WPP 2008 Interim Results

-- Billings up 11.8% at GBP 16.871 billion.

-- Reported revenue up 14.3% to GBP 3.339 billion and up 8.1% in constant currencies.

-- Like-for-like revenue up 4.3%.

-- Headline operating profit up 18.4% to GBP 453.4 million from GBP 383.1 million and up 9.2% in constant currencies.

-- Headline operating margin up 0.5 margin points to 13.6%.

-- Headline profit before tax up 15.1% to GBP 389.1 million from GBP 338.0 million and up 4.9% in constant currencies.

-- Profit before tax up 15.1% to GBP 338.5 million from GBP 294.1 million and up 3.4% in constant currencies.

-- Diluted headline earnings per share up 21.4% to 22.1p from 18.2p and up 9.3% in constant currencies.

-- Diluted earnings per share up 21.1% to 17.8p and up 6.4% in constant currencies.

-- Interim ordinary dividend up 20% to 5.19p per share.

-- Estimated net new business billings of GBP 1.292 billion ($2.519 billion).

In this press release not all the figures and ratios used are readily available from the unaudited interim results included in Appendix I. Where required, details of how these have been arrived at are shown in note 19 of Appendix I or explained in the glossary.

Summary of Results

The Board of WPP announces its unaudited interim results for the six months ended 30 June 2008. These represent record levels of performance throughout all regions and sectors of the business and reflect good revenue and operating profit growth, operating margin improvement in line with objectives, a number of smaller acquisitions, currency gains, share buy-backs and a reduced tax charge.

Billings were up 11.8% at GBP 16.871 billion.

Reportable revenue was up 14.3% at GBP 3.339 billion. Revenue on a constant currency basis, was up 8.1% compared with last year, chiefly reflecting the strength of the Euro against the GBP sterling in the first six months. As a number of our competitors report in US dollars and inter-currency comparisons are difficult to make, Appendix 2 shows WPP's interim results in reportable US dollars. This shows that US dollar reportable revenues were up 14.4% to $6.595 billion, headline profits up 18.2% to $895.8 million and diluted headline earnings per share up 21.1% to 43.6 cents. Further analysis is included in Appendix 2.

On a like-for-like basis, which excludes the impact of acquisitions and currency, revenues were up 4.3% in the first half.

Headline earnings before interest, depreciation and amortisation ("EBITDA") was up 17.5% to GBP 531.9 million and up 9.1% in constant currencies. Headline operating profit was up 18.4% to GBP 453.4 million from GBP 383.1 million and up 9.2% in constant currencies.

Headline operating margins rose yet again, in line with objectives, by 0.5 margin points to 13.6% from 13.1%, also in line with the full year margin target of 15.5%. Before short-term and long-term incentives (including the cost of share-based compensation), operating margins were almost flat at 16.1%. Short and long-term incentives and the cost of share-based incentives amounted to GBP 84.1 million or 16.3% of operating profits before bonus and taxes, compared to GBP 92.2 million last year, partly as a result of currency movements, and partly the first half impact of additional investment in staff and space costs.

On a reported basis the Group's staff cost to revenue ratio, including incentives, remained at 59.9% in the first half of 2008, the same as achieved in the same period last year, even after a continued investment in people. On a like-for-like basis, the average number of people in the Group, excluding associates, was 93,233 in the first half of the year, compared to 89,027 in 2007, an increase of 4.7%. On the same basis, the total number of people in the Group, excluding associates, at 30 June 2008 was 95,093 compared to 90,881 in June 2007, an increase of 4,212 or 4.6%. Of the additional 4,212 people at the end of June this year, 3,633 or 86% were added in the faster growing markets of Asia Pacific, Latin America, Middle East and Africa and Central and Eastern Europe.

Net finance costs (excluding the revaluation of financial instruments) were GBP 64.3 million compared with GBP 45.1 million in 2007, an increase of GBP 19.2 million, reflecting higher levels of net debt as a result of net acquisition investments and share repurchases over the previous twelve months.

Headline profit before tax was up 15.1% to GBP 389.1 million from GBP 338.0 million or up 4.9% in constant currencies, primarily reflecting the impact of higher GBP sterling translation of interest costs on Euro-denominated debt.

Reported profit before tax rose by 15.1% to GBP 338.5 million from GBP 294.1 million. In constant currencies pre-tax profits rose by 3.4%, again, primarily reflecting the impact of higher GBP sterling translation of interest costs on Euro-denominated debt.

The tax rate on headline profit before tax was 26.0%, down 0.9 percentage points on the first half 2007 rate of 26.9%.

Profits attributable to share owners rose by 14.5% to GBP 208.2 million from GBP 181.9 million.

Diluted headline earnings per share rose by 21.4% to 22.1p from 18.2p. In constant currencies, earnings per share on the same basis rose by 9.3%. Diluted reported earnings per share were up 21.1% to 17.8p and up 6.4% in constant currencies.

The Board declares an increase of 20% in the interim ordinary dividend to 5.19p per share. The record date for this interim dividend is 10 October 2008, payable on 10 November 2008.

Further details of WPP's financial performance are provided in Appendices I and 2.

