IPG - Earnings call 4 2023 | The Interpublic Group of Companies, Inc.

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Operator

Good morning, and welcome to the Interpublic Group Fourth Quarter and Full Year 2023 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,

Jerome Leshne

you our us. by CEO, our Thank are Ellen morning, joined CFO. by Philippe for morning. This joining we Johnson, Good Krakowsky and

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

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

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

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

Philippe Krakowsky

this Thank Thank you Jerry. you, joining all us morning. for

going the to outlook for high-level for will as followed key conclude our as usual, with the and view well detail Q&A. the year be at full updates As ahead. and additional in performance start developments then the Ellen quarter I'm agencies I'll our to year of a provide by on with

of We're of growth Organic in pleased by the a highlighted during to growth ago. seasonally share X.X% year largest quarter. the top our our year, on expectations strongest X.X% fourth quarter was our which exceeded quarter

specialist evident set in the which agencies. austerity our These and headwinds out throughout client roster. to our economy the services our portfolio significantly continue digital large include faced our on currents Underneath the and of the among overall that at work to and number, competitive at most the across that in tech and weigh the continued cross by quarter called reflect sector the our growth. challenges notably and factors discussed we've year, Those clients telecom the within was

called out East. also tragic we in October, the of the developments the In impact Middle

and in geopolitical of Israel, also that harm's First to and that part Understandably, region foremost, colleagues. the has to impact numbers results. had needs Gaza our in it continue our in across on an turmoil that the economic of world, and the this increasingly way, and of put war many includes therefore, huge be activity and said in people

in those QX earlier showed from the factors, in growth our year. acceleration Notwithstanding

sustained in sector New media, business noting leader steadily greater And as also care wins which our size. throughout onboarded the strong health here, well. in growth stronger in and it's was growth performance worth XXXX,

organic American client into helped overall Our and year improved We performance performance QX in European U.S. revenue from QX markets, the and our year-end of levels investment solid saw was by variable quarter regions those fourth Latin or compounded ago. strong of the spend. sequential the so-called fourth both project and a also improvement quarter

the remains somewhat seems backdrop activity that in seasonal quarter. largely Given been to a macroeconomic of have function the cautious, this

follows a full decrease XXXX That X% organically XX in revenue strong Growth quarter brings for organic fourth year basis our XXXX. to change growth in a of the points. the

down sectors. in the in by QX. slightly, in by led mentioned consumer earlier, growth health X double-digit beverage care QX performance as Growth increases. against and sectors, followed Six and Auto at revenue transportation Looking was XXXX. though our goods mixed saw sectors clients and food was sector, client of the was

of the and quarter. consolidated weighed negative Each lost and assignments, reductions our X.X% in growth grew our telecom organic budget organically during Between segments quarter. operating by tech the approximately sector our on

continuing our IPG strong segment. very weighed Solutions, Mediabrands. X.X% In growth Media, Data at at Decreases this significantly & was Engagement specialists by organic digital on growth led

offset partially of growth strong segment Advertising organically, Led and Creativity at Integrated grew X% by FCB traditional led offerings. our some & IPG by more Solutions Our Health

Our full the in including across of quarter. segment saw We public X.X% disciplines, & balanced the Communications growth organically sports grew range marketing. of Solutions relations, Specialized Experiential experiential and

Turning expenses profitability the quarter. and to in

We flexible complicated excel economic fourth continued business is year investing modern performance and the use reporting operationally. navigate today. teams The are strong a we while of capabilities. a in growth margin to our of effectively model levers environment year sophisticated challenging to and our the the most quarter Our simultaneously full and result

basis With year occupancy. net against expense was on our was over which We of on XX.X% margin improvement drove revenue for ago. operating tax, increase consolidate for margin points XXXX the margin significant our the recent XXX performance-based expense beginning the base XX.X%, EBITA a an in year we compensation quarter, benefits further incentive Adjusted set and and of leverage from that at performance, delivers past. full our target the and payroll,

Fourth quarter income was million. reported net $XXX.X as

reported million, of of from quarter Our was as the increase ago. adjusted EBITA XX% and disposition diluted small and intangibles, amortization adjusted an as nonoperating nonstrategic share $X.XX $XXX.X was for $X.XX a of earnings per impact the year Fourth businesses.

