IPG - Earnings call transcript Q4 2020 | The Interpublic Group of Companies, Inc.

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Operator

Good morning and welcome to the Interpublic Group Fourth Quarter and Full Year 2020 Conference Call. [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. Jerry Leshne, Senior Vice President of Investor Relations. begin. may you Sir,

Jerry Leshne

you by with and Philippe Chief Johnson, Thank we by This are our Officer. joined Krakowsky, Financial for morning. us. being morning, Ellen Good our CEO

release usual, and website As posted have our interpublic.com. our presentation on we slide our earnings

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

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

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

Philippe Krakowsky

for begin usual on you, joining performance quarter Thank you full updates morning. and I of then additional to will for some a followed year. in be details. level with I with conclude our the provide the agencies Jerry our view this us will high Ellen our and by thank all will Q&A.

I safe foremost, that and and hope families remain your First healthy you pandemic. continue to and during the

lives. the still very is the much virus all in we globe, As presence our across much daily of know, a

their the the clearly of clients crisis to business. commitment over been Their well to our and subject across priority our remarkable our have our resilience appreciation for as such, challenges. effort. IPG, extraordinary their past very that mitigate acknowledge admiration year, and for impact our our fact important the continues first achievements I and to our to a as ongoing to been have It’s range on want As express the people of colleagues and be health in

fourth at place we the our quarter revenue continue are and X.X%. our a performance should In pleased of be organic under top challenging year our to solid full change us that to the report negative quarter, growth was again to of net now results, fourth Moving sector. conditions once that

XXXX You significant included result from which organic our of X.X%, QX losses. growth certain that will was headwinds recall client

was for So, that for worth a it’s continuing in QX from markets, of in X.X% were the noting the lapping quarter, of year’s context, U.S. which book quarter fourth similarly fourth X.X% business our decrease In comp growth growth essentially against challenging was organic U.S., XXXX XXXX, number. our X.X% last organic was quarter decrease international In ‘XX. in underlying XX.X%. the a QX we

net our For the revenue year, full was organic X.X%. decrease

and the would on expect, those businesses of to pandemic, varying the continue clients. effect you results our widely impacts had has As which reflect

as companies, which positive in markets situation that event Our continue the build planning to quarter, public fourth quarter, continued most brunt the during in in restrictions such to the strong and are bear the in we media the gatherings health given typically in particular, momentum Conversely, place disciplines remained world. around on of investment.

have in strongly and expenses, to continued respect teams to the sectors fourth discipline. client health With the been retail, operating such again as of leaders crisis, which once healthcare duration the perform outstanding growth demonstrated Additionally, quarter. for our our

the from for XX ago year report points from restructuring, charge to pleased are we basis result, that to quarter, XX.X%. for adjusted a which a increased excludes our As EBITDA XX.X% margin a

$X.XX reported and for per as and For share, was restructuring adjusted was the other our as quarter, $X.XX items. diluted earnings

strategic, new to for key the increased thinking model restructuring business As with would estate for long-term component our real with you moving of of on need role had environment a and reductions our close operating evolve execute respect services. of be from a that is also is in focus hybrid work reduced to we that realities. evident workplace delivery our in year we to the expense to previously results our continue our an to A this We as driving to program. home morning, mentioned actions the and through

the diligent identifying and into restructuring related year, business a of better so opportunities wide During range our and going was team forward savings the to as XXXX in position beyond.

restructuring it can a year yield the full see, to was million. largely though expect operating this that that of led the significant, We reductions expense is As annual will fourth $XXX permanent our charge quarter actions now non-cash. in range you for

that structure, are of our strongest it’s very driving expense differentiated result out respect in offerings, demand to growth. in development year secular remaining success investment order disciplined are to marketplace. invest in business during strategic areas point important and continue to opportunity the in continues and to While That we in and which capabilities with to accelerate our the in

of velocity further aware up with digital That’s that, are even consumers a We the of in year brands change the where increasingly result interact of last the pandemic, space. businesses. picked the and as

media create existing together are well as as ability growth wins. marketing encouraged clients our that creativity, solutions resulting technology with bring We in and that and to data new is client

