Mark Read - CEO Paul Richardson - CFO Andrew Scott - COO

Daniel Salmon - BMO Capital Markets Peters Stabler - Wells Fargo Securities Doug Arthur - Huber Research

Hi. And good morning to everyone in the U.S., it's Mark here, and I'm here with Paul Richardson, our CFO; and Andrew Scott, our Chief Operating Officer.

I think what we'd like to do let me take quickly through results for the first half a little bit about how we see the future, the presentation this morning is online, and then we have to give you the chance in the U.S. or where most you are to ask any questions that you have, if you have so we're trying to keep the front of it shorter rather than longer.

I think before Paul takes you through the numbers quickly just to put the results in context and how we think about them. I think the good news is that it's the first quarter of positive growth, I think if you see in four quarters, our last quarter's Q1 2017, 0.7% so make positive sense for the first half and I think that's positive.

We are not declaring victory I think we have the July number in the statement which takes us again to 0.3 for the year, but we are expecting to hit that number -- well, not hit that number, we are expecting to raise our net sales less pass-through cost growth slightly in the full-year to similar with first half. I think the second relevant metric is the headline PBIT operating margin.

It's slightly lower from 13.7% to 13.3% and Paul I think quality all going to that piece of it a little bit more detail in this presentation. To put that in context, it's around £20 million out of the cost base of £5.3 billion.

I think if you look at the control of the cost, we had good control of our stock, we invested some of the margin back into incentives, and we saw some slippage in G&A and establishment and bad debt largely the result of the mix of growing and more challenged parts of the business. And we're saying that we expect a similar operating margin for this full-year.

And then the third number to think about it is proceeds from disposals of £676 million against the target we set at £750 million in April and Andrew has really been leading this, done a fantastic job of raising money through likely minority investments and associates that no loss of revenue associated with those and then minimal loss of earnings. That helps to move our leverage ratio that much closer to in the target that we reset in April at 1.5 to 1.75.

And at the same time, the dividend it is being maintained at a strong level on a payout ratio of 53% somewhat above our 50% target. So I think on balance we have returned to top line growth and we may progress in doing that on a sustainable basis, and that's really going to be our focus.

Think about how we're doing when we go back to where we were in April, we set our thoughts and was making sure we focused on clients and our people, and I know the key metric -- we are looking at how it's how competitive we are in reviews. I think that the eight major client wins we won six of the eight and there is some attention on reviews that we'd incumbent I think three out of four views we've been successful.

And we are really focused on bringing new people in, new approaches to client pitches, making sure that we really embed the best WPP talent in those reviews, and all of our data and technology assets in a simpler structure with more effective cooperation across the group. I think we have some success in that.

So I think while the nature of our business is that always reviews, I think we demonstrated that and it was a transitional phase to some extent. The Company is competitive and WPP has a very strong set of assets that clients want.

So I will come back with little bit more to how we see the future, but it's important to put results in that context maybe Paul can take us through really quickly.

So, I got work with the slides on the screen. Mark's really covered a lot of highlights on the first slide, Slide 3.

The key points as he mentioned obviously it was the like-for-like less pass-through cost growth of 0.7 in quarter two, making 0.3 for the half year, and we have also made it clear that North America is still our challenging market, actually the decline in North America was greater in the second quarter at minus 3.3 compared to quarter one at minus 2.4. It was challenging in the advertising, data investment management and brand consulting areas, but good improvement came through North America and on media based management business but it remains a very high priority, if we are to improve the overall group performance.

We talked about a lot -- there is a very detailed kind of helpful water flow chart as we call it on the margins difference, which basically shows that the stock cost remains flat. The stock cost before incentives is slightly better.

Incentives however were slightly higher, which actually netted out the stock cost ratio being flat. The other elements for change were some property costs of 0.1 and other operating costs of 0.2.

Making an overall change of 0.4 margin points in the half year, which is likely to be the expectation on a full-year basis compared to last year's margin. So it's basically down 0.4 on a full-year basis as well as a half year basis.

