflationary impacts were going to dampen consumer demand in the second half of the year, and that's going to impact marketing spend, then you might bring the guidance down slightly. I think we've taken, in my view, a very sensible position, which is reflected in the first quarter's outperformance in our overall guidance for the full year, but effectively held steady assumed growth in Q2 to Q4. I think it's fair to say what we're seeing in the market at the moment. We're not hearing any particular negativity from clients at this point in time. We've got reasonable visibility, of course, into Q2. But there is -- it's undoubtedly, there is huge uncertainty out there, and we have to be mindful of that. I think we made that very clear in the statement today.

Our next question comes from Lina Ghayor from BNP Paribas.

Lina here. I hope you can hear me well. I have 3 questions, if that's okay. First one, just to come back on your guidance. Could you just explain a bit more what you have factored in, in terms of supply constraint, inflation risks, but also the evolution of the health situation in some of your markets, such as China? And what assumptions have you taken for your guidance? The second question is on Q2. Q2 last year was your strongest quarter. So how should we think about the growth in Q2 versus the rest of the year? And lastly, on the margin, I believe you kept the margin guidance unchanged. So could you explain the reason behind that? Is it just that there's no incremental operating leverage from the additional organic revenue growth? Or there are other factors offsetting it?

Maybe I'll have a go at those and then Mark may want to add. Look, I think in relation to guidance, what we said is very clear that there's a whole bunch of uncertainties out there, supply constraints, market GDP growth, particularly in the European region, inflationary impacts, both in terms of -- on our cost base, but perhaps more importantly, on the consumer and how they respond in marketing spend accordingly. So I think there are huge amounts of factors that reflect that go into our guidance. And that, as I said, leads to a range of potential forecast and outcomes, both on the upside and downside. What we're assuming in the guidance that we're giving today is a naturalization in effect of the upside we've delivered in Q1, but really holding the balance to achieve for that guidance for the full year is actually a growth per quarter around 4.8%. So -- and I think that's -- in our view, that's a reasonable estimate based on where we see our market going forward. There is certainly upside potential to that, as I said, if we carry the momentum through, there is equally downside potential if inflationary pressures impact on the second half. I would say that we're experiencing at the moment more uncertainty than you would on an average basis, that won't be any surprise to you. I think we're being sensible in the way that we set our guidance out. And I don't think I've got much more to add than that. In relation to the second quarter, I think we've got good visibility over growth, and obviously, I'm not going to give specific guidance quarter-by-quarter. We are expecting -- obviously, this time last year, Q2 was a strong quarter. That said, we are expecting continued momentum…

Our next question comes from Lisa Yang from Goldman Sachs.

Congratulations on the results. 3 questions as well, please. The first one is just to come back to you. I think the first question was asked on this call. Could you maybe just remind us of the cyclicality of the various businesses within WPP. And is it fair to assume given the strong demand you're seeing from clients on data, tech, et cetera, that increasing part of your business is less cyclical, even countercyclical? Any color on that would be helpful. And related to that question, could you maybe just tell us like how much of the remainder revenue -- the remaining revenue for the year are already so secured? Or how much visibility do you have on that? That's the first question. The second is on the new D2C initiative Everymile. So just wondering if you can give us a bit more color in terms of the expected benefit from this new offering over time, maybe initial investments required, is it significant or not. What percentage of your client base do you think could take this, could be interested in taking this? And that also give you the opportunity to tap into for instance SMEs, which I think is an opportunity you talked about for a long time, and I'm just wondering whether that could get you to, to tap into that market? And the third question is on the buyback. I mean you said you probably will be doing GBP 800 million by the end of H1. Do you think there's a needed flexibility to increase that GBP 800 million target that you had given for the year given the strength of your balance sheet and obviously, depending on the evolution of the share price or you're basically strictly you want to stick to that GBP 800 million?

