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Company Report & Profile

GLOBAL ADVERTISING & MARKETING COMMUNICATIONS

WRSX

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GLOBAL ADVERTISING & MARKETING COMMUNICATIONS
CONTENTS: (click to view page) Company History Mission Statement Company Timeline Board of Directors Corporate Governance Group Structure Operating Units Financial Performance Measures Share Price / Market Capitalisation Financials Non-financial Performance Measures
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WRSX

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WRSX

Global Advertising

Company History / 1

Introduction: WRSX (Waldron Roux Silberstein Xao) was founded 15 years ago with the merger of three agencies: a long-established London-based advertising agency, WWMV and new partner agencies in New York (Silberstein & Lord) and Paris (Roux Toussaint Berthe). The London agency: Westcott Waldron Morrissey Vickers (WWMV) was one of the new-wave creative London agencies of the late 1970’s but as three of the original founding partners Westcott, Morrissey and Vickers cashed-out, the last remaining founding partner, Juliette Waldron, saw the opportunity to take advantage of global opportunities and grow the agency network by merging with the New York agency Silberstein & Lord and the Paris agency Roux, Toussaint, Berthe. The New York agency: Silberstein & Lord is on Madison Avenue and Lloyd Silberstein is both president and creative director. He was described in Ad Age as “one of those old-style advertising mavens who would go onto the ledge of his 50th floor office to fight for a creative idea”. The agency dates back to the 1980’s when it established its reputation as a highly creative boutique and attracted some of the top Fortune 500 companies as clients. Its reputation was set in stone when it won a slice of the General Motors automotive business. Robert Lord, the second founding partner and previously director of client services, left the agency due to failing health, leaving Lloyd Silberstein in charge. A large personality, Lloyd Silberstein has the reputation of not being able to keep his top staff.

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WRSX

Global Advertising

Company History / 2

The Paris agency: Roux, Toussaint, Berthe (or RTB as they were known) is based in Paris. Raphael Roux, who had a highly successful career with a major cosmetics firm as international marketing director teamed up with two of the agency team who serviced the company’s business: Serge Toussaint and Philippe Berthe. RTB soon had an enviable reputation and produced highly creative award-winning work in the French tradition of “risque iconoclasm” as it was referred to in an advertising survey in Le Monde. The merged new agency – WRSX / WaldronRouxSilbersteinXao: These three companies merged 15 years ago and decided upon the name of WRSX / WaldronRouxSilbersteinXao, which a majority of the founding partners believed reflected the size and reputation of the merging companies. The founding partners and shareholders consisted of: Juliette Waldron of WWMV, Lloyd Silberstein of Silberstein & Lord, Raphael Roux of Roux, Toussaint, Berthe and Victor Xao, a senior director in the London agency. Their stated strategy at the time was:

Creative quality and a range of advertising and marketing communications services to support targeted clients globally.

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WRSX

Global Advertising

Company History / 3

WRSX LSE Listing WRSX went public through an Initial Public Offering 8 years ago on the London Stock Exchange (LSE) where its shares are traded. The company is a diversified advertising agency offering advertising, media, direct marketing, PR and speciality communications services across a range of disciplines. While WRSX is quoted on the LSE “big board”, through significant account gains in France, the centre of gravity of the company is largely in Paris, where Board meetings are held. Concurrent with these account gains in Paris, Raphael Roux was appointed CEO five years ago and is now retiring as global CEO and you, as one of a new Board of Directors, have recently been appointed to take over the strategic and business management of the WRSX Group. The WRSX share price has been underperforming in the advertising sector for the past 18 months and analysts have written of “strategic drift” and “lack of strategic focus in low-margin subsidiaries”. Because of your strong strategic track record in a related industry, you have been brought in to help redirect the fortunes of the company.