an year we and in benefit our not both included adjust. diluted previous Full adjusted, EPS second and the reminder, the $X.XX, tax did income audits of of years per of $X.XX for year's federal the was related quarter, important adjusted to routine as share EPS which resolution reported as

XXXX $XXX repurchases to in During our million. million, repurchases brought the which totaled our quarter, share $XXX share

of returns Over $XXX year, the shareholders capital were to repurchase between dividends and total the course million. share

repurchase increased XXth of authorized to $XXX of the additional remaining and our Board as also our As our financial you've the we've per as position share our given authorization. operating an of consecutive million X% continued once well again quarterly and on Board year on our IPG's $XX of previous raised strategic confidence million trajectory, by strength $X.XX long-term top seen today, marks our share. dividends, and This dividend

regarding disparity client uncertainty with we to largely we is past macro signs remains is geopolitical clients' views of continue many This economy XXXX, much to discussion of Despite consistent economic noted overall see the our our there what prospects. over the conservatism, thinking. to growth of Turning and year. consumer that some leading improving, inform a

sector, the companies. our marketing still measure spending We're discussed a of quarter-to-quarter enterprise within it's reductions major consequence upturn seeing been in previously we've budget call tech noted a telco have technology of stability spend. at clients and programs not a broader activity, and cost-cutting industry significant tech timing, And recent to in a possible while the with those that more in stabilization

in plan sector to a XXXX. our not growth been into However, factored us return this for for has

of With and cost aligning their base hub in innovation performance. operating digital comprehensively respect in headquarters steps we've several leadership, well to with as their taken line lowering common strengthen specialty includes new offerings, our co-location a global revenue. to This as

includes We to strategic scale a near address greater as market-facing digital need for as to solutions the broad on continue focus the and transformation. range that over term, and of M&A well

business we of company. As significant as growth. our We're building look new strength we of on ahead, remain in during past the focused longer-term well year on confident as the success fundamental record our on

will in that and which our of capabilities, perform expertise, growth offering, We our marketing data marketing the and areas also anticipate and consistent is business, most PR year experiential to strongest the ahead. media well continue health tech-driven care

operational discipline will proven stay our addition, effect. In in

with that the specialists and and a client year certain of range organic XX.X%. parts, challenges portfolio, of some on of addressing an of of to our expect focus caution performance X% revenue a expected digital At areas continued net in these The very moving growth, in for XXXX strong EBITA margin within growth XXXX us level X%. of net adjusted to leads we full legacy

decision-making addressable continue our including number of well the building further investments reflects inform on contemporary and within operations IPG, across artificial that tools as data-powered of also integration media, models in streamlining focus This and intelligence capabilities, new drive processes development We'll to group. across buying retail brands. is the a which media as and

We're our of upward all confident our ahead, continued this on that build record combined in over part of along in and the with area. margins for integrating their years resume that the clients means goals, brands on investment our creating trajectory excellence our in will that value consistent stakeholders. our help teams with our operational essential delivering will ways business be their XXXX, their services in In with growth, our

things our hand of I'll over Ellen to view a in-depth point, more this results. At for

Ellen Johnson

that I Thank hope you. well. is everyone

track my slides to webcast. the a will presentation that remarks accompany our As reminder,

revenue brings our That X Beginning year Fourth from the Slide of X.X%. organic the to points. revenue for presentation. net X.X% a increased decrease year quarter on organic of ago growth basis XX with

growth rate is the COVID which cumulative X-year of Our period period. volatility through now, the and the post-COVID XX.X% hopefully, is

on was quarter the and XX.X%. in EBITA million, net revenue margin $XXX.X Adjusted was

businesses. as diluted nonoperating the excluding gain per intangibles, of in a quarter nonstrategic reported of from few sale the and as Our share was a acquired so earnings adjusted, amortization $X.XX $X.XX

of which benefit are for Our the federal audits adjusted resolution but in income to related year, $X.XX second share routine that we permitted the diluted quarter the was the previous of full per $X.XX adjust. years, of to of tax includes not EPS

our We financial and of the our shares, in double of a cash facility. year financial latter balance which $X.XX of $XXX X.Xx concluded billion metric includes in sheet of in X.X quarter to million XX.X million in total due fourth repurchases repurchased million bringing the gross shareholders debt XXXX. shares returned upcoming full as with defined with the to position million our our debt to credit on EBITA prefunded April having our year $XXX strong gross The carry maturity. We to a

authorized and the $XXX our authorization. Our repurchase dividend to another addition million program X% $X.XX million under to $XX Board quarterly remaining in our prior increased by