Why don't I start on the first question and John takeover and add to it and then answer the rest. So I think -- we based our guidance on our best judgment for the year. I think our business is a cyclical business, but clients do react differently depending on the economic pressures. I think my sense is we're in a very different point from where we were this time 2 years ago. As I said before, where clients were looking to cut spend to maintain profitability and margin in the business. And I'd say now they're looking to whole spend where they can. And even in the case of some companies at the expense of margin to protect the business and drive revenue growth. I think the different media have different levels of cyclicality, depending on the point in the cycle and probably the media part of our business maybe the most cyclical, but even there, there's a difference between what clients spend on media and our fees. And if clients start to replan media budgets, actually spend more money on fees doing the replanning. And a lot of what we're doing, if we get to that point is incremental work to think through clients' plans. So I don't think that there's parts of the business, I'd say, a less cyclical or more cyclical, I think we are in a cyclical business, but our guidance based on our best judgment of what will happen during the year. And sort of that's where we are. John, you want to?

Yes, I think that's right. I think there are some areas, if you look back over the last couple of years. You look at the performance, the impact of COVID and the bounce back, I think you can draw attention to parts of the business that actually remained relatively robust over those 3 or 4 years. I mean, I pointed the great performance in PR. And we actually didn't see PR particularly impacted in COVID, and we've seen that sort of also that bounced back pretty strongly subsequently. So I think PR certainly seen, I would say, it's not particularly cyclical in nature in terms of the spend that we see. And I think there are key parts of our business, I think as you alluded to in your question, on the data side and the technology side, digital, e-commerce, which was cyclical in nature, they are strong structurally, strong foundation, strong structural growth, and I think they do help underpin. So I would say, Mark's right, we are cyclical in nature, but I think we are becoming less cyclical over time.

So touch on Everymile.

Yes. So on Everymile. I just think it's a really exciting opportunity. And why do I think that? Because -- for years, we've worked with our clients in building websites and providing CRM solutions and helping with their marketing plans. And very frequently, our clients will come to us and say, that's great. But actually, what we're really interested in, can you help fulfill, can you do the whole end-to-end solution for us in these certain markets. So we have got -- and we have had an active demand over the last couple of years from our clients asking us to do this type of work for them. So it's great to be able to announce that we've now built a team of people and some infrastructure that will enable us to provide this end-to-end solution to those clients over time. So I think it's a really interesting opportunity, a very attractive opportunity in my view. We've had to make investments and the overall investment in Everymile for this year will be in the order of $20 million or so. And we expect that investment over time to be around $50 million, so another $30 million over the next couple of years. But we do expect to, over time, create a lot of client interest and a lot of growth going forward. So we think that's a very attractive investment for us. In relation to -- and we think a lot of our client base are very interested in this proposition and obviously, since the announcement we've had a lot of incoming from our clients who are very interested to learn more. That said, I think you also raised the point Lisa about SMEs. And I do think this is, in particular, an offer that is both attractive on a selective basis to large-scale FMCG companies in particular markets, in particular product lines, but is equally attractive to SMEs who do not have the infrastructure to be able to provide that end-to-end solution themselves. And as you know, we tend to, as an organization, over index on the large corporates and under-index on the SME. So I do think this is actually quite an interesting opportunity as well to start to get into that side of the market in a way that perhaps we haven't been historically. So I see it as a very interesting opportunity. In relation to the buyback, look, as I said, we guided to GBP 800 million for the year. I think we will do GBP 600 million by the half. I'm not anticipating at this stage, increasing that for this year. I think we want to keep our options open, keep that balance sheet flexibility. But obviously, we'll update as the year goes, but I would expect it to be about GBP 600 million through the first half and another couple of hundred million in the second half as we guided.

And can I just add a very quick follow-up. What was the contribution from new business in Q1? And how do you expect that to ramp-up for the rest of the year? .

Look, we don't sort of break those figures out in detail. Obviously, as Mark has already alluded to, we have a lot work onboarding Coke and the feedback from the client there has been exceptionally positive. And when we look at our new business to go for the -- the new business we've identified years ago, we're in a better position than we were last year with vis-a-vis our forecast. So I think we're in a comfortable position in terms of new business and bringing on new business into the group.

Our next question comes from Silvia Cuneo from Deutsche Bank.

