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WRSX
GLOBAL ADVERTISING &
MARKETING COMMUNICATIONS
WRSX
GLOBAL ADVERTISING &
MARKETING COMMUNICATIONS
CONTENTS:
Company History 3
Mission Statement 6
Statement from the Chair 7
Company Timeline 8
Board Directors 12
Corporate Governance 15
Group Structure 16
Operating Units 17
Financial Performance Measures 21
Share Price and Market Capitalisation 22
Financials 23
Non-financial Performance Measures 27
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WRSX
Global Advertising
Company History / 1
Company History
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).
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Global Advertising
Company History / 2
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Global Advertising
Company History / 3
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. You, as one of a 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.
You have been brought in to help redirect the fortunes of the company because of your
strong strategic track record in a related industry.
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WRSX
Global Advertising
Mission Statement
Mission Statement
We exist to make our clients successful through differentiating and strengthening their
brands by creating advertising and using a range of marketing related activities.
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WRSX
Global Advertising
Statement from the
Chair
If we want to increase our market share, we have to take it from someone else. We can
do this either by: expanding our market share in our existing markets; or by expanding
the range of products and services we offer our clients in those markets; or by growing
ahead of our competitors through expanding our operations geographically; or by
targeting new industry sectors.
Many of our competitors are pursuing growth strategies by mergers and acquisitions.
Most are relying on acquiring advertising businesses alone, while at WRSX, our strategy
to date has been to increase our portfolio, not only in advertising businesses, but also in
research, PR, direct marketing, branding, film production and even sports marketing. We
have acquired businesses in the past and some acquisitions have been more successful
than others, so we will balance the opportunity to grow through acquisition with a firm
focus on growing our existing businesses.
Our strategy is going to put a heavy demand on our management abilities. As you already
know, I have taken steps to strengthen the Board of Directors in order to have a Board
that challenges our thinking and that takes a dispassionate view of our strategy and
performance.
I am confident that continuing with our growth strategy, and increased focus on business
strategy in bringing our costs in line with industry averages, will set us on the path to
increased growth in market share, profitability and returns for our shareholders.
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WRSX
Global Advertising
Company Timeline /
1
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Global Advertising
Company Timeline /
2
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Global Advertising
Company Timeline /
3
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Global Advertising
Company Timeline /
4
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WRSX
Global Advertising
Board Directors -
Executive
Picture
Yourself
here
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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.
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Global Advertising
Biographies: Non-
Executive Directors
Non-Executive Directors
Below are summary biographies of the three current Non-Executive Directors of WRSX:
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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 have been made to date.
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 group-wide stated code of corporate governance as
this issue is managed at a local level.
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Global Advertising
Group Structure
Branding &
Identity
* Office Central Services = Planning & Finance, HR, Marketing, Procurement & IT
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Global Advertising
Operating Units / 1
PR Relationship Marketing/CRM
Name: Publicitas Name: WRSX 121
MD: Sylvie Tourre MD: Daniel Auchan
Specialisation: Consumer PR Specialisation: Direct marketing
Lobbying Consultancy
Mail Handling Services
Name: FastTrak Mailings Name: Smith Inc.
MD: John Soares MD: Bradley W. Smith
Specialisation: Mailings Specialisation: Political lobbying & PR
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Global Advertising
Operating Units / 3
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Global Advertising
Operating Units / 4
Sports Promotions
Exhibitions & Conferences Name: Sports World
Name: PromoCo MD: Royce Moon
MD: Deena Patel Specialisation: Brand sports
promotions
Specialisation: Exhibitions &
Conferences
Media Services
Name: MediaCom AsiaPacific
MD: John Read
Specialisation: Media planning and
buying
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Global Advertising
Financial Performance
Measures
Note: An Income Statement and the PBIT and Staff Costs Ratio will be displayed
at the end of each decision period in Phase 3 Strategy in Action of the
simulation.
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Global Advertising
Share Price and
Market Capitalisation
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Global Advertising
Financials / 1
Please note: Period 0 denotes the position for all WRSX finances at the
start of the simulation.
Operating costs:
Staff costs (126.0) (151.2)
Establishment costs (16.0) (19.2)
Other operating (15.0) (18.0)
Total operating costs (157.0) (188.4)
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Global Advertising
Financials / 2
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Financials / 3
Non-current assets
Intangible assets
Goodwill 215.0 258.0
Other intangible assets 50.0 60.0
Property, plant & equipment 15.0 18.0
Other investments 10.0 12.0
Other non-current assets 5.0 6.0
295.0 354.0
Current assets
Inventories and work in progress 10.0 12.0
Trade and other receivables 175.0 210.0
Cash and short-term deposits 70.0 84.0
255.0 306.0
Current liabilities
Trade and other payables (275.0) (330.0)
Corporation tax payable (2.0) (2.4)
Bank overdrafts (17.0) (20.4)
(294.0) (352.8)
Non-current liabilities
Bank loans (75.0) (90.0)
Provisions for liabilities and charges (5.0) (6.0)
(80.0) (96.0)
NET ASSETS 176.0 211.2
Equity
Called up share capital 8.0 9.6
Share premium 5.0 6.0
Retained earnings 163.0 195.6
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Global Advertising
Financials / 4
Investing activities:
Acquisitions and disposals of subsidiaries (12.0) (14.4)
Purchases of property, plant and equipment (5.0) (6.0)
Purchases of other intangible assets (1.0) (1.2)
Proceeds on disposal of property, plant and 0.5 0.6
equipment
Net cash flow from investing activities (17.5) (21.0)
Financing activities:
Net movement in long-term borrowing 20.0 24.0
Proceeds from share issues 2.0 2.4
Equity dividends paid (5.0) (6.0)
Net cash flow from financing activities 17.0 20.4
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WRSX Non-Financial
Performance
Global Advertising
Measures / 1
Twice a year, this survey is carried out to benchmark 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.
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 earning 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 (NFPIs) is driven
by how WRSX performs in the Industry Benchmark Survey.
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WRSX Non-Financial
Global Advertising Performance
Measures / 2
WRSX Scores:
1. Management of Growth 43.5
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WRSX Non-Financial
Global Advertising Performance
Measures / 3
3. Leadership Capability: Some offices perform well but others perform 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.
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WRSX Non-Financial
Global Advertising Performance
Measures / 4
5. Client Attraction and 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.
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WRSX Non-Financial
Global Advertising Performance
Measures / 5
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WRSX Non-Financial
Global Advertising Performance
Measures / 6
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