IPG - Earnings call transcript Q2 2019 | The Interpublic Group of Companies, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to the Interpublic Group Second Quarter 2019 Conference Call. All parties are in a listen-only mode until the question-and-answer portion. [Operator Instructions] This conference is being recorded.

If you have any objections, you may disconnect at this time.

I would now like to introduce Mr. President Relations. Vice Senior Leshne, of Investor Jerry Sir, begin. you may

Jerry Leshne

you joining morning. Good for us. Thank

posted and joined We on earnings our have release interpublic.com. and Mergenthaler. morning Roth our our This we Michael are by Frank website presentation slide

to We followed We market at by before Time. Eastern be X:XX will conclude prepared A.M. to Q&A. with open begin remarks plan

is earnings uncertainties During These are company. and this about in cautionary presentation detailed statements the our and call, our filings we and in forward-looking will the included statement slide the our that to SEC. release our refer the in with to further subject other XX-Q

We supplemental allow transparency in will believe useful data We that financial measures. the review while for greater of substitute to and also measures certain our operational not performance. non-GAAP GAAP provide that these performance measures a refer for

pleasure is things At my to point, to this Roth. Michael turn it over

Michael Roth

us, we six for Thank for thank you and all joining XXXX. of months quarter as this this you, morning, results our and Jerry, review first

the and to start Frank additional provide As usual an then will our by details, performance, our highlights conclude by Q&A. followed on out our of be update with agencies I'll I'll covering

of of revenue this quarter a year to quarter. months another performance. report of and financial brings net ago year to Pleased on top growth the over was six first Organic the in X.X% X.X% solid That's of organic growth X.X%.

growth activity we disciplines by our end last toward in headwinds about calls. X.X% to X.X% organic be reflects from growth U.S., the LatAm, at which X.X% quarter the In the and This of and continue organic account driven across international bode talked was performance previous year strong U.K. U.S. markets the of growth on last the by across have agencies Europe, Regionally, against year. Continental, in many result our quarter, in our growth the

our industry-leading growth headwinds saw These a in despite the losses The X.X% and U.S. rate comps year this our remains along in of with from demonstrates quarter. solid. we win year-over-year business that resulted last the headwind year

IAN was MullenLowe, organic along Mediabrands growth our Agency Huge. from in R/GA, Worldgroup, and or second Networks In led Integrated the segment, by McCann FCB and Health with quarter global contributions X.X%

CMG grew public in organically relations another Our Octagon notably Weber by by performance paced FutureBrand. by and X.X% segment Shandwick advance strong with and

we the changes. and of acquisitions globally, consumer on as was as X.X% our which Among pleased remains includes telecom, was goods, with growth industrials, strong and of Acxiom client currency growth, dispositions, healthcare, margins. Within The growth and year-over-year be to impact services, sectors the quarter second total with we across XX% tech That well to the half. financial and continues saw growth be net retail. and track accretive our and organic first that in growth continue revenue the expectations to in of

Turning to EBITA income. and operating the

Second quarter second points increased last was from of percent income of a revenue quarter EBITA was $XXX.X last $XXX.X to year's XX.X% year's XX EBITA EBITA from quarter. million, as million. an margin. the XX.X% basis net margin in increase Operating

basis XXX increased from margin EBITA points adjusted our year months six first a the For ago.

was was diluted quarter ago. year $X.XX $X.XX earnings per a which and share $X.XX to adjusted Second compares as

start. means the the year performance off and Looking half, that a to our the quarter is at solid first

very offerings. the such our Festival industry in recognition accorded and people as client-centric reflected our talent Our integrated to to in quality and continues offerings further global other awards once again high of This continue is Creativity industry rankings. of and Cannes in the levels of highly our this key competitive drive growth agencies strengthen year our

and that confident the X% range of with inclusive basis to to the targets growth points and margin we're At we of tone track that end into year business our financial our came expansion. XX at current that of headwinds. deliver performance and of high mid-year, is to Turning recall have organic us outlook, to of to-date on X% you'll the XX that

In to XX year's points addition, last for XX.X%. we continue basis to XX expansion EBITA of with over our be comfortable target margin

we'll progresses. outlook year always, as our update the As

things point, update Frank it's pleasure highlights this for return I'll businesses. performance our on of At my our to detail with over turn to and an additional and Frank?