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WRSX

Global Advertising

Mission Statement

Mission Statement We exist to make our clients successful through differentiating and strengthening their brands. How we add value: WRSX is a creative, innovative, customer-driven communication company built around highly specialised business units. Due to the way the Group has developed historically, mainly through merger and acquisition, the structure of the business contributes to the independence of the various business units with a great deal of autonomy that we believe contributes to the effectiveness of the service we offer our customers. Local service and local account management are what drive our customer excellence. Sector Specialism WRSX has developed its reputation as a leading advertising agency through its expertise in the following sectors: • Automotive & transport • Health & pharmaceuticals • Telecoms • Beauty & fragrances • Government & public sector
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WRSX

Global Advertising

Company Timeline / 1

The WWMV timeline: 31 years ago – Youthful talent and drive At this time, the present-day WRSX chairman Juliette Waldron gets together with Richard Westcott, Sean Morrissey and John Vickers to found one of the new-wave London creative agencies. Creative directors Morrissey and Vickers have many awards between them. Campaign magazine calls it a “marriage made in creative heaven”. Many client accounts follow the talent to the new agency. 30 years ago – First big win WWMV wins a slice of an international airline account from one of the larger, more established agency groups. 29 years ago – First diversification PR division started. Leading PR person joins and starts new division. 27 years ago – WWMV goes west New York contact office opened through client pressure. 24 years ago – Consumer advertising agency of the year WWMV confirmed as the fast moving consumer goods agency of the year. 21 years ago – Retail advertising unit established WWMV offered the advertising account of the second largest retailer in the UK if they set up a retail unit. WWMV agrees to do this. 19 years ago – WWMV on the continent Paris contact office opened through client pressure. 17 years ago – Waldron buys out partners Three founding partners bought out by Juliette Waldron.

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WRSX

Global Advertising

Company Timeline / 2

The Silberstein & Lord timeline: 28 years ago – The Big Apple Lloyd Silberstein and Robert Lord join forces to establish their agency in New York. Lloyd Silberstein has a background in copywriting with a top agency in Chicago but his ambition was always “to be on Madison Avenue”. He is approached by Robert Lord, something of a father figure and a famous marketing name – and they decide to start their own agency. 27 years ago – First creative award Copywriters Association of New York votes S&L top consumer advertising agency. 26 years ago – Direct Marketing Unit S&L acquires a Direct Marketing company with a large downstream mailing services operation. 25 years ago – DM Agency of the Year S&L Direct Communications named DM agency of the year. 21 years ago – Car account win S&L main agency wins the launch of a new GM car model. 19 years ago – Robert Lord retires Due to ill health, Robert Lord retires. Lloyd Silberstein becomes president, S&L NY. 17 years ago – Approach by WWMV Invited to merge and found a large international agency grouping by Juliette Waldron of WWMV to form WRSX.

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WRSX

Global Advertising

Company Timeline / 3

The Roux, Touissaint, Berthe timeline: 21 years ago – French Flair Raphael Roux always believed that you never do things by halves, so he persuades his new agency partners, Serge Toussaint and Philippe Berthe to launch the agency with a bang by stopping the traffic on the Champs Elysee with a parade and being featured on the evening TV news. The agency has always had a high profile ever since. 20 years ago – FMCG account wins The major competitor to Roux’s former employer appoints the agency to handle a portfolio of brands through EMEA. 19 years ago – New Creative Director Pierre-Jean Xavier (P-J) creative high-flier, joins the agency as creative director. 18 years ago – PR and Film Production Unit RTB starts a PR company and the new creative director persuades the board to invest in a film production unit. 17 years ago – Consumer Agency of the Year RTB names consumer agency of the year in France. 17 years ago – Financial services account win RTB wins the account of Europe’s largest insurance company. 17 years ago – Approach by WWMV Invited to merge and found a large international agency grouping by Juliette Waldron of WWMV to form WRSX.

