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IPG revenues jump 12.9%, but Krakowsky predicts ‘consolidation’ in 2022

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By Sam Bradley | Senior Reporter

February 10, 2022 | 4 min read

Interpublic Group (IPG) increased its net revenues almost 13% last year, according to its full year results for 2021.

IPG company assets

Interpublic Group has released its full-year results for 2021

Its annual results showed the holding company managed to increase its operating margins, cut debt and increase revenues.

Philippe Krakowsky, IPG’s chief executive, said its data and performance capabilities had helped boost its bottom line. “Our strong performance reflects more than the cyclical economic recovery – it further validates the growing role we are playing with marketers as they adapt and enhance their businesses to meet the challenges and opportunities of the digital economy.”

What do the results show?

IPG increased its net revenue from $8.06bn in 2020 to $9.11bn last year, a rise of 12.9%. Net revenue in the fourth quarter of the financial year was $2.93bn.

Organic net revenue growth was 11.9% – its US operations grew 1.9% and its international business grew 13.9%.

It increased its operating margin last year, increasing its EBITA (earnings before interest, tax and amortization) rate from 13.1% in 2020 to 16.8%.

It also continued to bear some restructuring costs left over from the previous year, spending $13m over 2021. The previous year saw it mark down over $400m to restructuring.

The IPG board has approved a 7% increase in its quarterly dividend – a move that will please shareholders. It also reauthorized its share repurchase program, which seeks to buy back approximately $400m of the firm’s stock.

Which areas of the business performed best?

Organic growth in the US was 12.1%; the UK and Europe grew 6.2% and 6% respectively. APAC saw organic growth of almost 10%.

Speaking to investors, Krakowsky highlighted the contributions of McCann and Jack Morton in particular.

Axciom, he said, had been of particular aid, following its acquisition in late 2018.

What next for IPG?

Krakowsky suggested that 2022 would be a year to consolidate on the firm’s post-pandemic gains.

In a statement, he said the organic growth target for the next full year was 5%. “As we look ahead, we anticipate that 2022 will be another year of strong growth, on top of our multi-year, industry-leading performance. As such, we are targeting full-year organic growth of 5% in 2022. With that level of growth, we expect that in 2022 we will consolidate the significant gains achieved in adjusted EBITA margin over the past two years, at a level of approximately 16.6%.”

IPG wiped millions of dollars off its total debt last year, cutting it from $3.27bn in 2020 to $2.96bn in 2021.

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