Have we had kept staff under good control and headcounts and average to be reduced by 2,000 staff for about 1.7%. As we mentioned, very good progress on the cash proceeds from disposals with no loss of revenues to the group and minimal impact on profit so far, which at the half year asset disposals had just as you come into June balance sheet, on the 29th in those cases at £469 million and the net debt at June to June was £84 million that we hope to slightly better position as of June, but we didn’t have a particularly good working capital position in June; however, one month later looking at July to July positions compared to the year ago we're £508 million better, reflecting most of the disposal proceeds that are in i.e.

469 with the remaining 207 million from AppNexus and oOh!media actually coming in late August and early September. So those are still to hit the benefit of our day-to-day cash position.

Dividends, we maintain as I mentioned flat with last year as a 53% payout ratio for the half year and full-year guidance updated to reflect the performance in the first half. So with that, I’m going to move on to Slide 4 on the IFRS Statement and really the key difference here is that we did have some exceptional gains in the counting terms around £190 million they show up in the operating profit line where we had a net gain of 143 million and hence the constant currency growth in operating profit from 724 million to 842 million benefiting from that net gain in the strategy numbers and likewise in the PBIT or profit before interest and tax, the net gain impact there was a 140 million, again so improving the constant currency ratio.

So actually in the reported diluted EPS, we're 20% stronger than a year ago of 53.4p. The analysis on Slide 5, the headline results, we’ve broken out for you in the reported impact, which obviously is with the impact of foreign exchange, which on average for the first half has been 5% negative.

The constant currency basis by removing the impact to the foreign exchange, but does include the organic and acquisition growth. And we’ve also for both revenues and margins showed a like-for-like performance of the business.

So on the revenues -- on the constant currency basis, we're up 2.9%. And on revenue less pass-through costs on a constant currency basis at 1.4%, and then we showed the like-for-like equivalence.

As Mark mentioned in the PBIT, the difference between the 882 last year and the 821 this year which is 61 million, of that foreign exchange is 41 million and as you underline operating performance is 20 million. We show you the margin at 13.3 which on a like-for-like basis is 0.4 changed and on a constant currency basis it’s 0.5.

That has resulted in earnings of diluted EPS down 1.3% on constant currency basis to 42.60 as I mentioned dividend was held flat on the first half. I will come on to net debt later in the presentation.

On Slide 6, we just basically show in graphic form the modest improvement in -- from quarter one organic decline of revenues of 0.1, with slight easy to pass in and it's fair to say in quarter two, but like-for-like growth in revenue less pass-through costs at 0.7 making 0.3 for the half year, acquisitions remaining constant but just over 1% in the first half. Slide 7 shows you the currency impacts which is beneficial around 4.6% in 2017 is a headwind and against us in the first half this year by minus 5% and on a full year we’re expecting it to be a headwind of minus 3% on full year 2018 basis.

Turning now to Slide 8 which is revenue less pass-through costs by region, we do show the break of the group in terms of North America representing 35% of our business, and has a like-for-like decline as I mentioned in the first half of minus 2.9, I think slightly worst in quarter two where it was down 3.3 compared to 2.4 in the first quarter. United Kingdom is around 13.5% grew pretty constant, 1.5% for the half year.

It’s growing at 1.6 in quarter one and 1.4 in quarter two. WESTERN Continental Europe has had a good turnaround at 21.5% to the business overall.

It grew on a half year basis 1.9%, having been actually flat or down 0.2% in quarter one and nearly 4% in the second quarter; that was partly because we had a very weak quarter one in Germany followed by very strong quarter two in Germany almost up 6%. And then other markets, it was strong in the second quarter in particular included Italy, Spain, Poland, France and Denmark, In Asia-Pacific, Latin America, Africa, Middle East, Central and Eastern Europe, it's a better story this year for us with 30% of the business in that region growing overall at 2.6% having grown at 2.3% in quarter one, and 2.9% in quarter two.

China, we saw a strong improvement in mainland China. Good improvements in Japan, Korea, Malaysia and Philippines as well and a very strong business in Latin America overall up at 8% with Brazil, up 6%.

