IPG’s 12.8% net revenue fall ‘not as severe as anticipated’

Financials

• Net revenue of $1.85bn, down 12.8% from a year ago.

• Organic net revenue down 9.9%.

• Second quarter reported net loss was $45.6m (includes restructuring charges, which hit $112.6m).

• Staff cuts across “most of our agencies”, says Roth.

• Expenses decreased 5.4% to $1.31bn following reductions in base salaries, benefits and tax.

From the boss

• Surprisingly, Roth admitted: “The decrease was perhaps not as severe as we might have anticipated or have seen elsewhere in our industry. Spending by our largest clients held up relatively well.”

• However, auto, financial, industry and transportation industries were its hardest-hit sectors.

• “As expected, our results bear the imprint of the severity of the health crisis and its economic impact,“ Roth said. “However, our companies and our people have adjusted quickly to these uncertain times and new ways of working, as evident in our results, which once again show IPG outperforming the sector.”

• “[IPG] furthered our progress in the most contemporary disciplines, including media, data and technology offerings, as well as our healthcare marketing offerings.”

• Despite the difficulties, he said IPG was “new business positive” for the year, complete with a “solid” pipeline. “We look forward to returning to our strong trajectory of organic revenue and profit growth as a recovery takes hold.”

• At the height of the virus, 95% of staff worked remotely. Now 50% of its staff in Asia are back in offices while in Europe that sits at 30%.

• Roth concluded: “When this does turn around, we will be lean, mean and positioned to outperform.”

• Quarterly earnings hit $0.23 per share, beating analyst expectations but way below the $0.46 per share a year ago

Omnicom reported its earnings yesterday, with a huge revenue drop and 6,100 staff cuts in the quarter.