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

on Turning to revenue Slide quarter full the year X. and fourth

basis was the QX dispositions exchange year an impact revenue billion, in to basis ago. was of XX Our rates from the points. net XX the Net in of positive change Compared X.X% quarter $X.XX were a 'XX, points. increase

XX net slight organic us revenue was points. to increase for brings a which of year organic basis the X.X%, Our full decrease

our we revenue performance. slide, the down Further break segment out net

at quarter grew Our & Engagement growth a of Data driven the organically on of top in segment Solutions fourth double-digit year Mediabrands X.X% top of growth by on X.X% ago. The XXXX. strong quarter was IPG Media,

weigh Our year. segment overall continue XX was of segment basis challenges in decrease this The to the growth. our agencies specialty full significantly points our digital organic for on

Integrated Solutions ago. of Organic X%, year is top X.X% our growth Led Advertising at a & on segment which Creativity was

was the our FCB in IPG offerings. Health offset traditional partially quarter growth some by by of Our more and led

organically X.X% growth segment after the the decreased in For XXXX. X.X% year,

sports Experiential of At our segment, year relations, on growth and disciplines: major top was growth experiential segment X.X% public across organic Solutions all ago. We a had & Communications marketing. X.X% Specialized

For the segment year, organic growth in XXXX. organically X.X% grew SC&E the X.X% compounding

agencies growth which had strong notably to our growth organically was in region XX% on quarter. by revenue, and Mediabrands largely X, our at points. the a offset were in net decreases revenue at and fourth of sector our the We by loss Health, grew specialist Slide of quarter others by The telecom increases the IPG McCann. IPG FCB. basis Moving U.S., digital in by at XX client These

impact the broadly was addition, traditional of more offering. felt a across consumer-facing In macro uncertainty

were was the U.K., net markets is of our revenue in increased the with the of on XX% basis was clients revenue XXXX. quarter, the Those of offset sectors. automotive in had fourth the revenue In growth in International which quarter decreased increases in growth quarter XX X.X% strong We of care very the top telecom organically, sector. and by organic tech net X.X% and our points. which and health were retail in largely X% and

markets We XX% grew XX.X% IPG We consumer, saw organically, strong and net of top revenue in had the McCann. and across quarter food and Continental ago. beverage sectors. health performances national a grew care of X.X% on Europe and notably a strong in most growth by Mediabrands our year and was

was which X.X%. Pac, decrease is net revenue, of X% Asia our In organic

India had by in year more Australia, While organically the a in on China. of we top offset In Japan XX% and in that we decreases growth LatAm, strong than grew quarter, X.X% and ago. was

all across national the in Argentina. our was strength quarter. net growth of with X% revenue markets Mexico, LatAm notable Brazil major Our in and was

in markets X.X% Our Performance the to and was Israel. decreased net year against decrease Other of a our other of Africa, Canada, ago. in international markets group revenue growth consists the due international X.X% East a organically was Middle quarter. which X% double-digit

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

expenses in XX.X% XXXX, was Our in XX.X% XX% in of improvement, total and year's our of revenue related EBITA net basis as quarter. percentage points. fully salaries a increase was to with adjusted the of margin quarter ratio Underneath fourth compared last an XXX compared XX.X% that

for base expense performance-based on We on have and expense our tax leverage benefits compensation. for and incentive payroll, our

with the headcount XX,XXX of ended with We ago, year a year a of X.X%. XX,XXX compared decrease a

mainly XX.X%. Occupancy of net the and in while increased branding of technology. direct and other other XX basis points to Our offerings of percent decreased investments and as a direct revenue other increased percent computing expense in expense as office net revenue and expense to our media due by office cloud all a positioning

decrease of expense points. SG&A X.X% basis was Our net of revenue, a XX

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

for $XX.X expense after-tax million. tax, these businesses per intangibles of diluted the Our X. second previous $XX.X and Below in shown of from our EPS as amortization foot net million. $X.X share. diluted the million was was the per adjustments, $X.XX small adjustments at expenses, Column of quarter $X.XX nonstrategic restructuring in fourth of column see to operating the of is which after adjusted reported The acquired of gain the $XX.X sales actions to which slide, million can share diluted earnings each the bridges At impact you was

Slide adjustments X similarly comparability. for the for continuity year, and again, full depicts

the adjusted the after tax. including, EPS and tax the Our million. year $XX.X was diluted the amortization result $X.XX expense is net million resulted again, year. million year Dispositions $XX $X.XX billion of The gain and a our in in course adjusted from $X.XX, of over of item earlier $XX EBITA of full

second rate tax includes the million XX.X%, full effective tax in so benefit adjusted the our Our $XX.X that was year for quarter.