So a good performance in our faster growing markets this year. That is shown graphically for you, optically for you on Slide 9, where down below we show the overall growth for the group in the first half being 0.3% and the faster growing markets combined growth of 2.6 and mature markets decline of minus 0.6.

We then breakout for you by sub regions within Asia-Pacific, Latin America, the growth you see Q2 growth in Asia-Pacific 1.8, Q2 growth in Continental Europe was 3.9 and Q2 growth in Latin America 8.6%, we're showing you that you to digest. When I look at the major markets as they are our concern because it's such a large market for us remains the USA, which is down 3.2% last year and it's down 2.8% this year.

UK has had a good year last year at plus 4.8% and it is growing 1.5% this year. Germany is story of two quarters being almost down 6% in the first quarter up 6% in the second quarter, so flat half year-to-date.

Greater China as I mentioned a good second quarter growing at 6.5% and almost 5% for the half year, and France has been studied at around 0.3% to 0.4% last year in this. Breaking China out into mainland China on Slide 11 is even stronger with first half growth of 6.6%, with a very strong quarter two growing at 9%.

Brazil as I mentioned solid growth of 6% this year, India still quite disappointing having grown at 1% last year, still only growing at 1% but it's expected to be very good in the second half the year. It was a country that was most impacted by the goods and services tax, last year and it did seem to have an impact on business volumes in the second half of ’17.

Russia still remains choppy basically down 5% year-to-date. If I go through on revenue let's start to cross by sector, taking 30 outside the media and investment management business, which is 43% of business is trending overall down 0.8% in the half year, very similar picture in quarter one and quarter two, quarter one is minus 0.9%, quarter two minus 0.7%.

The data investment management business, which is 15% of the group today overall was down 1.5%, a slightly better performance in the second quarter were it was down 1.3% compared to down 1.7%.Improvement we saw in the second quarter in UK good growth continues in Latin America and Asia Pacific while USA remain challenging. In Public Relations & Public Affairs which is 9% of business a very good performance in the second quarter, having grown at 1.1% in quarter one, growing at least 6% in the second quarter to average 3.5% for the year, good growth in financial public relations in the UK and Germany and good network growth in Latin America, and Middle East in particular.

The Brand Consulting, Health & Wellness and Specialist Communications business which in total represents 33% of business it has solid growth in the first half, 1.9% in the half year having grown at 1.5% in quarter one and two 2.2% in quarter two. Slide 13 lays out that waterfall chart which I explained in the highlights in some colors make it easier to digest.

Slide 14 looks at the margin and headline PBIT impacted by the business performance and geographic performance since the top line and any restructuring charges we are taking through the business. Turning to North America, challenging environment on revenues, margins are down half a margin point to sort good margin at 16.2% in the first half.

United Kingdom, margins are down 0.6 margin points to 13.2. In Western Continental Europe despite good growth in quarter two, we did take a lot of actions in the first quarter and the profit is impacted by that.

The margins overall was down 1.9% and it was tougher in our profit performance in the first half in Germany, France and Italy. In Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe good top line performance overall an improving performance coming through with some of our major markets with margins up 1.1% to 12.3% at the half year.

Doing the same by margin on by disciplined, so in advertising and media investment management margins overall are down 0.8, margins points from 15.2 to 14.4. Our data invested management margins are down from 13% last year to 11.9% this year.

Our Public Relations business, margins are stronger growing out from 14% this year to 15.5% this year. And the brand consulting, health and wellness and special communication margins are broadly flat being at 12.1% this year compared to 12.3% last year.

If I look at the trade estimate of major client wins, they tend to be reporting mostly media, mostly U.S. and UK.

You can see a good volume of growth. So everything illustrated that's happened since the 1st of April both in quarter two and subsequent to that.

I think Mark will speak in a bit more detail about some of the wins and retentions we've had, but a healthy clip of new business momentum coming through the group since the 1st of April. Likewise of the some of the great losses on Slide 17 are also shown.