My first question is a follow-up on the loans of Everymile. Can you please talk a bit more about what are the disadvantages in [Technical Difficulty] the early initiatives discussed for the company's opportunity at the 2020 CMD [Technical Difficulty] And then also, how could we think about the getting new models for this new site. Then my second question is on the progress in integrating the agency structure following the merger of MediaCom and Essence, can you please share your thoughts about how you attract the agenda to drive efficiency gains and margins towards the target range that were previously provided for 2023? And then finally, if you could just comment on the other drivers of the headline operating profit margin improvement beyond the organic improvement, can you say anything about how to think about M&A and FX impact?

Do you want to tackle that. I didn't totally hear the Everymile question, to be honest.

Yes, it was a very -- Silvia it's a very poor line in our side. So apologies. I think I got the gist of what you were asking, so I'll have it go. Look, I mean, in terms of -- I think you asked how it compared to some of the things we talked about at the Capital Markets Day back in 2020. Look, I think in our eyes, it's one of many interesting opportunities we have in the business to invest in our future growth. We've already talked to you many times about the opportunities in areas like Finecast and Xaxis and Choreograph and data. And we see Everymile very much as being adjacent to those in terms of an investment for future growth. We know this is going to be a huge market going forward. So that's absolutely clear. There's massive growth just in the U.K. alone, frankly, in the last year in this area. So this is going to be a huge market going forward. We know that our clients are asking us for solutions in this area. The intention is to provide an end-to-end solution from website design and build through to order management through to inventory management through to warehousing, supply chain logistics and fulfillment and returns and so on and so forth. That's not a trivial exercise, and we brought on a very strong team of people who've got great experience in this area that the business is being led by Mark Steel, who -- when I was the CEO at Argos, he was my Digital Director, a really strong individual, and he's built a very strong team of people around him from some great branded retailers to bring that expertise together. So in terms of potential revenue opportunity, I wouldn't want to be guided at this point as to what we think we can achieve. We'd like to have a number of clients live by the end of this financial year, and we're certainly on track to deliver that. And we'll see how that revenue builds over time. But there's clearly a massive, massive market out there, and the intention will be to launch as we have done in the U.K. first and then look at selective geographic opportunities probably driven by the U.S. in the [ May ] next in order to grow the business. Hopefully -- hopefully, that addressed your question. I didn't quite catch all of it, as we said at the beginning.

Go ahead, Silvia.

That -- you're answers definitely captured my questions.

Okay. Good. On the structural point, I mean we continue to streamline and simplify the business in some respects like Essence, MediaCom, but we continue to launch new brands like Everymile. And I think we say -- we believe there is attractive opportunities in our industry to expand and grow, particularly organically as well as by acquisition. And our structures designed to capture them. It's much more around a growth focus than it is around taking cost out of the business or driving margin though in some cases, it can help us meet our financial targets. . I think the last question was around M&A and FX, John, do you want to tackle that impact on the year?

Yes. I think from an M&A perspective, we said that like-for-like growth between half and -- sorry, obviously growth of 0.5% and 1% as a result of M&A. I think from a margin perspective, we see these things has been broadly neutral. But there's a 0.5 point contribution in the first quarter, we'd expect that to increase slightly through the remainder of the year. And again, FX, we had a tailwind of about 0.3 in the first quarter, which is largely an offset of the dollar and the euro moving in different directions relative to the pound, but we'd expect that tailwind to increase through the year if ForEx conditions remain the same, a couple of percentage points coming through. But of course, that could change. There's a lot going on -- there's lots of moving parts there. So at the moment, we're expecting to see a bit of a tailwind come through, but we'll obviously update at each quarter as we report. I think from a Russian perspective, I think, just to sort of -- I think you asked specifically about that. We think from an overall cost perspective, the exit costs getting out of Russia will be about GBP 40 million to GBP 45 million or so. We think actually, when you look at Russia, we will also be a little bit dilutive on our margin but that will be more than offset by the foreign exchange, which we think in combination will play a [ draw ]. And hence, broadly neutral margin overall. So that, hence, why we are comfortable reiterating the margin guidance that we gave at the beginning of this financial year.

