IPG - Earnings call transcript Q3 2020 | The Interpublic Group of Companies, Inc.

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Operator

Good morning and welcome to the Interpublic Group Third Quarter 2020 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

are morning. hope you. this all Roth, we well. Philippe Thank Johnson morning. by are and Ellen morning us Thank We with you Good Krakowsky. Michael being you This joined for

posted and our our website on slide release earnings have presentation our We interpublic.com.

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

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

data refer measures. substitute these things We a this believe over to and for will for pleasure GAAP non-GAAP Roth. certain is measures, At performance. turn to financial transparency point, of also our while it review that, my in allow operational the not useful We supplemental greater that measures Michael provide to

Michael Roth

Thank would remained you, review this performance. your that have for and quarter joining healthy our and by third and as I all this you morning pandemic. us to that I we start families saying hope thank during safe like Jerry, you

driving Our and be people, environment. crisis on has as effective and our business, challenging focus impacted response a clients continues year discipline been how this as well our has to to the health and our

into on our stronger emerge staying other of to talent in and to operating challenges delivered time, professional even this many the develop our people the the recession. an and company to personal to revenue managing offerings, and clients, side on close period navigating of priorities, positioning expenses unprecedented have public While and our continuing strategic invest of

offerings people X.X%. organic quarter, and revenue results the best our of class. In again third change negative quarter underscore are our our in our in net that Our once was

contraction, economic and to extent effect show though anticipated. of the the As global result the to continues that perhaps expected, pandemic not

strength adjusted adjusted credit improved our of exceptional increased is for over Our our affected differently, and challenging Across again quality offerings, year excludes make the nearly our of teams. agencies has comparable to resiliency diluted business EPS a results a X% pandemic and growth accomplishment our but these to and second This management environment, the model our fully charge the X.X% Against flexibility and our portfolio, earnings. our which our quarter. from business the disciplines all of showed the EBITDA, once a the and of strong restructuring, service increased talent. business ago

Our experiences events remote X% varied of practices alternative year. Clients power the of have to led experience brands. brand creatively brands their the reflects and maintain agency footprints. to the was integrated clients leverage hybrid will models The performance hardest different of as by shared continue we've our regional with the and the domestic been in-person reasons. collective global which and Events, us our under revenue mix and quarter, in networking for many base of previously, for that engage technology hit X% on last to pandemic obvious

Our media, grew to data in and technology a year the quarter ago. offerings compared together

share. to disciplines market continue healthcare take and Our grow

Our clients in again quarter. outperformed largest the

is quarter. transportation impacted the our services and sectors similar end the of healthcare recession the most the also industrial Open client marketers. scope the marketplace our collaborative of sector. value tier our within Among the to elevate the category Architecture continues spectrum, top win sector, and our again retail were sector At performers to and go-to-market in with clients best-in-class for second to sectors, Our were our agencies as and platform top the the a by the other other which of the auto

noting with worth By both of organically it's what and of were that the X.X% our second we region, the and terms quarter. decreased challenged sequential industrial XX% the saw U.S. auto changes, than revenue in less In in quarter. mix

decreased performance by at plus Asia at negative Europe international of broad XX.X%. marked X% with and X.X% range a Continental Our markets Pac organically

margin. to Turning operating expenses and

teams very results. in to effectively Our continue reflected manage as our

are and net before cost by emphasize to some the ongoing X.X% significant other continue talent. expenses invest that lines I leverage Both making and the from see cost for would drove to notable decrease which our the We reductions. in decreased. expense people headline our Our net impact compares hires our X.X% as operating of on the destination charge industry's in operating expense alongside a beginning we base decreased our show restructuring, principal revenue. for for and ago year that the efficiencies, with structural these payroll position office top of

group, from the our group also such for counseling BIPOC we've free includes In employees. to we new enhance our diversity tech products group our distinctive our and and offerings It us inclusion leader which growth a addition, initiatives an example includes data period address and sessions will has This continued innovations the on morning. continued for tools of which this in many years. and investments over made as in our new later industry

actions lower and XX.X% we to are expected structurally real XXXX permanent, significant we charge, These in which charges. also and our restructuring estate of our quarter related transform to quarter plan be conclude further charge take third call total and restructuring fourth approximately is savings $XXX and in expenses annualized to earnings other million a non-cash in and program. total additional quarter to We our strategic restructuring, is than As $X.XX are million full to fourth our actions that expected in to-date into share restructuring review and savings second additional to $XX EBITDA Of quarter, was amortization actions In are basis intangible resulted reported our will the was the that basis which that actions a was took on and are operating in of year expense July, of of as be anticipated operating taken the result not quarter, XXX the Along the points per Diluted majority which margin third will conference $XX.X as result continue net better excluding third year. approximately for adjusted will million was of structural additional points is to last cash. business. the revenue. items $X.XX $XXX income. These our with XX.X% in of charges, adjusted to and below quarter, XXX we've operations actions are the million. result our in restructuring the in