And when I look at our internal estimates with net new business wins, I am at 3.2 billion for the year-to-date being 1.5 in quarter two and 1.6 in quarter one. It was slightly less than last year where we were strong but over 4 billion having picked up in the first half of last year.

The PSA business is about a 1 billion and 600 million is WBA and 500 million of LBMH media wins coming through in the first half last year which are pretty strong in our billings internal estimate. In terms of cash flow, showing you that these businesses have very good cash generation so in our case of interest and tax, we generated 605 million of cash for various uses.

The 605 was spent as follows to the 178 was spent on CapEx expenditure. The increase year-on-year has been on the property and part of the extra locations and significantly we kind of just moved in or are moving in 4,300 into close to 7 or 600,000 square feet in three World Trade Center on the 20 year lease, which should be fantastic for the businesses concerned.

In terms of acquisitions disposals, you can see here that disposal proceeds of 469 have come in just for the vast majority at the end of June. The initial payments paid from new acquisitions throughout the first six months under the £36 million and earn-outs paid to continue to acquisitions of 38.

So, net-net the cash incurred 295. And then with share buybacks running at 1.3% both last year and this year, we had cash generation of £494 million in the first half.

These both of the proceeds are listed out on Page 21 for you, 469 million in the first half and further 207 million to come in September making it 676 million year-to-date. And then on Slide 22, the metrics we give you now, we give you both constant currency and reported, although the difference is not that material as the half year I’d say.

So on the year-to-date average net debt, we are still worth than last year at 4.9 billion compared to 4.7 billion or 273 million worth, that position at the end of July had improved to a deficit being worth by 208 million. What was disappointing for us was the net debt at 30th June, was better than a year ago it was only lesser by 84 million because we did have a slightly worst working capital position at June compared to June ’17; however, in the first half of this year the outflow from December last year to June this year was more modest at a 192 million compared to previously worth 258.

And pleasingly by the end of July where the working capital position had reversed, we are £508 million better in July than we were last year. The reason why the July point to point is higher than the June point to point is we payoff final dividends in the previous year in July and the fact the amount this year was around 465 million.

So, the interest cover remained strong. Leverage is still running high but we would like it 2.1 times.

And on a pro forma basis at the end of this year and on a full year respect to the disposals made to date, we’d be running about at 1.9 times, net -- average net debt to EBITDA basis. So on our targets on the full year basis on Slide 23, we’re still aiming to acquire new businesses in the range of 300 million to 400 million of new initial considerations having spent 136 million in the first half; share buybacks were great between 2% to 3% having both 2.5% last year and year-to-date purchasing 1.3.

Headroom remains strong at around £3.6 billion been undrawn since we're using surface cash and we also are targeting to achieve the 1.5, 1.25 average net debt to EBITDA figures in the next 12 to 18 months in the group. And finally on outlook, the financial guidance for the full year reflects what was achieved in the first half revenue the pass-through cost growth and our second quarter report card and our like-for-like revenue with the pass-through cost growth would be similar to that to the first half i.e.

around the 0.3%; the target of full year headline PBIT margins similar to the first half, i.e. a decline of 0.4 margins points on a like-for-like basis compared to last year.

And with that, I’d like to hand over to Mark.

Thanks, Paul; and so I’d just talk briefly about how we see strategies evolving. It’s early days and to some extent it’s my second day on the job though, so Andrew and I have been working on this for the last 4.5 months and we haven’t been standing still, we’d be getting up with developing the thinking as work underway within the Company and it’s important to what we do.

I think the starting point is that I am optimistic about the future for WPP and for our industry. When I talk to clients, I talk to lots of clients and this is lots of clients over the last three or four months, they value what we do, but they want us to do something differently.

They value the strong set of assets we have, the 130,000 people in 112 countries around the world help them build their businesses. We’re in most cases one of the most important partners, if not their most important partner in that business.

And they want us to succeed and across that they value the technology, data capabilities that we bring. And but they won’t have easier access to that and when I listen to clients, and if our task is to return WPP sustained growth, I think we need to start by focusing what our clients want.