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WRSX

Global Advertising

Company Timeline / 4

17 years ago – WRSX - The new integrated agency is born Present day WRSX chairman, Juliette Waldron gets together with Raphael Roux, Lloyd Silberstein and Victor Frederick Xao to re-invigorate the business and restructure the equity with personal investments. This is billed by Campaign magazine in London and Ad Age in New York as “an integration of massive talents – watch this space”. 17 years ago – NY offices combined The WWMV contact office closes and personnel transfer to the S&L offices. 15 years ago – More account gains The new management team brings in new business gains. 13 -14 years ago – Fastest Growing Agency 30% growth per annum. 10 years ago – Advertising Age Agency of the Year Award Judges vote WRSX Ad Age International Agency of the year. 9 years ago – WRSX makes public offering Shares traded for the first time on the London Stock Exchange. 8 years ago – Big account wins in France Paris office expanded. Range of services widened. 7 years ago – New York account losses Lloyd Silberstein had to announce the loss of a big account. New York office restructure necessary.

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WRSX

Global Advertising

Company Timeline / 5

6 years ago – Raphael Roux appointed as global CEO Juliette Waldron appoints Raphael Roux as CEO and herself as Chairman. 5 years ago – Singapore office opened With Victor Xao’s experience and encouragement from an FMCG client wanting to launch in Thailand, Malaysia, Philippines, Hong Kong and Singapore, an office in Singapore is opened. 4 years ago – Diversification The board decides to widen the range of disciplines and makes acquisitions in research. 3 years ago – Revenue tops £200 million The Group’s revenue topped the £200 million mark this year. 2 years ago – The Group makes further acquisitions The Group diversifies into brand identity and digital media. Current year – Raphael Roux is temporarily suspended from duties Following allegations in the Paris office of bribery to gain business, Raphael Roux is temporarily suspended pending enquiries into allegations of corruption by a former employee of WRSX Paris.

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WRSX

Global Advertising

Board Directors – Executive

The Main Board of Executive Directors: Executive Chairman Global CEO Paris office MD London & Singapore office MD New York office President Chief Financial Officer Group HR / Talent Director Group Market Insights Director

Juliette Waldron Raphael Roux Serge Toussaint Victor Frederick Xao Lloyd Silberstein Leena Chakrabati Francoise Mellier Bjorn Krog-Jensen

Juliette Waldron

Raphael Roux

Leena Chakrabati Picture yourself here…

Victor Frederick Xao

Lloyd Silberstein

Serge Toussaint

Francoise Mellier

Bjorn Krog Jensen

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…because you are also a main board director

WRSX

Global Advertising

Board Directors Non-Executive

Non-Executive Directors: There are also three non-executive directors who advise the board. These three non-executive directors are up for re-election within the next year. Sandrine Mauret Mervyn Hill-Lewis Rod Raoul Saurez Director, GDF Industries, Brussels Director, RLT Financial Services, London Director, Telecoms Worldwide Inc, New York

Sandrine Mauret

Mervyn Hill-Lewis

Rod Raoul Saurez

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WRSX

Global Advertising

Biographies: Non-Executive Directors

Non-Executive Directors: Below are summary biographies of the three current Non-Executive Directors of WRSX: Sandrine Mauret Director, GDF Industries, Brussels. Sandrine Mauret is seen as a rising star at GDF where she is Director of Operations (Brussels). GDF is a major utility supplier of gas and electricity to the commercial and residential sector. Mauret obtained her MBA at IMD in Switzerland where she met Raphael Roux. Roux invited Sandrine Mauret to join the WRSX Board as a Non-Exec three years ago. Mauret is also a Non-Exec of three other companies, a trustee of the Opera House in Paris, a UNICEF Special Envoy for Humanitarian needs in Africa and a prospective member of the European Parliament. So far Sandrine Mauret has attended one Board Meeting and a meeting called by Roux where he announced his suspension from duties pending investigations. Director, RLT Financial Services, London. RLT were major clients of WRSX during Mervyn HillLewis’ time as Marketing Director of RLT. RLT are the UK’s seventh largest financial services company. Mervyn retired from RLT when it was acquired by Spanish financial Services Group, Santos four years ago. He has been a Non-Executive Director of WRSX for six years. He has attended every Board meeting convened during his tenure to date. Director, Telecoms Worldwide Inc, New York. Telecoms Worldwide Inc is a major player in the telecoms industry in the USA. He has an astute brain and is seen as giving “wise counsel” to the Board – although the Board has chosen to ignore some of his more radical ideas in the past.