Frank Mergenthaler

and Thank Michael you, morning. good

the summary reminder, be I a accompanies of see X, a our will our webcast. that results. As to you'll referring slide Slide On presentation

was XX.X%. growth X.X% of $XXX Second quarter of at net ago, international being QX an a which X.X%. growth year U.S. million, was compares EBITA revenue X.X%. X% $XXX.X the million increase Organic with with

For the earnings intangibles and due adjustments was agencies. certain to non-strategic small exclude losses non-operating acquired per the of share adjusted $X.XX. exclude The quarter, diluted amortization of disposition

for the adjust the settlements in of also certain tax quarter. benefit We

Turning to cover you'll the the for X, see detail and P&L expenses Slide quarter. our operating I'll slides revenue in follow. that in

first small last charge, $X.X expense took expense due noting net we September interest Acxiom. income, the fine-tune financing worth year restructuring be late in year-over-year a of quarter. higher it's continues operating Below due we Here the in to million to the added actions to our to the

a dispositions. X, QX quarter well X.X% Net the $X.XX which Acxiom, the less with as against and the includes in to currency. divestitures X%. impact Compared acquisitions half was resulting was every revenue revenue acquisitions negative first net X.X%, functional smaller international the Turning as billion. stronger our increase and change to The the QX impact of organic net revenue U.S. of on added Slide exchange rates XXXX, in was dollar

the of operating bottom we segments. our break the At slide,

see, media offerings and MullenLowe integrated IPG can you our led McCann Underneath Huge. and and grew segment As creatively global FCB, agencies Worldgroup R/GA growth in specialist digital and by at X.X% organically. our was Mediabrands IAN our that led result

accounts Shandwick marketing XXXX lost of from in impact strong in reflects headwinds was Weber including quarter which The QX IAN quarter entertainment currency CMG with driven in X.X% revenue along from growth by growth was from dispositions in and Total felt At growth another FutureBrand. was acquisitions at and Octagon drag sports segments. organic segment, XX.X%, a Acxiom our changes. both and of the

Moving region. on the revenue second slide to X.X%. U.S. revenue growth X, In of organic quarter was by net

our from VW regional growth integrated Acxiom. from namely offerings. due XX.X%, where global dispositions, the we solid see last a see this From which Creative. impact U.S. to the accounts FCA of to headwinds Media, Army begun revenue worth It's continue and lost also was the growth was We that year, have of impact standpoint, noting and total include acquisitions to

growth and our segments, and markets, CMG solid Mediabrands, international Shandwick. contributions terrific of XXXX. increase in quarter another growth with organic our We In Weber of a top by In had was X.X%. QX McCann, very had X.X%, double-digit highlighted organic growth U.K., the we strong IAN from both on

very markets, In growth X.X%, national Continental This in in QX. Spain. In our largest of strong X.X% but and XX.X% namely Australia. of our decreased largest on and was organic Italy in we Asia some China had also by Europe, growth growth organic in XXXX. Among highlighted that Germany, and strong by in Pac, QX Japan, was was markets, offset at India net revenue strong top soft results

organic X.X% in Colombia. led year. was organic in in of Brazil, growth first Lat and XX.X% Am organically by strong grew Argentina very region in the Mexico, We growth by led growth half the strong group, Other region growth was the across the In our Canada. Markets XX.X% Organic QX. had

our quarter. expenses, were to amortization Compared increased only operating X.X%, adjusted and intangibles. as operating again for the acquired Moving the on controlled growth in to of which well of net revenue expenses net X.X% X slide

growth total organic points. of was expenses of ratio The disciplined benefit the XX%, to the expense Our XXX of salaries improvement related consolidation from reflects Acxiom. basis and revenue an of improvement and

and base the points. net decreased basis of quarter improvement Underneath XX.X% to payroll that, revenue benefits of ratio the to an XX in

labor expense incentive X.X%. severance quarter, We compensation the while ago the the of saw performance-based with of revenue in also as was and operating expense on year solid leverage at employee percentage a flat for net our temporary

an X.X% ago, At quarter increase Acxiom. addition from was increase year XX,XXX, total end, of the a due the of of approximately most to with headcount

from That investment in margins technology. more consolidating is net XX.X% XX expenses relatively direct while we to by Our a Within of by overall, Acxiom, XX.X%, for than expenses compared expense office was which a and was year our with points data of levered and offset more other profile year basis second ago. direct, occupancy accretive quarter the revenue and our other office ago.

Our fees and – professional reflects was XX expenses points general XX revenue, net SG&A basis corporate. lower expense which points of at QX

Our which due was amortization expense quarter. increased as this million to for depreciation the of year consolidation our the with the in $XX.X was Acxiom case expense,

represents million in year's $X.X of quarter, the which small to charge the in this restructuring actions expense a taken first adjustment a quarter. had also We

left-hand side our a steps On in in provide the our slide detail comparable results better adjusted reported performance. results the diluted begins EBITA, to adjustments report present EPS. and we in through to order quarter This to and in picture of X, transparency and with our

of in other related operating for Our non-strategic amortization million businesses. acquired EBITA had quarter a to $XXX.X resulting in expense $XX.X million. intangibles Below of expense, $X.X disposition was in few expense small of the loss a we million

of tax we results well. quarter, positions the certain benefit include which in also Our of a reported from million $XX.X the adjust settlement as for

after-tax each the adjusted diluted between $X.XX. slide, share reported a $X.XX per and of can of see the At per EPS that's of adjustments impact share, of of at you foot $X.XX these the difference and

six the of months, $X.XX diluted we On to show the slide earnings per to X, first share. similar adjustments which adjusted bridge

in cash flow to the generated the million quarter. $XXX use operations that, million for in ago. $XXX capital to compared working Cash slide was $XX used Within the million million we second On Investing turn million CapEx $XX year compared in a activities X, from quarter. with of XXXX. QX $XX

of Our stock $XXX repayment dividend. financial common million and including for $XXX note, used the $XX term our activities million towards million, our

was in $XX the decrease Our cash net quarter for million.