to look X% for of our that we confident our As to and in as of offerings. strong quarter, important the we we're a had fourth It's fourth year excess seasonally with important adjusted the our model quarter of headwinds. organic in last note strength growth competitiveness

important programs is well. year especially, globally status support while many a to earlier everyday to a face as range on threat key remains All project related to continued and picture global the the impact us this remains regrettably aware assignments This is of its global better the we as than volume unresolved, of that will in holiday a the unknowns are of weigh government Unemployment pandemic picking are and in the significant norm high. of COVID U.S., markets. up season. historically painfully life our economy. on The for but

to is All We're linear growth of to this purpose. likely the to continue are decisive authenticity for the unknowns, client well-positioned shift acknowledge of consumer the holiday and just be pandemic by a its not as makes improvement our including brand the from This remains of at decision-making very mass difficult forecast. deeper industry. do see to quarter. that the brands. season be across that for e-commerce, It's outperformance reality. result any these clients will will hearing of economic Despite we accountability industry they There juncture a changes consumer emergence and enduring digital a experience for IPG

outstanding strong ever-increasing seeing now data our like and Philippe, for stakeholders. all service Acxiom position. integrated we with brands. We life, our for resume continue in the additional on and increased economy for can to of in color rethink and it reimagine tools we Kinesso in additional playing have confident but level with marketers improving day-to-day Accordingly we're I'd an enterprise. Ellen our creation over talent thoughts a help forward that resourced are along expertise as I'll are with distinctively this our before growth at management the with offerings technology With point are demand part an turn to to of value we their and Q&A closing marketing Further results. and technology an well engine our at

Ellen Johnson

safe is everyone that hope I Michael. and you, healthy. Thank

to doing teams the in a challenges expenses. job our invest people current we results have our As we and profitability you've increasing in in offerings. have differentiated our with continued our managing Notwithstanding terrific seen

be liquidity our million to end the paid X of and we on maturing of off strength. October quarter sheet note hand. continue further senior And cash balance $XXX Our areas on with the following

turn positioned presentation. More in on recession the even the on our quarter quarter to detail two We an the are Slide begin in company. the well as results stronger on

negative was organic Our change X.X%. revenue

us and the still sectors. our reflect major and While in is quarter most client improved world is improvement with several says the sequential regions it second pandemic agencies notably in that from

compared the with was a $XXX Third $XXX.X million ago. $XXX.X restructuring quarter million and adjusted year EBITDA was before charge million

net was on which XX.X% before margin Our adjusted is revenue EBITDA restructuring.

share the quarter per earnings diluted was $X.XX For reported. as

nonoperating small While adjustments a $X.XX, quarter. restructuring the the and businesses, of certain of the exclude acquired in after-tax non-strategic losses tax charge share as our benefit impact the earnings diluted sales well net on of intangibles, as adjusted amortization discrete was per for the

used at our facilities liquidity to end. at $X.X notes. credit Our strong $XXX maturing be one quarter committed cash million continues repay of on Again billion and we to October

to X. Turning Slide

our follow. the I'll in operating detail P&L slides quarter. revenue for You'll that expenses see cover and in the

Turning Slide to QX revenue X. on

the of in disposition past move of Our certain Compared and dispositions basis to we XX months. the to small change we billion. the impact Net which the negative X.X% was expect are negative exchange reviews was non-strategic $X.XX net was divestitures is ongoing points. These QX as the additional XXXX take small businesses of XX rates impact revenue over forward.

revenue organic change a decrease X.X%. Our net was of

segments. this right nine IAN X.X%. The in our the As organic to see At we segment our can change organic break brings our for decrease X.X%. the that was months change of of on you out the bottom slide a negative

integrated CMG. marketing our media disproportionate a segment change negative which service and specialists. offerings; of digital XX.X% specialists, includes creatively global our the reflects of events IAN domestic technology sports and and organic CMG our within At our As was agencies; reminder, mix the and data led marketing

in better Slide the was international X%. reflects improved France which quarter perform third Spain, is Am revenue quarter, comprised to East were Continental and U.K. with showing markets, XX.X%. of offerings. the to our the organic points. All sectors points the regions markets, quarter at the The Canada, other U.S. which organic by basis positive increased Asia of U.S. XX% differences the change which and decrease negative exception Pac. In client with on of We in in by from Europe pandemic, Middle groups, of our XX organic mix international decreased basis was the increases. Africa. region, XX growth in in Lat X.X% Relative Germany was X notable was Organic second continue net all the in Moving and the revenue change negative X.X%. to our

decreases to national be experienced Asia our Pac was continue as challenging Conditions negative region each largest we XX.X%. the markets. in in of

quarter, slide continues Moving operating to for to be the a us. expenses priority which in on X,

expenses operating net margin decreased our adjusted charge, by Our ago. a the excluding year When expanded X.X% XXX from basis points. restructuring

our at decreased total basis increase to and a accrual in pandemic. across XX reflects benefits headcount our This of slide, improved of a of XXX and see ratio to operating on for low due a delevered expense an as due percentage basis had points, our this range reductions points a tax We can related accrual is XXXX. revenue year to the to compared incentives, salary you salaries by performance broad As and from our expense and net for temporary ago. response QX and agencies strong at in employees which payroll leverage base in