They want us in a simplistic terms to be easier to navigate, have fewer silos within the organization, have more resources placed on the things that they value in creativity, technology, data and few other things that do value and a back offices, finance functions. They want us to continue to have a broad geographic spread, but make it easier to organize our resources in far flung markets to help them succeed in local markets and many of them, think about individual local markets in much the way we’re increasingly thinking about.

So I think we had a tremendous set of asset capability inside the group and the goal now is to return to growth. On Page 26, the page on how we see the world, I've left this unchanged from April, because I think we see the world in an unchanged way, this continued demand for clients to what we do.

And the fact that consulting comes when enter our market, I would exited in an attractive market, so I’m optimistic about the opportunities but we need to recognize the challenges facing the industry, changes are structured and not cyclical and when, not we’re not going to go back to doing things in the old way, so it means WPP to operate. We’re repeating with the consulting firms.

That is in the fast growing segments. And I'd say it still at the margin rather than in the heart of our business.

And in terms of actually dollars impacted is not larger, probably not large enough impact our organic growth at this point, but I think it's increasingly directed by stand and if the case the Amazon, Facebook, Google and Tencent and Alibaba are competing for talent, competing for potential clients, seek for more direct relationship and disrupting our markets and that puts implications for us in terms of how we understand these platforms and work with that back to that all most effectively. So I need to see a world where that continues stronger demand to what we do but where we need to change, how we operate if were able to grow in that world.

So that on page 27 what we call the path to growth, you know how do we get WPP back growth and we had one quarter of growth, it's too early to declare victory though it is a positive step. It starts with division for the group, where we will invest and where we will grow and how we have to focus our portfolio on the faster growing parts of the business, it was really are in the area around the intersection of marketing and technology.

We need to focus on our clients and if we do it will hit in the right direction, giving them thoughts that will agile more effectively integrated solutions across the group. But I think in some of our new business where we been successful we have done that.

And we need to simplify organization to better position it for growth and I think about that in three terms, clients and how we have a simpler organization that clients can access. Companies how do we have fewer bigger companies, each of which is structurally positioned to growth and countries how do we organize at individual local markets to bring our strengths together, so that the example I used is Portugal, the 600 people in Portugal they are no longer in 20 people in 30 offices.

They are in one fantastic office overlooking the water front with one country manager the brand still there, but I think in terms of the key audience as we need to attract to our company and clients and people in perhaps an attractive solution. Our clients look it and say there is a talent base of 600 people and I think people that come to work they would say this it's 599 other likeminded colleagues and who like to learn accounted to provide wit them a career.

So I do think that's people in our business, a few years ago, were skeptical about co-location, but I think if we provide attractive locations in the UK sea containers where WPP will be moving soon, we voted one of the top three office buildings in the world. I think we provide attractive locations.

I think it's good for our people. It’s good for our clients and it's good for efficiency.

The next area we've focused on how we embed data and technology in our phone from the data perspective will be most focused on how we use data to power our work to how we basically surfaced inside the target our messages, make sure they return, and I think it's free conversation with someone from Google about in the application of AI to creativity and how AI can improve the creative process. And from the technology perspective, how we embed that much more deeply in our offer, and that doesn’t mean buying technology or developing technology and increasingly, it means integrating other people's technology leveraging the investment that the others are making here between them, Google, Adobe, Microsoft, IBM, Salesforce, Oracle to name a few, probably spending $10 billion on advertising and marketing technology and we can't compete with them.

But I think by being experts and neutral experts and having a really deep understanding of this platform. We can bring tremendous value to the clients, and we've really leaned in at Wunderman in particular, it will be landed to the relationship with Adobe, and they've been a fantastic partner for us.

We were their partner of the last year I think that meant we did more business with Adobe than any other company, which would include Accenture and Deloitte Digital and others, And it demonstrated what we can do if we really put our mind to it. And then talent, because our business it's all about people that's what makes it fun to come to work and else what makes clients want to work with us.

Great ideas come from great people. Great strategies come from great people.