a strong core brands For now, capabilities. developed has platform, through been architecture talent. and This years, defined we to have commitment recent with our on many have solutions clients and customized open in over very resources of We evolving and behalf data a In about of of these bring which our integrated capabilities. agency together our clearly destination differentiated identities strong management the period offerings culture for years. data spoken top sometime in importance includes IPG we making industry

when our when in bears forward. and comes are personally ecosystem our consumer It of digital inclusion. on coming remain concerns might to is it And comes practices, is equity be this of and the These it my few This how growing a and together focused better helpful to has at our pillar of on to do something highlights taken I strong thought ethics work key new will in well IPG our point, the business I doing mention going ahead behalf role. position media to we of clients. it of in on privacy. the that provide transparency commitment culture they a current priorities all strategic Another scrutiny regarding are our also

awarded one size the agencies in pitch. Also healthcare space our our architecture of a CPG CRM client resulted open created clients at well Asia’s This and first the agencies Matterkind data-driven creative an and our in year. responsibility our Kinesso number specific the had projected data well client nearly our by a marketing telecom, generate open a and of independent by during on national markets. brought auto The specialty from and and audiences. proposed a role In new these in of As as address. activity, the contracts domestic of proactively using global account the across with that you from in OEM client ability an and healthcare of remit patented leading our one ideas In PR common a that each access North advertising data we last from In retentions Acxiom in unique This played QX, our May the to an networks of software issues creative largest which and doubled to channels. capabilities last decision-making, several multiyear global of revenue algorithmic large integrated layer as know, of back tailored investment year, existing our team production sector, as within creative arena, to With two pitch advertising can relationship resulted expanded together that Matterkind, half consumer and well addressable sector, launched we existing offering and doubling included in architecture as engagement. ad agencies. client annualized insights wins our this range media specialist of all we several inform oversee backed real-time again of Acxiom Acxiom, client in media to is Kinesso, we others at business again examples tech media global an the to to in optimizes as resources to America as studio. we broaden denominator an from digital innovative their in adding a in teams help some an solution the holistically all global sizable win

we Our strategic technology to IP-based a goal partner, opening derive they marketing should their is effect Over of new have this connecting to seek and also believe for businesses. more become us. supporting from streams needs performance revenue more time, to power as client the and value

a terms services, and say financial of full and the any The of question and are performance. health significant both function organic of open result by hinges to relevance and is consistent of vantage economic tech-enabled and architecture be deliver digital the and XXXX that is focus crisis. this to and in point another on participate with is for offerings. of macro But bottom-up as To year to timing from of e-commerce approach a resolution group. bringing connected magnitude those performance marketplace competitiveness media however of approach It’s uncertainty relatively the reside a seen Another to caliber and integration with well course services and There our analysis, together is of clients, businesses. economic the ahead a our well-positioned to because data means We of vital range the conversations of visibility their this full fully our the crisis. the expect a key year of significant recovery our growth recovery. based experience area it where talent our the on a the we clients to remains of acceleration building situation post agencies. by control, health industry fully remains customer macro us and transformation within which feel return it’s top is fair business promise our the XXXX, provide positive of into work, growth beyond the our the plan XXXX has on that challenged. media of range commerce, the a where creative strong confident stronger offering, are we since today, over remain impact as potential area we of to in also or specialist conditions XXXX on an and systems growing year digital global has not looking we This area that This our are of driven capabilities Heading within we clear, timing that as and complete. our clearly strength of offerings for

have you us. way to We will continue from realized see of will expense benefit revenue align we in disciplined to the course expect significant with come of of restructuring. expenses the savings our Further,

and our share has long-term view resources, Ellen raise and As share. for quadrupled. quarterly quality This In to in per announce of to that and pleased as On things over this will year the the our on that morning always, success. people of unfolds. to calls, note, our our we in our by during confidence we X% marks fuel more a our all the will now dividend hand together, longer for in-depth time year Board’s I are our capabilities, our dividend per of will we term provide believe which $X.XX are these review our value than perspective to prospects, our continue increases it results. of IPG’s more decision quarterly details over place consecutive our collective Underscoring IPG’s our of namely operating to drivers dividend quarterly stakeholders ninth regularly summary,

