Interpublic Group of Companies Inc

Interpublic Group of Companies — Q4 2024 Earnings Presentation

41 slides from Interpublic Group of Companies's earnings presentation, Feb 12, 2025

  1. Slide 1: Fourth Quarter & Full Year 2024 Earnings Conference Call

    FOURTH QUARTER & FULL YEAR 2024 EARNINGS CONFERENCE CALL Interpublic Group February 12, 2025

  2. Slide 2: Overview — Fourth Quarter & Full Year 2024

    Overview — Fourth Quarter & Full Year 2024 • Fourth quarter total revenue including billable expenses was $2.9 billion ◦ Organic change of revenue before billable expenses (“net revenue”) was -1.8% ◦ US organic decrease was -3.2% ◦ International organic growth was +0.3% • Fourth quarter net income a

  3. Slide 3: Operating Performance

    Operating Performance Three Months Ended December 31, 2024 2023 Revenue Before Billable Expenses $ 2,434.9 $ 2,586.2 Billable Expenses 422.1 437.1 Total Revenue 2,857.0 3,023.3 Salaries and Related Expenses 1,430.4 1,536.9 Office and Other Direct Expenses 335.5 352.9 Billable Expenses 422.1 437.1 Co

  4. Slide 4: Revenue Before Billable Expenses

    Revenue Before Billable Expenses (1) Three Months Ended Twelve Months Ended $ % Change $ % Change December 31, 2023 $ 2,586.2 $ 9,400.6 Foreign currency (11.7) (0.5%) (33.2) (0.4%) Net acquisitions/(divestitures) (91.9) (3.6%) (200.3) (2.1%) Organic (47.7) (1.8%) 20.5 0.2% Total change (151.3) (5.9%

  5. Slide 5: Organic Change of Net Revenue by Region

    Organic Change of Net Revenue by Region Three Months Ended December 31, 2024 -3.3% United Kingdom -3.2% -3.0% United States Continental Europe +12.1% All Other Markets -7.9% +10.4% Asia Pacific Latin America “All Other Markets” includes Canada, the Middle East and Africa. Circle proportions represen

  6. Slide 6: Operating Expenses % of Revenue Before Billable Expenses

    Operating Expenses % of Revenue Before Billable Expenses Three Months Ended December 31 (1) (2) (1) Includes deal costs recorded in the fourth quarter of 2024 related to the planned acquisition of IPG by Omnicom. (2) Excludes amortization of acquired intangibles. Interpublic Group of Companies, Inc.

  7. Slide 7: Adjusted Diluted Earnings Per Share

    Adjusted Diluted Earnings Per Share Three Months Ended December 31, 2024 Amortization Restructuring Net Losses on Adjusted of Acquired Charges (1) Deal Costs (2) Business Results As Reported Intangibles Dispositions (3) (Non-GAAP) Operating Income and Adjusted EBITA before Restructuring Charges $ 56

  8. Slide 8: Adjusted Diluted Earnings Per Share

    Adjusted Diluted Earnings Per Share Twelve Months Ended December 31, 2024 Amortization Impairment Restructuring Net Losses on Adjusted of Acquired of Goodwill Charges (1) Deal Costs (2) Business Results As Reported Intangibles Dispositions (3) (Non-GAAP) Operating Income and Adjusted EBITA before Re

  9. Slide 9: Cash Flow

    Cash Flow Twelve Months Ended December 31, 2024 2023 Net income $ 715.7 $ 1,118.1 OPERATING ACTIVITIES: Depreciation & amortization 324.7 313.0 Impairment of goodwill 232.1 — Net losses (gains) on sales of businesses 64.2 (17.9) Other non-cash items 48.1 34.0 Non-cash restructuring charges (5.0) (0.

  10. Slide 10: Balance Sheet — Current Portion

    Balance Sheet — Current Portion December 31, 2024 December 31, 2023 CURRENT ASSETS: Cash and cash equivalents $ 2,187.1 $ 2,386.1 Accounts receivable, net 5,649.7 5,768.8 Accounts receivable, billable to clients 2,088.4 2,229.2 Prepaid expenses 552.4 415.8 Assets held for sale 51.4 21.9 Other curren

  11. Slide 11: Debt Maturity Schedule

    Debt Maturity Schedule Total Debt = $3.0 billion 4.65% 4.75% 2.40% 5.375% 3.375% 5.40% ... ... ... Short-Term Debt Senior Notes ($ in Millions) Interpublic Group of Companies, Inc. 11

  12. Slide 12: Interpublic + Omnicom

    Interpublic + Omnicom Strategic Rationale Technology Financial Timing - Expanded and enhanced - Superior data, identity - Significant revenue growth - Regulatory process products and services will resolution and commerce opportunities will result from progressing across relevant benefit IPG & OMC cl