Mervyn Hill-Lewis

Rod Raoul Saurez

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WRSX

Global Advertising

Corporate Governance

Corporate Governance There have been reporting irregularities in the past. The problem was the way certain offices reported revenues and associated costs. There have been allegations of bribes to win business which have come from the Paris office and while an internal investigation was conducted no charges were made. This occurred despite the appointment of three non-executive directors, all of whom are up for re-election this year. There is a move among shareholders to ask for the appointment of new non-executive directors who are strong in corporate governance. The Group does not currently have a stated code of corporate governance as this issue is managed at a local level.

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WRSX

Global Advertising

Group Structure WRSX Group Main Board
Company Secretary Chairman’s PA

Paris Office

New York Office

London Office

Singapore Office

Office Central Services Office Central Services Office Central Services Office Central Services Consumer Advertising Media Services PR Company PR Film Production Photographic Studio Web Design Company Relationship Marketing/ CRM Research & Insight Consultancy Consumer Advertising Consumer Advertising Media Services Direct Marketing Photographic Studio Mail Handling Services Digital Media/ Web Design Research & Information Lobbying Consultancy Branding & Identity Branding & Identity Audio Visual Productions Consumer Advertising Retail Advertising Media Services PR Company Consumer Research New Media

Office Central Services Consumer Advertising Media Services Branding & Identity

Exhibitions & Conferences Outdoor Media New Media/Digital Sports Promotions
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Branding & Identity

Office Central Services = Planning & Finance, HR, Marketing, Procurement & IT

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WRSX
Paris

Global Advertising

Operating Units / 1

Consumer Advertising Agency Name: WRSX Paris MD: Serge Toussaint Specialisation: Consumer advertising Media Services Name: WRSX MediaCom MD: Dominic de la Noe Specialisation: Media planning and buying PR Name: Publicitas MD: Sylvie Tourre Specialisation: Consumer PR Film production Name: Cine FX MD: Jean-Luc Breton Specialisation: Animation and digital effects

Photographic studio Name: Atelier Photographique MD: Jean-Luc Breton Specialisation: Packaging and food photography Web design company Name: InterDessin MD: Pierre Rousset Specialisation: Interactive websites Relationship marketing / CRM Name: WRSX 121 MD: Daniel Auchan Specialisation: Direct marketing Research and Insight consultancy Name: PerspectivesConsommateur MD: Ghiselle Briant Specialisation: Behaviourial research

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WRSX
New York

Global Advertising

Operating Units / 2

Consumer Advertising Agency Name: WRSX New York MD: Lloyd Silberstein Specialisation: Consumer advertising Media Services Name: WRSX MediaCom MD: Ronald Rosenshine Specialisation: Media planning and buying Direct Marketing Agency Name: WRSX Direct MD: John Soares Specialisation: Classic DM Mail Handling Services Name: FastTrak Mailings MD: John Soares Specialisation: Mailings Branding & Identity Name: Identica2000 New York MD: Lloyd Silberstein Specialisation: Design & corporate identity

Digital Media / web design Name: Quazar MD: Rick la Motta Specialisation: Corporate websites Photographic studio Name: Drive-In Studios MD: Rick la Motta Specialisation: Automotive photography Research and Information Name: A. W. Sorensen MD: Liz-Anne Botma Specialisation: Direct marketing Lobbying consultancy Name: Smith Inc MD: Bradley W. Smith Specialisation: Political lobbying & PR

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WRSX
London

Global Advertising

Operating Units / 3

Consumer Advertising Agency Name: WRSX London MD: Victor Frederick Xao Specialisation: Consumer advertising Retail Advertising Name: WRSX Retail MD: John Hooper Specialisation: Specialist retail advertising Media Services Name: WRSX MediaCom MD: Adrian de Bock Specialisation: Media planning and buying PR Company Name: BTP MD: Rosie Burton-Taylor Specialisation: Consumer PR