current ended and with is the XX of quarter our We million Slide balance sheet. the $XXX equivalents. cash portion of

total end $X.X Slide term forward. quarter maturity diversified debt maturities debt XX of depicts with and at billion going outstanding the our of

us on slide positioned on well growth half our have mid-year XX, expansion and targets. deliver at to summary first financial In margin

to continue Our teams well. very execute

positioned. meaningful creation continues us sheet of strong to of balance a source be Our all has which value and well

over With that, I'll to Michael. turn it back

Michael Roth

Frank. Thank you,

comes despite results us. our quarter. Organic revenue growth in sign when with that a engagements clients it headwinds the in the faced an their to Our is encouraging reflect investment an U.S. mode, remain strong

and is strength of performance of differentiated our the people, reflection strategy. a offerings, Our also our the

both share growing a resume positioned we're U.S., in market the to gains to market. economy leverage and our well largest Specific

new are business and internationally the both positive We in U.S. net year-to-date

significant we return to we've losses, such, As domestic U.S. growth able we rates. cycle through once a headwinds. offset those expect see solid to And been to

strategic strength to differentiates that continued due a IPG. position is Our

creative, our model a in First, that most It channels in model clients. approach across market. media, to data marketing continues public client-centric integrates with management open and the the architecture is relations resonate

been has set financial sectors. a that to seeing is solution in with trying other clients and and deliver, and architecture one peer major cannot work care health Open in emulate. consultants We're our it services

we we addition, issues include creators. means positions issues. environmental, social In value important governance social consistently on public take as and That

We in want with to in, makes values feel are with doing for. work so us values people makes company to Doing want inclusion was transparency, of and believe ethics, actions. the do us community so, clients by a business involvement. can with It that people backed our company line and

having powerful hallmarks Thanks ago, integrated collaborative embedded value. quarter. having we transparency our a accolades our agency related received seeing step foundational the strong by creativity strategy include a as digital to go-to-market brands took our effectiveness, agency our capabilities differentiated culture years recognition host and a operations, during brands and core to as of Our joined many and IPG to a this

of of had year Awards. in contribute Company the named to XX that American was Most IPG among top the a marketing This success award Holding Effective all North third Effie we IPG the marketing performance. Cannes At and a Festival impressive the recognized a at winners the particularly across forms all row, disciplines. had agencies For brand's Creatively Creativity,

agencies These than IPG others. Grand the festival's home clients, by brand of This companies categories, and wellness, again, agencies combined. by experience, other breadth of across our data, and brands. many Prix. Prix is our in were and took honor health showcasing XX a and Grand won craft, consultants won the our including agency all agencies highest more global innovation, Prixs were the industry strength Grand of creative mobile variety holding

festival. holding agencies any per companies Lions, our of honor dollar highest other terms addition, the rankings awards in next more topped the among Notably IPG In than revenue, won the festival's of holding at company. Gold

influence Nations, there, societal marketers Women's Partnering While and Ninth attracted Breakfast. United advertising's and we hosted on inequalities. Annual impact and Microsoft Unilever featured we a from the Levi our standing-room-only examine Strauss, crowd Adobe, Mars, to top with

our clients idea of believe year capabilities provide enables future throughout Acxiom the as the IPG's tools and the coupled to business to calls, power results. most rests to expertise combine these solutions. creativity. adding on existing the with with and industry to drive continue data on noted creative transformative and we've in to use As our performance us the look ability us to forward-looking valued most partner industry's marketing Clients their creativity of the to with

to able IAN investment brands. in differentiated quarter, our our to our at networks. and reporting Network posting level, Integrated other been agency led strong thanks or growth segment, now very global We've In well which includes as Acxiom the performance. as a in perform this Mediabrands, again, Agency vibrant

This of a country's wards. chronicles Prix the documentary work Prix that its for in entertainment done agency a awarded the the marked the & in the for during one XB, the Grand won was first-ever media nurses HIV time specifically first Johnson UM created category. hospital by that first Johnson XXXXs Grand

kicked UM with The and including addition, winning honors at Pac. and picked the Canada. and the Prix EMEA took by media the TikTok across account. off including up high-growth sharing number new in in top Middle Groupon's Mattel quarter U.S.; in home agency Cannes, Initiative APAC a and of Africa the the and In Europe, of Asia third business also Carnival wins APAC a business number East Grand FCB

three of connected XX care Prix President Prixs very well. won network York New in well performance, highly New CEO posted as FCB Health, new in strong of Recently and wellness a York operations. Grand device. office year as its Canada named won FCB Grand for a especially a health The the Area innovative this as York. New a part new

continued increases the by growth saw clients. in driven existing Worldgroup with quarter McCann