  13. Slide 13: Appendix

    Appendix Interpublic Group of Companies, Inc. 13

  14. Slide 14: Operating Performance

    Operating Performance Twelve Months Ended December 31, 2024 2023 Revenue Before Billable Expenses $ 9,187.6 $ 9,400.6 Billable Expenses 1,504.1 1,488.7 Total Revenue 10,691.7 10,889.3 Salaries and Related Expenses 6,024.8 6,243.9 Office and Other Direct Expenses 1,343.1 1,342.5 Billable Expenses 1,5

  15. Slide 15: Organic Change of Net Revenue by Region

    Organic Change of Net Revenue by Region Twelve Months Ended December 31, 2024 -0.2% United Kingdom 0.0% +2.5% United States Continental Europe +2.7% All Other Markets -6.5% +7.4% Asia Pacific Latin America “All Other Markets” includes Canada, the Middle East and Africa. Circle proportions represent

  16. Slide 16: Operating Expenses % of Revenue Before Billable Expenses

    Operating Expenses % of Revenue Before Billable Expenses Twelve Months Ended December 31 (1) (2) (1) Includes deal costs recorded in the fourth quarter of 2024 related to the planned acquisition of IPG by Omnicom. (2) Excludes amortization of acquired intangibles. Interpublic Group of Companies, Inc

  17. Slide 17: Cash Flow

    Cash Flow Three Months Ended December 31, 2024 2023 Net income $ 358.3 $ 471.6 OPERATING ACTIVITIES: Depreciation & amortization 75.9 76.3 Net losses (gains) on sales of businesses 57.8 (36.8) Other non-cash items 6.2 9.5 Non-cash restructuring charges (6.4) 0.8 Deferred taxes (3.2) 10.6 Change in w

  18. Slide 18: Depreciation and Amortization

    Depreciation and Amortization 2024 Q1 Q2 Q3 Q4 FY 2024 Depreciation and amortization (1) $ 44.5 $ 44.6 $ 45.0 $ 43.0 $ 177.1 Amortization of acquired intangibles 20.7 20.4 20.3 20.4 81.8 Amortization of restricted stock and other non-cash compensation 16.4 18.1 17.9 12.4 64.8 Net amortization of bon

  19. Slide 19: Reconciliation of Organic Change of Net Revenue

    Reconciliation of Organic Change of Net Revenue Components of Change Change Three Months Net Three Months Ended Foreign Acquisitions/ Ended December 31, Currency Organic December 31, Organic Total (Divestitures) 2023 (1) 2024 Media, Data & Engagement SEGMENT: Solutions (2) $ 1,261.8 $ (7.0) $ (83.8)

  20. Slide 20: Reconciliation of Organic Change of Net Revenue

    Reconciliation of Organic Change of Net Revenue Components of Change Change Twelve Months Net Twelve Months Ended Foreign Acquisitions/ Ended December 31, Currency Organic December 31, Organic Total (Divestitures) 2023 (1) 2024 Media, Data & Engagement SEGMENT: Solutions (2) $ 4,348.6 $ (19.1) $ (12

  21. Slide 21: Reconciliation of Adjusted Results

    (1) Reconciliation of Adjusted Results Three Months Ended December 31, 2024 Amortization Restructuring Net Losses on Adjusted As Reported of Acquired Charges (2) Deal Costs (3) Business Results Intangibles Dispositions (4) (Non-GAAP) Operating Income and Adjusted EBITA before $ 567.9 $ (20.4) $ 6.4

  22. Slide 22: Reconciliation of Adjusted Results

    (1) Reconciliation of Adjusted Results Twelve Months Ended December 31, 2024 Amortization Impairment Restructuring Net Losses on Adjusted As Reported of Acquired of Goodwill Charges (2) Deal Costs(3) Business Results Intangibles Dispositions (4) (Non-GAAP) Operating Income and Adjusted EBITA before

  23. Slide 23: Reconciliation of Adjusted EBITA

    (1) Reconciliation of Adjusted EBITA Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 Revenue Before Billable Expenses $ 2,434.9 $ 2,586.2 $ 9,187.6 $ 9,400.6 Non-GAAP Reconciliation: Net Income Available to IPG Common Stockholders $ 344.5 $ 463.2 $ 689.5 $ 1,098.

  24. Slide 24: Adjusted EBITA before Restructuring Charges and Deal Costs by Segment

    (1) Adjusted EBITA before Restructuring Charges and Deal Costs by Segment Specialized Media, Data & Integrated Advertising & Communications & Engagement Solutions (2) Creativity Led Solutions (3) Experiential Solutions (4) Corporate and Other (5) IPG Consolidated (1) Three Months Ended Three Months

  25. Slide 25: Adjusted EBITA before Restructuring Charges and Deal Costs by Segment

    (1) Adjusted EBITA before Restructuring Charges and Deal Costs by Segment Specialized Media, Data & Integrated Advertising & Communications & Engagement Solutions (2) Creativity Led Solutions (3) Experiential Solutions (4) Corporate and Other (5) IPG Consolidated (1) Twelve Months Ended Twelve Month

  26. Slide 26: Reconciliation of Adjusted Results

    (1) Reconciliation of Adjusted Results Three Months Ended December 31, 2023 Amortization of Restructuring Net Gain on Adjusted Results As Reported Acquired Charges (2) Business (Non-GAAP) Intangibles Dispositions (3) Operating Income and Adjusted EBITA before Restructuring Charges (4) $ 606.8 $ (20.