Review of Operations

Revenue by Region

The pattern of revenue growth differed regionally. The table below gives details of the proportion of revenue and revenue growth by region for the first six months of 2008:

Region Constant Reported Constant Like-for- Currency(1) Revenue Currency(1) like(2) Revenue as Growth Revenue Revenue a % of 08/07 Growth Growth Total 08/07 08/07 Group % % % North America 37.3 7.0 6.5 2.1 United Kingdom 14.0 4.6 4.6 2.5 Continental Europe 25.9 20.5 4.8 3.2 Asia Pacific, Latin America, Africa & Middle East 22.8 26.7 17.6 10.7 ----------- ----------- ---------------- ----------- TOTAL GROUP 100.0 14.3 8.1 4.3 ----------- ----------- ---------------- -----------

(1) Constant currency growth excludes the effects of currency movements

(2) Like-for-like growth excludes the effects of currency movements and the impact of acquisitions

On a constant currency basis, the Group grew at over 8% and all regions continued to show growth. In North America, revenues were up 6.5%. In Europe, the United Kingdom was up 4.6% and Continental Europe up 4.8%. Central and Eastern Europe was up over 19%, Asia Pacific, Latin America, Africa and the Middle East were up over 17%. Again, the world grew at three speeds. The faster growing markets of Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe grew fastest and the United Kingdom and Western Continental Europe slowest, with North America and Spain generally in between. The United States continues to grow, with revenue growth in the first half up 5.8%, on a constant currency basis, although less than the first quarter.

As in the first quarter Asia Pacific, Latin America, Africa and the Middle East, continues to be the fastest growing region, with revenues up over 17%, accelerating in the second quarter. Asia Pacific (including Australia and New Zealand and Japan) remains strong, with revenues up over 8%. Mainland China and India continued the rapid growth seen in 2007 and the first quarter of 2008, with first half like-for-like revenues up over 17% and almost 26%, with India growing at over 30% in the second quarter. Continental Europe was up 4.8%, slightly lower than the 5.2% in the first quarter, with Central and Eastern Europe particularly strong at almost 20%. The United Kingdom remains marginally the slowest growing region, with revenues up 4.6%.

Estimated net new business billings of GBP 1.292 billion ($2.519 billion) were won in the first half of the year and the Group continues to benefit from consolidation trends in the industry, winning assignments from existing and new clients.

The faster growing geographical markets of Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe, accounted for over 25% of the Group's revenues in the first half of 2008, compared to 23% in the first half of last year.

Revenue by Communications Services Sector and Brand

The pattern of revenue growth also varied by communications services sector and company brand. The table below gives details of the proportion of revenue and revenue growth by communications services sector for the first six months of 2008:

Communications Services Constant Reported Constant Like- Sector Currency(1) Revenue Currency(1) for- Revenue as Growth Revenue like(2) a % of 08/07 Growth Revenue Total 08/07 Growth Group 08/07 % % % Advertising, Media Investment Management 45.1 11.5 4.3 3.8 Information, Insight & Consultancy 14.6 12.7 7.2 5.0 Public Relations & Public Affairs 10.8 13.8 9.0 7.5 Branding & Identity, Healthcare and Specialist Communications 29.5 20.1 14.7 3.5 ----------- --------- ------------- -------- TOTAL GROUP 100.0 14.3 8.1 4.3 ----------- --------- ------------- --------

(1) Constant currency growth excludes the effects of currency movements

(2) Like-for-like growth excludes the effects of currency movements and the impact of acquisitions

Media investment management continues to show the strongest growth of all our communications services, along with direct, internet and interactive, public relations and public affairs and information, insight and consultancy. Direct and digitally-related activities now account for 25% of the Group's total revenues, which are running at the rate of approximately $13 billion per annum.

Public relations and public affairs continued the strong growth, which started in 2006, continued throughout 2007 and into the first half of 2008, with constant currency revenues up 9.0%, reflecting the positive impact on the sector's growth of fact-based polling techniques and social networking on the web, which demonstrates the increased effectiveness of editorial publicity over paid for publicity.

Almost 55% of the Group's revenues came from outside advertising and media investment management, in the first half of 2008, compared to over 53% last year.

Advertising and Media Investment Management

On a constant currency basis, advertising and media investment management revenues grew by 4.3%, slightly up on the first quarter, with like-for-like revenue growth of 3.8%. Reported operating margins were up by 1.2 margin points to 15.9%.

These businesses generated estimated net new business billings of GBP 984 million ($1.919 billion).

Information, Insight and Consultancy

The Group's information, insight and consultancy businesses growth improved in the second quarter, with first half revenues, on a constant currency basis, up 7.2%. Reported operating margins were up by 0.4 margin points to 10.1%.

Public Relations and Public Affairs

In constant currencies, the Group's public relations and public affairs revenues rose by 9.0%, with like-for-like growth of 7.5%. Reported operating margins were up by 1.4 margin points to 16.1%.

Branding and Identity, Healthcare and Specialist Communications

The Group's branding and identity, healthcare and specialist communications (including direct, internet and interactive) constant currency revenues were up 14.7%. Reported operating margins were down by 0.9 margin points to 10.7%. Particularly good performances were registered by several companies in this sector in the first half - including, in promotion and direct marketing OgilvyAction, OgilvyOne, RMG Connect, Wunderman, 24/7 Real Media and Schematic; in branding and identity Addison, The Brand Union, Lambie-Nairn and VBAT; and in specialist communications, The Farm, The Food Group, Headcount, Metro Group and Spafax.