Cash flow from capital. X, working the was $XXX.X we year. for full in cash to Slide billion and turn before million operations the $X.XX was changes On

we pointed volatile. capital is working have in As out past, the

Over $XXX the capital. a last total generated in million X years, we have of working from changes

will we and operating the flow $XX fund to our our a derisk quarter. that our obligations environment contribution the for highlighting the close on and order in includes terms to In plan fourth that of are advantage out our taking of U.K. cash benefits are rate and interest to fund, U.K. party worth a also a buyout. under It's participants buy-in for with plan attractive million pension the secure to a third ensure both course put

risks. be will future we the range tax, obligations to charge noncash XX thereby incur our eliminating involvement $XXX The third in end IPG's transfer We commitments plan. party, will $XXX a million months. required that in time, estimate the buyout IPG's the million of to completed anticipate representing would At with the of and of XX process we to net

the that by investing activities Our CapEx used reflects of $XX.X million proceeds from million businesses, cash of mainly of offset from $XXX.X million and of proceeds investments. nonstrategic $XX.X sale $XX.X million, net

used and our common Our partially financing offset issuance debt million we shares, prefund of dividends million, to of is new which $XXX.X our maturity. $XXX.X stock, through our raised the mainly repurchases upcoming activities April on the by

year Our was net cash decrease in the for $XXX million.

maturities XX including sheet. is We with our $X.X depicts and XX year-end balance diversified $XXX Slide million of cash the the debt equivalents. and our at debt portion current maturity was ended Total of our billion of billion, schedule. upcoming maturity. $X.XX year Slide the the outstanding

scheduled until XXXX. maturity next our is Thereafter, not

continues. In Slide summary, XX, on discipline our financial

Our a liquidity balance foundation build with turn back strong and to success. us Philippe. to I'll on sheet And for it that, give

Philippe Krakowsky

Thanks, Ellen.

for During our the of not company improved quarter, measurably And expectations fourth faced the did the and degree over perform long the year, course volatility. while our standards term. through we up both the XXXX, an our of top we to line the set industry elevated or

areas as to commerce client and us resolution you've the such production. our of resources of address We've recent performance skill and create definition sets needs the in ins and and marketers and and it this identity mix. audience relates more in outs centralized seen recently, covered years, as modern To asset

group, our order level. We're also connecting number activate more functional at these XXXX, to in corporate a of the key these traditional to the of group services offerings and capabilities we brought across fully in leaders during

innovation, continue clients help creativity and in culture come our integrated talent which drive succeed. that services, ways Our strategy, to together and

areas our been solutions. increasingly to our deliver Another looking simultaneously relevance to core marketing expertise outcomes economy. build their of management be business These first-party to has brands data and accountable continue in an long-term key to in marketers growth and digital

X we strategy. areas on strategic and further recently, our technology have More to focused data

identity a built help cookie-less tools world. is of Acxiom clients suite First to a resolution by navigate

the network PR. experiential and integrates retail or across have commerce offerings unified our media, whether with in Second, that's of their the earned extends creative, company, media solution marketing platforms. fast-growth ensures which Mediabrands functions, IPG This, of brands which holistic impressions turn, to view our in all core performance a across ecosystem retail

moving in are investment helping all journey and our at to is follow efforts. customers performance activate of then core our which well Kinesso, fourth, tools purchasing brands addressable users, modeling the decisioning as to throughout closer teams marketing movement accordingly. as powerful end and And Analytics solutions their these

data These are in for advances part of also in media the the marketing It's investments the and level areas our that is spectrum. of not we're generative for an has ongoing same years. note to intelligence to many creation adding content make of continue personalized where business been across Machine artificial we Combined latest with now AI, the learning intelligence. new. AI important

enterprise-level Amazon, emerging well We key AI scale with competitors as and agreements as respective place current in relative and continues the rates a believe Getty in be this AI partners with of Microsoft, Google, at and with prospective organizations. vendors, to space. commensurate range our Adobe, to our in IPG investment including has of innovative OpenAI