Our next question comes from Julien Roch from Barclays.

My first question is on visibility. How much of the rest of the year is already known and guaranteed because I understand that your guidance is best effort, is sensible. It's based on a very detailed budget, very bottom up, but clients can only give you their current budget, not what they think will happen to the budget. So I'd like to know how much net sales you get if everything stops tomorrow. I mean John several times says good visibility on Q2, but I said you were only getting organic for the months of -- a week after the end of the month. So as has that changed. So basically, how many weeks of visibility do you have? How much of the rest of the year revenue is guaranteed and set in store? So that's my first -- my first question. The second one is on margin. You said it was unchanged because better top line was offset by high inflation cost, 50 bps on size. So if net sales disappoint, will margin go down? So I suppose you have some flex so until what level of net sales can you keep the 50 basis point margin increase. Is it at 3%, at 1%, some color on that would be great. And then the last one, FX impact on next year, 2% to 2.5% this year, but the spot is lower than average. So you should have a benefit next year as well. So I'm helping Peregrine to get consensus in the right place for next year on FX?

So well, look, the point on margin. Yes, I think the reality is if the net sales disappoint then we can course correct. I think we've got a great track record actually of managing the business. And we're very agile as an organization. If we see the top line coming through being slightly disappointing, then we can course correct pretty quickly and taking out costs. A lot of our cost, of course, is in freelancers, and we can remove or add that resource relatively easily. So we do track at quite a detailed level, freelance resource, permanent resource across all the different agencies and the networks and look at the forward thinking about the forecast and make sure we've got a cost base that is very adaptable to that change. So now all of that said, of course, if the growth starts to come down to that sort of 3% level, then we would expect to see that to impact the margin over time. So I think that's just the mathematics of the operating model in the business. But I think we could stand -- we could withstand a bit of pressure on that top line through adjusting our cost base. But obviously, if it were come down a lot beyond that sort of 5.5%, 6.5% growth, then that would start drop through operating margin. I wouldn't like to say the turning point, but somewhere between 3% and 4% of net sales growth, I would suggest. In terms of visibility, your question on visibility and then your question on guarantee. I mean it's visible, but it's not guaranteed. When we do our forecast for the organization, we get each of the operating units to base their forecast on their understanding of their client budgets. I would say that's a pretty good visibility. Now of course, budgets can change. And I think we do put in a great conservatism into our forecast, but nothing is guaranteed and particularly in a world of uncertainty that we live in today. So I'd say we've got good visibility for most of Q2 and Q3 and in some ways, arguably for Q4 as well. Our new business requirements, as I said, in our forecasts are lower than they would historically be this time last year -- so that's also encouraging. But despite the visibility, nothing is guaranteed. So -- and there is uncertainty out there. So I hope that gives you a little bit of color as to our thinking. And I've written down the third question as well. The FX?

Yes. FX, yes.

I'm not going to get into speculating about the FX impact for 2023. I'm not sure we can accurately predict what will happen in 2022. So I think we need to -- we're probably getting ahead of ourselves if we're trying to think through the FX impact for '23. What we're saying at the moment, if you're baking the current rates into our forecast, then we expect to see a tailwind of 2% to 2.5% in the -- in Q2, Q3 and Q4. But of course, we've seen quite a lot of movements to FX over the last quarter, and that could certainly change that guidance as we go forward.

Very clear. Just an add-on visibility. So it's visible but not guaranteed and it's based on your understanding of the client budget. So I suppose the only thing that is really visible is the spend that has been committed already because everything beyond that can be cut. So you would say the real visibility on revenue is what, is it 2 weeks, 2 months?