Ellen Johnson

to Thank is and hoping reiterate you. I and want Philippe’s everyone that comments healthy. safe

client international Beginning my was our the the decrease In in of markets our improved U.S., track outperformed only change presentation X and quarter of net organic compared less to quarter. XX.X% that environment website. that in EBITDA that UK, parts while were and sequentially Europe U.S. revenue a slides a a remarks accompany was year by Asia-Pacific, Fourth pandemic with As XX.X%. the the negative lockdowns the our was to impacted margin U.S. which of and the on macroeconomic sectors charges of in revenue. XX.X% will X.X%, and presentation, the was due reminder, Slide and effects our the The some adjusted before restructuring ago. in to international in X.X% mix the weighed decrease on organic offerings current the

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

charge diluted adjusted non-operating per the businesses. the acquired amortization certain per sales of The on earnings was restructuring the earnings while adjustments and reported, after-tax diluted losses as of quarter the intangibles, For $X.XX share of share our impact for non-strategic is exclude the small $X.XX.

year continues and Our cash billion cash flow the $X.X for to and operations $X.X of billion facilities solid from credit be end. was committed at strong at our at liquidity quarter

charges expect we $XXX.X Our of approximately during will savings expense annualized permanent result year, million in resulted in program restructuring which million. the $XXX of

the approved quarterly X% our dividend noted, a program. per We This to as our under actions Philippe our Board have to concluded increase $X.XX share. morning,

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

points, points. impact $X.XX the basis the small divestitures the disposition of revenue of revenue change XX is QX months. net Slide to impact was over XX the negative XXXX, rates basis Turning were the Compared quarter was in which XX exchange past of on QX X, in businesses certain the non-strategic our Net billion. to positive

Our reviews move additional expect continue are dispositions to as and small forward. ongoing we have to we

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

As break our you for was At of organic we segments. can the slide, organic our right segment X.X%. our change negative of out see that The side hand full to change on in bottom of year X.X%. the brings the the this decrease a EM slide,

As and and digital domestic collaborative media, technology is our and re-branded weight within negative the segment, highly a creatively-led the pandemic. DXTRA, agencies, global sports live the reflects most our significantly reminder, integrated XX.X%, offerings, data specialists. has which organic service in been group our global marketing marketing of The the our was specialists. and EM disproportionate events of by CMG, IPG impacted change the quarter includes which

organic negative XX% in net revenue in other from to make UK; Asia-Pac; Continental change our U.S., X.X% change XX% by Moving our revenue revenue of on in XX.X%. X.X% comparisons year international organically XX% group; quarter, in which organically. region, organic net the a declined of negative against organic was LatAm up the challenging which region, in the By X.X% to in X.X% Slide and fourth was ago. negative our The negative XX.X% X, decrease our our increased revenue, quarter was Europe; net markets, markets

the Moving on to Slide X in and operating expenses quarter.

a decrease our net X% expenses decreased revenue in a which and in excluding the amortization, margin by Our XX restructuring than adjusted operating when ago from charge year more as our was points. result, expanded basis

on expense unchanged as base see due for ratio the XXXX. by of dollar expense related net can net of was decreased to the percentage you absolute and slide, As and total Underneath ratio our a although payroll, that, revenue of tax this from salaries X.X%, revenue. in XX.X%, our benefits increased lower fourth terms quarter

restructuring, compensation, significant incentive severance end, very have X.X% and temporary office headcount ago quarter and of net basis business our labor. expenses result direct Also for severance on slide, this year which regular our was on with expense leverage X.X% X.X% a and a At year total and on XXX decreased was for performance-based we approximately a other ago XX% dispositions. our We of points expense revenue revenue. XX,XXX, to worldwide our decrease de-levered compared as a from of net attrition and

We in have T&A. our occupancy for a continue to decrease significant expense and

Our ago. the same SG&A which year expense is of X% as net was revenue, a

and real quarter. real slide, to of the lower executed and a last right estate We headcount charge X restructure order headcount make estate of in to net you As Slide the XX.X% the on footprint hand months. to changes the is side the our see in restructuring revenue of can our structural program. summary was X over

the million, million $XXX.X charge was total you which of was non-cash. have seen, $XXX.X As

a teams ultimately headcount we the opportunities through real permanent Between were went of million. we approximately year, footprint able and real reduce $XXX identify our and to As continue of realize our by to savings level expect actions, XX%. estate we our estate significant annual to