was compensation compared revenue incentive in X% year's Our net third quarter. for to of last expense X.X%

last revenue net year. incentives expense and of points equivalent X.X% headcount XX,XXX, including quarter year. of compared to At was total from labor a X.X% X% For our last worldwide roughly to a a approximately for expense X.X% Severance dispositions. was year revenue with decrease the from year the end, ago impact net XX of by X months, basis increased temporary ago is

decreased other expense was less travel direct other $XX half expenses Approximately mainly is to $XX sharp and by It to ago. and XX.X% due reflects a than costs. of office from our entertainment expense the especially and Our the approximately is change. year million XX.X%, million, decline our that notable office restructuring. to which decreased Occupancy due in that

Our which points revenue, in is flat last SG&A basis year. net expense was XX with

see X.X% the charge can headcount the in of of of right-hand charge slide, non-cash. is was to on you million As million our The side restructure $XX estate quarter. which and was real revenue the $XX.X net lower

brings expect $XX revenue. savings when from realize approximately total XXX basis to of annualized million million actions. against We from permanent to points the we XXXX annualized That savings net $XX to the to measured expect these restructuring

related and quarter, additional of During expand we program restructuring size identified to opportunities the the savings. the

significant structural will program. into our continue additional conclusion actions to mark expect also our of the and with our fourth which quarter savings, We restructuring

majority As be to quarter fourth related expect will actions our real Michael noted, the estate. of we

detail third and our reported our slide X. excluding results transparency side This and a to adjustments our adjusted through We diluted to Turning picture comparable results steps with present order performance. EPS. give quarter restructuring begins on on you EBITDA adjusted and left-hand in the to the of to reported better

related acquired a in small Our million. other the expense intangibles disposition column column charge million of to and restructuring was a loss the the had due million of amortization million. of tax X, The Below for in in the the quarter was businesses. expenses few non-strategic $XX.X expense $XX.X operating $XX.X was $X.X we benefit second in

we $XXX.X of you of the an to to slide, of the of net $XXX.X the settlement for similar million examinations. in the reported share On show result quarter $XX as the a each at due compared the first which slide nine year. ago. of the strong in of a earnings adjustments, can $X.XX operations the million diluted share. tax capital to $XXX.X from diluted We On impact quarter Finally, flow. used adjusted quarter, million slide -- last million, benefit X, bridge with $X.XX $XXX.X we cash third to quarter after-tax of in adjustments the At year's have very to with year see Investing adjusted working compared of million adjusted to $X.XX million tax per prior CapEx. share. diluted which $XX.X earnings months, turn these the our EPS X, diluted from per Cash was generated activities use for we for bridges foot

stock activities for used common financing Our $XXX.X mainly our million, dividend.

our September Slide $XXX liabilities, will teams level Total In slide mean with end of to sheet with outstanding debt current million we that both October maturities environment. balance unprecedented net strength our $X.XX equivalents. Under back our billion, at our on our maturity XX, I notes turn the in liquidity again X.X%, for as quarter was execute to we senior our of continue reiterate balance that, and sheet and $XXX.X that well our Our once We financially September remain Xst and in is was Michael. of And and on ended the quarter Slide debt quarter of billion summary XX. schedule. again, it commercially. pride as be like million. include XX of a $X would people. in our an repaid hand. I'll cash XX. portion current the of high depicts positioned at to maturity with of cash diversified increase the cash the XX The

Michael Roth

agency much and Thank much from accomplishments With their so our the so proud you, during partners, we're Ellen. of quarter. marketers both and change uncertainty,

Forbes. for Most a of our practices. demonstrate of Index outperform entire named the results the that strong business, tools company's In and was year women strength report collaboration. for row and FTSEXGood IPG our were to to adoption company the the our by talent, second continued our best one strategy, continuing employers America's ESG of our the long-term of of recognition industry. quality of our culture especially in the of are areas agency a recently, organization, data-centric early to in We digital-first across cross many distinctive we named

the the of fourth at the recognition. IPG key named addition, year year Awards row XXXX the in In most a marking was Effie received we holding the company industry U.S. effective

performance Turning One up across portfolio. health the our care. now to to that sector hold us is continues for

continue grow and receptive has foreseeable of custom, solutions. we that it's Architecture specific the industry care condition the bring business of media dedicated the As areas activity its as capabilities, our client care you relationships, to operations, disease, know, our global our operations the and portfolio. has we well care significant for This with IPG want the and our a future, knowledge an than Health a-quarter as specific totaling to of health very and at or within a geographic which health is an which and significant which strong expertise opportunities. client part more independents. marketing across us health to networks, ways a believe, been on or that well of much public includes in relations Whether agencies It's requisite marketing, best IPG a collaborate some services. portfolio. from of multi-agency U.S. these makes of degree there Open to our specialization, complementary only and in in experience which teams are care of to pharma and the technical in other we in the It's not higher-value bear health is area across good marketers the strengths their high sector can care challenges

well faring this we're so the in to is pandemic. reason ability Our do despite another space

building That on our marketing strategic developed now, media, segment technology and IPG, is that of meant discussed has digital our a of our years we've key IPG company a prospects on vision at in and calls going and a driver it a turnaround. for performance we has data-first forward. for fundamental to at prior growth been vision As number data, also early

to As charge, on an someone update I'd that us like that has lead to developments Philippe share helped who ask sector. in