Cash Flow and Balance Sheet

A summary of the Group's unaudited cash flow statement and balance sheet and notes as at 30 June 2008 are provided in Appendix I.

In the first half of 2008, operating profit was GBP 378 million, depreciation, amortisation and impairment GBP 125 million, non-cash share-based incentive charges GBP 30 million, net interest paid GBP 67 million, tax paid GBP 84 million, capital expenditure GBP 74 million and other net cash inflows GBP 11 million. Free cash flow available for working capital requirements, debt repayment, acquisitions and share re-purchases was, therefore, GBP 319 million. This free cash flow was absorbed by GBP 176 million in net cash acquisition payments and investments (of which GBP 100 million was for initial acquisition payments net of disposal proceeds, GBP 30 million was for earnout payments, GBP 43 million for investments and the balance of GBP 3 million related to prior year loan note redemptions), and GBP 112 million by share re-purchases, a total outflow of GBP 288 million. This resulted in a net cash inflow of GBP 31 million, before any changes in working capital.

Average net debt in the first six months of 2008 rose by GBP 621 million to GBP 1,873 million, compared to GBP 1,252 million in 2007, at 2008 exchange rates. On 30 June 2008 net debt was GBP 1,857 million, against GBP 1,264 million on 30 June 2007, an increase of GBP 593 million. These figures reflect the level of acquisition activity and share buy-backs for the previous twelve months. Your Board continues to examine ways of deploying its EBITDA of over GBP 1 billion (over $2 billion) and substantial free cash flow of over GBP 700 million or over $1.4 billion per annum, to enhance share owner value, given that interest cover remains strong at 7.1 times in the first half of 2008. As necessary capital expenditure, mainly on information technology and property, is expected to remain equal to or less than the depreciation charge in the long term, the Company has continued to concentrate on examining possible acquisitions, such as the offer for Taylor Nelson Sofres plc ("TNS") or returning excess capital to share owners in the form of dividends and/or share buy-backs.

In the first half of 2008, the Group continued to make small-sized acquisitions or investments in high growth geographical or functional areas. In the first six months of this year, acquisitions and increased equity stakes have been concentrated in advertising and media investment management in the United States, the United Kingdom, France, the Netherlands, Switzerland, Ukraine, the Middle East, Chile, Guatemala and China; in information, insight & consultancy in the United States, the United Kingdom, Spain and India; in public relations and public affairs in the United Kingdom and China; in direct, internet and interactive in the United States, China (digital), India, Japan (digital) and Malaysia. On 9 July, WPP announced an offer to acquire the whole of the issued share capital of TNS, on the basis of 173p in cash and 0.1889 of a WPP ordinary share for every TNS share. Based on the latest WPP closing share price of 475.5p per share, WPP's offer values a TNS share at approximately 263p and values TNS at approximately GBP 1.1 billion.

In addition to increasing the interim dividend by 20% to 5.19p per share, the Company continues to focus on examining the alternative between increasing dividends and accelerating share buy-backs. Consistent with the objective, announced in 2006, of increasing the share buy-back programme to 4-5% of the Group's share capital in 2007 and 2008, 18.8 million ordinary shares, equivalent to 1.6% of the share capital, were purchased at an average price of GBP 5.96 per share and total cost of GBP 112.2 million in the first half. All of these shares were purchased in the market and subsequently cancelled. Such annual rolling share repurchases are believed to have a more significant impact in improving share owner value, than sporadic buy-backs. The Group is currently running at an annual rate of share buybacks of slightly over 3%, partly reflecting the requirement to withdraw from the market in the midst of the bid for TNS, the earliest skirmishes of which started at the beginning of May.

Client Developments in the First Half of 2008

Including associates, the Group currently employs over 116,000 full-time people in over 2,000 offices in 106 countries. It services over 340 of the Fortune Global 500 companies, over one-half of the Nasdaq 100, over 30 of the Fortune e-50, and approximately 550 national or multi-national clients in three or more disciplines. More than 320 clients are served in four disciplines and these clients account for 56% of Group revenues. This reflects the increasing opportunities for co-ordination between activities both nationally and internationally. The Group also works with almost 260 clients in 6 or more countries. The Group estimates that more than 35% of new assignments in the first half of the year were generated through the joint development of opportunities by two or more Group companies.

Current Progress and Future Prospects

The Group's profit performance in the first half of the year was strong and ahead of most estimates, despite the general economic tightening in the United States and Western Europe in the second quarter. The faster growing geographical markets of Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe, continue to show double digit revenue growth, with the United Kingdom and Western Continental Europe improving in the second quarter, although they remain at mid single-digit rates. The United States, despite the continuing uncertainties surrounding the financial markets continues to grow, with revenues on a constant currency basis up 5.8%.

Functionally, media investment management (which is a stronger growing part of what some call our advertising revenues), public relations and public affairs, direct, internet and interactive and information, insight and consultancy, continue to grow strongly. Healthcare communications, particularly in the United States owing to FDA non-approvals of new drugs, some project-based specialist communications activities and traditional advertising in the mature markets of the United States, United Kingdom, France, Germany, Italy and Spain, performed at or below the Group's revenue growth for the period.

