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Good morning, everybody, and welcome to our 2023 first quarter results call. I'm here in Sea Containers with John Rogers, Tom Waldron and our Investor Relations team. And I'll just take you briefly through the highlights before John takes you through our financial performance, and then we'll come back to close at the end and take your questions.
On Page 2 of the presentation, you can note our cautionary statement, which is important.
So turning to Page 3, and then 4, highlights of the first quarter. I think we had a positive start to the year, reflecting continued momentum in the business and continued investment in our [ offer ]. We delivered first quarter growth of 2.9%. I think pretty much in line with our expectations or maybe even very slightly ahead. Again, probably the toughest comp of last year. We saw growth across the business at 3% in our Integrated Agencies, 2.2% in our Public Relations, public affairs firm and 1.9% in our Specialist Agencies. Obviously, call out strong performance from GroupM at 6.1% and also strong performance from Ogilvy.
We continue to improve our work. We topped the WARC, the World Advertising Research Council (sic) [ Centre ] ratings in media, in creative and effectiveness in all 3 categories and delivered $1.5 billion in net new business in Q1. I should also point out, Ogilvy won Agency of the Year at the Clios 2 nights ago and reflects in our continued investments in our creative capability. That has been supported by acquisitions, particularly in the influencer market as we made 2 acquisitions we'll come onto later and a series of partnerships.
KKR took a minority interest in FGS Global and we'll talk a little bit about that later on and what that means for us.
And then overall, after a positive first quarter, we're leaving our guidance for the year unchanged, which remains at like-for-like revenue at 3% to 5% and a headline operating margin of around 15%. So those are the highlights. John, do you want to take us through the financial performance in more detail?
Thank you, Mark. So moving to the financials for the first quarter of 2023. So coming first to Slide 6, revenue less pass-through costs. At the reported level, we've seen an increase of 9.9% for the quarter. This is supported by a 6.3% point tailwind in relation to FX due to the weakness in sterling relative to last year and also our targeted M&A strategy that Mark has just referred to, added 0.7 percentage points to reported growth and actually stripping out the impact of the disposal of our business in Russia last year, the contribution was 1%.
On a like-for-like basis, we saw 2.9% growth against the 9.5% growth in the same quarter last year, very much in line with our expectations and slightly ahead of consensus forecast. And looking forward, as Mark has just said, we've reiterated our guidance for 3% to 5% growth for the full year 2023.
So moving now on to Slide 7 and business sector performance. We continue to see broad-based growth across all of our business lines, but starting with the Integrated Agencies at 3% on top of the very strong 8.6% growth this time last year. And as Mark just called out, GroupM in particular, showed strong growth of 6.1% on the back of 12.8% growth in Q1 last year. And our creative agencies had a slightly slower start to the year at plus 0.7% compared to 5.6% a year ago.
And within this, we saw strong growth at Ogilvy, driven by exposure to CPG clients and increased their spend by 15% across WPP in the quarter and also driven by recent new business wins. However, this was partially offset by a slower start to the year at Wunderman Thompson, reflecting lower spend from some technology clients and a softer start to the year at Grey.
In our PR businesses, we saw like-for-like growth of 2.2% compared with 14.1% a year ago. FGS Global performed particularly strongly, but we saw a slightly softer performance of BCW and Hill+Knowlton. And finally, Specialist Agencies saw growth of 1.9% versus 13% in the same quarter last year, with particularly strong growth in CMI, our specialist health care media agency and strong growth at Landor & Fitch.
So turning now to Slide 8 and our top 5 markets, representing 2/3 of our overall net sales. The growth in the U.S. of 2.3% was driven by growth in spending from clients in the consumer packaged goods and financial services sectors, offset by weaker spend by clients in the technology and digital services and retail sectors. In the tech sector, clients now have adjusted budgets to post-COVID levels of spending on some categories of hardware. And in retail, we've seen an impact from recent consolidation in the U.S. supermarket sector.
In the U.K., growth was 7.4% on top of 8.1% in Q1 of 2022, with particularly strong demand from CPG clients.
And Germany, our biggest European market was up 4% compared with 16% this time last year with broad growth in media and strength in the travel and leisure segment, partially offset by the runoff of a COVID-related government contract in Germany at one of our specialist agencies.