On front, the added new among others. business they ADT

continues In very of to see recognition. levels high addition, McCann industry

named second as in Health Healthcare at of McCann named the the row, Index Year the Healthcare McCann Creatively a also was the Following year network of named Health momentum being China their Network Network recognition the continued the Effective its Year World the in Effie Most Year. for by of Network Cannes. and Agency

and new several of had The on Fox a end Group automation had MullenLowe number more quarter at and a Sports Fox Mediahub first wins adding recently the network business including fronts. strong company Entertainment the of home quarter, the ecobee.

a all innovator growth. The a to result President media number and of leaders a of arm digital senior U.S. promoted business added also leading as new

You'll that continue our brands to creative to networks MullenLowe digital and which the demonstrates three a value offerings. well, and note, McCann, global our the perform FCB services hallmark of strategy of are our our invest in embedded

Acxiom very noted, well. As is also doing

connections get the since acquisition, one-to-one bring have their Acxiom us management better our out an industry us into only help of with data more allows capability. unrivaled position This company of at reasons driving the efficient strategic to scale. assets, to best giving accelerated marketers the All data in and consumers all

expectations bring be the market, accretive and line products continuing their grow IPG. results opportunity see progressing. and to We with is new in continue data to services are innovative management Performance as to our with as of pleased well how is We to integration upside business. existing to

marketing new Acxiom in multi-year entered U.S., continued to quarter and data Australia, most customer recently expanding expand This Canada. a a managing and and Japan, in capabilities. and company major with a distributor also respect client, audience the technology global to data offerings, expanded with auto its its its financial with reporting measurement The relationship Spain engagement looking

pipeline rich impressed and of We the opportunities. to team a Acxiom continue with business. has and be promising

the citizens the key with solve Together Brooklyn solutions century. XXXX quarter during humanity environmental facing with designed XXst Challenge Amazon Network, in the help Earth tech Earth Day partnered initiative. to challenges they the create based Huge to

R/GA quarter, arm with the Pantone newly Kinship, Sinai won business. between in the Petcare. agency included earned-first Also office in global and the to Mars selected the clients, at their the innovation with Venture Studio Health growth agency handle campaigns existing partnership quarter the launched Toronto plus the of the Highlights

the eight and purpose-led Pakistan, the U.S. Uganda and created academy the Exchange of companies Innovation Brazil, they start-up from mentored Together female-founded Kenya,

recently by to their R/GA front, On was selected GameStop the experience. redesign cultural gaming new business

They can their Our U.S. clients the integrated on IPG agencies of marketing out portfolio. best round full the also of solutions. and our deliver to continue combine collaborative our with offering to suite open independent the services architecture

onboarded group and within Highlights engagement group from this Wings. which to Buffalo it's -- with inclusion and marketing continues Wild department new come CarMax culture recently its this and the welcomed specialist talent and agency, expand clients first-ever

we're CMG, seeing also positive At developments.

together Shandwick, worked saw you week, a transformative Shandwick ranks. forefront team move CMG during keep our marketing contemporary new era As This roles. communications. from them of Weber Weber pleased last within new at and has brand-building these into at to announced have IPG the leadership We're to of and leadership promoting

of Weber called SABRE out, Shandwick Shandwick the agency after point has Awards PR named of received Global the Year Professional space, Week and CEO at named most she the Global previously the title, U.S. Awards this of Professional was awarded the and in among Awards highly particular of last we With PR Golin at most one The XXXX the in As are Weber accolades the we at added shortly a agencies received the the her awarded leaders take recently the agency's PRWeek PR women highest-ranking Year IPG American was quarter. Agency in. quarter. pride North the a number CEO business.

quarter. the the recently Year. PRWeek agency named an of Agency had exciting Global Golin

half of continued the the first Asia-Pac, at Porsche perform through Verra had top in total, a that company IT of we end the In we and industry. Hong the are new number business front, service On to Kong Mobility. management including Golin happy the AIA year, wins of in

modern the on in focus succeeding formula. right is data-fueled our and is our It model in that client-centric the investment shows people offering that open architecture a and

prospects. We results are to pleased our feel long-term in confident with our and continue plans we and

As reduction financials the in to our debt over as dividend. as always, we well and significant years, few strong remain continuing to committed next grow

repurchases also a time. period to We to return expect of after share

to-date Turning our performance to to us growth our high we're growth that track of X% deliver X% end has confident outlook, the range. organic our on at to

significant with continue of will continue last we margin We XX for to value. be basis over points XX factors long-term to strategy year's and XX.X%. EBITA comfortable adjusted current addition, expansion shareholder our as performance that view In target to enhance our

it questions. to let's -- your Thank Now, up the you. call open

Operator

Quadrani, is line JPMorgan. you. your Alexia from open, Thank

Alexia Quadrani

thank you business. the Thank your so much. color Michael, U.S. you for on

you think I mentioned a about losses. headwind from X.X%

Michael Roth

Right.