And so while our technology is part of our offer even great technology is designed by great people. So, I think we really need to make WPP more than ever a destination for the best talent in the world to develop the talent and there is a lot of it that exists inside our operation and to provide people with increasingly careers within WPP not within individual operated companies to make the group more attractive.

And then lastly, we need to look at the overall shape of the portfolio that we made into the progress and even to the progress on the disposal and divestment front in the last four months. We need to look at that and make sure that we have discipline in terms of how we add to the group and how we build our balance sheet so that's sort of sums up to a strategy review by year end.

We’ll come back to before the end of the year and look at the actions we’re taking to return the business so better position the business for growth and to address the non-performing parts of our business primarily in North America in the creative agencies within the data investment management part of the Company as well as any restructuring costs that maybe needed in the associated benefits with them. That's kind of a bit about how we see the world we will come back to you.

I think a couple of organizations and we’ve done in the last four five months, first on clients, we have won six of the eight major pictures we've been part of and defended successfully three of the four views. The nature of our businesses, there’re always ongoing reviews, and we need to be competitive.

I think what we try to do in particular is make sure that when a client comes to us, they have the best resources for their problem regardless of what company they come from, and often there’s one company in the lead. But increasingly it’s a number of different WPP companies and clients are looking for the best results no matter where they come from, so in the case of Mars and MediaCom led it, but there’re important resources from Wunderman and POSSIBLE, and Wunderman Commerce on the data, and e-commerce fundamental part of that review.

On office depot, it was an important WPP win, the resources from YNR, from VML. And again I think MediaCom from one of our media networks.

On T-Mobile that’s really a programmatic media win and T-Mobile is a top three advertiser in the U.S., and we are managing their programmatic deal through a media for them through essence and a fantastic win for essence. And then lastly, Shell where JWT was the incumbent on the business and we really went back with a slightly different offer going through the Wunderman door.

Mirum which is part of JWT, was part of the solution and Shell chosen four WPP agents to be part of their overall agents the future structure so Wunderman, Mirum, Geometry, and Hill+Knowlton alongside Mediacom who is part of the set of review also retained the media business. So you can see that by combining our efforts, working seamlessly across the group embedding some of the newer capabilities in e-commerce or data or customer experience thinking, we can really come out with a strongly differentiated offer.

Turning to the balance sheet and the portfolio, on Page 29 laid out some of the disposals via alignments that we’ve made which was some of the acquisitions in terms of two acquisitions, one Guerilla in the U.S. which is an e-commerce business in the U.S.

and the other, HZ, which is also U.S., Burson Cohn & Wolfe. I think in both cases, they are in the sort of digital technology area, Guerilla is just short of 400 person e-commerce business.

They integrate well into Wunderman commerce. They have Magenta experience which complements our existing technology experience.

And they set us a strong creative digital agency that expands what BTW can do in terms of web development. I think increasingly we need to think about sort of technology rather than the word digital and how we use technology in our work rather than thinking of the world is based to a digital world and to non-digital world.

And on the disposal front, we have made 15 disposals. I think the goal is both the tidy up the sort of portfolio around the edges some of them are relatively small, but they eliminating them or disposing and make the group easier to manage and some of them like AppNexus, Globant, Grey significant amount of money will help us on the reducing our debt to EBITDA.

So in conclusion on Page 30 before we take questions, I think we're seeing business momentum continue to improve slowly. It's -- actually, it's our first quarter of like-for-like revenue as part half growth in the year, and it's too early to declare victory, but I think that is positive.

We've said that the back half of the year, expect to be in line with the first half of the year and we’re being cautious about the revenue outlook for the Company, which I think is the right thing to do this point. We’re listening to clients and our people how best to evolve the strategy coming back to by year end and we’re seeing progress in improving the win rate and focusing our people and assets on in greater reviews.

We have the priorities that remain and understand that we know where their focused operative agencies, you need to have stronger creative agencies to challenge that because we have stronger businesses with better work, better strategy, better reputations as well as in shorter those companies have the capabilities that they need to grow. Data investment management particularly in the United States has been challenged.