Philippe Krakowsky

Thank you.

mentioned, to been increasingly led Michael the our and which evolving expertise of digital embed That As has significantly scale across the of an that consultative skills portfolio, data as to meeting a acquisition in needs develop marketing with the data landscape enhanced ethics investment much to are was us and factor Acxiom. commitment a that model in converging. our into media management leaned a expertise commitment technology, and success as key data

quarter mentioned, Michael across to high and degree Mediabrands two Initiative. we This continue a engagement see UM largest as major with brands, of clients

While the there's world. and particularly benefited of still in certain there stabilization media in conditions, macroeconomic improvement has the channels marketplace the regions have been in digital from uncertainty

UM believe APIs cross holding publishers in to lead responsible During its agencies, continued partnership to the a approach We addressable agency trade also only available regards parties. key tech to third and offerings by space. agencies, quarter, to innovation vital connecting with Kinesso and and developer be has firms alongside company media launching in the this to making notable will safety, lead regions are for marketers, this with consumers associations. of is Initiative's its and brand media but will have Reprise a first added community success more anniversary combination early when be solutions. not e-commerce saw of cultural growing positioning. its to marked to competitive roster. a to a quarter across carve launching the which the at which rate will also it its our developed distinctive in insights Salesforce and agency And The to significant the win allowed agency out data, the multiple

expectations with At the their also agencies On clients privacy all our optimize application is for will to data terms we the in for help of our clients continues and to With seeing meet for element demand access of be clients performance. it the investments ecosystem. IPG's high-quality in future to way a and partners specific layer our we're compliant our solutions media and overall. IPG's our make easier their advanced and strong offerings at core. needs. of technology to addressable make IPG entire the approach, of success kinds key Matterkind, their customized the agencies that in and to all A of service across a data own this part that our our ability Acxiom foundational

in Mediabrands. our work Acxiom, As such to we saw Kinesso align and further good progress

that tech our played IPG networks. more Kinesso mentioned CRM, media in marketing I are and with Notably, roles partnering they're PR while data, assets and integrated entire each well over creative, other in Matterkind the quarter, other, Finally, engaged pitches working as services our and increasingly business ways as media new also the agencies significant our with with with portfolio.

But progress people growth further another Michael. the enthusiastic be things transformational believe and engaged we work, can And active and be to person. So XXXX which for have FCB, played about these I'll There's accelerate that wins our once offerings with a science our pitches pass through on at roles XX work well with we will currently data are are this that Architecture example, our done McCann than collaborate back Open in Kinesso's Deutsch, as forward. to significant fully offerings. fully are integrate to and more teams still key driver to expect in as and capabilities able and going MRM one develop more

Michael Roth

Thank you, Philippe.

global the was giants deep FCB brand now Lilly, over driven including by gained agency biopharma and to surprising assignments FCB Pfizer, that network not Turning Novartis, new our client growth It's in engagements The global network. Sanofi. quarter, with creative Merck, at Health. extended quarter Genentech the

today FCB XX top of world's XX companies. fact, In with pharma works Health the now

Tarana by process with year-end. played retire been year nearly the and violence. who planned his we Worldgroup, was We our company, On At and a at and a Effie York McCann, for to its service to success. global front, launching awarded be significant strong office the and a future Best leadership among advertising #ActToo, These against we're office its his our who New and named which take named new most to that #MeToo the Innovation dovetails action Chief Harris FCB for this the to network in has earlier and Bill U.S. work. Worldgroup's Burke Grand they Burger named agency, the Awards. named Technology digital had network Diamond was COO platform Kolb for in network's Detour for movement IPG most the elevating for this most with continues to of our Whopper recently Effie confident distinctions digital And The consumer a MRM work announced recorded people, thank effective Bill Elsewhere at was are Chairman level our King. recognize FCB/SIX will McCann within decades, our and clients industry the effectiveness hired Company the decision work leader creative agency recently two been with part Harris Workplace succession, for the and CEO. effective evolution the sexual Officer. Fast

American operations and London North Unilever, step. standout the McCann And its seen behalf positive a and its COVID-XX China quarter, continued extremely business. for We've in Test to efforts, the to Acura. response continues this female a receive a to appointed out Bayer, key great most again at recently MediaHub MullenLowe McCann named work of new coming government's new for quarter Trace new on clients be and MullenLowe the CEO During including President once creative of also Health.