Alexia Quadrani

Can us half? how a trends Does it at give become had And of you worse this that gets in the the of run it offset we assume wins the second before sense you point? know better? Or Does should for some notable year. earlier rate similar get I a some an year? remainder that

Michael Roth

as indicated, first little new year the half Well, worse the Unfortunately, Yes. net in a first the quarter bit we're of the U.S. into positive frankly, I get half and, on second Thank headwinds through little a Alexia. you, the the runs through both quarter, next worldwide. year. business and of

what's to organic headwinds. to we of headwinds, we say note our is X% X% here growth, that's But with comfortable that, net when despite these important are the

indicative wasn't losses. that's that losses with strength of -- the But here have those continue you overcoming wins offerings losses, the go. and net If the if to we're have So our the extremely fact of tone high out Unfortunately, new is for we would business there. those growth. economic frankly organic I we it

Alexia Quadrani

a then, follow-up. just And

Europe, in a your to lot especially. continue outperform peers You Continental Europe, of

color, market? that's gains? -- underlying really Germany think great. strong performance. us Are I highlighted any if I you was more think can guess, on be half growth would I share area the give you mostly seeing in guess, you that And, being color you year that So any an good really

Michael Roth

McCann Yes. win Well, in and of reflective business notably Continental in frankly, Opel it's some wins, new Germany Europe. its

of dramatic X%, a to businesses are size have in reflected. that's on and markets X% losses the our growth. those so So impact wins the Again,

the over it been were that we couple net positive and take positive of we've last We'll quarters. though net

of think there's continue it's our markets. as particularly And I offerings, So Mediabrands. strength this in as case, competitiveness in McCann of indicative the believe in well to we those

Alexia Quadrani

much. Thank very you

Michael Roth

Thank you, Alexia.

Operator

you. Thank

Tim from of Our next Macquarie. question comes Nollen

is line open. Your

Tim Nollen

geographic is Hi. other Thanks. to region One ask China. like about I'd

on the was another have sector highlighted for You're to if you let not in peers you you amongst a strongest work and some Does come of Again, area I it why growth consumer attrition have? on I could you just not if good could goods why first declines to comparison ad and it's what's pretty others then of you sense fees in broad-based been down in time, Thanks. the you're as or a Does is. about terms us other but you wonder us many the sectors guess. being do? talked I going that come China wonder could give understand down the talking for know I yours the help there? if strong a that that of client consumer you in And to negative spending. mention sector, quarter. growth elaborate about are and this not? bit

Michael Roth

consumer business. Yes, our of above. the of X% it's goods all is Again,

We the by wins. of it consumer there had the the So business in cutback goods client in bit our businesses, we new growth in environments. overtaken some a respect consumer to good with had those of little notion was wins markets of goods our again but of

we're that back a raising for goods the and what the before is this all are seeing again. I strength So not on saying accounts we're consumer goods. flag said consumer

to goods I as -- the think to continue cutbacks. going on margin and packaged focus challenges the entire face in industry particularly consumer did is

out. both I that we new have strength markets the spend that worldwide goods. the is fall grab we that might if where our With business that clients, we've those off those from the companies. in more our to good consumer our if respect with add in goal that couple is will you And given wins CPG brands to a U.S. you we that leveling reflects have wins believe and in of growth seen largest and

being that we're big to no our We're China that largest there market. China Japan I there. Again, us by don't the and But it's think recovery are see question in economy The to there's the for our impact China of the Singapore. offset service news India, horizon. in growth losses in multinationals. starting see on we a good in not the

We continue to that invest we of brands, people China anytime in our terms believe see I don't big in in but our environment a turnaround soon. and

Tim Nollen

a I consumer Can on response? goods follow-up the Okay. ask quick

Michael Roth

Sure.

Tim Nollen

thanks that you little couple explanation others? Again, You the from data question. there, times doing remarks. the something a Michael. goods might can your a it's is Acxiom? architecture you're in for provide I just different mentioned not with consumer it it open that of with wonder what is be a Maybe Or your

what you better peers? than your doing helping Just do that's are you

Michael Roth

this than they Well liberty of other better I'll I just take before are. saying said the we're than that.

have tops, Our Europe. really -- to sitting particularly I'm of attended and And in FCB. the number when a open in top architecture a a I've we is we key. And room

