IPG Rebounds From the Pandemic With 20% Organic Growth for Q2

Interpublic Group (IPG) reported a continuing rebound from the height of the pandemic, with CEO Philippe Krakowsky stating strong growth across its agencies worldwide and organic revenue jumping by almost a fifth. In its latest earnings update, Interpublic Group reported net revenue of $2.27 billion (+22.5% year on year) and organic growth of 19.8% globally for the year’s second quarter. “Our performance this quarter is highlighted by very strong revenue growth across agencies, disciplines, world regions and by outstanding margin performance,” Krakowsky said in a statement. “These results represent a remarkable rebound from the impact of the pandemic on our business, demonstrating the resilience of our people, as well as their commitment to each other, our clients and our craft.” The growth is up from Q1, which reported net revenue of $2.03 billion and organic growth of 1.9% globally. In 2020, IPG saw its organic net revenue decrease 9.9%. IPG Reports 1.9% Organic Growth for Q1, Predicts 5-6% Growth for 2021 For Q2, IPG’s net revenue increase was 10.6%, with an 8.3% organic net revenue increase in the U.S. and an increase of 15.2% internationally. The U.S., which accounted for 63% of net revenue in the quarter, organic growth was 17.4%. The decrease a year ago was -8.0%. “Our results this quarter compare favorably not only to the same period last year—which while the steepest decrease of the recession was well ahead of our peer group—but also Q2 of 2019, which underscores the continued evolution and vitality of our offerings,” said Krakowsky. The first half of 2021 total revenue for the holding company that counts R/GA, McCann and FCB among its global agencies, which includes billable expenses of $4.77 billion, increased by 8.7% compared to $4.39 billion in 2020. In light of the strong quarter, Krakowsky upgraded the expectations for IPG’s full-year performance, saying the company will hopefully deliver organic growth for the full year from 9% to 10%, with an adjusted EBITA margin of approximately 16%. He made the predictions acknowledging that the pandemic continues to pose a risk in many parts of the world, but that progress on public health issues should keep the targets intact. “We see this as another year of strong value creation for all of our stakeholders,” stated Krakowsky. Krakowsky, who succeeded Micahel Roth as CEO in 2020, highlighted that the company continues to focus on the well-being of its employees as it emerges from the pandemic, which includes DEI efforts, data stewardship, brand safety practices, wellness initiatives and sustainability efforts. The company recently launched an ambitious emissions reduction policy as part of its climate action plan, vowing to source 100% renewable electricity by 2030 across its entire portfolio. Other results from the Q2 earnings report include: First half 2021 net revenue of $4.30 billion increased by 12.3% compared to $3.83 billion in the first half of 2020.Operating income in the first half of 2021 increased to $627.4 million, compared to $116.4 million in 2020.Second quarter 2021 net income available to IPG common stockholders was $263.3 million, resulting in earnings of $0.67 per basic share and $0.66 per diluted share.As of June 30, 2021, cash and cash equivalents totaled $2.34 billion, compared to $2.51 billion as of December 31, 2020 and $1.09 billion on June 30, 2020. IPG noted key account wins as part of its growth success, including Cigna, which recently consolidated the majority of its account with IPG agencies. Rival holding company Omnicom Group stated its net income for Q2 of 2021 as $348.2 million, compared to a net loss of $24.2 million in the second quarter of 2020. WPP will announce its Q2 results on August 5.

Earnings Reports

IPG Rebounds From the Pandemic With 20% Organic Growth for Q2

The company reports first half revenue increased by 8.7%

Kyle O’Brien

Agencies

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