- Total revenue, including billable expenses, was $2.50
billion
- Revenue before billable expenses (“net revenue”) was $2.18
billion, an increase of 0.3% from a year ago, with organic increase
of 1.3%
- Net income was $110.4 million as reported
- Adjusted EBITA before restructuring charges was $205.5
million with 9.4% margin on net revenue, in seasonally small first
quarter
- Diluted EPS was $0.29 as reported and was $0.36 as
adjusted
Philippe Krakowsky, CEO of IPG:
“The first quarter results we are reporting
today represent a solid start to the year, and are consistent with
our 2024 targets. Our data and tech driven media offerings,
healthcare marketing, and PR capabilities continued to perform
strongly, driving our growth. Marketer sentiment has begun to
improve relative to the back half of last year, and the new
business pipeline is more active.
“We continue to enhance our offerings, further
embedding precision and performance into our integrated,
full-funnel media solutions, including our suite of Unified Retail
Media services, which deliver cross-platform planning and
optimization for a range of clients. We are also progressing in the
integration of technologies such as Generative AI into the core of
our marketing services capabilities, notably through our
recently-announced partnership with Adobe, which speeds content
ideation, creation, production and activation. By deploying
proprietary best-in-class Acxiom data and identity products into
our enterprise-wide marketing engine, we can create a more accurate
picture of consumers and deeper connections with brands, all in the
service of helping marketers drive growth and achieve business
outcomes.
“At this point, with our smallest seasonal
quarter complete, we continue to expect to achieve full-year
organic growth of 1-2%, although a recent decision by a significant
ongoing client will adversely impact the balance of this year and
likely make achieving the top end of that target more challenging.
With growth in that range, we continue to expect to deliver
adjusted EBITA margin of 16.6% for the full year. The strength of
our balance sheet positions us well to deliver on our long-standing
commitment to capital returns and also augment our offerings and
asset mix with M&A, with a particular focus on further
broadening our commerce and digital transformation
capabilities.”
Summary
Revenue
- First quarter 2024: Total revenue, which includes billable
expenses, was $2.50 billion, compared $2.52 billion in the first
quarter of 2023.
- Revenue before billable expenses ("net revenue") was $2.18
billion, an increase of 0.3% from the first quarter
of 2023.
- The organic increase of net revenue was 1.3% from the first
quarter of 2023.
Operating Results
- In the first quarter of 2024, operating income was $184.2
million compared to $188.3 million in 2023. Adjusted EBITA before
restructuring charges was $205.5 million compared to $210.8 million
for the same period in 2023. First quarter 2024 margin of adjusted
EBITA before restructuring charges was 9.4% on revenue before
billable expenses.
- Refer to reconciliations in the appendix within this press
release for further detail.
Net Results
- In the first quarter of 2024, the income tax provision was
$47.3 million on income before income taxes of $160.6 million.
- First quarter 2024 net income available to IPG common
stockholders was $110.4 million, resulting in earnings of $0.29 per
basic and diluted share compared to earnings of $0.33 per basic and
diluted share for the same period in 2023. Adjusted earnings were
$0.36 per diluted share compared to adjusted earnings per diluted
share of $0.38 a year ago. First quarter 2024 adjusted earnings
excludes after-tax amortization of acquired intangibles of $16.5
million, after-tax restructuring charges of $0.5 million and an
after-tax loss of $7.9 million on the sales of businesses.
- Refer to reconciliations in the appendix within this press
release for further detail.
Operating Results
RevenueRevenue before billable expenses
of $2.18 billion in the first quarter of 2024 increased 0.3%
compared with the same period in 2023. Compared to the first
quarter of 2023, the effect of foreign currency translation was
positive 0.1%, the impact of net dispositions was negative 1.1%,
and the resulting organic increase of net revenue was 1.3%.
Operating ExpensesIn the first quarter of
2024, total operating expenses, excluding billable expenses,
increased 0.5%.