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

full was after-tax which tax diluted of and few our expense for Our share the expenses, non-strategic amortization X, in of of these expense of quarter charge similar see impact was can the foot the or column Below in The million. benefit operating the at comparability. and to small of you $X.XX. disposition in related continuity adjustments $X.XX second $XX.X slide, to a million businesses. $XX.X acquired the was adjusted adjustments, had we $XX.X of Slide Column intangibles the restructuring a for for million. At EPS bridges $XXX.X diluted million other as in loss EPS year, X reported diluted depicts the again the due

million. expense The $XX.X in Full $XXX.X of our of XX.X%, adjusted a adjusted Note year a diluted million. $X.XX. was discrete result million. over benefit with our turn is of were low the which at Dispositions amortization range of is for restructuring XXXX. $X.X items operations generated impact a Cash of XX, which capital company’s compared billion, year the effective Our On highest tax was in charges from resulted ago. we $XX course flow The the of XXXX was working year targeted. rate $XXX full includes the the Slide the the $XXX million. was that is year compares $X.X the The $XXX.X full book to for million to we loss EPS year. in full cash had million history. billion comparison from level end That in year

out factors typically growth our areas year. couple business One in return seasonally pointed the we fourth strong result capital our of can past, growth with that quarter. from volatile, was particularly notably generate a the of cash While to working capital in drove strong our as in working for be a

growth use to On hand, fully some of recover pandemic. from businesses the impact working with that the yet the other capital have of our ongoing

continue management We area. focus to and insight and of this on in invest

million. of year, used million in the activities CapEx investing $XXX $XXX reflecting Our our mainly

Our increased financing activities $XXX million.

You of of of common dividend. $XXX debt with We course the that matured used issuance the $XXX October. that in $XXX will debt of the million recall raised pre-funded long-term we our that in for new over long-term year repayment our million the March stock million

is cash cash year XX We in was and balance the of $X.X billion with ended portion our billion. Slide increase net sheet. Our equivalents. $X.X of the current

in X.XX% year outstanding debt is reflected In the diversified Our our to our and and was XX, on $XXX unprecedented back commercially. paid summary, October million, a maturity these I cash with to high teams plan under efforts schedule. environment. our maturities Slide both our And positioned remain senior to for maturity, of note matures Having like of debt repaying people. our with billion. our $X.X I on reiterate our year end continue will it And this in of hand. total execute well balance October XX we that, liabilities. and turn financially depicts current Slide the liquidity, level pride and notes strength We at on The sheet would an at and in off gratitude of Philippe.

Philippe Krakowsky

Thanks, Ellen.

behind integrated teams as our level to allows to opportunities. portfolio when so of brands agency know, we client As and strategy for to and to of our address invest create greater embed expertise that a hallmark across our has the digital people you activate our been long-term collaboration

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segment, the The DXTRA quarter, puts hybrid IPG which our with the global Juice, to promote unveiled Turning with wins during new Shandwick called announced Weber agency employee General also client recognized added workforce all existing at to for agency clients, a its permanent Roche a and model global also and its flexibility core. roster. Group work including Mills was CDC Agency. with FCB and the ANA the XXXX new Multicultural named of Martin at along to chairwoman lifespan awards, Americans. the IW across Canada, [indiscernible] immunization Excellence The the

ESG, diversity, area including equity focus. of key the years, made have holding for and a inclusion, Turning many we to companies,

marketing live, As employees work a citizen healthier a services vote, leader and and the in communities where a a planet. and our sustainably, the responsibility healthier we of contributing to welcome society operate to

the we this including diverse as and a In how reduce train recent our working years, fully to gas emissions commitment, further world. live promote reporting. progress made as steady around well sustainability, we are more build by have reassessing planning, workforce and action greenhouse in We into and hire, on

XXX the the month, year U.S. Campaign public we was Index were the past also As ESG FTSE the a Jones practices. top on Index for for global Rights a Human and included two the top Index running. result, ESG Good Sustainability performers further Canadian the during the row, Corporate in with index recognized that which quintile America, and quarter identifies largest North second this just named In Equality IPG and XXth second for the consecutive to Index, Gender-Equality including sustainability the in with year for were among year of companies. strong honors, recognizes Bloomberg the the We Dow companies