Julien, this is Mark. I don't think that's the way to think about it. I mean we talk to our clients, they tell us how they see the world. And at the moment, they're saying that they don't think they're going to make major adjustments from what they told us 4 weeks ago or 8 weeks ago. We're coming into the year many of these concerns were known. Certainly, the inflation concern [Technical Difficulty] budgets did bake in, slightly more conservative estimates from the CPG companies and slightly more aggressive estimates from the technology companies. We have, John said, good underpinning from new business with Coke and Google coming in for the year. And we're making our new business targets as we go through the year. There is clearly uncertainty and nothing is like as guarantee, but our best judgment based on what we hear from clients today and what we're hearing about what they want to do in the future is that we'll meet these numbers. We could if we had wanted to have held our guidance, banked the Q1 outperformance for a softer last week, we've chosen not to do that. I think the reason is that what we hear from our clients gives us confidence that we'll make the numbers in the last 9 months of the year. And that's as much visibility or guarantee as anyone have in any of those scenarios, and I'll come back to it. It's a very different pattern of what we heard 2 years ago where clients were very quick to cut budgets or not. Remind you, Coke saw 18% organic growth in Q1 is a top 5 partner for WPP. L'Oréal saw 14%, 13.5% organic growth in Q1 to top 10 clients of WPP. Google despite having disappointed we saw 23% organic growth in Q1. So we have clients whose businesses are performing well. And we have other clients whose businesses maybe a little bit more challenged auto but we knew that coming into the year. So I think it's based on our best judgment on how we see the pluses and minuses. It's true there were pluses and minuses from clients on spending. But as we sit here today the pluses and minuses is more average each other out and we are we are where we are on the guidance.

Our next question comes from Thomas Singlehurst from Citi.

I suppose implicit in a lot of the questions you've been asked already, Lisa and Julien and then actually from the investors, we get the same point, which is there's this sense that it's all going okay now, but you're in that stage where you run off the cliff and the legs are still turning you haven't fallen yet. I just wanted to sort of test whether you think there has been any sort of change that we're just not seeing. So for example, within your client base, are we seeing a fall in promotional activity that's just not being reflected in advertising spend and sort of spend on digital transformation. Is there anything that you can point to that some of these sort of FX are already working through? It's just that you're genuinely not being impacted because as I say, that would give comfort that we're -- we're not just in that sort of state of suspend disbelieve. That was the first question. And I suppose linked to that, the other question I'm interested in is whether, when you see wage pressures, whether that's a factor supporting your revenue growth in the sense that it's these are costs that are passed on to your -- pass on to your clients and therefore, recognize the revenue. So those are the questions on sort of the broad picture. And then one quick narrow one as well. As you mentioned, PR growing really fast. I was just wondering whether there were any one-offs in that? And in particular, whether there's any benefit there from the FGH SVC merger?

Maybe I'll continue with the answer to the previous question. I think what we're seeing in our business is improving structural growth in the company. And a quarterly statement not necessarily point to discuss that. But I think if you come back to our 3-year stack of 9.2%, by the way, if you take annualized 3% a year comes to 9.27%. So we're sort of 9.2% exactly at the top range of our medium-term guidance, which underpins the investment case for WPP. I think we see that over the last 3 years despite the ups and downs of COVID, I think if you come back to what are we trying to do longer-term in terms of improving our own competitive performance in North America, we've seen that with strong growth in Q1 -- on growth in Q1 of last year and improving the competitive performance of our agencies through restructuring. We've seen that with 5.6% growth in our integrated agencies in Q1 on top of growth in the last quarter. So I can only really point to, I think, a stronger structural outlook for the market overall. I mean, it's good if you think about what our peers are guiding to that the industry overall is broadly speaking guiding to 5% what are in range of 4%, 5%, 6% growth during the year, right? So I think that's positive. And against that backdrop, we see a stronger structure to the industry. We're seeing a stronger more competitive WPP. And the cyclical things will be the cyclical things. I mean a cynic might say, back in October last year when our share price was 12%, you were expecting 3% growth this year as analysts. And now our share price is 10%, your models say we're going to do 5% this year. So things are sort of a bit the wrong way around. So I think that the share price is what the share price will be, we're not in any way commenting on that. But I think that our guidance is based on our best estimates for the year, a stronger and more competitive WPP, an industry that I think generally is expected to be in a stronger structural position and those are the things that we can manage with and the things that are in our control.