workplace us styles new of internal through AI help Mediabrands partners IPG Our already our used and launched in that portrait and to activate assistant productivity campaigns behalf of programs a optimize work employee brand have capabilities the AI. enhance chat where also Mediabrands with being by at products clients. client-facing including marketers, are resulted these technology gen on brand use leading voice

creative transformation is Huge, and and clients Gen are the practice their that decoder R/GA index At analytics. to agency's clients using journeys, areas culture powered using across ad help capital and creative on research concepting, include tools AI

a set and cultural training ensuring has possible. It's technology group the the that with Shandwick the effectively using tools AI, and and AI product called related on marketers they're the our generative a as team as and Accelerator. Weber to issues ethically both that help clients technical

are both made a number technology. a industries, we and of enabling variations of market gen use in of that all in of campaigns range content AI markets, capabilities Across expanding the and with possible by this with with of our feature domestically internationally thousands and clients

As for I Client team mentioned like IPG that commerce portfolio; collaboration and ensure who's marketing solutions tech and Chief Adobe channel our delivery is Salesforce. the service and drive and our as earlier, Chief audience Commerce who and key Officer, Strategy and includes and our the platform a Solutions in the we've combine and our used to across at Chief expertise senior identity, that also production platform are such integrated being partners approach with enhanced clients; group, this areas who capabilities Officer, will the Business across centralized to existing connecting Architect, orchestrating resources data

And announced level and leaders performance the delivering platforms talent highlights creative week, QX. ideas to on just to and creative the join team we will briefly the of agency in one top to of come the now at innovative focusing across IPG turn across this company. I'll industry's that championing

Ads evolution we the partner first made company Prime that very Mediabrands well, the be IPG ads. new agreement a which this in Amazon performed mentioned, marketplace. help It's entered closing And into year. will and brands us strong media Amazon Mediabrands of offering, had was audiences Ads Video a to the the believe on another through X-year with exciting As holding development out to reach announcement noteworthy significant

America. in standout integrated The as recently for Year offering FCB and quarter named Year initiative and An that to saw North America CEO. of global a Agency same year by internal streamlined with promotion consecutive partnership At the sixth of Festival Latin Media well in Media Media won the MediaPost it Boeing the the and UM, both of a as be XXXX. with we leaders honor U.S. the Network global had of was the X Kinesso and of for win named

health and data At health onboarding set care enable company as spotlighted Acxiom, and significantly space on Snowflake's identity and a advertising. and success offering Stack also improve in the our video Data the leader platform data an Marketing is new clients launched increase to display has report. care was the Acxiom going health in side, to campaign the the conversions Acxiom of

a business long-standing quarter, IPG mentioned, we've As category. the its in Health strong from leadership leveraging wins new both and tailwinds had

dominated being Awards the of the second at Year consecutive Marketing the Network terms unit recognition, & named Medical year. In of industry the Media for

the the during operations. honors of its as with strong North FCB's over and U.S. to performance XXXX. agency garner all course the network Global And at it has consistently duties continued the Year accolades industry America of consolidated Network been year-end, was at top Show honors QX. its Clorox creatively of One similar for creative with The

fuse Our secure more patents experiences machine its and create notably to AI and smarter on Momentum as earned significantly range to of clients work Premier fourth first the and expanding SNICKERS League. and Octagon a well quarter, consumers such AI for and as clients Subway became with targeted experiential in brought agencies the new as learning agency the Worldwide to

Weber operations, showed and was Kellanova, media media AOR strong for care this driven our as management contributor, well on of sponsorship geographies. including biggest their at across solid and of to bowl football earned won was by U.S. appointed campaign key part the network sector college with lead new important external ever measurement. duties of during crisis We existing as PR PR newsroom clients, Fidelity's content earned as growth AOR Our saw clients Golin Eventbrite relations, one with The efforts also the part quarter. a and created and Vertex. Walgreens the appointment assignment a health

leading Jones we Index. create the inclusive a on Disability Sustainability Work We Campaign's Index The fair front, from announced see Index Equality Best these On the the Place Corporate Human inclusion efforts and to Rights ratings. organization. culture earning for a the further America, across ESG in recognition of Dow Equality corporate our validation to organizations our as X North key and