In the first quarter of 2024, staff cost ratio,
which is total salaries and related expenses as a percentage of
revenue before billable expenses, decreased to 72.1% compared to
72.5% for the same period in 2023. Total salaries and related
expenses in the first quarter of 2024 were $1.57 billion, a
decrease of 0.3% from a year ago. The decrease was primarily driven
by decreased base salaries, benefits and tax partially offset by
increased severance expense.
In the first quarter of 2024, office and other
direct expenses as a percentage of revenue before billable expenses
decreased to 14.8% compared to 15.2% for the same period in 2023.
Office and other direct expenses were $322.1 million in the first
quarter of 2024, a decrease of 2.5% from a year ago, primarily
driven by decreased client service costs and expenses related to
company meetings and conferences.
Selling, general and administrative ("SG&A")
expenses were $38.0 million in the first quarter of 2024, compared
to $12.9 million a year ago, primarily due to increased centralized
base salaries, benefits and tax and technology & software
expenses.
Depreciation and amortization expense decreased
by 2.0% during the first quarter of 2024 compared to the same
period in 2023.
Non-Operating Results and TaxNet interest
expense decreased by $1.5 million to $14.1 million in the first
quarter of 2024 from a year ago, primarily attributable to higher
interest rates on net deposits.
Other expense, net was $9.5 million in the first
quarter of 2024 which primarily related to losses on sales of
businesses and the classification of certain assets and liabilities
as held for sale.
The income tax provision in the first quarter of
2024 was $47.3 million on income before income taxes of $160.6
million. This compares to an income tax provision of $33.8 million
for the first quarter of 2023 on income before income taxes of
$166.0 million.
Balance SheetAt March 31, 2024, cash
and cash equivalents totaled $1.93 billion, compared to $2.39
billion at December 31, 2023 and $1.68 billion on
March 31, 2023. Total debt was $3.19 billion at March 31,
2024, compared to $3.20 billion at December 31, 2023.
Share Repurchase ProgramDuring the first
three months of 2024, the Company repurchased 1.9 million shares of
its common stock at an aggregate cost of $62.4 million and an
average price of $32.41 per share, including fees.
Common Stock DividendDuring the first
quarter of 2024, the Company declared and paid a common stock cash
dividend of $0.330 per share, for a total of $126.6 million.
For further information regarding the Company's
financial results as well as certain non-GAAP measures including
organic revenue before billable expenses change, adjusted EBITA,
adjusted EBITA before restructuring charges and adjusted earnings
per diluted share, and the reconciliations thereof, please refer to
the appendix within this press release and our Investor
Presentation filed on Form 8-K herewith and available on our
website, www.interpublic.com.
# # #
About Interpublic
Interpublic (NYSE: IPG) (www.interpublic.com) is
a values-based, data-fueled, and creatively-driven provider of
marketing solutions. Home to some of the world’s best-known and
most innovative communications specialists, IPG global brands
include Acxiom, Craft, FCB, FutureBrand, Golin, Huge, Initiative,
IPG Health, IPG Mediabrands, Jack Morton, KINESSO, MAGNA, McCann,
Mediahub, Momentum, MRM, MullenLowe Global, Octagon, R/GA, UM,
Weber Shandwick and more. IPG is an S&P 500 company with total
revenue of $10.89 billion in 2023.
# # #
Contact Information
Tom Cunningham(Press)(212) 704-1326
Jerry Leshne(Analysts, Investors)(212)
704-1439
Cautionary Statement
This release contains forward-looking
statements. Statements in this report that are not historical
facts, including statements regarding guidance, goals, intentions,
and expectations as to future plans, trends, events, or future
results of operations or financial position, constitute
forward-looking statements. Forward-looking statements are based on
current expectations and assumptions that are subject to risks and
uncertainties, which could cause our actual results and outcomes to
differ materially from those reflected in the forward-looking
statements, and are subject to change based on a number of factors,
including those outlined under item 1A, Risk Factors, in our most
recent Annual Report on Form 10-K and our quarterly reports on Form
10-Q and our other filings with the Securities and Exchange
Commission ("SEC"). Forward-looking statements speak only as of the
date they are made, and we undertake no obligation to update
publicly any of them in light of new information or future
events.