  27. Slide 27: Reconciliation of Adjusted Results

    (1) Reconciliation of Adjusted Results Twelve Months Ended December 31, 2023 Amortization of Restructuring Net Gain on Adjusted Results As Reported Acquired Charges (2) Business (Non-GAAP) Intangibles Dispositions (3) Operating Income and Adjusted EBITA before Restructuring Charges (4) $ 1,482.6 $ (

  28. Slide 28: Total Shares: Basic and Eligible for Dilution

    Total Shares: Basic and Eligible for Dilution (1) Weighted-Average (2) Basic Shares Dilutive Shares (1) Includes basic common shares outstanding, restricted shares, in-the-money stock options and convertible debt and preferred stock eligible for dilution. (2) Equals weighted-average shares outstandi

  29. Slide 29: Acquisition Payment Obligations

    Acquisition Payment Obligations (1) (2) Actual Potential (1) Amounts represent payments related to our previous acquisitions based on current estimates of financial performance and are subject to change. Amounts include deferred payments, payments we may be required to make in connection with our re

  30. Slide 30: Metrics Update

    Metrics Update Interpublic Group of Companies, Inc. 30

  31. Slide 31: Metrics Update

    Metrics Update CATEGORY: Revenue Before Billable Expenses SALARIES & RELATED OFFICE & OTHER DIRECT REAL ESTATE FINANCIAL (% of Revenue Before (% of Revenue Before Billable Expenses) Billable Expenses) METRIC: By Client Sector Twelve Months Ended Twelve Months Ended Total Square Feet Available Liquid

  32. Slide 32: Revenue Before Billable Expenses By Client Sector

    Revenue Before Billable Expenses By Client Sector Top 500 Clients for the Twelve Months Ended December 31 2024 2023 (1) Other Other 11% 10% Retail Retail 10% 10% Health Care 31% Health Care 29% Financial Financial Services Services 14% 14% Tech & Tech & Telecom Telecom 10% Consumer 12% Consumer Good

  33. Slide 33: Salaries & Related Expenses

    Salaries & Related Expenses Twelve Months Ended December 31 % of Revenue Before Billable Expenses Interpublic Group of Companies, Inc. 33

  34. Slide 34: Salaries & Related Expenses (% of Revenue Before Billable Expenses)

    Salaries & Related Expenses (% of Revenue Before Billable Expenses) Three and Twelve Months Ended December 31 2024 2023 Interpublic Group of Companies, Inc. 34

  35. Slide 35: Office & Other Direct Expenses

    Office & Other Direct Expenses Twelve Months Ended December 31 % of Revenue Before Billable Expenses Interpublic Group of Companies, Inc. 35

  36. Slide 36: Office & Other Direct Expenses (% of Revenue Before Billable Expenses)

    Office & Other Direct Expenses (% of Revenue Before Billable Expenses) Three and Twelve Months Ended December 31 2024 2023 “All Other” primarily includes software and cloud based expenses, client service costs, travel and entertainment, professional fees, spending to support new business activity, t

  37. Slide 37: Real Estate

    Real Estate Total Square Feet as of December 31 (1) (2) (3) Occupied Sublease/Vacant (1) Increase primarily due to the inclusion of Acxiom real estate. (2) Decrease primarily due to real estate restructuring actions taken as part of the 2020 Restructuring Plan. (3) Decrease primarily due to real est

  38. Slide 38: Available Liquidity

    Available Liquidity Cash, Cash Equivalents + Available Committed Credit Facilities Cash and Cash Equivalents Available Committed Credit Facility ($ in Millions) Interpublic Group of Companies, Inc. 38

  39. Slide 39: Credit Facility Covenant

    Credit Facility Covenant Four Quarters Ended Covenants December 31, 2024 Leverage Ratio (not greater than) (1) 3.50x Actual Leverage Ratio 1.69x Four Quarters Ended CREDIT AGREEMENT EBITDA RECONCILIATION: December 31, 2024 Net Income Available to IPG Common Stockholders $ 689.5 (2) + Non-Operating A

  40. Slide 40: Cautionary Statement

    Cautionary Statement This investor presentation contains forward-looking statements. Statements in this investor presentation that are not historical facts, including statements regarding guidance, goals, intentions, and expectations as to future plans, trends, events, or future results of operation

  41. Slide 41: Additional Disclosures

    Additional Disclosures ADDITIONAL INFORMATION ABOUT THE TRANSACTION WITH OMNICOM AND WHERE TO FIND IT In connection with the proposed transaction, IPG and Omnicom have filed a joint proxy statement with the SEC on January 17, 2025 and Omnicom has filed with the SEC a registration statement on Form S

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