As we signaled at the prelims, China continues to be a challenging market, declining 13% in Q1 as we flagged. We face a tough comparison in China with 12% growth this time last year. Q1 also began with high levels of COVID infections as restrictions were lifted late last year. Towards the end of the period, we're encouraged by initial signs of recovery in the media market in China and economic indicators are actually positive, so we expect to bounce back in Q2 against easier comparatives. Actually, excluding China from our overall like-for-like growth would have delivered like-for-like growth for the quarter of 3.6%.
India was also a little bit more challenging, down 1.4% in the first quarter, reflecting a tough comparison against Q1 2022, which grew at 25%, and there was some macro uncertainty at the beginning of the year. We expect the recovery to happen through the rest of the year, particularly around events such as the Cricket World Cup and against easier comparisons in the second half.
Coming on now to Slide 9 and looking at the main movements in our net debt through the quarter.
So net debt at the 31st of March 2023 was GBP 3.9 billion, representing an increase of GBP 1.4 billion from the year-end, driven by the usual net working capital movements, CapEx consistent with our full year guidance, the investment in the 3 M&A transactions that Mark has already mentioned, and a slight strengthening of sterling year-to-date.
The typical seasonal outflow of working capital since the year-end reflects a small underlying improvement actually versus the same period last year, benefiting from operational improvements and some reversal of the timing and mix factors that impacted our year-end position that we discussed in detail at the prelims. And we remain confident that we can deliver a flat trade working capital performance in 2023. That combined with a small outflow on nontrade working capital of around GBP 150 million or so. Again, as I guided to on the prelims call, it will result in a significant improvement in cash generation in 2023 over 2022.
So moving to other items in the bridge. On CapEx, we maintained our focus on organic investment, including our campus program, opening new sites in China and Manchester and as I said before, we continue to make bolt-on acquisitions Goat, Obviously and 3K to strengthen our offer in the growth areas of influencer marketing and health care.
And with that, I'll hand you back to Mark.
Thank you, John. So just touch on a few of the sort of business drivers at the moment. So on Page 10, I think, called out -- we had a strong start to the year in terms of new business and in terms of recognition of the quality of our work. I highlight a few of the new business wins, the Adobe Media win in the Americas, and win of production work alongside another partner, Mondelez and then particularly the Maruti Suzuki win in India. It's actually India's second largest advertiser. I point out that India is now I think the world's most populous market. We now work with 45 out of the top 50 clients in India.
Our business was recognized by WARC in all 6 categories in media, in effectiveness and in creative as were our agencies actually Ogilvy, EssenceMediacom and Wavemaker. And I mentioned earlier, Ogilvy topped the Clio's Agent Network of the Year at the Clio's 2 nights ago in New York.
On top of the organic investment in business on Page 11, we did make 3 acquisitions in the quarter, 1 subsequent to the call, we acquired 2 businesses in the influencer marketing space. And given by the amount of time consumers are spending on the social media platforms, our clients are increasingly looking for ways to reach them, and many of those ways do involve influencers. Both of these businesses enable clients to invest more money behind influencer marketing. It's probably been the biggest challenge that they face through maintaining relationships with several hundreds of thousands of influencers, understanding their performance, their relevance and helping clients use them in their marketing. We also acquired a small health care specialist PR business in Germany to further invest behind that fast-growing sector.
And then in April, Landor & Fitch acquired amp, a really interesting creative, [ histrionic ] branding agency based in Germany, but with some operations around the world. And those acquisitions are supported by a strategic partnership we continue to develop our relationships with, technology partners in a positive direction. I think I'd highlight that the span primarily the areas of CRM, through Braze and BigCommerce and also both global in nature and then a very interesting partnership in Japan with KDDI, and that represents Kyoto, our new Japanese country managers, the first major partnership in that market that shows how we can sort of bring the strength of our global offer to their -- in that country.
On Page 12, it's worth briefly touching on the FGS Global transaction and KKR took a strategic investment in the company in March.