Levels of activity in 2008 should match those seen in 2007 and there are significant new business opportunities at both the network and parent company levels. Spending behind the United States Presidential Election and around the Beijing Olympic Games should continue to boost 2008 revenues, as well as some clients taking the view, that our research supports, that the cost of cutting brand spending at this stage of the cycle is too costly in the long-term. However, the prospects for 2009 remain less certain, particularly if the United States and Western European economies continue to be impacted by the financial crisis and commodity price increases. In addition, the new United States President will have to wrestle with twin fiscal and budget deficits in early 2009 and post the Olympics, Chinese growth may slow due to inflationary (particularly food price) concerns and the impact that a weakening United States economy has on the rest of the world. In mid-2009 the financial markets may start to rebound and 2010, in the real world, continues to look better, with the prospect of the impact of "mini-quadrennial" events such as the FIFA World Cup in South Africa, the Winter Olympics in Vancouver, the mid-term Congressional elections in the United States, the World Expo in Shanghai and the Asian Games in Guangzhou.

Despite these shorter-term uncertainties, the prospects for trading performance improvements at WPP remain good. Eighteen months ago the Group increased its margin target for 2009 to 16.0% and for 2010 to 16.5%. Our long term operating margin target remains 19%.

Plans, budgets and forecasts will continue to be made on a conservative basis and considerable attention is still being focused on achieving margin and staff cost to revenue or gross margin targets. Margins continue to be strong in important parts of the business. In addition to influencing absolute levels of cost, the initiatives taken by the parent company in the areas of human resources, property, procurement, information technology and practice development continue to improve the flexibility of the Group's cost base. Flexible staff costs (incentives, freelancers and consultants), which remain at the historically highest levels of around 6-7% of revenues, will position the Group very well to weather any economic slowdown.

The Group continues to improve co-operation and co-ordination between companies in order to add value to our clients' businesses and our people's careers, an objective which has been specifically built into short-term incentive plans. Particular emphasis and success has been achieved in the areas of media investment management, healthcare, privatisation, new technologies, new markets, retailing, internal communications, hi-tech, financial services and media and entertainment. The Group continues to lead the industry, in co-ordinating investment geographically and functionally through parent company initiatives, which competitors initially 'pooh-poohed', but now attempt to imitate. Increasing co-operation, although more difficult to achieve in a multi-branded company, which has grown by acquisition, than in an organically grown uni-branded one, remains a priority.

The Group also continues to concentrate on its long-term targets and strategic objectives of improving operating profits by 10-15%; improving operating margins by half to one margin point per annum or more depending on revenue growth; improving staff cost to revenue or gross margin ratios by 0.6 margin points per annum or more depending on revenue growth; converting 25-33% of incremental revenue to profit; growing revenue faster than industry averages and encouraging co-operation among Group companies.

As clients face an increasingly undifferentiated market place, particularly in mature markets, the Group is competitively well positioned to offer them the creativity they desire, along with the ability to deliver the most effective co-ordinated communications in the most efficient manner. The rise of the procurement function, the increasing concentration of distribution and the legislative acceptance of media ownership concentration in several countries, will further stimulate consolidation amongst clients, media owners, wholesalers and retailers and last, but not least, advertising and marketing services agencies. The Group is very well positioned to capitalise on these developments and to focus on developing the best talents, the strongest management structures and the most innovative incentive plans in the industry for our people.

This announcement has been filed at the Company Announcements Office of the London Stock Exchange and is being distributed to all owners of Ordinary shares and American Depository Receipts. Copies are available to the public at the Company's registered office.

The following cautionary statement is included for safe harbour purposes in connection with the Private Securities Litigation Reform Act of 1995 introduced in the United States of America. This announcement may contain forward-looking statements within the meaning of the US federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially including adjustments arising from the annual audit by management and the Company's independent auditors. For further information on factors which could impact the Company and the statements contained herein, please refer to public filings by the Company with the Securities and Exchange Commission. The statements in this announcement should be considered in light of these risks and uncertainties.

WPP GROUP PLC Interim results for the six months ended 30 June 2008 Unaudited condensed consolidated interim income statement for the six months ended 30 June 2008 Six Six Year months months ended ended ended 31 30 June 30 June Constant December Notes 2008 2007 Currency(1) 2007 ---------------------------------------------------------------------- GBP m GBP m +/(-)% +/(-)% GBP m Billings 16,870.7 15,084.6 11.8 4.6 31,665.5 ====================================================================== Revenue 3,339.1 2,921.0 14.3 8.1 6,185.9 Direct costs (180.1) (151.3) (19.0) (12.2) (335.5) ---------------------------------------------------------------------- Gross profit 3,159.0 2,769.7 14.1 7.9 5,850.4 Operating costs 4 (2,781.2) (2,450.2) (13.5) (7.8) (5,045.7) ---------------------------------------------------------------------- Operating profit 377.8 319.5 18.2 8.2 804.7 Share of results of associates 4 20.7 19.5 6.2 (7.6) 41.4 ---------------------------------------------------------------------- Profit before interest and taxation 398.5 339.0 17.6 7.3 846.1 Finance income 5 70.1 57.7 21.5 16.2 139.4 Finance costs 5 (130.1) (102.6) (26.8) (24.0) (266.1) ---------------------------------------------------------------------- Profit before taxation 338.5 294.1 15.1 3.4 719.4 Taxation 7 (101.2) (90.9) (11.3) (4.3) (204.3) ---------------------------------------------------------------------- Profit for the period 237.3 203.2 16.8 3.0 515.1 ---------------------------------------------------------------------- Attributable to: Equity holders of the parent 208.2 181.9 14.5 0.5 465.9 Minority interests 29.1 21.3 (36.6) (24.7) 49.2 ---------------------------------------------------------------------- 237.3 203.2 16.8 3.0 515.1 ====================================================================== ---------------------------------------------------------------------- Headline PBIT 6,19 453.4 383.1 18.4 9.2 928.0 Headline PBIT margin 19 13.6% 13.1% 15.0% Headline PBT 19 389.1 338.0 15.1 4.9 817.3 ---------------------------------------------------------------------- Earnings per share(2) Basic earnings per ordinary share 9 18.2p 15.3p 19.0 4.5 39.6p Diluted earnings per ordinary share 9 17.8p 14.7p 21.1 6.4 38.0p ----------------------------------------------------------------------