That makes sense. Sorry, carry on.

Go on Tom.

Well, I was going to say, I completely agree with that. I mean, obviously, we're bullish on the shares. But the question is more, is that for example, with promotional spend, are we seeing budgets change somewhere else that's not immediately apparent to us as media analysts and therefore, not sorry, immediately apparent to your revenue...

If you look at U.K. media spend, it's interesting. TV is up 17% in Q1, digital video, digital is up 7%. So things are a little bit all over the place. And I think it depends on the opportunities and where things up. But I don't think we're seeing a pullback in promotional spend. I mean a lot of companies are having to drive promotion -- to drive sales growth. What are the 2 -- you saw the success of the discounters, I think consumers are clearly being a little bit squeezed in the middle. But the U.K. is only 11% of our business. We've got a big business in the U.S., big business in Latin America, a big business in India. Yes, we do have a big business in China, it's about 5% or 6% of our sales. So I think we're very well diversified geographically by client sector and by activity. You talked about the strength of our PR businesses, which I don't know if -- there's no one-off effects. I mean I think that, since we got [indiscernible] gives us a stronger business and it's doing well. They're doing extremely well in the M&A league tables this year, advising on several very, very high-profile pieces of business. But I think that reflects the strength of our business and strength of demand for those services. There's not a one-off element within it.

I mean, Tom, one place I go to look for some of those what you might describe as early warning indicators, either of sort of an uptick or a downtick. If you look at our sort of brand consulting businesses that tend to be quite project-based. And we actually saw that through COVID. I think they were one of the first parts of our business, one of the first sectors of our business to be impacted by COVID because clients cut spend pretty quickly in those areas as they could. So I was sort of look at that area as a sort of a bellwether, if you like, as to the overall business. And we're not seeing any cuts in those areas, far from it, in a way, Landor & Fitch with a very strong first quarter performance and Superunion likewise. So now I'm not going to say that's not going to change. But I think it's fair to say we're not seeing any early signs yet of any changes in client behavior, and that goes across the board. Maybe coming on now to your question on inflation, which I think I'd characterize as being -- I think you were suggesting that does -- is wage inflation a good thing because ultimately, you pass it on to your clients in net sales increases. And I think just to echo Mark's earlier comments on the call that if you look back historically, inflation has not necessarily been a bad thing for our sector. And that said, I do think there is somewhat delay in an ability to -- as the increasing costs come in, there's a somewhat delay in your ability to pass those on to your clients, so I think that's all else being equal, a little bit of margin…

Our next question comes from Richard Kramer from Arete Research.

It's Richard Kramer from Arete. Two things that maybe haven't been asked yet. First on we've hosted some investor calls with consultants on media spend and they're highlighting a different aspect of the dreaded high word inflation coming into media costs. So I guess, Mark, question is, are you seeing this? And how do you think it's impacting well as for your clients? Is it going to get harder to deliver that return on ad spend? And then the second question I've got there's just a ton of hype that we're seeing around retail media as the fastest-growing segment of digital, especially given how it directly links to conversion and attribution. Can you talk about the challenges for your CPG clients, for example, finding audiences now that you have dozens of retailers that are probably also your clients that want to be providers of add inventory, which makes it much harder to find where you should be advertising?