McCann. have We

have We Shandwick. Weber

have Acxiom. We

have RGA in and leadership an I And strategy new servicing our that IPG. and I I of We That's a table say the all pretty group the client. when look this existing look to room a have is room. at sit the powerful clients in of sitting go-to-market in

offer. best IPG You're to entitled has the to

light to the coming it see You room. in

old you client-centric all your know agencies offering and purpose that not are that out which are resonates one are our sitting is our who You open model total our a I probably don't architecture, present are got the and mean clients in -- called needle problem collaborative silo of. from. in issues with to the this help yours. a move their even sole And people of which clients. fact, It's industry I biggest in kick it our actually room

to wave I CRM put terms future. the they the the giving all business clients of powerful in particular offerings. which in of course, in complain creative, expertise that But care consumer, this the the of that it's offering terminology. didn't the have case And Of with them on need group, very we with to those our targeting terms in right have with in health one you great using capabilities, in a place you in Acxiom the best focus

you I new that's brands, that it with open clients. are the the So IPG our And teams respond? stages work sure some it's and well problems because together your firmly -- it's here. our the way brands and that us they really put our And team our resonates in doesn't the make When architecture tell the Can you to and you way those make agencies people in management way the as I'll right And believe working the as they having should. their make sure they resonates that's the working of And -- marketplace. I but well, all we early up we're of launched protect our else. engagement, include says a collaboration way the look they on are to are brand. to by really supposed to sure think it to something get and go I it the e-mail

Tim Nollen

Sounds great. Thanks.

Michael Roth

Thank you.

Operator

you. Thank

Our Ben Swinburne. next question comes from

open. line Your is

Ben Swinburne

to conservative. year pacing just nicely I you questions, a terms to call you're half had Thank Michael full strong first XX. I'm and if the in XX don't Acxiom. wondering one outlook taken expansion very morning. margin you, Two you've talk margins, on the of second year, I'm know because margin of you activities. restructuring could on some ahead about the the for good you the want half one certainly or sure

else to fourth back out that particularly margin on got But you'd anything want headwinds. You've the quarter realizing performance half call account wildcard? the is a

if about And about And the of strategy. great? discussion the you'd in accretive to data data. being that that's there how of rent any new the then examples you is. even market Acxiom, sort it to company of be and continues us decision focus I'm or of to IPG. own versus by throw to know on financially net terms talked a buying sort And of that be early of made it -- think on in like you if you've business, I second, would early at own Acxiom, just is helping mischaracterization of But sort wondering the anecdotal the points business strategic any of

Michael Roth

Two Yes. Ben. questions, Thank great you.

Let focus on Acxiom. me

And it's its first-party we remarks, Acxiom wins why first-party listen prepared a bought to not We And That's mischaracterization say I at new the think question a of core or that buying if to Acxiom strong that's business and see data data management. core is of management, relate you management. renting. continue business the Acxiom, you data Acxiom a okay? my competency to has.

seeing we're the where growth. that's So

yet introduced in we Acxiom capability. talked with terms of Mediabrands the opportunities the haven't new synergy on We that revenue using coupled about the products

So when whether and I or about Acxiom Acxiom. people core us conflicts talk there's misunderstanding buy, or totally competency rent buying the of they're think

you of maybe privacy of one-third right They management consumer third-party when their data cleansing billon organizing reach to Acxiom think management. that's have of two and they're business think When first-party so is data as XX,XXX in using you the sources what does. data individuals

with one-third to a They who But But with, don't our in of have them with to significant. that's happens clients they that. being choices clients It is and work own to and are just number that. respect that. really have terms there of use the have of so the the of company able Acxiom that within core target work their The business. cleanse opportunities and competency data use

clients. their have part about with companies the those great what's long-standing business. we're those mean relationship are I And of we

in businesses, the and key really And terms to recognized. a compelling They're that's clients top-rated those with I this. story. and transparency ability Forrester on offerings. it of the quality grow the the of to the they safety are is So retention our mean their from

competencies not The that are opportunities. and data that So that data. selling bigger and where that's core we much the see bought we're than it's we

when margin, with of headwinds, have in a those those of of kinds some terms clients you good carry In number margins it.

So point, margins. at going to upside any this comment on not I'm on the

that's or cost goal XX line we if that's goals of We we -- achieve focus what how points. then if our the on both XX it's can achieve to when and and frankly and we is I example what basis -- another that, top are. Our that and think we to you that containment believe continue achieve

seen XX And the we our if at is say performance look to expansion, you impressive and growth accomplish. over organic which I we're margin quarters you've going pretty last what history the a think of

Ben Swinburne

Make sense. Thank you.

Michael Roth

Ben. you, Thank

Operator

Thank Salmon you. of BMO. Dan

Your line is open.