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back expertise years our company. incorporate Another is every into success future with of and decision do aspect the essential to to power of the several data strategy and data company. to the Understanding absolutely core has of going current its our

as ahead brand look safety, respects an that conscious is the all As approach to consumer space. and promotes privacy of increased media regulation be we digital ethical will crucial in and which

forward, and continue tech-enabled user understanding build offerings holistic deliver personalized marketing is us technology within makes experiences what businesses is This informed to what vision thrive brands. marketing will us IPG a the partner that by and ensuring digital our in is more key allow be to the This confident for to for in in accountable Going long-term audiences. our layer Ultimately, solutions, we enhance clients’ prospects. of to will our the economy.

in year is to participate economic the recovery. positioned ahead, well at Looking global know the IPG we

the first this world was quarter that this is open and we to full XXXX recovery, The decisions return in in of consistent that policy variable progress health the burdened largely I with our with remained earlier, especially to our unaffected but the major group. on growth pandemic significant due while our public year of and COVID, organic we by year by an line to has the growth the As last in related true given stated a face markets. And over it’s year, macroeconomic question. during to industry positive the of all fully in to for to the outperformance deliver expect year’s top year course part fact peer remain timing that’s economic relative does the

these get as As will larger we better as been our recovery sectors visibility of well that the pandemic, become to the issues, rate industry impacted clearer. by have of the most pace progress in

unfolds, quarterly you you our year our the call as and expectations. we regularly always, perspective will As keep on updated on with we’ll review our

creates a our value of businesses for our is course, which invest our helped keeping pay in clients our our of us to position the continue down to ultimately sector. has a intend establish sheet flexibility, people financial and In and will, continue to focus We further debt. and we long-standing maintaining differentiate growth just what offerings, balance behind with developing to leadership of strong on in

the longer clear a announced to to for our in is Board priority in of by commitment action which our also ongoing confidence remains the for capital speaks today, Our the prospects And return dividend us. company. term

look forward So a as your to part now. to Thanks repurchase look position approach share questions a your to creation. in time. of return value to we sustain for again being We balanced to forward

Operator

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

ahead. go may You

Alexia Quadrani

you welcome, so thank couple questions. much had Hi, and Philippe. two I a –

Europe. a any bit paused has that movement you softness in account little across kind client how if I softness you of any color year? if And terms can guess maybe verticals elaborate in or start has the is well? it widespread vein Europe that little continued of disciplines, in as First, indication could the really early. Really us maybe now of it’s on know a into the bit I staying give in and

Philippe Krakowsky

was during and I you that just what year. expecting. vis-à-vis fourth think to the it we’ve Look, Hi, in of that question. indicative not course just to XXXX. I I into matter or of for that’s something the degree we’re Alexia. looking at really of when the it’s be the going wouldn’t But project the a a a you really continuation seen of trend think came delta international saw U.S. that Thank that quarter

of And heavily not the that driver all think probably skews performer mix, our X:X. So of markets. and strongest a getting by U.S. just over was built Interpublic a that direct-to-consumer exists you, also that very to I of the first fact care in factor health obviously, key about really is reflective so the And And was sort say sector advertising, I’d year in it’s that that’s that how terms and was time. something that most foremost, of world function right? for point out underneath of of that I’d

we sectors. – So care in clearly client the had in what one has And project as U.S. sail QX also our lot wind place is revenue. health strongest the a I of would think much of health is the to more than where a around care of in globe elsewhere

of more that saw realized we So here.

performer in The second was strong for that how would is I media of us QX. piece split think a about

when going back what we media. clients dialed had the was situation the digital So that, reacted about largely been talked hit QX, by fact economic the pandemic to that the in on with shutting down