Now in and stepping clients AI ever, for world solve using a set thinking that widening we live powered that we opportunities. is think audience-led back, need I from to help of digital, business which more increasingly data problems than know in the by and us

As always, continuing also to of the we're offerings. and businesses going invest to developing training by in particularly platforms own behind differentiate and continue This upskilling, investment and recruitment, our people includes to growth our but computing. marketing around cloud AI,

Our and plans M&A, that disciplined digital include transformation, offerings. strategic approach to consistent our and a increasing growth which our total will with notably commerce on capabilities are in opportunities also focus areas, scale

the in stated As X% in XXXX the we seeing are earlier, growth client sectors, key range X%. some despite we're in uncertainty targeting of continued to

in track margins level that record, discussed confident growth our morning, of that we're long-term ahead. upward resume Based the years XX.X%. with on that adjusted we investment of and margin EBITA Consistent we've will trajectory needs with the this foresee you their

course, ongoing Of confidence which another in capital future speaks is the announced key by also creation balance and our our And remains of our value strong returns trajectory our strategic a actions commitment very to and Board evident today, liquidity. to in sheet prospects. area

priorities mentioned in meeting commitment to is that the to Now addition M&A earlier. returns capital

questions. call that, your this the to by open continued interest would like I those floor And around you clients, our with on support. for let's and our course, the people your to world, just thanking of of close

Operator

[Operator Instructions].

of question America. is Adrien from Saint first with Our de Hilaire Bank

Adrien de Saint Hilaire

I've don't got if a you mind. couple,

full cadence in of Ellen, of have that been and First of expect Philippe you the all, help QX your line competitors us talking growth XXXX? about with you can Some being the with year. for

year about second out? more weighted. shake being Where half Some talked others you have do the

question GM assuming what Because X% like the Pfizer, some but review under some GEICO, Amazon, review. success, the the like And others one is in other are of are net be second had which to impact business hand, decent may new with course, you X%? from some which have accounts you've under then on you

in curious So assumed or you've benefits there? neutral or any if any loss something

Philippe Krakowsky

the What Adrien, and try question. component to the thank to of parts X%. for you is unpack give X% do just you that I'll

X would group, small about of continued of what sort revenue size mix balance baked of part more I think overall performance traditional accountability the impact though right? that be in segments precision So agencies, it. strong we're more expertise you the thinking to relative our assets that those talked Whether more factored have technical was having that some and/or of we in. growth. But or of to ways assets. the think our consider into either maybe the a from of or We've digital portfolio

telco and pressure that sizable of than last And are we're year. most So in as less clearly, line, will experiential clearly, felt a that to that's, media, think, with growth, said, relevant is stabilization, broadly care. reasons, top connect and carrying set. long the we year. continue hard leader, through client accretive consumers. We But any an very the for factored services among it like tech with telco And be marketing us, health that will in of then expectation how I for so number and making bottom earn, to and speaking, impact clients loss given

lean I the there specialists, mentioned, think think I digital got thinking around They plan into scale specifically a the require, as also the we've we similar has On transformation. more space. skill digital whether tech expectations. about like lot I do the we're But sets heavily that

different benefit then sizable respect to the half last going then back feel had year and we be business, you more X those QX. last basically a positive some of than Regrettably, year. quite began of year large likely to this the all we're a of headwinds in behind the both different said, in reasons that. But we as so of had new losses of year. And losses, number flavors, drag carrying to but not less of So wins, with which we

So about our new the a if think out 'XX, we head we business of totality year lot wind the that's as for of into of taken sails. the

I through of see the parts. folks don't broadly the and got And that we're all point, how figure to I But the to the to. 'XX if anything by we hopefully, of usually we and phasing flat. moving of mean we guiding sort what ways that, quarter. those that Ellen, add, range is we're that speaking, that So we point walk all don't informs there's know are

Operator

next with JPMorgan. Our from Karnovsky is question David

David Karnovsky

follow-up broadly a Philippe, prior one. a stabilization tech... on noted Maybe you for

Philippe Krakowsky

only X. There's been

You're following question. second a the prior on you're up question,

David Karnovsky

Well, up prior part first I the follow of the on question.

the expand see broadly you indications tech brand of any could You kind now? of seeing project a of on new and right outside if vertical telecom a wanted or for there impact. Are the renewed what to spend? in just broke stabilization noted you're business I

then of on almost in a certain in any growth resetting speak areas. longer company's past? term. are expect to can we you little the convert have I But appreciate ability I you've past, wanted in And you to margins, in as to the to kind environment. continue or unique incentives And factors bit And there would to get you margin like organic think gains 'XX into to in profitability expand the investment spoken