Consumer research Name: Synergy Insight MD: Penny Alder Specialisation: Consumer behaviour New Media Name: Silverfish MD: Jay Bravura Specialisation: Digital media channels Branding & Identity Name: Bellamy Borthwick Jones/Pentagraph MD: Matt de Wolff Specialisation: Corporate identiity Audio Visual Productions Name: Audio Image MD: Grahame Edmunds Specialisation: Product launches

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WRSX
Singapore

Global Advertising

Operating Units / 4

Consumer Advertising Agency Name: WRSX AsiaPacific MD: Victor Frederick Xao Specialisation: Consumer advertising Branding & Identity Name: ImageMedia MD: Stephen Lim Specialisation: Corporate identiity Exhibitions & Conferences Name: PromoCo MD: Deena Patel Specialisation: Exhibitions & Conferences Media Services Name: MediaCom AsiaPacific MD: John Read Specialisation: Media planning and buying

Outdoor media Name: Impact Media MD: J. N. Wang Specialisation: Poster sites New Media / digital Name: The Tube MD: Victor Frederick Xao Specialisation: Digital media channels

Sports Promotions Name: Sports World MD: Royce Moon Specialisation: Brand sports promotions

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WRSX

Global Advertising

Financial Performance Measures

How we judge our performance Our objective is to create value for our shareholders in both the short and long-term through effective strategies that deliver year-on-year growth in our existing markets and sectors as well as sound investment in developing markets and emerging sectors. WRSX key financial performance ratios (Start Position Period 0) are:

RATIOS: • PBIT Margin

WRSX Group 16.5% 63% 12.9% 45.5%

Industry average 19% 58% 15% 42%

calculated as PBIT/Revenue:

• Staff Costs Ratio: calculated as Staff Costs/Revenue • Return on Capital Employed: calculated as PBIT/Total Assets – Current Liabilities • Gearing Ratio: calculated as Non Current Liabilities/Total Equity

Note: An Income Statement and the PBIT and Staff Costs Ratio only will be displayed at the end of each decision period in Phase 3 - Strategy in Action - of the simulation.
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WRSX

Global Advertising

Share Price & Market Capitalisation

Share price & Market Capitalisation: Following the unproven allegations of bribery in the Paris office and the resignation of the CEO the share price has been in a long term decline over a number of quarters and is now trading in a narrow band around 230p and shows the average share price per quarter over the past 9 quarters. With 125,000,000 issued shares in circulation, this puts WRSX market capitalisation at approximately £285m. Earning per share (pence) last dividend was 15.23p

WRSX Share Price - £'s
4.00 3.71 3.50 3.00 2.77 2.50 2.32 2.00 1.50 1.00 0.50 0.00
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3.51 3.25 2.78 2.52 2.28

2.52

Q1

Q2

Q3

Q4

Q5

Q6

Q7

Q8

Q9

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WRSX

Global Advertising

Financials/ 1

Please note: Period 0 denotes the position for all WRSX finances at the start of the simulation.

INCOME STATEMENT forfor Period INCOME STATEMENT Period n Revenue Direct costs Gross profit Operating costs: Staff costs Establishment costs Other operating costs Total operating costs Profit before interest and taxation Finance income Finance costs Profit before taxation Taxation Profit for the year

0

£m 200.0 (10.0) 190.0

€m 240.0 (12.0) 228.0

(126.0) (16.0) (15.0) (157.0) 33.0 5.0 (10.0) 28.0 (9.0) 19.0

(151.2) (19.2) (18.0) (188.4) 39.6 6.0 (12.0) 33.6 (10.8) 22.8

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WRSX

Global Advertising

Financials/ 2

SEGMENTAL ANALYSIS for Period 0 By region Revenue £m 100.0 50.0 30.0 20.0 200.0 PBIT £m 19.0 8.0 3.9 2.1 33.0 Revenue €m 120.0 60.0 36.0 24.0 240.0 PBIT €m 22.8 9.6 4.7 2.5 39.6

North America Western Europe Central & Eastern Europe Asia Pacific

By division

Revenue £m 76.0 48.0 28.0 22.0 14.0 12.0 200.0

PBIT £m 10.8 7.7 6.8 4.0 2.1 1.6 33.0

Revenue €m 91.2 57.6 33.6 26.4 16.8 14.4 240.0

PBIT €m 13.0 9.3 8.1 4.8 2.5 1.9 39.6

Advertising & media Information, insight & consulting Public relations Branding & identity Specialised communications New media & digital