And maybe just go back in history to the creation of FGS Global and what this means for us strategically. Back in January 2021, we put together Finsbury, Glover Park and Hering Schuppener. They were 3 public relations and financial PR firms that operated totally independently within WPP based in the U.K., the U.S. and Germany, respectively. And one of the businesses had a minority employee investment. We brought those businesses together on a transaction with management heading towards an IPO with WPP as the majority owner.
In October 2021, we saw the opportunity to bring that business together with Sard Verbinnen, the leading U.S. Investor Relations financial communications company. In the U.S., we formed FGS Global back in October 2021. That business has really performed extremely well. If you look at the merchant market tables for last year, they were #1 by some region -- by some measure in each region of the world in terms of deal volume and deal values for M&A transactions. That was recognized by KKR.
We've come in to take out in part Golden Gate Capital. It's one of the investors in Sard Verbinnen, provide some liquidity to the management of the company, which is naturally changing somewhat. And we remain in a partnership with WPP owning a majority stake with the management of that business and with KKR now as a strategic investor online to develop that company over the next few years. So it really highlights the value inside that company and accelerates the progress that we're making.
Touch briefly on AI on Page 13. I know it's a topic of a lot of interest to people. I think that at WPP, we've been using AI extensively in our business for a number of years, primarily in our media business in GroupM through AXA and other parts of the company. We use it to target media, to optimize campaigns, to create audiences. And in the production part of this Hogarth, we used AI extensively to create, to produce work for all of the channels that consumers need.
I think what's changed over the last 6 months is the application of AI through generative AI into the creative process of the production of a language, video, still imagery through AI. And that's really allowed us the opportunity to use it much more creatively in the company. There are many examples of work we've done. It goes -- actually goes back to 2016, a campaign that J. Walter Thompson then did for ING in Holland, all the work we did last year in India for Cadbury's, Mondelez on Diwali.
So I think we'd highlight 3 examples. The work that Ogilvy did from Mondelez, which I'll show you in a second. AKQA Bloom have been using it to promote NotCo. It's a plant-based meat company from Chile actually, and they use it to show what would happen as animals aged, a great work from AKQA Bloom. And then Wunderman Thompson have been doing some work with the Iranian Democracy Council to highlight the future of the women in Iran. And you can look at each of those pieces of work offline. But before we go on, I think we should show the work that Ogilvy did for the Mondelez brand, Lacta, in Greece. So could you play the film please, operator? [Presentation]
Very good. So I hope there's something useful in that for everyone on the call.
So in summary, I think we had a positive start to the year, very much in line with our expectations, and we saw a strong demand for our services from clients. We made good progress against our own strategic plan in creativity, AI acquisitions and continues to invest both organically and through acquisitions in those areas.
In the FGS Global, transaction with KKR does highlight the value and growth potential of that company within WPP. So net-net, I'm sure we'll get onto this in the questions, remain on track to deliver our guidance. And looking forward, longer term, we're well placed in an environment of increasing complexity as AI changes our industry in a fundamental way, as a trusted partner to our clients and a more modern future-facing offer to prosper. So thank you very much.
Now before we take questions, there's one topic -- one person I'd like to thank and that's John Rogers. This is John's last call with us.
John joined back in January 2020, just think 8 weeks before COVID struck, and we were all locked up, and I have to say, he steered us through COVID extremely well, coming up to speed with a very complex business I'd say in record time in helping us really to navigate that very successfully financially. We had the same later with the challenge we faced following the Russian invasion in Ukraine. So as he moves on, I'd say he leaves us in better financially and better shape strategically. So John, thank you very much. Thank you for your contribution. I wish you all the best in your next endeavors. So thank you, John. And I think will now open the line up to questions.
[Operator Instructions] And first question of the day is from the line of Lina Ghayor of BNP Paribas.
Congrats, and John, all the best to what's next for you.
Thank you very much.
I have 3 questions. The first one is obviously on the guidance. Sorry, not very original. But could you perhaps give a bit of color around Q2 and more [indiscernible] and importantly, how we should think about the trajectory of growth throughout the year? The second question is kind of a follow-up that, where it would be useful for us to understand the visibility and how much of the year is already known or guaranteed. I know it's never really guaranteed, but some ideas if you could quantify how many months you have known, for example?