Forward-looking statements involve inherent
risks and uncertainties. A number of important factors could cause
actual results to differ materially from those contained in any
forward-looking statement. Such factors include, but are not
limited to, the following:
- the effects of a challenging economy on the demand for our
advertising and marketing services, on our clients’ financial
condition and on our business or financial condition;
- our ability to attract new clients and retain existing
clients;
- our ability to retain and attract key employees;
- risks associated with the effects of global, national and
regional economic and political conditions, including counterparty
risks and fluctuations in interest rates, inflation rates and
currency exchange rates;
- the economic or business impact of military or political
conflict in key markets;
- the impacts on our business of any pandemics, epidemics,
disease outbreaks or other public health crises;
- risks associated with assumptions we make in connection with
our critical accounting estimates, including changes in assumptions
associated with any effects of a challenging economy;
- potential adverse effects if we are required to recognize
impairment charges or other adverse accounting-related
developments;
- developments from changes in the regulatory and legal
environment for advertising and marketing services companies around
the world, including laws and regulations related to data
protection and consumer privacy; and
- the impact on our operations of general or directed
cybersecurity events.
Investors should carefully consider the
foregoing factors and the other risks and uncertainties that may
affect our business, including those outlined in more detail under
Item 1A, Risk Factors, in our most recent Annual Report on Form
10-K and our quarterly reports on Form 10-Q and our other SEC
filings. Investors are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date they
are made. We undertake no obligation to update or revise publicly
any of them in light of new information, future events, or
otherwise.
APPENDIX
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND
SUBSIDIARIESCONSOLIDATED SUMMARY OF EARNINGSFIRST QUARTER REPORT
2024 AND 2023(Amounts in Millions except Per Share
Data)(UNAUDITED) |
|
|
|
|
|
Three Months Ended March 31, |
|
|
2024 |
|
2023 |
|
Fav. (Unfav.)% Variance |
Revenue: |
|
|
|
|
|
|
Revenue before
Billable Expenses |
$2,182.9 |
|
$2,176.9 |
|
0.3 % |
|
Billable
Expenses |
313.0 |
|
344.1 |
|
(9.0) % |
Total
Revenue |
2,495.9 |
|
2,521.0 |
|
(1.0) % |
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
Salaries and
Related Expenses |
1,572.8 |
|
1,577.3 |
|
0.3 % |
|
Office and Other
Direct Expenses |
322.1 |
|
330.3 |
|
2.5 % |
|
Billable
Expenses |
313.0 |
|
344.1 |
|
9.0 % |
|
Cost of Services |
2,207.9 |
|
2,251.7 |
|
1.9 % |
|
Selling, General
and Administrative Expenses |
38.0 |
|
12.9 |
|
>(100)% |
|
Depreciation and
Amortization |
65.2 |
|
66.5 |
|
2.0 % |
|
Restructuring
Charges |
0.6 |
|
1.6 |
|
62.5 % |
Total
Operating Expenses |
2,311.7 |
|
2,332.7 |
|
0.9 % |
Operating Income |
184.2 |
|
188.3 |
|
(2.2) % |
|
|
|
|
|
|
|
Expenses and Other Income: |
|
|
|
|
|
|
Interest
Expense |
(62.8) |
|
(49.7) |
|
|
|
Interest
Income |
48.7 |
|
34.1 |
|
|
|
Other Expense,
Net |
(9.5) |
|
(6.7) |
|
|
Total
(Expenses) and Other Income |
