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IPG loses US$9.5m in first quarter of 2019, but is ‘on track’ for growth

Interpublic Group (IPG) has announced a “seasonally small” first quarter, which amounted to a loss of US$9.5m. The figure was down on the same quarter in 2018, when the company lost US$16.1m.

Total revenue for the Interpublic Group between 1 January, 2019 and 31 March, was US$2.36bn, an 8.9% increase on the same period last year. Net revenue was up to US$2bn, a 13% increase.

Operating income, however, soared from US$38.8m in the first three months of the 2018 calendar year, to US$50.2m. The company said this rise can largely be attributed to the inclusion of Axiom – the data, analytics and identity management business IPG acquired last year in a US$2.3bn cash transaction.

The company had cash and cash equivalents of US$630.5m at the end of March, down from the US$673.4m it had at the conclusion of 2018, but up from the corresponding period in 2018 when it had US$597.3m.

Its debt climbed to US$3.94bn – up from US$3.73bn at the end of last year.

Interpublic chairman and CEO Michael Roth was optimistic about the results, despite the small quarter.

“We continue to be pleased with our strong organic growth in the US and in all international regions,” he said.

“Our results were driven by strong top- and bottom-line performance in media, as well as growth from our global creative networks, public relations and digital offerings. While Q1 is our smallest seasonal quarter, our results continue to demonstrate the many strengths of our company and underscore the successful evolution of our offerings amid significant change in the environment in which we operate. With Acxiom, we have also significantly strengthened our position as it relates to helping clients succeed in a world where data-driven marketing solutions are core to brands’ success.”

IPG is, he said, on track to deliver growth across 2019.

“We remain on track to deliver on our targets of organic growth of 2.0% to 3.0% and 40 to 50 basis points of improvement to our adjusted EBITA margin for the full year. This takes into account the impact certain losses that took place in late 2018 will have over the remainder of this year. Our operating performance, combined with our commitment to deleverage our balance sheet and our strong history of capital return programs, including dividend increases, means we remain well positioned to further enhance shareholder value.”

Rival holding group WPP also recently announced its financial results for Q1 of the calendar year, with a revenue decline of -2.8%. Its North American arm was hit particularly hard with client losses, racking up a revenue decline of -8.5%.

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