And my third question is on margins. I know this call is not about the margins, but could you give us some elements around where you stood in your recruitment in Q1 and your headcount plans for the next coming months?
Okay. Why don't I give you some color in terms of sort of the guidance overall and what we're hearing from clients. And John could talk about sort of specifics on the phasing. I think we'll take the first 2 questions really as 1 question and then we'll --John can talk to you about the margins.
Look, I think overall, we're 3 months into the year. We're 6 weeks away from giving you the guidance. I think we remain confident of being within the range of 3% to 5%. I don't think at this point, we'd say that that's changed really in any way from the last -- from 6 weeks ago despite some of the sort of turbulence in the financial system. When we gave the guidance, we knew that Q1 would be the toughest comp because of the strong comparative last year. I think we flagged that at the time. I don't think anything has really changed. We've come in I think in Q1, I'd say very, very marginally ahead of our expectations, which gives us confidence to make the numbers for the year.
I think overall, in my discussions with clients, I don't see any major change in client sentiment or client spending. I think those areas of the business that we knew would be slightly more challenged this year like technology or continue to be very slightly more challenged, and I think that they've become more positive or more negative over the period, perhaps in stronger earnings from Google and Meta in Q1 than expected, give us some confidence that they're not going to deteriorate further.
So I think things are really very much as we thought, and I mean John can talk more about what that means for you to understand as sort of Q1 and the second half. And I think we understand the challenges of looking at an acceleration during the year as well.
Yes. Hi, Lina. Thanks, Mark. So just in terms of phasing, I mean, I think the key message is no new news. It's only 6 weeks since we last gave the guidance, and we were very clear on the prelims call that we thought Q1 would be a little bit softer. And so hence, mathematically, we expect the second half to be a little bit stronger than the first half. I mean, I think it's as simple as that. And as Mark just said, we've delivered Q1 pretty much in line with expectations, maybe a little bit better than we thought, but not significantly.
And I think if you think about the sort of the range that we've given, if you looked at the 2-year wrap, which is about 11% to 12% or so, and if you maintain that through the year, then you'd end up at the top end of our range, that would give us now a turn of about 5%. And if we were to maintain Q1's performance through the rest of the year, that would obviously put us at the bottom end of our range at 3%. So that's, I guess, gives you one way at least of bounding the range, but 3% to 5%, I think we are very comfortable with, albeit we expect the second half to be a little bit stronger than the first.
In terms of visibility, again, I don't think any new news here. Typically, we have visibility of 80% to 90% of our spend looking forward 12 months. It very much varies business by business, while PR agencies will typically have good visibility going out 3 months or so. Our creative agencies will have visibility going out a little bit longer. But there's no material changes in our visibility from, for example, this time last year.
And in terms of margin, I would say one way to think about that, I think partly because of the phasing of our investment in IT, which I talked about at the prelims, which is largely front-end loaded and also because we expect the second half on a net sales basis to be slightly stronger than the first, then I think we'd expect directionally in the first half margin to be flat, maybe a little bit negative year-on-year in the first half. And we'd expect to outperform in the second half, but all of which would net out to a margin of around 15% on a constant-currency basis at the year-end. So entirely consistent in -- with the guidance that we gave at the prelims.
And I would say, by and large, in all aspects, actually, nothing fortunately -- much has changed since the prelims in terms of the underlying dynamics of the business. We're pretty much in line with where we thought we'd be.
One thing I'd say on headcount, just as they asked us the detailed question there. We're actually, I think, in the quarter itself, where we've got 1,000 fewer people at the end of the quarter than we had at the beginning of the quarter. That, I think, shows good discipline about keeping control over our cost base. Actually, 800 fewer permanent people and about 200 fewer freelance people. So good control over our costs.
And actually, if you look at the year-on-year position, in terms of our permanent headcount, we're probably up at around 3%. So quarter-on-quarter, we're up at around 3%. And on a freelance basis, we're down at around 15%. So if you remember this time last year, we had to employ quite a lot of additional freelancers because net sales was ahead of expectations. And so we had to support that client work with freelance resource. This year, we've kept very good control over our freelance spend. So in terms of our numbers, we're down about 15% year-on-year in terms of our number of freelancers. When you aggregate those 2 together, so the 3% increase in our permanent and the 15% reduction in our freelancers, we're up roughly 1%, just over 1% year-on-year in terms of the number of people, which again is entirely consistent with the guidance that I gave on the prelims call only 6 weeks ago.