QX. back QX. It that we stronger So see came started in to come in back

our are than much in was X% of to call side probably of the that significantly the what we impact project-based two has was think favor. pandemic the by U.S. restrictions our even things. that that throughout last actually the about then as about impact calls risk were U.S. and clearly and anybody’s larger on to a businesses. to out went rest business And the holiday-themed call I kind could U.S. this events, largest more QX a spend, we there played out, a that clearly our did squeeze have then played on again, a so the outside QX upside. so, level to the more Acxiom a greater I events again it impacted other it international guess was on activation, the definitely of lastly, and is and were clearly out was so factors to world. you, virtue in not less on of much on the as there Ex-U.S., It’s a of the than year. was of retail degree year it market, do was of experiential I right. And it that business And and with cyclical And of fact fact said kind business, year, the in through project gatherings, the where project X:X that less an we you susceptible think pandemic couple have going And clearly there to there of

continuity a has comfortable. get will that the our it then of succession of that and feel things our sort of sense a that you – hopefully, good So lot in is of clients about terms to people a and that’s one of

the may planning on good that be still on things are is I of a quarter-by-quarter don’t have tell about a reporting you on we not that month-by-month to sorry one basis, kind that. not think – so of – I that we

So limited a what in anybody are ‘XX seeing insight is size the are to that’s into. very we and very sample we small early something stages give likely it’s of

Alexia Quadrani

you it that follow-up the on what your at And it’s growth whether to I about No, quick to on in Are start curious it worries. of just then to metrics and opening am clarity comments the more I buyback, or some know is vaccines, No point. certain really do look return sort understand organic and that. return touched of a shareholders when capital the will look make sort we to just the you positive on virus I just buyback? return determination to you of there

Philippe Krakowsky

going I jump am Well, to in to ask Ellen here.

Ellen Johnson

How Good morning, are Alexia. you?

Alexia Quadrani

Great.

Ellen Johnson

Thank you mentioned, we return the remains of question. Listen, as priority. capital, for a

dividend. by did the that Board can today against our actions think I see the you

back is that the We maintain we so… return Our in plan repurchases have our are looking on mix resume the in to that strong But October. so that to something priority is capital balance due the we get maintain past, debt is down to a sheet. paying share we

Philippe Krakowsky

that We back balanced definitely want to get return. capital to

Alexia Quadrani

you much. Thank Okay. very

Operator

Research. John Thank Janedis The you. next question Wolfe with is from

go You ahead. may

John Janedis

of a you and partner. about talked change more velocity Good Philippe, strategic Thanks. morning. of the becoming

some you it cost still fairly salary – And in company? on overall flow the you time in your can estate larger are real bit more the and organic you the clients gave, say talk talk lease separately evenly And side, of examples estate? Can little would a for share be rate more know, growing that I it split based at to And clients? fair is take a a don’t on between your about that faster expirations. wallet savings. Ellen, I XXX based assume of the of terms top So real or XX with you talked than on may about to then some

XXXX? So do in come those savings beyond

Philippe Krakowsky

the mechanisms And about forward companies customer that or the our a rest spaces, companies be reaching or outpacing of that’s the as definitely and matter wallet or a of about are like with supposition consumers that fair grow something fact not more a confluence And also in smarter it’s value probably that, the of something pandemic things than reviews because as the that that including as about on of of and obviously, company. and I then top that the that see way said, thinking be industries seeing. so think share nature. of were is are So for data-rich that, very lifetime reliant in that to an think certain not having marketing that on the is would clients likely one. we that’s there And things brought portfolio sort that are reliant to to to of and to the be is that, would broad nature. of say impact technology every fact range we I of you has I XXX need consumers,

sort some everything the is core then the have the essentially of to that of sort of very kind kinds into to to definitely Everything something and it of that. you that traditionally of you remarks, more some when where I of addressable. digital data more opening and how optimize the was capabilities bring ideation, do reasons begin engage we’re really out detail the And allows in you to engagements the informs it when just wanted in and becoming focused lead served understand insights the which capacity the and it’s to are color have media call the messages into on. you of could So give not from one them you then audiences and all clearly with in that ways the and and out,

for of of an area teams that’s our bulk for definitely the So then and us the at focus agencies. management

Ellen Johnson

take permanent throughout the question your really look projecting. actions to to first this amazing in continue program. for regarding from of would say take learnings an teams year, time have with savings to our regards result opportunities with restructuring, to then it period all, the and that All the did we’re And the that against they that I job

of accounting see a XXXX on see the and do line on some So for as as in but it. get to the thereafter linear expect we savings is will to The you leases see savings, result start or so will more SRS subleased. intuitive you both occupancy neither leases

several years. and leases, longer imagined, have because over they’re right, you – as So paybacks,

all grateful again, very it. these for teams we but – are really efforts in and we’ll hopefully permanent that So our savings the confident undertaking are realize of

John Janedis

you. Thank Okay.