(1) The basis for calculating the constant currency percentage change shown above is described in the glossary attached to this appendix. (2) The calculations of the Group's earnings per share and Headline earnings per share are set out in note 9.

WPP GROUP PLC Unaudited condensed consolidated interim cash flow statement for the six months ended 30 June 2008 Six Six Year months months ended ended ended 31 30 June 30 June December Notes 2008 2007 2007 ---------------------------------------------------------------------- GBP m GBP m GBP m Net cash (outflow)/inflow from operating activities 10 (165.4) (7.2) 891.3 Investing activities Acquisitions and disposals 10 (176.0) (208.0) (674.8) Purchases of property, plant and equipment (67.8) (66.1) (151.1) Purchases of other intangible assets (incl. capitalised computer software) (6.2) (6.1) (19.7) Proceeds on disposal of property, plant and equipment 6.7 6.6 8.3 ---------------------------------------------------------------------- Net cash outflow from investing activities (243.3) (273.6) (837.3) Financing activities Share option proceeds 5.9 21.4 34.8 Share repurchases and buybacks 10 (112.2) (209.2) (415.4) Net increase in borrowings 10 79.5 111.8 498.9 Financing and share issue costs (4.3) (1.9) (8.3) Equity dividends paid - - (138.9) Dividends paid to minority shareholders in subsidiary undertakings (26.4) (20.4) (38.9) ---------------------------------------------------------------------- Net cash outflow from financing activities (57.5) (98.3) (67.8) Net decrease in cash and cash equivalents (466.2) (379.1) (13.8) Translation differences 34.7 2.4 119.2 Cash and cash equivalents at beginning of period 1,062.3 956.9 956.9 ---------------------------------------------------------------------- Cash and cash equivalents at end of period 10 630.8 580.2 1,062.3 ---------------------------------------------------------------------- Reconciliation of net cash flow to movement in net debt: Net decrease in cash and cash equivalents (466.2) (379.1) (13.8) Cash inflow from increase in debt financing (76.0) (109.9) (493.5) Other movements 28.3 48.7 26.0 Translation difference (57.6) (9.6) 10.2 ---------------------------------------------------------------------- Movement of net debt in the period (571.5) (449.9) (471.1) Net debt at beginning of period (1,285.7) (814.6) (814.6) ---------------------------------------------------------------------- Net debt at end of period 11 (1,857.2) (1,264.5) (1,285.7) ======================================================================

WPP GROUP PLC Unaudited condensed consolidated interim statement of recognised income and expense for the six months ended 30 June 2008 Six Six Year months months ended ended ended 31 30 June 30 June December 2008 2007 2007 GBP m GBP m GBP m Profit for the period 237.3 203.2 515.1 ---------------------------------------------------------------------- Exchange adjustments on foreign currency net investments 282.2 (33.1) 71.7 Gain/(loss) on revaluation of available for sale investments 17.7 (2.6) 108.1 Actuarial gain on defined benefit pension schemes - - 27.0 Deferred tax charge on defined benefit pension schemes - - (9.9) ---------------------------------------------------------------------- Net income/(expense) recognised directly in equity 299.9 (35.7) 196.9 Total recognised income and expense relating to the period 537.2 167.5 712.0 ====================================================================== Attributable to: Equity holders of the parent 508.1 146.2 662.8 Minority interests 29.1 21.3 49.2 ---------------------------------------------------------------------- 537.2 167.5 712.0 ======================================================================