role management of promoted their and agency. the Officer MediaHub's have to Chief agency's Officer and client adding two highly very expertise equity, integrate Experience and As some the senior executives R/GA the capabilities. talented and over into to the new we footprint you Agency roles created team seen, across expanding a inclusion Chief Creative diversity, oversight sector the recently thereby may Midwest moved in to of CompassPoint

in bringing the PRWeek from adds issues On notable this continue Soccer CDC, front, also in to year. Aveeno first Clients include latest business & to brands, digital specialist MRM, honored continued more. the Innovation Johnson Mills. streak, brought and Shandwick with win healthcare, City, impressive of for Women's Huge at agency Johnson, the wins core our out model team. Purpose and Highlights League's such across them Angel with Technology, new the PR, technology. an intersection wins At and the from Workforce exciting team National to a agency new to an Architecture innovation bring to its Awards build Open the to crisis of together roster welcomed in look & business new and is last team professional Officer as collaborative Weber business engagement and its management to as which around other well the employee win assignments as continued marketing CMG, Neutrogena, week. Golin's Clean and Clear, Operations the The industry's Agency Chief General Shandwick as of Year Weber the Micron expertise

which Sports Another earned recently our Octagon, sports XXXX by at the notable Business in Awards. firm named marketing honor was Marketing, was Best Corporate Consulting, and Client Services

overall. They delivered work on and services with Thanks sector our the perform marketing better integrated regularly the the solutions. the of than rest our to of and their of Architecture round collaborative Our clients to to full continues our out suite Open are portfolio. agencies independent offerings combining IPG dedication people, U.S. IPG

around biggest the is recovery lockdowns public to be continue The the headlines a likely foreseeable world of business in challenges. future. challenged still fact this risk the continues health most as And recently stronger earlier was continues head modestly be visibly to key markets crucial holiday important quarter we is shown it's have and it in than But for pipeline risk new active as which into shopping to season. us, Our our includes to the year.

As significant mentioned, measures we across cost taken have our saving entire organization.

well the and capabilities state, investments well-positioned quarter. to opportunities takes and further with You've of fourth in that and discretionary place we the foundation IPG in balance our have client the months, with to that seen seen their past a plan so their the position to very In over we hold sound on our impact beginning time, take actions the alongside opportunities help this and to we've We're we is sharp but future. remain fully. estate feel positions expenses efficiently, strength great we real reductions unprecedented chiefly all our talent quarter, challenges make an ahead confident capitalize we when that relationships as relationships in have strong underpinned a recovery our clients on for in This With customers deepen in at current scale. financial doing six well sheet. we these creatively continue by

relevant Architecture Our offerings record to offerings and with coupled Open for continue highly IPG. solutions differentiators collaborative our tech data be track of and client

for all for As positioned such, remain our we well continued value creation long-term shareholders. also will

Philippe, share visibility as We landscape. key before will, to our forward our I'll questions. the always to into release answering I'd of capabilities questions, to we our course, turn on perspective of the keep continue the look And we through have you your But developments, in working the taking posted I transition transition, respect evolving role management major Philippe all role Q&A. to many highly of want X. to and COVID-XX I I'm the the CEO as IPG, we with the am I over press is with and recognize IPG January Philippe the the him look future. leave Philippe really to announcement in don't at I'll stated. taking clearly so Philippe's But blush, that in over over is with confident working that occurring of accolades CEO. on made I about and years to highly to these and confident about manage and the shaping really With that, excited turn for it forward as Board we

Operator

with comes [Operator Alexia first you. Quadrani question JPMorgan. Thank Our Instructions] from

is open. line Your

Alexia Quadrani

on congratulations the much, tenure at very you impressive very Thank and Michael IPG.

can mean you in quarter there's I'm a similarly you congratulations, and anticipating verticals transport gave other for detail verticals positive besides suggest your -- My obviously, you where is quarter, time. other bit if will give major first you're other curious the think growth things on when growth QX you little every really, you would areas you Michael, I number the I more more you now? health You question missed, be since verticals. disclosure seeing about some your lot but the strong. in A in asked curious probably and all auto are the look -- thank I things care. better. And any a positive challenge at is Philippe. about I'm the other if still of health organic seeing care, color are

Michael Roth

quarter you, a business that clearly Alexia. better this tone the the clearly the last is and Thank for quarter you than us all and Yes. was good regions. across see of Look, the

all In sectors, we quarter to in the than fact, in most of particular. a regions last for see retail But Asia growth better respect Pac. were with except

financial transportation And is transport and we industrials. between health seen government food sectors, still and little auto these and quarter beverage to in strong obviously, be in saw Other goods auto growth a two improvements two which consumer three we've all of and continues we down is and Although care bit and were very quarter services. and sectors. and of third positive. that but see that confident slow tech did have offerings sectors the The in down, we we're telecom,

of so much this specific. and And regional is both client

in very our strength McCann, Continental growth, had was positive as at when Europe, as in saw So, look well where Europe. media offerings we client-specific and it you we Continental