Dan Salmon

the of which more guidance. everyone. Hey, get can we basically to As before you bogged return the in noted I we the can before, to end return want down back higher just the comfortable known losses, to at that growth just being good if And commentary morning your Michael, too revenue organic this. don't well guidance? were

you've are end in one got year be about it and the -- macro there there on or more have it? give cushion may more there's that Maybe number confidence of always Are two there get commentary there variables through of towards higher you that things the losses. record, just there clients been back in closed new along you current a be moving confidence? sort -- the we're know can has net that that what to nicely being I leads and that towards of spending to door account business

that And know working the quite but one-year just those company? out be most Mediabrands you where not within Mediabrands on like of to But capabilities see can anniversary we're to that holding hints the then I yet the on been continues to has any flowing with the and focus. sounds box effectively I focus know beyond immediate Acxiom, the

Michael Roth

of the make -- and got from through so I reviews units the and I our always numbers. tell the want don't me our just the we don't most let present up. bottoms-up. come Yeah, up we team bottom strike, let's work to them have We in operating with Sure. really from

are. agency of see the where pipeline. their are see they from, where fees see coming We the record where We opportunities

their on clients. the our with the each a And units. reviews of of business. of based business over the developed CEOs the tone the ugly go of the each pipelines that's this clients is number including and our So the bad, units we talk existing of frankly business and of their about And number the sit good, health their

because that's health look how an open health of collaborative open clients a have at right? are really the stickier the their we architecture test. architecture more and their how base, you So do when And are we clients, of look they much the at utilizing, we

where get put do we agency. we So that's all an forecast We by a the when together, corporate that overlay you and from do number.

the guidance year including we of considerably know I in I upped And a the end way by in team range we've in Frankly couple -- past a -- and that telling the that's saying number. because high real our years. half past by was guidance the of due our the upped in we're the

year the of answered before more I as for little of headwinds the a difficult. the rest one the get questions And

more we So additional have the client headwinds, to in spend. difficult order overcome actually

existing Let's with not bring within so is clients. to base to of IPG that of those sight key of businesses health how source fact lose our the we're bear using respect to growth, the resources all our the our client the

So where that put make we goes it into mix a all comes up from. number it But the just that's and of and then up.

respect that's the and correct. you're bringing was first But we're of new IPG integration Mediabrands going of focusing we example as bear, Cadreon to on. said on that all business the indicated Acxiom in mean, Acxiom, what next On within we going as with plan, this and certainly to with that we I at Mediabrands and be these products part well capabilities our the wave to products. data to we've latter utilizing be Acxiom year for new and have year, been

and assets agencies, can capabilities with own IPG own candidly Acxiom our We've Acxiom to how analytics to their existing already how data both and can can their started with all importantly leverage introducing and more of clients existing all Acxiom to and to Acxiom respect they respect introduce their creative introduce to how clients. capabilities capabilities our their of they

So we're in process. the

this said out about was year of force ability want But lot everybody are know the one transactions I on the is, most to a for thing these the integrate. we difficult to out everything didn't because rush imperative. that it And I and thing comments there are

to that asset breaking asset without a much Board an on were smooth basis our very and view IPG. to transformative we future for, the going as it these but within we businesses integrate commitment was Our that we paid dollars significant

we year, it's see with to to to any problems the it. respect going frankly So, to And this. want We're pretty very going the not integration. of think, having exciting rush come next out stuff be We're to integration. that's with didn't happy I into

Dan Salmon

very Thanks helpful. That’s Michael. Great.

Michael Roth

Thank you, my pleasure.

Operator

you. Bank de America. Hilaire of Adrien of Thank Saint

line open. Your is

Adrien de Saint Hilaire

Yes, good please. morning them everyone of and thank you very much I've three for taking the questions. got

So, Army despite that handled being I'm first still being Michael, still the are is of the impact of McCann. and by account expected all the we losses than U.S. -- impression bigger this under

can we've explain just missed? So, you what

of then is Secondly, us back be the on of details one the margin where number or question, eliminated contribution this another bit the is morning a bit a bigger give first companies, thirdly to question. would more you a margins there excluding Can of first-time the being Acxiom? And a changed. in what CMO are half McDonald's title

Just operations your wondering you impacting relationships how with very this clients. much. day-to-day is and Thank

Michael Roth

Okay. Three questions.

out your Let units me out margin question. don't break business take margins We that. and give on

when businesses manage we of that's basis XX and number margin inclusive to XX we all So, our you on our how a of give points, businesses. it's

but we're information. not I -- don't know that So, question, disclose we just your

We you bigger of going year. frankly And had three. the FCA there It You these losses. client we there into as put year was guidance the again, started the all, the a another that Media we the to was on That We and we didn't of in the which X% when miss mention. first didn't was out X%. we started didn't losses knew year, number anything -- reflect.

the forecast it's X%. these reflected timing magnitude in we when those of losses the already of the and X% losses, So, to

So, missed analysts maybe number, have may we some didn't. that

And McCann no we it to doing going for and where was exactly it business it's longer by -- the far So be. thought way is the Army.