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WRSX

Global Advertising

Financials/ 3

BALANCE SHEET as at end of Period 0 Non-current assets Intangible assets Goodwill Other intangible assets Property, plant and equipment Other investments Other non-current assets

£m

€m

215.0 50.0 15.0 10.0 5.0 295.0

258.0 60.0 18.0 12.0 6.0 354.0

Current assets Inventories and work in progress Trade and other receivables Cash and short-term deposits

10.0 175.0 70.0 255.0

12.0 210.0 84.0 306.0

Current liabilities Trade and other payables Corporation tax payable Bank overdrafts

(275.0) (2.0) (17.0) (294.0) (39.0) 256.0

(330.0) (2.4) (20.4) (352.8) (46.8) 307.2

Net current assets/(liabilities) Total assets less current liabilities Non-current liabilities Bank loans Provisions for liabilities and charges

(75.0) (5.0) (80.0) 176.0

(90.0) (6.0) (96.0) 211.2

NET ASSETS Equity Called up share capital Share premium Retained earnings TOTAL EQUITY

176.0

211.2

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8.0 5.0 163.0

9.6 6.0 195.6

WRSX

Global Advertising

Financials/ 4

CASH FLOW STATEMENT forfor Period CASH FLOW STATEMENT Period n Profit before interest and taxation Adjustments for non-cash items: Depreciation Impairment of intangible assets Profit/loss on disposals Operating cash flow before movements in working capital Movements in working capital Cash generated by operations Taxation paid Interest paid Interest received Net cash flow from operating activities

0

£m 33.0 4.0 2.0 1.5

€m 39.6 4.8 2.4 1.8

40.5 12.0 52.5 (5.0) (7.0) 3.0 43.5

48.6 14.4 63.0 (6.0) (8.4) 3.6 52.2

Investing activities: Acquisitions and disposals of subsidiaries Purchases of property, plant and equipment Purchases of other intangible assets Proceeds on disposal of property, plant and equipment Net cash flow from investing activities Financing activities: Net movement in long-term borrowings Proceeds from share issues Equity dividends paid Net cash flow from financing activities Net movement in cash and cash equivalents Cash and cash equivalents at start of period Cash and cash equivalents at end of period

(12.0) (5.0) (1.0) 0.5 (17.5)

(14.4) (6.0) (1.2) 0.6 (21.0)

20.0 2.0 (5.0) 17.0 43.0 10.0 53.0

24.0 2.4 (6.0) 20.4 51.6 12.0 63.6
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WRSX

Global Advertising

Non-Financial Performance Measures / 1

WRSX key Non-Financial Performance Measures are divided into six major categories, each with sub-categories, which are those used in the ADCOM Industry Benchmark Survey:

1.

Management of Growth: Entrepreneurial capability & management of organic growth Competence in acquisition management International/global market positioning Branding, trade names and intellectual property rights Management of Risk: Management of Financial Risk: Forex, liquidity, creditworthiness Management of Legal & Reputational Risk Management of Operational & Business Risk Leadership Capability Strategic leadership Excellence in operations, information management, admin etc Ability to lead and manage change Retention of key personnel Attraction of next generation / new talent Corporate Social Responsibility (CSR) Corporate Governance Ethics Social profile Sustainability profile/Carbon footprint

2.

3.

4.

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WRSX

Global Advertising

Non-Financial Performance Measures/2

5.

Client Attraction and Retention Market research/understanding market segments & channels Breadth of services & disciplines Creativity & Innovation Account management structure Value-added to client businesses Procurement and Supplier Management Media buying effectiveness Exploitation of synergies that deliver economies of scale Effective production buying & management of suppliers / spend control NOTE: Please see the next page for the results of the latest ADCOM Industry Benchmark Survey to see how WRSX has performed in the last year compared to the industry average.

6.