Our next question is from the line of Tom Singlehurst from Citi.
And yes, a big thank you to John on the level of transparency on communications disclosure. That has come on leaps and bounds, so it's very much appreciated. All the best what comes next. But 3 questions to keep you busy in the meanwhile. First one, China heavily negative in the first quarter. But going into the second quarter, the comp is, I think, something like 18 percentage points easier. I suppose the question is, does this all work through in the second quarter? And does that mean -- I know you specifically said second half just then in terms of better growth profile because that better growth profile kick off immediately in the second quarter. I suppose in contrast to that, the India comp gets a lot harder. And so the question there is when you did your deep dive on India and Brazil, I think at that point, Stephan or maybe even you, John mentioned that you had aspirations for India and Brazil both to grow. So the question is, do we think overall, that's still on track?
And then the third question is on the FGS Global stake sale. I mean, I know you mentioned some of the mechanics of the deal. I just wondered whether that actually means anything concrete will change in how that business is run? And I suppose whether it presages scope for more minority stake sales in sort of discrete business units elsewhere in the organization because the multiple is off the charts relative to the multiple that you yourself are trading it. So those are the few questions.
Well, let's start with the FGS question. So I think the answer is it doesn't presage any more stake sales. I mean it was a unique situation in that we put together 3 businesses, and I highlighted that there was already an employee investment, a management investment in that. Then we did the transaction with Sard Verbinnen, which brought a financial partner and an equity management equity stake, significant management equipment stake from the Sard Verbinnen partners into the overall structure. So I think from a structural perspective, it's the same post this transaction. First is prior to this transaction, perhaps with changes in the percentages, you know WPP is the majority investor.
There's a significant financial partner, and there's a significant management investment in the company. So I don't think anything in reality has changed apart from the fact that it shined, I think, as you say, a multiple disparity on the overall value of WPP versus to -- maybe versus the private market and the growth potential of the business. And I don't think we expect -- we have no plans and I don't foresee any plans to do a similar transaction in other parts of the business. It's really a unique situation given the starting point and the opportunities ahead of us, which have been significant, really bringing -- I mean Sard Verbinnen is a fantastic business. We might not know it well in the U.K., but it's a very, very strong business in the U.S., and we've created with Roland Rudd and Alex Geiser and the team there a very strong and effective partnership that's going to attract some of the best people from that industry into the company.
On China, I think our broad expectation is China will go from being a drag in Q1 to a positive impact, having a positive impact on WPP's growth in the rest of the year. The situation is complicated by a strong comparative last year and by lockdowns in China in January, which, obviously, have eased. And we are starting to see an improvement in the media market in March and April that we expect to flow through into our business in the rest of the year.
And in India, I'd say that we did a deep dive, and you saw the strength of that business, but we do expect it to grow on the balance of the year despite the comparatives.
Yes, just to build on Mark's comments, and I think across India, China and Brazil for the full year, we expect all of those markets to be good growth opportunities for WPP as they have been in the past.
To your point, you've highlighted issues of phasing. And we've covered China, I think, already, but the comp gets a lot easier in Q2 and then even easier in Q3 and Q4. So we'd expect to return to growth in Q2. And indeed, in Q3 and Q4, maybe step up a little bit more because the comps get comparatively easier.
In India, I think you raised the point the Q2 comp is pretty tough. I think we're up about 45% last year. So that was -- so we're lapping pretty strong growth in Q2, but we really would expect to return to growth in India in the second half when the comps do get somewhat easier.
And on Brazil, I think we'd get some small growth in Q2 and again stepping up, again, growth higher in half 2 on the back of slightly easier comps. But overall, good growth across all of those markets for the full year because they've been and continue to be good growth engines for our overall business.
Our next question today is from the line of Julien Roch from Barclays.