(23.6) |
|
(22.3) |
|
|
|
|
|
|
|
|
|
Income Before Income Taxes |
160.6 |
|
166.0 |
|
|
|
Provision for
Income Taxes |
47.3 |
|
33.8 |
|
|
Income of Consolidated Companies |
113.3 |
|
132.2 |
|
|
|
Equity in Net
Income (Loss) of Unconsolidated Affiliates |
0.3 |
|
(0.1) |
|
|
Net Income |
113.6 |
|
132.1 |
|
|
|
Net Income
Attributable to Non-controlling Interests |
(3.2) |
|
(6.1) |
|
|
Net Income Available to IPG Common
Stockholders |
$110.4 |
|
$126.0 |
|
|
|
|
|
|
|
|
Earnings Per Share Available to IPG Common
Stockholders: |
|
|
|
|
|
Basic |
$0.29 |
|
$0.33 |
|
|
Diluted |
$0.29 |
|
$0.33 |
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding: |
|
|
|
|
|
Basic |
378.4 |
|
385.8 |
|
|
Diluted |
380.6 |
|
387.4 |
|
|
|
|
|
|
|
|
Dividends Declared Per Common Share |
$0.330 |
|
$0.310 |
|
|
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIESU.S. GAAP
RECONCILIATION OF NON-GAAP ADJUSTED RESULTS(Amounts in Millions
except Per Share Data)(UNAUDITED) |
|
Three Months Ended March 31, 2024 |
|
As Reported |
|
Amortization of Acquired Intangibles |
|
Restructuring Charges |
|
Net Losses on Sales of Businesses1 |
|
Adjusted Results
(Non-GAAP) |
Operating
Income and Adjusted EBITA before Restructuring
Charges2 |
$184.2 |
|
$(20.7) |
|
$(0.6) |
|
|
|
$205.5 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income3 |
(23.6) |
|
|
|
|
|
$(6.8) |
|
(16.8) |
Income
Before Income Taxes |
160.6 |
|
(20.7) |
|
(0.6) |
|
(6.8) |
|
188.7 |
Provision for Income Taxes |
47.3 |
|
4.2 |
|
0.1 |
|
(1.1) |
|
50.5 |
Equity in Net Income of Unconsolidated Affiliates |
0.3 |
|
|
|
|
|
|
|
0.3 |
Net Income Attributable to Non-controlling Interests |
(3.2) |
|
|
|
|
|
|
|
(3.2) |
Net
Income Available to IPG Common Stockholders |
$110.4 |
|
$(16.5) |
|
$(0.5) |
|
$(7.9) |
|
$135.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
378.4 |
|
|
|
|
|
|
|
378.4 |
Dilutive effect of stock options and restricted shares |
2.2 |
|
|
|
|
|
|
|
2.2 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
380.6 |
|
|
|
|
|
|
|
380.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per Share Available to IPG Common Stockholders4: |
|
|
|
|
|
|
|
|
|
Basic |
$0.29 |
|
$(0.04) |
|
$(0.00) |
|
$(0.02) |
|
$0.36 |
Diluted |
$0.29 |
|
$(0.04) |
|
$(0.00) |
|
$(0.02) |
|
$0.36 |
|
|
|
|
|
|
|
|
|
|
1
Primarily relates to losses on complete dispositions of businesses
and the classification of certain assets as held for sale. |
2
Refer to non-GAAP reconciliation of Adjusted EBITA before
Restructuring Charges on page A3 in the appendix. |
3
Consists of non-operating expenses including interest expense,
interest income and other expense, net. |
4
Earnings per share amounts are calculated on an unrounded basis but
rounded for purposes of presentation. |
Note: Management believes the resulting comparisons provide useful
supplemental data that, while not a substitute for GAAP measures,
allow for greater transparency in the review of our financial and
operational performance. |
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIES U.S. GAAP
RECONCILIATION OF NON-GAAP ADJUSTED RESULTS (Amounts in Millions)
(UNAUDITED) |
|
Three Months Ended March 31, |
|
2024 |
|
2023 |
|
|
|
|
Revenue
Before Billable Expenses |
$2,182.9 |
|
$2,176.9 |
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliation: |
|
|
|
Net
Income Available to IPG Common Stockholders |