The inside part of the business remains under pressured. Work has been disrupted by different ways of getting to the same answer, using technology.

And North America and I think in North America sort of the intersection of those two trends and where they are most pronounced. So that’s the focus, we will come back to you by year end.

And I think it's time to your questions.

Welcome Mark to the CEO position. I think versus your predecessor, one of the key themes that I've heard is certainly more focused on competition from the consultants in your prior role and particularly I think you got to see it up close.

On the earlier call today and meeting in London, you've talked a little bit that Wunderman putting teams in side, on site it at your clients a little bit more, I know that’s not new for agencies. But it does sound to me like something I think is associated a little bit more with how a consultant mark didn't work.

And but what I’m really asking about, if there are two or three things that you would highlight that are most important to competing with that group that you liked to see go forward at a high level? And then just the second one in-housing continues to be a regular conversation, and it does seem that it's shifting a little bit from certain capabilities around social and programmatic that we were talking about a few years ago to things being a little bit more orientated to some services like creative.

I would love to hear your high level view Mark on where you see CMOs looking to do things themselves more and maybe a loop that back to how go into market can change for your agencies to help them with those changing needs?

So, I think probably that's right. I saw the competition more acutely at Wunderman and perhaps we see in other parts of the business.

I think the as someone asked the question this morning it's true. The competition is in part because the consultants are doing some of the things we historically did and in part because we are doing new things that we didn’t use to do that the consultants did.

So I would look at it in both directions. And within that I think lies what we need to do to be successful.

I think we have to understand how to implement the end marketing technology in our company and help to help clients develop programs that run through from strategy to creative to the execution of technology and where we were at successful Wunderman where we can put big programs that are in place with clients. I think the second thing we need to do is hire somewhat different mix of talent probably we need to hire some talent in the consulting companies and we are doing that.

The new Head of Wunderman in Singapore came from Accenture. The person that ran our Shell pitch came from Deloitte Digital.

But though interestingly, these had agencies backgrounds before so I think that there is a sort of hybrid individual that we are heading towards, setting with new different types of talents to understand technology, but we also understand how agency businesses work. And when working in agencies so the attract thing is not one way.

I mean I think in the last two weeks, we need to remember is creativity, I mean the value of our business is the ability to generate ideas, to inspire consumers, to develop visions around how companies can grow. And I do think that agencies are better qualified to do that than consultancies that tend to derive hypotheses at the beginning of the project than spend the next three months proving the conclusions they come through at the start of the process.

And either by sort of analysis or by analogy, so I think the leap of faith and innovation and inspiration and creativity that our business brings is very valuable to clients because, ultimately, clients are interested in growth and growth comes from connecting consumers. On the second and speaking just emotionally, it is not just to price for other carriers.

On the second question of in housing, I think maybe sort of change to debate from sort of our in housing to be on the site. Again at Wunderman we also look at Wunderman inside, which is the mix to help clients bring resources on site.

We just sold a project last week to a client in Chertsey to put people up in their office to generate content. And I think the again it is something where I think historically agencies have been reluctant to let people work outside of operations and the consulting firms have been more familiar to do that.

And I’d like to thank any of our clients who are looking to sort of outsource and the consultants who bringing them in house they can have -- they should have a conversation with us. And I think we can very effectively develop solutions with them as we have done it best buy, Minneapolis or News in the UK and other clients to do that, so that’s how it is, I think it’s an opportunity for us if we do it correctly.

One question for Mark and one for Paul. Mark, we’ve long believed that the migration at digital has been a tailwind due to higher labor intensity associated with execution and measurement and particularly on the media side.

Wondering if the industry is reached the sort of tipping point on the creative -- creative agencies where an accelerating reduction in the number of non-digital creative assets, as combined with an efficiency gains in digital to now present a headwind where overall, the non-working spend as the total percent of spending is now structurally lower. And if so, can we see additional pressure or do you see an equilibrium being reached at some point?