Yes. Thank you, John, for being so transparent on numbers. The bar is very high for your successor. So first question, coming back on FGS. Can you give us some numbers because I calculate that KKR [ puts ] 70x p when you trade on 9. So is it because FGS is expected to grow well above WP going forward? What have they grown out annually on an organic basis and pro forma since 2019? For instance, you told us 18% in '21, but what about '20 and '22? That's my first question.
The second one, sorry to come back on China again. But -- so you say it will turn around in Q2, but are we talking 0 to 5, 5 to 10, more than 10, some numbers there?
And then the last one on AI. A long question, sorry. So say you win a content creative budget where a client will spend 100. Historically, you run your business on a cost-plus basis, so you take your 15% margin, spend 85% on delivering what the client wants. Thanks to AI, it will cost you far less. So let's say, you only spent 40%, don't think the client will let you get a 60% margin rather than 15%. So they're going to say, why don't we share the spoil and we're going to pay you 60% to 70% and your margin is higher?
So what do you think about this specific point, i.e., AI could lead to higher margin but lower revenue for content and creative budget?
Okay. So on FGS, I think we've given you the disclosure that we're going to give you at this point. I wouldn't want to be drawn into further details of their performance, and I think we'll see how that -- we'll see how the business continues. But I'd just agree with your point about the comparative valuations.
On AI, I saw you asked the question before. But I don't -- sort of at one level, I hate to discredit you, Julien, but I don't totally follow the point.
I mean there's -- if you think about how we do work, there's the creative process, there's the production process and there's the media process. If you're sort of thinking about it simplistically, all underpinned by data and technology.
I think as you relate to the creative process, with distinctly the production process, I don't think AI is going to make people suddenly more creative or shorten that process. So I think the amount of work we get paid -- the amount of money we get paid for the ideation, the strategy for account management, all of those things are substantially -- I think, are going to be unchanged.
If anything, it might be increased by the application of AI because it's going to demand greater volume of assets. I think on the production process, there is a question there around volume versus price. We need a greater volume of creative assets to be produced. A much greater volume, by the way, is the number of channels explode and the formats implode. And by the way, when you can combine media and creative, we're going to be using millions of different types of creative assets in relation to the data signals that we get from our technology and media. Much of that work is -- some of that work is done on [ an hours ] basis, but much of that work is done on a fixed price basis. And so it's not going to be directly comparable, and I think the jury is out on whether the explosion in volume offsets the sort of reduction in price. All of our experience with technology to date in WPP's businesses, it tended to create more jobs than it's destroyed. And so I don't think net-net one can come to the conclusions you've come to.
They also, by the way, the opportunity for us to gain market share by investing more and being more competitive. And I think some of what we're seeing in terms of clients looking to streamline their partners and work with partners that have the wherewithal to invest in this indicates the opportunity for us to gain market share by better applying AI through our work. So John's going to answer your question.
Yes, just on China. I mean, obviously, we've given quite a lot of guidance on this already, we really want to try and avoid getting in -- drawing into guidance on a quarterly basis. But I guess, mathematically, if you looked at the 2-year wrap and you have that consistent Q2 versus Q1, then you'd be much more likely to be in the range of 5 to 10 than in the range of 0 to 5, which were the 2 that you sort of suggested in your question. So that may be one way of looking at it.
Our next question today is from the line of Lisa Yang of Goldman Sachs.
All the best, John, as well for much of your input. A couple of questions, please. So firstly, on the full year guide, I think you said that full year results on the 3 to 5 pricing will probably be 3 to 4 and the rest is volume. Could you talk about the evolution of that mix in the first quarter? I guess you probably didn't have the 3 to 4. So how do you -- what would you expect basically the pricing contribution to accelerate for the year? So that's the first question.
Secondly, on the performance in Q1. I mean, U.K. was very strong. So just wondering, like what's going down there? I think Publicis' U.K. number is also very strong, and do you see that's going to be sort of sustainable for the rest of the year?
And third question is on the restructuring. I think you said the GBP 180 million which doesn't include any potential additional restructuring coming from the property review. When should we expect to hear on that property review? Or can you maybe give us any sense of the size of potential additional restructuring that could be coming this year related to that?