$110.4 |
|
$126.0 |
|
|
|
|
Add Back: |
|
|
|
Provision for Income Taxes |
47.3 |
|
33.8 |
Subtract: |
|
|
|
Total (Expenses) and Other Income |
(23.6) |
|
(22.3) |
Equity in Net Income (Loss) of Unconsolidated Affiliates |
0.3 |
|
(0.1) |
Net Income Attributable to Non-controlling Interests |
(3.2) |
|
(6.1) |
Operating
Income |
184.2 |
|
188.3 |
|
|
|
|
Add Back: |
|
|
|
Amortization of Acquired Intangibles |
20.7 |
|
20.9 |
|
|
|
|
Adjusted
EBITA |
$204.9 |
|
$209.2 |
Adjusted EBITA
Margin on Revenue before Billable Expenses % |
9.4 % |
|
9.6 % |
|
|
|
|
Restructuring Charges |
0.6 |
|
1.6 |
|
|
|
|
Adjusted
EBITA before Restructuring Charges |
$205.5 |
|
$210.8 |
Adjusted EBITA
before Restructuring Charges Margin on Revenue before Billable
Expenses % |
9.4 % |
|
9.7 % |
|
|
|
|
Note:
Management believes the resulting comparisons provide useful
supplemental data that, while not a substitute for GAAP measures,
allow for greater transparency in the review of our financial and
operational performance. |
THE INTERPUBLIC GROUP OF COMPANIES, INC. AND SUBSIDIARIESU.S. GAAP
RECONCILIATION OF NON-GAAP ADJUSTED RESULTS(Amounts in Millions
except Per Share Data)(UNAUDITED) |
|
Three Months Ended March 31, 2023 |
|
As Reported |
|
Amortization of Acquired Intangibles |
|
Restructuring Charges |
|
Net Losses on Sales of Businesses1 |
|
Adjusted Results
(Non-GAAP) |
Operating
Income and Adjusted EBITA before Restructuring
Charges2 |
$188.3 |
|
$(20.9) |
|
$(1.6) |
|
|
|
$210.8 |
|
|
|
|
|
|
|
|
|
|
Total (Expenses) and Other Income3 |
(22.3) |
|
|
|
|
|
$(4.2) |
|
(18.1) |
Income
Before Income Taxes |
166.0 |
|
(20.9) |
|
(1.6) |
|
(4.2) |
|
192.7 |
Provision for Income Taxes |
33.8 |
|
4.2 |
|
0.3 |
|
1.3 |
|
39.6 |
Equity in Net Loss of Unconsolidated Affiliates |
(0.1) |
|
|
|
|
|
|
|
(0.1) |
Net Income Attributable to Non-controlling Interests |
(6.1) |
|
|
|
|
|
|
|
(6.1) |
Net
Income Available to IPG Common Stockholders |
$126.0 |
|
$(16.7) |
|
$(1.3) |
|
$(2.9) |
|
$146.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average Number of Common Shares Outstanding -
Basic |
385.8 |
|
|
|
|
|
|
|
385.8 |
Dilutive effect of stock options and restricted shares |
1.6 |
|
|
|
|
|
|
|
1.6 |
Weighted-Average Number of Common Shares Outstanding -
Diluted |
387.4 |
|
|
|
|
|
|
|
387.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per Share Available to IPG Common Stockholders4: |
|
|
|
|
|
|
|
|
|
Basic |
$0.33 |
|
$(0.04) |
|
$(0.00) |
|
$(0.01) |
|
$0.38 |
Diluted |
$0.33 |
|
$(0.04) |
|
$(0.00) |
|
$(0.01) |
|
$0.38 |
|
|
|
|
|
|
|
|
|
|
1
Primarily relates to losses on complete dispositions of businesses
and the classification of certain assets as held for sale. |
2
Refer to non-GAAP reconciliation of Adjusted EBITA before
Restructuring Charges on page A3 in the appendix. |
3
Consists of non-operating expenses including interest expense,
interest income and other expense, net. |
4
Earnings per share amounts are calculated on an unrounded basis but
rounded for purposes of presentation. |
Note: Management believes the resulting comparisons provide useful
supplemental data that, while not a substitute for GAAP measures,
allow for greater transparency in the review of our financial and
operational performance. |
Interpublic Group of Com... (NYSE:IPG)
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