IPG released its third-quarter earnings report today, with CEO Michael Roth optimistic about the holding company’s performance.
“We are pleased to post another quarter of solid financial performance. Our growth was led by our media, healthcare marketing, public relations and sports & entertainment offerings,” Roth said in a statement. “We saw contributions from a broad range of client sectors, including healthcare, financial services, retail, tech and telecom, and consumer goods.”
IPG’s Q3 earnings report follows Publics Groupe’s market value dropping earlier this month after reporting disappointing Q3 organic revenue.
The results were highlighted by a third-quarter net revenue increase of 8.7% to $2.06 billion, compared to $1.90 billion for Q3 of 2018. Organic net revenue, excluding Acxiom results, was up 1.4% compared to the same period in 2018.
For the first nine months of 2019, net revenue increased 10.2% to $6.19 billion, compared to $5.62 billion in the first nine months of last year, with organic revenue (again excluding Acxiom) up 3.5% for the first nine months of the year compared to the same period in 2018.
Management confirmed IPG was on target to hit year-end organic growth targets at the high-end of between 2 and 3%.
In the U.S., IPG reported organic growth was down 4.8% for the quarter, compared to 2018.
“Regionally, international markets led our growth, while in the U.S., we are working our way through the impact of certain account-specific headwinds,” Roth explained in a statement. “Our overall performance continues to reflect our strong offerings and differentiated strategy, as well as the power of the ideas created by our talented people.”
“If you pull out the [account loss] headwinds, we’re doing pretty well in the U.S.,” Roth said on an earnings call, adding that similar headwinds are anticipated in Q4 but not at the same magnitude.
Roth also addressed the integration of Acxiom and its impact on IPG during the call, claiming the holding company was “in good shape in terms of integrating Acxiom” and is “maybe 90% there,” adding that the integration has “gone better than planned” and IPG is “very pleased with how Acxiom has been integrated and the value added.”
“Acxiom has been very helpful in terms of new media wins,” Roth said and that IPG didn’t expect to fully see the impact of this until 2020.
Addressing a question about succession planning and IPG’s decision to promote Philippe Krakowsky to COO, Roth said, “When myself and the board made that decision, it positions Phillipe in a very strong way in terms of succession. Our job is to make sure there’s a succession plan in place, not just for my job but for everyone’s job.”
“As far as my timing goes, I’m on the back 9 as opposed to the front 9,” Roth joked. “My responsibility to the board is to make sure everything is in place. “