WPP GROUP PLC Unaudited condensed consolidated interim balance sheet as at 30 June 2008 31 30 June 30 June December Notes 2008 2007 2007 ---------------------------------------------------------------------- GBP m GBP m GBP m Non-current assets Intangible assets: Goodwill 12 6,422.9 5,530.8 6,071.7 Other 13 1,176.0 1,087.5 1,154.6 Property, plant and equipment 455.0 417.5 449.6 Interests in associates 570.0 451.4 540.1 Other investments 307.2 162.2 268.6 Deferred tax assets 44.3 105.4 56.0 Trade and other receivables 14 184.2 94.3 149.3 ---------------------------------------------------------------------- 9,159.6 7,849.1 8,689.9 Current assets Inventory and work in progress 375.5 324.4 343.9 Corporate income tax recoverable 29.0 28.6 37.2 Trade and other receivables 14 6,569.7 5,205.7 6,140.8 Cash and short-term deposits 1,276.9 755.5 2,040.2 ---------------------------------------------------------------------- 8,251.1 6,314.2 8,562.1 Current liabilities Trade and other payables 15 (8,139.9) (6,785.0) (8,248.9) Corporate income tax payable (73.0) (50.3) (70.0) Bank overdrafts and loans (771.0) (410.6) (1,585.9) ---------------------------------------------------------------------- (8,983.9) (7,245.9) (9,904.8) ---------------------------------------------------------------------- Net current liabilities (732.8) (931.7) (1,342.7) ---------------------------------------------------------------------- Total assets less current liabilities 8,426.8 6,917.4 7,347.2 ---------------------------------------------------------------------- Non-current liabilities Bonds and bank loans (2,363.1) (1,609.4) (1,740.0) Trade and other payables 16 (540.1) (407.4) (460.4) Corporate income tax payable (347.3) (364.4) (336.2) Deferred tax liabilities (464.7) (461.8) (464.0) Provision for post-employment benefits (135.0) (187.6) (135.0) Provisions for liabilities and charges (113.7) (104.5) (116.8) ---------------------------------------------------------------------- (3,963.9) (3,135.1) (3,252.4) ---------------------------------------------------------------------- Net assets 4,462.9 3,782.3 4,094.8 ====================================================================== Equity Called-up share capital 117.4 121.8 119.2 Share premium account 109.8 97.3 103.9 Shares to be issued 3.2 3.4 5.3 Merger reserve (1,365.0) (1,368.4) (1,365.9) Other reserves 206.9 (324.7) (114.9) Own shares (201.8) (256.9) (255.3) Retained earnings 5,454.3 5,414.2 5,482.1 ---------------------------------------------------------------------- Equity share owners' funds 17 4,324.8 3,686.7 3,974.4 Minority interests 138.1 95.6 120.4 ---------------------------------------------------------------------- Total Equity 4,462.9 3,782.3 4,094.8 ======================================================================

WPP GROUP PLC Notes to the unaudited condensed consolidated interim financial statements (Notes 1 - 20)

1. Basis of accounting

The unaudited condensed consolidated interim financial statements are prepared under the historical cost convention, except for the revaluation of certain financial instruments as disclosed in our accounting policies.

2. Accounting policies

The unaudited condensed consolidated interim financial statements comply with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), IAS 34 'Interim Financial Reporting' and with the accounting policies of the Group which were set out on pages 153 to 159 of the 2007 Annual Report and Accounts. No changes have been made to the Group's accounting policies in the period to 30 June 2008.

Statutory Information and Independent Review

The unaudited condensed consolidated interim financial statements for the six months to 30 June 2008 and 30 June 2007 do not constitute statutory accounts. The financial information for the year ended 31 December 2007 does not constitute statutory accounts for the purposes of s240 of the Companies Act 1985. The statutory accounts for the year ended 31 December 2007 have been delivered to the Registrar of Companies and received an unqualified auditors' report and did not contain a statement under s237(2) or (3) of the Companies Act 1985. The interim financial statements are unaudited but have been reviewed by the auditors and their report is set out on page 33.

The announcement of the interim results was approved by the board of directors on 21 August 2008.

3. Currency conversion

The reporting currency of the Group is the pound sterling and the unaudited condensed consolidated interim financial statements have been prepared on this basis.

The 2008 unaudited condensed consolidated interim income statement is prepared using, among other currencies, average exchange rates of US$1.9743 to the pound (period ended 30 June 2007: US$1.9703; year ended 31 December 2007: US$2.0019) and EUR 1.2908 to the pound (period ended 30 June 2007: EUR 1.4822; year ended 31 December 2007: EUR 1.4619). The unaudited condensed consolidated interim balance sheet as at 30 June 2008 has been prepared using the exchange rates on that day of US$1.9908 to the pound (30 June 2007: US$2.0071; 31 December 2007: US$1.9827) and EUR 1.2651 to the pound (30 June 2007: EUR 1.4826; 31 December 2007: EUR 1.3598).

The basis for calculating the constant currency percentage changes, shown on the face of the unaudited condensed consolidated interim income statement, is described in the glossary attached to this appendix. WPP GROUP PLC

Notes to the unaudited condensed consolidated interim financial statements (Notes 1 - 20) (continued)

4. Operating costs and share of results of associates

Operating costs include:

Six Six Year months months ended ended ended 31 30 June 30 June December 2008 2007 2007 ---------------------------------------------------------------------- GBP m GBP m GBP m Amortisation and impairment of acquired intangible assets 25.5 17.1 40.3 Goodwill impairment 20.0 29.0 44.1 Goodwill write-down relating to utilisation of pre-acquisition tax losses 0.7 1.0 1.7 Gains on disposal of investments (3.6) (3.0) (3.4) Write-downs of investments 12.3 - - Share-based incentive plans (including share options) 30.2 33.3 62.4 Other operating costs 2,696.1 2,372.8 4,900.6 ---------------------------------------------------------------------- 2,781.2 2,450.2 5,045.7 ======================================================================

The goodwill impairment charge of GBP 20.0 million (30 June 2007: GBP 29.0 million) relates to a number of under-performing businesses in the Group. In certain markets, the impact of current local economic conditions and trading circumstances on these businesses is sufficiently severe to indicate an impairment to the carrying value of goodwill. The Directors will reassess the need for any further impairment write-downs at year end.