the good as second bit questions number gets is pipeline. door we opportunities saying just one of news we're now the see other a in why So, and But we the hope back harder. the is, the little half that of our right close year that's in were, now

the kind are of the you our what global waves centralized versus The clients of global it's the to in the That's local. the looking be for going various less MullenLowe, on Business have markets why, a look of if global navigate McCann, question to a to at be because, in are interesting. if going distribution, centralized compete through basis, capabilities FCB, is networks, relevant basis CMO, that very terms to a we to help and position local they're the markets. need offer in local using want to presence talent they you in

get come get reach all is an markets ability you you to -- markets and are the when what you to important. local IPG when that So the that's

on to structures haven't that. when seen from impact of -- But we yet And the our decentralize. far to plays pays big changes so do centralized they any strength it it the candidly,

third-party a business now side to Of local business, need business arbiter the centralized our the navigate the course, media you help the either help really needle. a on the customs them of clients and move and through focusing of plan

offer a of through that so we in are that the that our that What's from IPG example many local capability They expertise have frankly what their they Europe. can on of that's on. are think creative And I and the don't the in is changes creative And Latin have than of So, that America efficiencies consultants particularly you point what's competitors, capability, have focusing view. markets. seeing of need kind kind different not clients offer. for networks to global and in our creative our

Adrien de Saint Hilaire

Thank area you, very the in If could quarter politics? sustainable much. sneak quick the I U.K. has agencies in the very a in one recent just and volatility and latest been follow-up, is in years. all the this given uncertainty for How macro strong

Michael Roth

good question. it's I'd a Yes. say

in big over-weighted the are seen U.K. a services the haven't quite We and impact maybe not for yet us. because financial

seeing we're capabilities in continue to the creative U.K. PR. be media. seeing strong And We're We're seeing so,

far, what have So seen and business. we this -- the off it. new leadership has. but handles impact Brexit And our of all bets X% on again, so are how not depending But it's it

we're side, good the very on So, well. doing

downside On the its is business. the of on our X% hedge

our it's numbers. So, yes, baked I all into --

Adrien de Saint Hilaire

Thank Okay. very indeed. much you,

Michael Roth

My pleasure.

Operator

Thank you. David Joyce of Evercore.

line Your open. is

David Joyce

perhaps technologies going view you. targeted smaller Thank open and And when and marketers? accelerate too form does forward? guess, From some well here? you you do there if drive with sit that you advertising with aligning enough at how Or targeted incremental Are developing strategies that quantify see spending? the where see Acxiom, do this Thank many from work platforms? targeted And disparate you. could you advertising in opportunity to would I advertising

Michael Roth

whole have dislikes. And power: think is targeted buy management instead through first-party order in and to purpose Think the audiences, the you and do be of the the to the you and acquisition I able that marketing and to that. specific data consumers insights we Acxiom. their whole how have buying can just do Look likes of is of Yes. capability of

That just to comment potential the data selling By maximize talking that first-party capabilities. our data. that use data is enhance data those have first-party efficiency helping let that who indicated about other me someone we're has to clients. and of first-party first-party way, data resources that that we're the What is clients

on specific proposition that's particularly amenable digital side a that how individuals spend of reach can clients business are to to digital shows So those consumers. forward And what we're doing. continuation I is yes, think target seeing why value of putting a us which the and you're we the

a as Acxiom pretty capabilities that's that to us of opportunity because we is have for relevant all together powerful because view the create the also to creative messaging the I voice. but putting that an consumer capabilities, that So, and two

our think reasons that So value the adds and And it also one it bought continuing. key working -- growing clients. see proposition the as of our with in I to that's And we Acxiom. it see I frankly I of

David Joyce

technology And too too Or this are starting it many things point? and are is align? to it the there from for platform still Is players at confusing perspective marketers?

Michael Roth

that's mean strength are we to are Well, better the for, I looking clients our it to what out all someone exactly solve right technologies, -- and them together. if what figure that's it confused I clients is expertise out for cleanse it there and different And have always and ability we all work mousetrap helps because confusing. they us that. put is that We and say clients in is good need our do. confusion with

plays our it into So strength. right

our together PR digital what think I I notion data need, creativity business. mean focusing grail That's why management the on putting clients the in all holy that's of of a room

built premise. that why tools clients that frankly, now have that's and will there there on out right And isn't all the in believe we our an don't sit we IPG talent, And that's put clients best are we move we what capabilities. helping with the the to talents needle. And outperform offering together business tools where looking. the Creativity, because best-in-class I continue we best based

David Joyce

Great, thank you.

Jerry Leshne

Operator?

Operator

sir? Yes

Jerry Leshne

hour. That was We've come our of any to closing the question. the for bottom final to thoughts. Back Michael

Michael Roth

hiccup overcome we're We some you about in we're And Again to hard a little look very that. the had opportunities. but our terms Yes. Thank of next call. excited of forward I working to those headwinds, much.

Operator

This today's concludes conference.

You may disconnect at this time.

The Interpublic Group of Companies, Inc. (IPG) 23 Jul 192019 Q2 Earnings call transcript