And then secondly, for Paul on Slide 14 where you break out the margin by region just wondering how we should think about that longer-term given the pretty significant disparity advantage in the U.S. would you expect the U.S.

to the even with a small amount of growth to trend toward the rest of the group or for this relationship to stay intact any insight there would be appreciated?

I mean I sort of understand your analysis I think trying to get to the same conclusion that you do as I see how you look at it. I mean I think that there’s definitely pressure on the traditional parts and I think that has been more intense in the last couple of years.

I do think that’s continued growth in the digital parts and they’re more labor intensive as you pointed out there’s increased execution and volume of data ironically means that to over analyze to be more analyzed, but I think it’s really more that in part because the way we are structured, they are cutting pressure on the traditional without being structured to capture the new and in some ways the trick that we need to do to better lead to the work line, to better alignment of our resources and greater use of common production and technology platforms is captured in new areas of growth from clients. I think if we talk to clients whilst they’re sort of some parts of traditional market budget made out in cut I think overall what they’re spending is increasing particularly when you include the newer clients.

So I think there’s a number of factors, it’s capturing the new work from existing clients and also growing and being relevant to capture and particularly being relevant and competitive with the new clients.

So, it's Peter on margins. So I think in the way I think about it is traditionally we’ve had best margins in North America pretty closely followed by some of the margins in Asia Pacific, Latin America, Africa, Middle East combined.

And the weakest margin that’s traditionally being sort of European market, and I think it really comes down to some pretty simple sort of economics in terms of -- firstly, it's the scale of the budget that we operate with and clearly the budgets in North America are bigger and the opportunities are great to make sense in a sort of more homogenous market than many. So that will by trend often give you the biggest opportunity.

It's where we can transfer skills between offices and between businesses more easily compared to say some of the European markets so obviously language does play a factor. Then the second element is sort of the frictional cost of change, and obviously in a changing revenue environment it's really how you advance to that opportunity in the USA, you can as we call it turn on the fix you can ameliorate your cost very rapidly with a change in revenue outlook where it's so much harder to do in certain Asian certain European market.

And finally, I think the social cost in some of the European markets require high. So all those factors tend to give you the belief that America will with its current sort of labor structure still be a very strong market in terms of performance and again labored it for the fixed in terms of cost.

Our market share, our market positioning, I think gives us very good scale and presence on the Asian and Latin America markets. I think that should be good.

So I think the order of ranges of prophecy will remain pretty similar going forward.

When you look at the second quarter in particular, you really had pretty good growth in an awful lot of major markets, you know, U.S North America and then by sector data investment management being the laggards and ongoing laggards. So I guess is as you look at your operations over the next six months is there anything you can do from a structural point of view in North America in the data investment management sector to change the growth trajectory or do you think it's mostly cyclical?

Well I think, I don’t want to focus on some of those investment management is that it could happens, it’s the core markets the UK, U.S, Germany, France in a certain degree staying. So and insight businesses still finding it challenging there in those markets where as we have often said the insight business in the software market is not from a specific actually doing very well.

So I think there are competitors to how we carry out that business, not all with the same economic model, but we’re to a certain degree hostage to where the market there major markets are and while we’re all making investments in the fast growing markets they don’t scale at the same pace as the business we have in North America, UK and Europe. So that will be it needs the industry to perform better on our own businesses so to keep up with that I think some of our businesses within the camp operations are very strong they are making investments the panel business is doing really well some of the consulting businesses are doing very well.

And that is again like always a mix bag of how we are doing. So that sense I don’t see any major change.

The U.S. as we mention it's been really four quarters now finding more of disappointment and first it was so triggered by I think since like major account losses, if you recall into the AT&T days it's actually principally affected the USA.

The Volkswagen which had some effect, but obviously more in Europe as well, and I think we've gained the momentum strongly in the media business and seen that come back. The other businesses having yet I think recovered the strengths that we they should have in the major American market.

So, I think that's the work we've got that's the challenge we've got to take on. They are trying to get since back in some of the other businesses that haven't been as successful in North America over the last 12 months.

Well, thank you very much everyone. I don't have anything else to add at this point.

And we'll see you in the few months, if not before. Thank you.