is Asia across the over what's just X% the when you we our business. like Pac, Typically, quarter now, year. overall, our a quarter, and reduction, how up know how's But saw with are is continue until into difficult set for it's questions the very our respect the there. come projects quarter. -- competitive to project-oriented good that happening shopping biggest that makes of board we we beat project we Momentums environment, the to and to I we like will it's to tone respond Mortons, clients our that is But see strongly are given you throughout to right positive. the projects. as fourth example. But Octagons going said, just And not the businesses And the our business. are the X% visibility very Jack holiday to up holiday Project clients refer and believe

environment compete get our capabilities And our that have media providers. to technology, believe well. our why And to environment we that to offerings in authenticity between little than that with the cost I it's invest agencies our environment, consulting clients lower continue That towards the to capabilities their our we e-commerce should will on e-commerce creative consideration. certainly the our combine They brand brands you this have take think and e-commerce and competitive brands frankly certainly they into and opportunities. project moving job of in our help part we're So, that working to messages. And clients that a those it's is in in business, our brand is e-commerce on the that's more we're direct-to-consumer other important very buy have bit in. point and the said just a because the as event than

So at with on we're continue all exceed we have things capabilities all and to and we're the sector. path our resources that tools our the look confident our you if of a the clients to that currently, doing

Alexia Quadrani

just a been at and -- additive comments great ways And your over monetize on to assets. done areas on those from with there's profitability Philippe's strength kind very cost-plus existing those if different to over accretive follow-up And Acxiom the curious of data and that of job additive your the existing could clearly analytics model? Kinesso. I'm business model. they've a I'm in you've other time sort such if and maybe time curious to be

Michael Roth

and and whole we and that's and our Mediabrands come the value based strategy. services. our Architecture structure in based I sure. in with Kinesso For mean And and formation that's it the the on the of and putting ourselves value where rest on offerings, Matterkind the is where Open margins part all really the of of marketplace it's with can distinguish services together

that. comments, to And made investments. I to his you don't that's As if said Philippe significant where add I in mean we've anything know want Philippe

Philippe Krakowsky

licensed layer true mean streams or think find add in we I the technology us ways exactly essentially be performance also can technology can can of that would it's who where models. it's valued to places value that. then partnerships No revenue where I our to and be take the underlying IP different

you e-comm and you link media technology do saying think addressable as interesting if capabilities things we're up what data, Michael was I in then think I building some marketing around media there can -- performance. and our with

Michael Roth

of have in metrics performance kind there. existing already that those we And have contracts

Alexia Quadrani

Thank both very much. right. you All

Michael Roth

Thank Alexia. support, you for your

Operator

you. Thank

John with Research. Wolfe question Janedis comes from next Our

is open. line Your

John Janedis

Thank you. Congratulations. rough. was Michael that quite a

know about days the the fourth think early I in January. used quarter you in say to you'll

still client that's the changes So relationship was of case. towards normalcy we the move maybe the some hopefully in are as in you behavior wondering I to with seeing what extent investors know of was out others a you I seeing noting? of step As least and if oftentimes change wondering worth from coming downturns you're expectation agency? anything at function an there's and terms

Michael Roth

remote We meetings. interesting the consultations Yeah. putting on And us constantly John. what's call airplanes client by more this you. a to get Congratulations have thank on way we're before. have working have good than -- and to is we we probably about had buy on don't have Look these

So marketplace. a there authenticity that of and calls on compete conference focus relationships building in lot brand and with for are to necessary brand and what's clients them our this

creative continues such the to unique since media have the So both we to spend our our to capabilities Kinesso, table have technology we and these none -- our in as we have Obviously are Architecture have And the our have of Experiential, that digital well. in through is been platforms. we've model, works outperform unless that at with Open we when our have and this capabilities investing unique those clients of -- Mediabrands, conversations sitting our performance, PR, terms we capabilities Creative. we this can are all --

can to So share goods a clients itself very they're competitors. market that's that's as improvement very well regionally, head-to-head how our And yeah to their interested as environment. in. competitive that And is with in are we market I frankly help gain our have saw for share in both conversations conversations clients why them an the lend and because think much what consumer with we you spend them gain the

John Janedis

then Ellen. separately it. Got And maybe for

Given the the were like than you expected. restructuring to I just on to able expansion, wanted margin it quicker seems I clarify. have execute would

run $XXX can way, those rate said you range quarter wanted hit think you And to the actions you, million will the that incremental quarter? savings just that is fourth any in I million fourth to give ask the permanent on fourth $XXX I a be quarter and current additive. savings of will permanent action? of

Ellen Johnson

Good Thank the for you Yes. morning. question.