John, why don't you take those -- I think before just on the U.K., just to make the sort of qualitative point. I think we have a very strong business here in the U.K. I think that the growth reflects the breadth of our business beyond sort of traditional media advertising because we're certainly outperforming the kind of classic advertising market. And I think it also reflects sort of the importance of the U.K. as a creative and a media hub. But John, why don't you take the specifics on pricing in the U.K. and then on...
Sure. Okay. Well, just at least in terms of your question on pricing, we said at the prelims that we expected price increases to be roughly 3% for 2023, and we maintain that guidance. That still holds. I would say in terms of Q1, the benefit of pricing in our number would be 1.5% to 2%. So we are seeing volume growth in our Q1 and probably pricing around 1.5% to 2%.
Why is that different? Well, because it's largely down to the timing of price negotiations with clients, and that impacts when we put price increases through. So that's why you'll see it sort of slightly differ through the year, but we're very comfortable with the guidance that we gave of around 3% or so.
In terms of restructuring from our property review, again, which we discussed at our prelims, which largely focuses on the U.S. as the market where we hold a lot of property, we would expect to update the market at our interims on that in terms of some of the details there. I don't want to be drawn at the moment in terms of quantum. I think we need to do the full review first, and then we'll update in detail at the interims.
May I actually ask a follow-up question?
Yes.
So I think clearly, Mark, you sounded very confident on today's call. It doesn't look like anything has changed versus the full year results. It does look like Publicis Omnicom was slightly more cautious in tone. So just curious like any maybe reason why, I don't know, you're maybe not seeing what they were seeing, maybe a difference in geographic mix. And specifically, Omnicom said it will be a stretch to reach to the top end of their guidance, which is 5%. Do you think the same would apply to WPP? Or would you say you're as comfortable with 5% as you are with 4% or 3% at this point?
I don't know that our tone is necessarily different from theirs. I mean we're just -- we're saying it as we see it, there's no real change from the last 6 weeks ago, and there have always been challenges in the economy for the year. And so the things that we knew about remain the things that we knew about. We knew that technology would be a little bit softer. We knew China would improve a little bit over the year. I don't think anything has really changed.
I mean the one way to think about it that might help you, Lisa, is we did 9% last year in Q1 and 3% in Q1 this year. So that's sort of simplistically 12%. And we did 7% for the year. If we were to continue to deliver 12% when use that base, that would take us to 5%. And I think we're confident of being in that range of 3% to 5%. And that's sort of a simple -- maybe too simple a way of looking at it, but I think that, that's why we'll be in that range.
Our next question today is from the line of Adrien de Saint Hilaire of Bank of America.
Indeed, godspeed, John, for the future. A few questions then. I'm a little confused with trends in the ad market right now. We've heard some of the digital guys talk about an improvement and some acceleration into Q2, but then we're also seeing weakness elsewhere and caution elsewhere. So what do you observe on your end? And how do you think this plays out for GroupM and the broader WPP? That's the first question. Then secondly, you gave us some interesting color about what you expect for Brazil, India, China and for the rest of the year. Could we do the same exercise with some of the bigger markets like U.S., U.K., Germany?
Okay. I mean, look, I'll take the first question, and maybe John can take the second question in terms of it. I think that the GroupM can expect media advertising to be -- ad spend to be around 6% in 2023, very, very slightly down on 2022, and they grew GroupM at around 6% in Q1. So I'd say that the tech companies have very tough comparatives. I think Google, as you say, were up 3%. Google and Meta [ are ] up 3% in Q1, but Google is comparative, I believe it was 23% last year.
So they're facing sort of a somewhat different situation comparatively, and our comparatives get slightly easier as the year go on, but not significantly. So I think if you look at the year overall as being a little bit softer than last year and maybe the comparators driving the quarterly trends.
But I come back to where John started, as you know, we're in the range of 3% to 5%. I wouldn't say that -- 5% is better than 3%, but not necessarily tougher than 3% by definition. And we're sort of confident that that's where we'll be really. John.
Yes. So Adrien, on your -- again, we're not wanting to get drawn into market by market neither country by country, quarter-by-quarter.