Philippe Krakowsky

and have talked this cost notwithstanding is 'XX way is Absolutely. ability us do always to don't scale our model not think give in I flexible -- no us the said any over Well, it time. we've -- does margin of in the and look, that. number run complexity demonstrated see growth that And any about us improvement, you can which this a that business the we of

the AI offering. flat-ish part XX in underlying think essentially And in a our media to we're we our and processes with 'XX then going but to convert play it's to will well. And I about is the look has Looking event, own basis to degree for sort where our part in you the additional out changed business. about call forward, we for a in we terms need know growth which is. But as where why think not dimension and there improvement the areas we're well, of margin. at the to to continue I as a as organic and that's target of reengineering specific that see you think actually margin investment pretty where And points of down in we're business. the nothing in be there'll tried that that

where ability model buying we've a been has think principle generate of buyer to adds take efficiency that media I that So about the kind media effectiveness. been to value because

think be there. opportunity I there'll

year that this not is would I indicative. So conclude

clear tried the in remarks as that still we see on we we be to prepared upside think the could as I margin.

And then tech your past in did question, us don't fourth the during feel the as shared that think it we of I part the to -- first quarter, and I what meaningful again, if that thinking the And case. doesn't Adrien's upside we've telco would into was for to that there. are like still feel 'XX. we stabilizing. factored question, And that's our not seeing I say It is

Operator

The is with next Nollen question Macquarie. from Tim

Tim Nollen

that done, just focused I'd of actually had losses reorganizations you've data in your management you've like some some Philippe, some account prepared the media you about on but and the I'm you've ask remarks. segment, had turnover, mentioned to and Kinesso

more better, how can presumably investing on wondering M&A it business. And add there's particular us just mentioned you is hopefully prepared scale call thing activity just on that's that and think -- in. anything remarks that should digital more understand if transformation you about some if drive to if to be be kind win that. this Or returns activities. media your better in focusing wonder would simplified, help also a I and could relatedly, help of you spending, I is more clients Just standard if out how some organization or a and data

Philippe Krakowsky

an evolution. Kinesso of mean good That's I both questions. the was sort decision

long have that being us use, to of concentration agencies largely still built put an data us as business. the we and our to post many by know media allowed to engineering to then that of accessed followed you the possible, our think capability enough That again, led as by be I Acxiom, unit. addressable of and know creation

And too be were what complexity. bit way done. to There kind that started that places we to observing along many were just just you was much had that there stop of there a get to work the too

all folks as recombined integrated was Kinesso, units addressable drives into that performance then activate do have way just And Matterkind just into to Mediabrands. the the value and to we and chain. specifically also it get last the work meant strong very of to streamlined of aligned kind both quarter. what through tech year, that have I for that Acxiom called one and their And way performance, still those mentioned, across more who the out actually a was that reprise of So we more the unit. We've it's build all group. holistic, And

So for that tech that, I become think the that node will the from of IPG. which entirety it's that also do likely because help we will

that think, agencies strong we're run the or are of what of at some is nature goes you're sense performers scale years, question coming with look sort we and portfolio out business second come pandemic, many very that we've -- going asked, of across. how you with a when look that I at to those that looking in at for where digital lot in the space and the premium when that very, very I of matters of a into RFPs very, And is

of an regardless, so definitely area And it's area been we're think at have it's I the interested an would and interested particular moment. focus but in

Operator

The Cahall Steven Wells is from next with Fargo. question

Steven Cahall

one So has and accelerating at creative that been we've seen media peers softer. been has your strong of and

it long-term to out shift going what that of a paid so, to creative? up mean media this I as speak Interpublic? And trends and are just similar then some creative way just and increasingly Mediabrands think think change pick you with you Is dollars is out for brands clients, I'm means that softer evolving dollars the bit in industry? to performing do wondering, on well. to that called advertising margin change does into if the a And you've that the topic. take

programmatic, it take agency both of was like that of the and So capabilities we're X expansion it and ago, to AI. I in the about invest about every COVID industry until had media margin out years some think And now some seeing did kind of think in I era.

cycle expansion might before back? that you plan do how margin of investment last long how comes think about in it So terms longer-term this