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WRSX

Global Advertising

Non-Financial Performance Measures/3

ADCOM Industry Benchmark Survey Results & Impact on Share Price
Twice a year this survey is carried out that benchmarks companies in the Advertising and Marketing Communications Industry. The survey is conducted through research with all key stakeholders in the industry: Clients, suppliers, employees, the financial community, shareholders, relevant government and quasi-government departments, activist groups, competitors and trade associations. The survey uses a selection of Non-Financial Performance Indicators to measure the perceived performance of each company in the survey against its peers. This survey is important because it has a direct impact on the projected P/E Ratio of each business and through this the Share Price of each company in this industry. In general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E in the same industry. A higher P/E also reflects the quality and reliability of those earnings and their perceived risk. Therefore two companies with identical forecast future earnings may well trade at different P/Es if the market perceives significant differences in their business strategies, their long-term growth prospects or the capability of their management teams. Each of the scores for the Non-Financial Performance Indicators (NFPI’s) is driven by how WRSX performs in the Industry Benchmark Survey.
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WRSX

Global Advertising

Non-Financial Performance Measures/4

Industry Average Score each NFPI
WRSX Scores: 1 Management of Growth

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43.5

2. Management of Risk

41.3

3. Leadership Capability

39.2

4. Corporate Social Responsibility (CSR)

38.5

5. Client Attraction & Retention

52.0

6. Procurement and Supplier Management

38.7

Average of All Six NFPI’s for WRSX

42.2

Continued on next page>

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What the Survey Results Mean: Management of Growth: WRSX is perceived as just below average in terms of its Entrepreneurial Capability & Management of Organic Growth but well below average in terms of the way it has managed Acquisitions to date. According to the survey, it is not seen as a Global player measured against competitors. The WRSX Brand is quite well known but it is not a Top 20 Brand in the industry. Equally, it’s ownership of Trade Names and Intellectual Property Rights is below the industry average.

WRSX

Global Advertising

Non-Financial Performance Measures/5

Management of Risk: Traditionally WRSX has performed well in

benchmark surveys in terms its management of Financial Risk but it has dropped below average as a result of a sustained investment in acquisitions in recent years. Some acquisitions have not been perceived as financially astute. The recent corruption scandal involving Raphael Roux has damaged WRSX Group’s Reputational Risk score. Equally, the way the business is structured and managed, i.e. local autonomy and a “light-handed approach” by the WRSX Group Board, results in a low score in terms of Management of Operational, Market and Business Risk against the industry average. badly in terms of Management of Operations, Information Management and Administration - so that across the Group scores average out at below the Industry average. WRSX performs well below the industry average in terms of its Strategic Leadership Capability, its Ability to Lead and Manage Change and its ability to attract and retain high quality personnel in key positions in its businesses.

Leadership Capability: Some offices perform well but others perform

Corporate Social Responsibility (CSR)

Previous surveys have shown high scores for WRSX in terms of its ethical stance and its social profile (its social contribution to the communities in which it trades) but lower for corporate governance (the set of processes, customs and policies affecting the way the Group is administered or controlled). All three scores have dropped dramatically following the corruption scandal involving Raphael Roux and concerns about the strength of the WRSX Board. WRSX also scores well below industry average in terms of its sustainability profile/carbon footprint.
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WRSX

Global Advertising

Non-Financial Performance Measures/6

Client Attraction & Retention

WRSX scores highly on its market research capability and its understanding of market segments and channels. It also scores very highly in terms of its creativity and innovation but this masks a poor score for this factor in the USA. The breadth of services and disciplines WRSX offers matches the industry average being neither a specialist provider nor one of the Top Four that provides a full range of services to clients. Its account management structure is perceived as providing a below average service. Value added to clients’ businesses is seen currently as very slightly below industry average. This is an improvement on some previous surveys.

Procurement and Supplier Management

WRSX performs badly in terms of the way it manages production buying and how well it builds and exploits good relationships with suppliers. It performs particularly badly in terms of the synergies it achieves through exploiting economies of scale across the Group and it also fails to use its Group buying power in terms of buying media for clients.

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