Yes. I think on the first question, I mean, there's no doubt that inflation does build into media prices. And particularly in auction-based media impacts it directly into those prices. And that does lead to a deterioration in return on ad spend. I mean our reaction is that it has to be to look for untapped opportunities. I mean much of the growth, I'd say, in a platform like TikTok has been a shift from higher to low -- viewing that as an opportunity to drive return on ad spend because it's historically been, let's say, less in demand than other social media platforms. So we help clients respond to that. But that, I think, is sort of the [ inverter comes ] beneficial impact of inflation on the media business. I think on retail media, I mean, that has, as you say, been a lot of coverage of this. I'd say we see a couple of things, observation space. One is that increasingly, we're seeing clients bring retail media or retail spend together with marketing spend. You see that change at Mondelez and that Unilever where sort of the CMO is taking increasing responsibility for sales. And I think that, that is a positive development. Unilever media review included retail media within our scope, in many cases, for the first time after a thorough review of competitive providers. And I think the clients do need to bring that spend together because what retailers are trying to do is double dip. They're trying to take spend from the trade media budget, and they're trying to take spend from the brand budgets. And I think only by bringing those 2 things together can we protect for the integrity of our clients' budgets to really drive spend where it needs to go. I think that the biggest growth in retail is, as you say on, is in digital media. And clients -- retailers had some success in sort of rebadging what was trade spend as brand spend. But I think it's really just going to cause a shift in spend from what CPG companies would have spent on their trade media into really a different budget rather than in aggregate, drive up what clients are spending on promotions.

Does this widen your addressable market for the spend you tapped into?

From our perspective, that's correct. I mean, it's a positive impact. I think you see it in the growth of Amazon's media business, although Amazon is trying to ramp budgets as well. But I think, broadly speaking, it points to an increase in the addressable market and is positive and another reason why we've been focusing on the commerce sector more broadly.

And I think not just reflects an increase in the addressable market, but also reflects an increase in the market complexity. And we've always said that actually helping our clients navigate the complex market is where we add value. And of course, if that market is getting increasingly complex, we've got an ability to add even more value. So I think we've given a plethora of choices to our clients base that where they place their marketing spend and how we optimize that over? An overall campaign is where we can really bring our experience of operating in these different segments to bear.

Our next question comes from Matthew Walker from Credit Suisse.

I hope you can hear me, okay. The first question was on Europe and U.K. versus U.S. We didn't see a particularly big divergence in Q1. I was just wondering, given that the U.S. economy is supposed to be more robust going forward. Have you changed the mix of your budget at all to privilege the U.S. against maybe Europe or your budgets for Europe remain unchanged because you've actually had a good Q1 in Europe, too? And the second question was really around Google and what they said about YouTube. They mentioned a couple of factors there, one of which they talked about brand budgets in Europe coming down or some kind of impact seems to be very much different to what you're saying. So just any reflections on that? And then just a technical one on Russia. I'm guessing you're taking Russia out of the organic growth and the GBP 40 million of exit costs there, are you including them in operating profit? Or are you taking them as exceptional costs?

I'll just tackle the YouTube question and then let John talk about the sort of geographic impact in Russia. Look, I think YouTube -- Google grew 23% in Q1, YouTube, I think 14%, on a comparative, let's say, 43% last year. So it's a very strong comparative. I mean I saw Ruth's comments in the FT, I haven't actually read the transcript. And I think part of what she was referring to was -- what's the impact of Russia. Obviously, it impacts them organically, because they are not disposing of an entity is somewhat different from the way we would be accounting for because given that we're going through a disposal. All I'd say is our Q1 numbers reflect our business in Europe, which was up 16% in Germany, which is the largest market, close to that region. I don't have the Polish numbers in front of me. But I think we see it somewhat differently. And there's a lot of commentary in the Google numbers. I wouldn't read too much into what they saw in Q1. It was a pretty strong quarter for them, let's be honest, it's a little bit disappointing versus other people's expectations.

And Matthew, maybe just to build on Mark's response there. I mean, I think looking forward in terms of the way that we've constructed our budgets and the range of forecasts that we use, both on the upside and the downside to help inform our guidance. I think it's fair to say that on balance, on average, we would have seen a slight softening in our forecasts across Europe and to some extent, the U.K. and a slight strengthening relatively speaking, of our forecast in the U.S. I wouldn't want to call it out more than that. To Mark's point, we had a very strong first quarter in both the U.K. and across Europe as we had it also in the U.S. But going forward, we'd see a slight softening decided upon the slight strengthening relatively. The other side of the point, if that helps. On Russia, we're taking that out of like-for-like. And in relation to the GBP 40 million, that will be an exceptional.

Our final question comes from Omar Sheikh from Morgan Stanley.