Philippe Krakowsky

very questions. in lot a quick That's X

So I guess our on the margins years X latter, today. I ago would today, say to you that, years obviously, ago at if X you look

that to of the spend. kind So I be will you think it have I a margin piece, think to that begin unpack with, But perspective. from the helpful likely AI

there, who's a folks out sure I or around who the And There's investments put I'm what But would those classify lot not the the quite spending what it's across are commitments significant. think noise some for sit, apples-to-apples. as numbers AI-related of been necessarily group from been that are. even where that we

tech, training licenses a that at that great including many development, deal the assume of that, range we required. 'XX, is happen you. of and if that software, called then and bearing. partnerships, million which So is look can $XX and I And to is then number out I which And in-house

so on And business of offerings. of particularly leaning for a more part media, the the on has years, tech data, AI sort been many

been AI. be there 'XX that, spend annual I throw to incremental, the So number for for of increased So has out time, going think got growing over is development, to directed about that you portion we've right? an training, not the portion tech, budgets that and all for now of is

basically, internally. about of think, how components for processes, we're our that fund as a core And going we incremental I business, rethink talks to spend efficient we kind looking more Ellen are of lot

parts be mean, our for programmatic, on I or a that happen I So has I profitability it's AI did the significant to prospects. going I'm that business been while of about know drain faster. don't of definitely would conclude that thinking a certain AI. And part

say, question, And that observed a some we I trend for then the not time. would it's first haven't

that got say have where that in a heavily on of you creative would ago cases, And kind that called players think, as significant on I think companies business, strong more would out, of I very you existed have things I years side around still model the many many but very creativity, into very, in the of in large project of And there's driven some kind traditional value very, of space. traditional AOR. become, those So holding want to you've index the assets. focus than

ecosystem, creative a in so fragmented a lot. And media matter ideas

and setting trying way the very have FCB, integrated at goals management to and look agency, precise success production. but strong get figured I to is with data having insights in it's plug which a in for case, accomplish we're they're very out and the into a what traditional other they for then with team, to very a it's their their with layer clients, disciplines, forward-thinking

delivery, it's got of part bigger So a that smart content well. you've got great works system, if you've and pretty and then

that's brand performance because suggestion, the people point is, thing get for asked both. which as think or the that these you which So at days, a and doesn't They're a I that think clients want of sort quite to abandon there dangerous is question I asking which well.

Operator

Julien Our next with from Barclays. Roch question is

Julien Roch

Publicis Omnicom net telco and Can has X% so Omnicom tech anything X% did Just X%, question. account Publicis difference else not you guided from wins, to you I the flat between think wins benefit let's said to unpack on will roles, but X that you specialist X-point call account X%, X.X% to and digital wins. and account that X%, So to a about? difference.

XX digital to basis anything about? from tech about drag I that. know, specialist think don't didn't else I what XXX So exposure point, basis and the point on But

Philippe Krakowsky

And accounting. exactly I based things in numbers. comparing their on can't tell is not alike you that obviously, what we're are the

some we're for media talking that and of that account you about buying look tech I entirety also I telco delta may organic the cost but capability that deduplicate X.X%. at if can that so and I specialist And points the think 'XX, adding the counting, of that growth. cost not X.X% of us you X if us digital double about you're of us that growth percentage cost tell

pull it think like-for-like is all sort question, point of that what be your think built the very we direct can't question. is question, of year. And I very apart for our that to transparent their they're you So to a and wanted view I I into and exactly don't how first then to comparable. is numbers, again, go to and the I in the took -- I

of that the And rest with shared perhaps offering, you on just terrific media of the approach numbers We hopefully, opportunity there's part efficiency focus in because I the then have a a where world a that a and an but gap. us fill may means there be for the different gap.

Operator

And it Philippe now for that last thoughts. to our I'll back final was turn question. any

Philippe Krakowsky

back us for this And be for a of we the year where Thank stay that work done the that you. because number on definitely all of needs a the questions, are for some to the do long and I going of that. is will to have to to Thank your time. a get transformations things Sue. finish Well, thank norm you, been to can we point to that think you time, required here focused the get we have

So I appreciate the interest and the time.

Operator

Thank you. concludes this today's And conference.

time. You this may disconnect at

The Interpublic Group of Companies, Inc. (IPG) 8 Feb 242023 Q4 Earnings call transcript