Share of results of associates include:

Six Six Year months months ended ended ended 31 30 June 30 June December 2008 2007 2007 ---------------------------------------------------------------------- GBP m GBP m GBP m Share of profit before interest and taxation 32.8 31.5 65.8 Share of exceptional gains - - 0.8 Share of interest and minority interest 0.2 0.7 0.5 Share of taxation (12.3) (12.7) (25.7) ---------------------------------------------------------------------- 20.7 19.5 41.4 ======================================================================

WPP GROUP PLC

Notes to the unaudited condensed consolidated interim financial statements (Notes 1 - 20) (continued)

5. Finance income and finance costs

Finance income includes:

Six Six Year months months ended ended ended 31 30 June 30 June December 2008 2007 2007 ---------------------------------------------------------------------- GBP m GBP m GBP m Expected return on pension scheme assets 15.0 14.1 28.1 Income from available for sale investments 5.0 4.0 9.2 Interest income 50.1 39.6 102.1 ---------------------------------------------------------------------- 70.1 57.7 139.4 ======================================================================

Finance costs include: Six Six Year months months ended ended ended 31 30 June 30 June December 2008 2007 2007 ---------------------------------------------------------------------- GBP m GBP m GBP m Interest on pension scheme liabilities 18.5 17.0 33.8 Interest on other long-term employee benefits 0.8 0.2 1.5 Interest payable and similar charges 115.1 85.6 214.8 ---------------------------------------------------------------------- Finance charges (excluding revaluation of financial instruments) 134.4 102.8 250.1 Revaluation of financial instruments accounted at fair value through profit or loss (4.3) (0.2) 16.0 ---------------------------------------------------------------------- 130.1 102.6 266.1 ======================================================================

The following are included in the revaluation of financial instruments accounted at fair value through profit or loss shown above:

Six Six months months ended ended Year ended 30 June 30 June 31 December 2008 2007 2007 ---------------------------------------------------------------------- GBP m GBP m GBP m Movements in fair value of treasury instruments (17.2) 0.4 6.7 Revaluations of put options over minority interests 12.9 (0.6) 9.3 ---------------------------------------------------------------------- (4.3) (0.2) 16.0 ======================================================================

WPP GROUP PLC

Notes to the unaudited condensed consolidated interim financial statements (Notes 1 - 20) (continued)

6. Segmental analysis

Reported contributions by operating sector were as follows:

Six Six Year months months ended ended ended 31 30 June 30 June December 2008 2007 2007 ---------------------------------------------------------------------- GBP m GBP m GBP m Revenue Advertising and Media Investment Management 1,521.3 1,364.4 2,871.3 Information, Insight & Consultancy 486.5 431.8 905.4 Public Relations & Public Affairs 356.1 313.0 641.4 Branding & Identity, Healthcare and Specialist Communications 975.2 811.8 1,767.8 ---------------------------------------------------------------------- 3,339.1 2,921.0 6,185.9 ---------------------------------------------------------------------- Reported operating profit Advertising and Media Investment Management 203.9 157.4 384.4 Information, Insight & Consultancy 45.5 39.8 99.2 Public Relations & Public Affairs 54.3 43.7 101.7 Branding & Identity, Healthcare and Specialist Communications 74.1 78.6 219.4 ---------------------------------------------------------------------- 377.8 319.5 804.7 ---------------------------------------------------------------------- Headline PBIT(1) Advertising and Media Investment Management 242.6 201.1 466.9 Information, Insight & Consultancy 49.3 42.0 104.3 Public Relations & Public Affairs 57.2 46.0 106.5 Branding & Identity, Healthcare and Specialist Communications 104.3 94.0 250.3 ---------------------------------------------------------------------- 453.4 383.1 928.0 ---------------------------------------------------------------------- Headline PBIT margin % % % Advertising and Media Investment Management 15.9 14.7 16.3 Information, Insight & Consultancy 10.1 9.7 11.5 Public Relations & Public Affairs 16.1 14.7 16.6 Branding & Identity, Healthcare and Specialist Communications 10.7 11.6 14.2 ---------------------------------------------------------------------- 13.6 13.1 15.0 ======================================================================

(1) Headline PBIT is defined in note 19.

The operating sector disciplines above are the basis on which the Group reports its primary information. WPP GROUP PLC

Notes to the unaudited condensed consolidated interim financial statements (Notes 1 - 20) (continued)

6. Segmental analysis (continued)

Reported contributions by geographical area were as follows:

Six Six Year months months ended ended ended 31 30 June 30 June December 2008 2007 2007 ---------------------------------------------------------------------- GBP m GBP m GBP m Revenue United Kingdom 450.2 430.4 890.3 North America 1,189.7 1,111.6 2,266.7 Continental Europe 929.4 771.6 1,657.4 Asia Pacific, Latin America, Africa & Middle East 769.8 607.4 1,371.5 ---------------------------------------------------------------------- 3,339.1 2,921.0 6,185.9 ---------------------------------------------------------------------- Headline PBIT(1) United Kingdom 58.2 47.5 107.1 North America 187.4 175.8 391.5 Continental Europe 122.9 90.2 223.0 Asia Pacific, Latin America, Africa & Middle East 84.9 69.6 206.4 ---------------------------------------------------------------------- 453.4 383.1 928.0 ---------------------------------------------------------------------- Headline PBIT margin % % % United Kingdom 12.9 11.0 12.0 North America 15.8 15.8 17.3 Continental Europe 13.2 11.7 13.5 Asia Pacific, Latin America, Africa & Middle East 11.0 11.5 15.0 ---------------------------------------------------------------------- 13.6 13.1 15.0 ======================================================================

(1) Headline PBIT is defined in note 19.

