http://www.morningstar.com/earnings/54530060-interpublic-group-of-companies-inc-ipg-q2-2013.aspx

Interpublic Group of Companies, Inc IPG
Q2 2013 Earnings Call Transcript

Transcript Call Date 07/19/2013

Operator: Good morning, and welcome to the Interpublic Group Second Quarter 2013 Earnings Conference Call. All parties are in a listen-only mode until the question-and-answer portion. This conference is being recorded. If you have any objections, you may disconnect at this time.

I would now like to introduce Jerry Leshne, Senior Vice President of Investor Relations. Sir, you may begin.

Jerome J. Leshne - SVP, IR: Good morning. Thank you for joining us. We have posted our earnings release and our slide presentation on our website, interpublic.com and we'll refer to both in the course of this call. This morning, we are joined by Michael Roth and Frank Mergenthaler. We will begin with prepared remarks to be followed by Q&A. We plan to conclude before market open at 9.30 am Eastern.

During this call, we will refer to forward-looking statements about our Company, which are subject to uncertainties in the cautionary statement included in our earnings release and the slide presentation, and further detailed in our 10-Q and other filings with the SEC.

At this point, it is my pleasure to turn things over to Michael Roth.

Michael I. Roth - Chairman and CEO: Thank you, Jerry, and thank you all for joining us this morning as we review our second quarter and first half results. As usual, I'll start out by covering the key highlights of our performance, Frank will then provide additional details on the quarter, and I'll conclude with an update on our agencies, the tone of the business, to be followed by the Q&A.

We’re pleased to report a quarter that saw a solid growth in many key world markets. In the U.S., which is our largest market, growth accelerated during Q2 from recent levels. In LatAm, we again had an outstanding performance. And in Asia-Pac, we posted solid growth on the top of challenging year ago comparisons. Overall, our second quarter organic growth was 2.2%. Underneath that number, U.S. growth improved to 3.3%, with contributions from a wide range of our agencies. And let's not forget, we were cycling through the last of our headwinds in the market of approximately 2%. We were led by our marketing service specialist at CMG; Mediabrands, McCann, Huge, Deutsch and several of our integrated agencies.

Leading domestic client sectors were auto and transportation, consumer goods, food and beverage, and healthcare. In the Latin American region, organic growth was 16.1%, which was on top of 27% the year ago; very strong performance. In Asia-Pac, our growth was 4.5%, which also was on top of double-digit growth in Q2 2012.

Our results also reflect the continued challenging business conditions across Continental Europe, where our Q2 organic revenue change was a decrease of 8%, due largely to decreased spend across the region by multinational and local clients, particularly in June, which had weaker than expected performance.

Revenue from acquisitions added over 1% to our consolidated organic growth. This is the result of further investments in high-growth marketing disciplines, such as digital, shopper marketing and certain areas of healthcare, as well as acquisitions in high-growth and strategic international markets.

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