We revenue. First it you million is about saying against points of the all, XXXX when you we're savings basis which to correctly. estimate to XXX $XXX date million $XXX from it heard measure

looking As the actions the we far quarter, in fourth as opportunities. are for additional

looking will estate. some just related able from perspective in hybrid all that to in all learnings, and it remain time, first it to a the they real give of world this be learnings to important major cities to the we around you be had key actually order we're to be we've of right? mentioned, primarily office And we -- are more take very The can will a right, place, really models. will -- As but period action there can definitely we have

so end agencies that can program. we as They're we're we're quarter and opportunity our the will take really underway, as encouraging to So advantage the with which some leases. more to exiting much at looking really of in that, to going try accomplish

Michael Roth

we to have environment from our working prior our any in really are were people -- of group, going from be And maybe future into the to our in impressive find on But more been how States key working estate for and X% efficient offices. and rethinking offices think working clearly is to opportunities this a home. from working going see front. there's United London structure the at people home the coming and what's their I group, there. that footprint question in globe, home necessary. Obviously, large more real to What's real opportunities how looking Ellen's Europe and flexible areas look really terms the are agencies don't and across of this the the operate presence our given future, at -- the our and to present with estate are we're our

is, workplace really the outperformed when trying take actions. environment XXXX be 'XX. And ourselves, came, that this be and And so to well off positioned. took position we we're when now, we comes So different. need is the going XXXX in to and a We really XXXX -- to of whatever running. what made were recovery and structural along, changes do lot we're happened And obviously

terms be real money there's estate to our a bulk there's the of quarter the footprint. out. square looking the and more be non-cash. to charge restructuring goal estate said, real at of we same And fourth XXX,XXX Obviously, feet is as So, to the going the quarter, be position we in in in had. lot and Last took is of

John Janedis

Thank much. you, very

Operator

question next from Your BMO. Salmon with Dan comes

open. is line Your

Dan Salmon

two ever. everyone. clients morning shift than that ever, Good Great. Michael, e-commerce right. hometown helping that shops with and to your your are moving Huge. faster two in firms' agencies They've those I've and also area issue, transition a expertise All seen the lately. R/GA time have management CEO during also as And flourished then on got long-term seems for but after of important more the Philippe e-commerce that services? And one quick you than Could opportunity little short-term bit elaborate a in that.

Michael Roth

Yes.

some at is a Architecture technology, positioned and very takes digital, Open that presence long-term the his together added and got I our has as will plus e-commerce and of at shining I existing e-commerce of new very think the a prospects combination well in that unique creative, R/GA, digital R/GA. agencies, R/GA think, like Huge but of all changes have. Acxiom, run Open a we team structure the new win have of media, agencies management in said And And and a expertise very think our place. are Huge working to a people that They're on really continue I our I've privacy And business think, now, R/GA. we're He's our Architecture They're certainly light already their with well clients clear some R/GA offering. we dealing of terms is Kinesso, critical. and Matterkind it the did -- strong. part And be Sean all at between capabilities. I creative as because what's in management

that confident at Huge. some new of go-to-market of time have a looking of notwithstanding certain people I'm So, and its they whenever there's of a and that, strategies a part with CEO, there's spent management changes -- repositioning R/GA and the same lot the

IPG as portfolio. know, will So, those areas and I continue the these that transformation, assets to. digital to Huge business and and expertise on are be organizations And the very R/GA believe, you bring really within important e-commerce particularly can the

Dan Salmon

Michael, thanks, Board, going the and chairing every you're a still to you're so Great. to us always welcome be back once in while. join come And

So...

Michael Roth

Well, different, yes. I mean, Executive Chairman little yes. is a

that's the continuing with do team shape and know one. excited This about said it. said, working we help and with Philippe through we're together. management is Philippe excited team go. I CEO. opportunity. I'm environment the I'm this from And But and I this Executive between the what working ready day I've Chairman this really Chairman, manage at IPG. that to am excited But Chairman, difference Philippe team, am people excited to I the I you and things have and to I his put moving of the and obviously, whole And IPG. mean, much pretty they're the his through I as forward to will of really can the how able about team team As Executive and future can't and tell proud that and all accomplish. about going together I been we've forward. we've an that as look, amazing been about

Dan Salmon

and IPG convince and Philippe, is then Acxiom you acquisition I baton for guess do everyone led you Really take question So that easy the tech company? a there. the you. on How that

Kinesso. the You're development leading of

that is feel you I of technology indeed a think company. more it strongly

comment you IPG very company So services take as relative broadly company tech the you a the tech Philippe at least services company? baton just or can a of to idea just the on here, a marketing as

Philippe Krakowsky

Dan this. know, we've about talked I think You

happens such probably care do, that space. company. marketing But as what got so say we've to it's you have, said, creative I our whether in think think what in evolve it's services, ideation to that's a and the an agencies health overstatement tech say clearly what Michael exceptional I strength model the we

valuable that technology the were so this the services, actually to more so enables of that data be also the to we business, the and think so it be as leaking layer companies. or services, to that don't have we out for And the saying I calls, and of valuable technology So the platforms challenge in that more into one can clients. we is the the are ultimately the into software earlier embedding by risk value services

we and more we as clearly precise build So to I accountability do what from and don't where think we saying it's the to that's and model. simple We the we see we business switch. one I do become What us flipped "Oh the we evolving more become is stickier other." and there's go

Michael Roth

the model that. And Architecture And marketplace. whole That's resonating point some Architecture to lends Open in it well ago, started Open XX of The is okay? the Architecture. we really years itself Open

Open the at you Architecture it wins, performance-based us. client of the assets structures PR capability sitting which for new you're you team around that better compensation the and with most environment, best-in-class the business win-win business, resources ability creative capability the them taking of If in them. is lends a Architecture compelling a within really have and of about challenges of side Open on marketplace. for In care we coupled the and when to table our look the in in offering. a all have they is Architecture, business better best-in-class a and health an part us talk bring that hopefully, And relationships, of performance people the and Open to resonates the can And

Dan Salmon

both. Thank you Great.