WPP GROUP PLC

Notes to the unaudited condensed consolidated interim financial statements (Notes 1 - 20) (continued)

7. Taxation

The Group tax rate on Headline PBT(1) is 26.0% (30 June 2007: 26.9% and 31 December 2007: 25.0%).

The Group tax rate on Reported PBT is 29.9% (30 June 2007: 30.9% and 31 December 2007: 28.4%).

The tax charge comprises:

Six Six Year months months ended ended ended 31 30 June 30 June December 2008 2007 2007 ---------------------------------------------------------------------- GBP m GBP m GBP m Current tax UK Corporation tax at 30% Current year (0.8) 11.0 27.5 Prior years 2.1 2.4 (57.9) ---------------------------------------------------------------------- 1.3 13.4 (30.4) Foreign tax Current year 92.5 84.7 212.9 Prior years 10.0 (3.2) 5.7 ---------------------------------------------------------------------- 102.5 81.5 218.6 ---------------------------------------------------------------------- Total Current tax 103.8 94.9 188.2 ---------------------------------------------------------------------- Deferred tax Current year (2.6) (4.0) 16.1 ---------------------------------------------------------------------- Tax charge 101.2 90.9 204.3 ======================================================================

(1) Headline PBT is defined in note 19.

8. Ordinary dividends

The Board has recommended an interim dividend of 5.19p (2007: 4.32p) per ordinary share. This is expected to be paid on 10 November 2008 to share owners on the register at 10 October 2008.

The Board recommended a final dividend of 9.13p per ordinary share in respect of 2007. This was approved by the company's shareholders at the Annual General Meeting on 24 June 2008 and paid on 7 July 2008. WPP GROUP PLC

Notes to the unaudited condensed consolidated interim financial statements (Notes 1 - 20) (continued)

9. Earnings per share

Basic EPS

The calculation of basic Reported and Headline EPS is as follows:

Six Six Year months months ended ended ended Constant 31 30 June 30 June Currency December 2008 2007 +/(-)% +/(-)% 2007 ---------------------------------------------------------------------- Reported earnings(1) (GBP m) 208.2 181.9 465.9 Headline earnings (GBP m) (note 19) 258.8 225.8 563.8 ---------------------------------------------------------------------- Average shares used in Basic EPS calculation (m) 1,144.0 1,189.5 1,176.9 ---------------------------------------------------------------------- Reported EPS 18.2p 15.3p 19.0 4.5 39.6p Headline EPS 22.6p 19.0p 18.9 7.4 47.9p ======================================================================

(1) Reported earnings is equivalent to profit for the period attributable to equity holders of the parent.

Diluted EPS

The calculation of diluted Reported and Headline EPS is set out below:

Six Six Year months months ended ended ended Constant 31 30 June 30 June Currency December 2008 2007 +/(-)% +/(-)% 2007 ---------------------------------------------------------------------- Diluted Reported earnings (GBP m) 208.7 182.4 466.8 Diluted Headline earnings (GBP m) 259.3 226.3 564.7 ---------------------------------------------------------------------- Shares used in diluted EPS calculation (m) 1,174.4 1,242.8 1,227.1 ---------------------------------------------------------------------- Diluted Reported EPS 17.8p 14.7p 21.1 6.4 38.0p Diluted Headline EPS 22.1p 18.2p 21.4 9.3 46.0p ======================================================================

Diluted EPS has been calculated based on the Reported and Headline Earnings amounts above. For the six months ended 30 June 2008 and the six months ended 30 June 2007 the $150 million Grey convertible bond was dilutive and earnings were consequently increased by GBP 0.5 million.

A reconciliation between the shares used in calculating Basic and Diluted EPS is as follows:

Six Six Year months months ended ended ended 31 30 June 30 June December 2008 2007 2007 ---------------------------------------------------------------------- m m m Average shares used in Basic EPS calculation 1,144.0 1,189.5 1,176.9 Dilutive share options outstanding 7.0 20.4 16.6 Other potentially issuable shares 14.5 24.0 24.7 $150 million Grey convertible bond 8.9 8.9 8.9 ---------------------------------------------------------------------- Shares used in Diluted EPS calculation 1,174.4 1,242.8 1,227.1 ======================================================================

At 30 June 2008 there were 1,174,251,830 ordinary shares in issue. WPP GROUP PLC

Notes to the unaudited condensed consolidated interim financial statements (Notes 1 - 20) (continued)

10. Analysis of cash flows

The following tables analyse the items included within the main cash flow headings on page 11:

Net cash (outflow)/inflow from operating activities:

Six Six Year months months ended ended ended 31 30 June 30 June December 2008 2007 2007 ---------------------------------------------------------------------- GBP m GBP m GBP m Profit for the period 237.3 203.2 515.1 Taxation 101.2 90.9 204.3 Finance costs 130.1 102.6 266.1 Finance income (70.1) (57.7) (139.4) Share of results of associates (20.7) (19.5) (41.4