Operator

Thank next Barclays. with is The Roch from Julien question you.

You may go ahead.

Julien Roch

Ellen. media. Good Good question on My morning, morning, Good morning, is Jerry. Philippe. Yes.

You Ellen was about talked it strong in capital. QX. working said

positive it’s a QX. it like in QX being after positive looks in number So

And can organic. I color us So give was I was at staying full hoping give well? numbers Day X and the where straight I’d an Google by retired more time to us media WPP XXXX, media Facebook, need go as question me now. performance you mean, hoping you you the some if I GroupM I could the is, last could that there the because agency, Investor the had give to year. a us on be don’t then X.X% told QX color then media, every did on the in grown and client dollar, X.X% had in And years you

the us of space. one area of And long? Thank could also why been has for why an us has been the best why the media you and has explain how of is, headwind investors, you so explain agency media media that strong if So, business you. majority the of been which to

Philippe Krakowsky

I’ll the trying Sure. figure the I go which maybe to front. to out from am back

business that by an have that shift are invested fair of is digital where the of they an the we’ve very I sizable be also to that fact us the media expectation greater to investments. virtue for going because precision area had the – years their we’ve conversations took is accountability It clients say are people was virtue in ecosystem more allowed than on ability that ROI marketing what opaque in just there a it media it’s about business, been the that So recent and space of had. budgets perhaps there. accountability, those to conversations understand of some around But that that the I that while really have think being had you a with I of has to around degree the really think and their of has think what fact the by to and side

I And We’ve perhaps approach peers. a the most across that been taken that. different so of think groups, there’s investment than behind our

on a that building model to comes that it not and when it know, much was really volume. one you nature, predicated As was consultative was more in

investment ourselves what what audiences, tend our own there into was by we to programmatic in stack data interest platform so the made pulling or and at to of lot that least our we And began Acxiom. together a then we prior desk trading we by define able to understanding do the was of were that develop initially to own again, launching programmatic that

for And the to with has trying I all view is not why created as directly run bucket provide been come we’ve sectors. on us of how opportunity for huge definitely has I and to growth consultative hopefully, would because that to me think that complexity and media it’s those the complexity to you that media business. driver model the used all fragmentation that I say, is to going just then we point space sector reasons and So the services logical actually quantify from the performance, – analyze conform question want respect I not to my the will to understand answer and and understand think clearly respect and I’m that and your to if that’s channels one the now Michael is seen that a remember, we are good. the Complexity clients to always tougher disclosure, a

ground open a with So the integrated by as the that. I discussing agencies of engage with competencies mentioned now bringing multiple the in just table. of Clearly, services. clients an and/or approach technology part solutions initially, important and and data on layer We were That’s those to increasingly, prior as question, architecture. we we media is

together. operators performance that is the the think I And very of things me the word tired one interdependence. hearing tied closely the of get So say is the disciplines of

more the give we’ve So that years, it embedded agency’s makes into I also there’s that for it that but offerings digital common relevant, the the fact for working that does there’s of many language think us right. agencies. And specific all together,

strategy this to believe back right. digital years and going performance to of and quite organic becoming when highlight and peers didn’t, barometer working industry whether percentage growth, we is of to best so revenue, the our see number gauge the our more we is few the now, And much the digitized, a that was started

the an X of look X per X You last and average for to last growth. you even years X% to year have at to organic X years, X%

right. pre-pandemic, is this So,

I all performers. that, you from think is solid. of the conclude agencies quite that highlight do of on the performance And So we

at media, in but X you would years impacting But timeframe like it’s a care It’s agencies, some – range. it’s in It’s right. positively the posted sector right. space. health healthcare So look of agencies, have in north healthcare, timeframe you media. driver of an not when growth, X the that have recent point important year clearly I to that be the PR creative in agencies just And out to that ad specialist during our

the is driving this then supporting us So and the collaboration. their client, the brands for consumers, focus to

to counter think, to what starting are So I the runs philosophically trying apart, pieces to pick build. we

Julien Roch

thank Yes, much. very you Okay.