Look, I think what I would say is that if you look at the numbers for the U.S. market in Q1, for the U.K. -- at just north of 2% and then the U.K., it's strong at 7% and then Germany at 4%. As it happens, they are all, I would say, pretty good indicators in terms of our 4% forecast for the year. Now there is some phasing in there and et cetera, through the quarters, which I won't go through in detail, but they're not bad indicators of the direction of travel for the full year outturn for those specific market.
Okay. And if I can just squeeze one more follow up and the last question for you, John. On the working capital stuff, it seems that you're highlighting in the release that clients are now demanding maybe longer payment terms. Is that something which you've seen change in the last few weeks, maybe few months?
No. I mean -- look, we're always under pressure. It's always a big part of our negotiation with clients. We've always been actually pretty robust in terms of holding our trading terms. So it's -- there's been no material changes, I would say, in the nature of that negotiation over the last 6 months or so, and we're probably actually in the last year or so, it's always been a hot topic for debate and...
It's been a hot topic over the last 10 years.
Yes, and the pressure is there today as it was to Mark's point, 5, 10 years ago.
Our next question today is from the line of Omar Sheikh of Morgan Stanley.
Yes. Great. Just got a couple. Maybe if I could start on the creative business. It looks like that slowed quite a bit in the quarter. I mean despite the fact the comps are actually a bit easier. So I just wonder whether you could give us a bit of color on what's going on there. Is that you called out Wunderman Thompson and Grey. Is it kind of client losses? Is there something competitively going on? Is it just a client mix? Just some help there would be helpful.
And then secondly, just looking at your organic growth over the last 3 or 4 quarters, there is a bit of a kind of a gap opening up between your peers, if we look at the big 5 holding companies. You are slightly underperforming. So can you -- how would you explain that gap? Is it business mix? Is it sort of a bit less exposure to consulting, data analytics? Is it geographic mix? Just some help there would be good.
Okay. I think, look, on the first question, media first was creative. I think GroupM's business -- we've always been clear that our media business is a fantastic business. And I think particularly in times of sort of nominal advertising growth, GroupM's top line is probably more driven by ad spend. If the market is growing at 6% this year, GroupM did 6% in Q1, I don't think that should surprise us.
Our creative businesses have somewhat different dynamics and so I think have been a little bit softer in Q1. And as you correctly point out, we've had some business like Ogilvy do well, some business like Wunderman Thompson and Grey have a slightly slower start to the year. But I think if you look at the account wins that we've had, we've had a good performance there.
In terms of the organic gap, I'd encourage you, one, to wait until all the companies have reported; and secondly, to be careful in comparing revenue and net sales. And I'd point out that our revenue performance is similar to one, and our net sales performance is slightly lower than another. So I think we're not yet through the reporting system. And I'd say we feel good about our top line performance. We would like it to be stronger, but I think we feel good about our top line performance.
Our last question today is from the line of Silvia Cuneo from Deutsche Bank.
Thank you to John. Best of luck in your next project.
Thank you.
My first question is also on the creative agency performance, just a follow-up to the prior one. You talked about some areas of slowdown already, but just wondering if you could talk a bit more about net sales from areas like experience commerce and technology within that mix? Is that still close to 40% of that segment ex GroupM?
And then just a second question on the FX impact to date. So if we take the current FX rate for the rest of the year, what sort of impact do we expect for revenue and margin?
John, do you want to tackle those?
Yes. So on the FX, I would say we saw it as you see in the first quarter, effectively a tailwind of 6%. And we'd expect if you translate the current rate through to the full year, with a sort of headwind of -- well, flat to 1%, something of that nature on the FX.
And in terms of your question on the split between experience commerce and technology, we don't actually report on that on a quarterly basis. We'll give you a further update on that split at the interims. But I wouldn't expect any of those trends in the growth of those areas to have differed markedly from what we reported at the prelim 6 weeks ago.
And there are no further questions at this time. So I hand the call back over to Mr. Mark Read for closing remarks.
All right. Well, thank you all, and thank you all for joining. As we said, we had a good start to the year and remain on track to meet our guidance. I'd like to thank John for his contribution and say that Joanne started last week. She's here listening to the call and should be on the next call at the half year. So thanks, everybody, and we'll be here to answer any of your questions in more detail offline. Thank you.
Thanks, everyone.