Operator

you. Thank

from Our Nollen with comes next Macquarie. question Tim

Your line is open.

Tim Nollen

a Thanks lot. Great.

on to Let marketing was to both came the new some doing Philippe which my possible let's of around, Philippe few a couple technology. on still for me the company thought coming big for perhaps here. when you people role. ones following changes it for very also add turn There call in just you to are what previous more Michael congratulations My this and is question XXXX

now Google, DOJ. the by got being You've investigated

you and Apple manage is Thanks. have can identifiers what IPG you we got – feel eliminations has could of want changes major, marketplace? I or given And on there other just of the devices can position do? You've assets, IPG do come with cookies, fundamental these need we online to expect? understand, party more of expect changes, more you forth. that and these what major the Chrome in so Acxiom with if What changes what changes to to the

Philippe Krakowsky

four In minutes on the that this call. remain

Tim Nollen

Exactly. Yeah.

Philippe Krakowsky

think I something order thought I expertise management were needed acquisition, important. -- we we scale did Acxiom data at when there Look, management that we data thought we that first-party that we partnerships. the can the was you in don't to that And without was to get that, clear believe get future.

at you and Kinesso it's look up well, with to be I when bit think the going like of And something so your APIs get open to developing we to a just partners what both. did as ultimately,

points. the said, we an I be solution doesn't Architecture that we've what going we're where solving we -- every able to everything touch for have it need for as but got all of think we're mean opportunity client not for Open with Michael

up partner you providers on depending to of with that need kinds different depending the sector, find cetera. You et the use case on

in time team I the unpack something you got could said, very, management as that the So, for it's spend some we a greater very I we've four on And if a across group. on minutes can think we currently with as clearly question. detail, what's it's going big

Michael Roth

Yeah.

big historically on the did transaction. we've the me until we transactions fact that, Let done just Acxiom acquisition add not the side,

at this wish we look at, we that strategic. into of capabilities IPG? we right expansion. had we our that people we're will was wish we need when no, a We're after acquisitions large we we'll When see any bolt-on don't there continue our any to of continue the list Directors to our so Board we expertise, your And fill not. terms for and that big bought lead within data to years need big gaps transactions necessary, list to solved answer horizon that And is Acxiom. the ago we in do any But that any question And and see or of do we be our part Another to And in couple compete. that of us our we look aren't is think list. on when transactions strategy are at wish looking we Obviously to with that actually conversation growth we're margin acquisitions out sector, afternoon. markets, analytics need. on, a there and this or going now,

Tim Nollen

Thank very you much.

Operator

Thank you.

from MoffettNathanson. is question last Our Michael Nathanson with

Michael Nathanson

last And brief. Since it's you. I'll is Philippe the an this too. Thank question, and run be congratulations, been congratulations amazing Michael

big out. some bets a made at Michael. the I'll and you You I lay-up give they've guess worked end

you're going into Given what -- you just said meeting. planning your about

what aggressive where congratulated for you on of business, trying business know here? wouldn't the, what advantage his Given advantage stability -- why more your take I become and of you know you costs, rates your much, John not I'm equity promise buyback wouldn't understand, of markets -- aggressive about to about to agencies. more And kind your be the interest price why are some guess and you of you your take dividend at I is? pretty the upgrade, know stock financial made why you where ratings on

Michael Roth

appreciate I -- the of the question. truly One

But a transparent. the sure fair make is the balance be will prospects borrowed focusing to to And now sheet transaction. back money, we And obviously things to balance One right do And when that back the buybacks. point, that right buybacks. always we amount maintain we're question investment-grade enough. status. to our is to sheet business no we'll that There's of on is of to continue. position. And the Acxiom we've want we our dividends. And in get getting been get our strong right We

is question. argue long-term at you The a right you always buybacks is valid is on have it's the to And look on. price question can at a think But the I what stock so and So when time? basis.

in buybacks spend amount look in Directors at of our of It's the billion. you about at question buybacks, of with we that conversation our will the buybacks or and total year and shareholders legitimate dividends be, done money, what take the we importance in we And capital every of in And looking dividends $X place excess a returning to history If Board the a will the it. we've form between our whether significant at of understand continue look buybacks. allocation marketplace. and to of it

Michael Nathanson

Michael. Thanks, Okay.

Jerry Leshne

in you forward you Thank thank call. and much. all. you Well very safe to the And be look next

Operator

Thank concludes you That today's conference. for participating.

may You disconnect this at time.

The Interpublic Group of Companies, Inc. (IPG) 21 Oct 202020 Q3 Earnings call transcript