Operator

Nathanson Thank you. is from The MoffettNathanson. next with question Michael

You ahead. may go

Michael Nathanson

in to then they what’s of you? back have U.S. the return questions advertising. And behaviors When to to internationally, at were has been back services you So to and where the and which lag change mentioned, shaped. succeeded? where are And One growth? Have U.S. in surprised have lag? I been has digital look we are some just get some versus think of by you businesses what client now as the all agencies. – they V I understand those I Thanks. bounced you. have back But factors on spending looked seeing gating lockdown the So within that’s to given moving you Hi, like Philippe. spent It’s markets are is who scenario, what’s the want lockdown of wonder psychology of before? terms within versus two the for on U.S., first portfolio I the as almost Couple – I the people happened in How lockdowns. your speed know

Philippe Krakowsky

them, has you Hi, is And Michael. a in saw what commerce been last for would that understand sort say, what do are are of there and Thank social might things because you. just Look, was little of moving think to other year in extent think that e-com knowing of into the that sort seeing has the probably what I But sizable against three that had on take think may what certain of comping is – platform. on behavior And other the been kinds came growth. in restrictions we making And we you kind those I behavior. year to been that to to extenuating of the trying TikTok goes in I U.S., losses definitely seeing there I where think the be are clearly what number resilient. people less vis-à-vis as and be year factors. pretty shoppable mean, you obviously, there connected way I today, it’s channels. remarkably bit we there we here Europe changes client And of can any faster

ways – which or the do are activity. fairly what’s on intuitive looking ways you’d digital of it, mean, of magic terms at that that us expect. I would the know, home began, that I’m And their there or I what it’s people contributing either think on, would they’re lockdown channels have isn’t sure that to commerce are just CRM-like what so going would after data mean, And there’s these pandemic circumstances, in and to to is this pretty look think at have use any It’s a one. clients looking then to still psychology thought of I year pretty caution from that much use right? its no in is wand they the working first-party be this more kind much as part I of I drive anybody right. bet I we So the of extraordinary to year. to you that and

as fact the quite initial the informing are when though a being I don’t reacting there’s the at are there to get there of the light the as of on think that’s was on some sense end going for tunnel, But So line hoping deliberate. to shock isn’t see even we to be beginning are people or much hit. the forks pullback road that. in the we as are there of time might the just that we are that way people there now the really

So just bit I it’s cautious about think that engaged. are people still that’s people but a thoughtful being psychologically – and

Michael Nathanson

Philippe. Thanks, Alright.

Operator

Huber next Research Thank you. The Craig question Partners. Huber from is with

ahead. You may go

Craig Huber

in further, I bit Thank was maybe just just a quantify organic experienced growth little little of quarter bit you’ve in the the what decline the can than even you worse a you. it, obviously Great. third curious, am rated quarter. explain fourth

And wanted France, That’s could in etcetera? you Germany Italy was in If versus if Thank any project-based us there more to a the if wide I tell you countries performance versus in further little then took it that, the bit hear of the line? is out first Europe, disparity major also my of piece just you. there, question. Continental

Philippe Krakowsky

that I the project-based trying Look, go, I think businesses, that in that’s most but out, pointed as am one the I lot were to we mean, were – – a impacted. ones

felt at think the you most if I so dragged. decline in where was the quarter – what look And

our see the are fact the country-by-country a is performance you that Europe, that business. And overall can So it’s then running on market that’s revenue, that X% think But CMG total us like a for disproportionate of you if you again, are us, X.X%. basis, what think the for at we not sector and if you continent sectors the you where was, when about drag looked the had in down of a look at where about how the amount was. then

big Some not markets for those are of all that actually us. really

macro there, And kind and secular of less so a is what very think, I it’s specific. really, trend a or happening sector really have you

you it have really exposure of some mix So to where than down certain hurts it areas, comes you markets more in if to client those others.

Craig Huber

you. Thank

Operator

back thoughts. will our for question. And that I you. to Thank Philippe turn call any was final the closing

Philippe Krakowsky

year, the conversations of it’s game. Well, appreciate and this to thank course look support. you. Thank We appreciate continued us. We interest. you all for the joining over We long a forward the

safe. Thanks stays everybody So again.

Operator

Thank conclude And this does today’s you. conference.

You disconnect may at this time.

The Interpublic Group of Companies, Inc. (IPG) 10 Feb 212020 Q4 Earnings call transcript