I think just about remember my 3 questions. So maybe to start with, Mark, it would be very helpful in giving some color by, on the revenue growth by business activity and by geography. But you haven't talked much about verticals, so client verticals. So I wonder you can maybe just give us a bit of color on whether you're seeing any difference in activity from some of your clients, CPG, autos and so on, which might have been impacted more by commodity price inflation relative to the overall group. Are there any sort of differences in what you're seeing in Q1, Q2? That's the first question. Secondly, we'll go back to visibility point. And I heard what you said earlier on. But maybe if you could just say how often you think client budgets are set, is it sort of monthly? Is it quarterly? Or is it half yearly? So it just sort of give us a sense of when decisions might be made going forward by your client insofar as it's able to generalize? And then finally, I just want to clarify the point in the outlook statement where you said that you remain ready to respond to any changes in the economy. I just want to clarify, do you mean sort of an action on costs, so taking out freelance costs, that kind of stuff or maybe even sort of agency consolidation? Or is it something else?

So look, I think by sector, we've seen strong growth in technology as you would expect in retail, as you expect, given its opening up in health care continuing. We've seen weak activity in automotive, which is not surprising again given the chip shortage. So again, it does vary a little bit from automotive company to automotive company. And I'd say in CPG, it's [indiscernible] dozen than the other. And we have had some CPG companies that I mentioned Coke and L'Oréal they had a very, very good start to the year and strong spend. And obviously, in the case of Coke, the business is onboarding over the course of this year. And the impact it would have in subsequent quarters is bigger than the impact it would have in the -- that it had in the first quarter. We've seen good growth. Others came into the year more cautious. But I think the -- while inflationary pressures have intensified they were -- our CPG clients were very aware of them as they set their budgets for the year. And I think that comes to your second question, which is clients -- I mean, I don't want to make it be unhelpful. Clients can change their mind. Clients reserve the right to change their mind. But I don't think that they want to go backwards and forwards. I don't think they want to start and stop activity. So I'd say my overwhelming impression to date is that they're looking to protect their budgets. They don't want to make a big leap backwards, parts of our business, a longer-term programs that they don't want to stop and start. And I think many of them have learned the lessons of COVID. And I think it's quite clear that those clients actually that maintain their spend even coming into COVID came out of it in a stronger position. So I don't want to overplay the variability or indeed underplay. I come back to our guidance it's based on our best judgment of where we think we'll end up for the year based on conversations with our clients, conversations with our people and a kind of top-down review based on how we see the global economic outlook and the risks and the balances of positives and negatives.

And maybe just to -- and apologies if this is overplaying the point. But just to leave you with sort of 3 -- what we're trying to do in terms of the guidance and the outlook statement, just with 3 points. The first is that we've upgraded our guidance from the prelims to Q1, reflecting what we see as outperformance in Q1 and confidence and momentum in our business with good visibility going forward. And I think that's very clear. That said, there is clearly a range of scenarios out there on the upside and the downside, and there's probably more uncertainty than it would be on average in those forecasts. On the upside, if we keep our momentum in Q1 going through into Q2, Q3 and Q4, we will see upgrades come through during the year. And on the downside, if we see inflation pressures, impact on consumer spending, and subsequently advertising spend, then we'll see some downside. So there is a range of upside and downside. We think that where we've turned out is to Mark's point where we expect, on average, the market to be albeit reflecting a degree of uncertainty on both the upside and the downside. And then the third point to make would be irrespective of what the scenarios that transpire actually are, whether positive or negative, we have a track record of being able to adapt our business in a very agile way to reflect that economic scenario, from the upside and the ability to step up and build resource quickly to fulfill client expectations. And on the downside, if we need to an ability to take costs out. And to your point, that is about managing that sort of permanent prelaunch mix and the cost base in a relatively agile way. So we feel that we're well prepared to base into both the positive and negative scenarios, but nonetheless, there's a very clear upgrade in the quarter, demonstrating the confidence and the positive track record we've seen come through Q1.

Thanks, everybody. Thanks for all your questions. Appreciate it, and we'll keep in touch.