IPG posts revenue decline, share price jumps
IPG has reported a marginally better second quarter than expected, posting a 3.5% drop in organic net revenue. The news prompted a 6.7% jump in IPG’s stock.
The holdco reported AU$3.87 billion (US$2.54 billion) in total revenue for Q2, down from AU$4.14 billion (US$2.71 billion) in the same period last year.
Net revenue was down 6.6% year-on-year at AU$3.31 billion (US$2.17 billion). This reflected a net decrease due to “strategic dispositions” of 3.4%, organic growth of -3.5%, and impact of foreign currency translation of 0.3%.
Given the market’s gloomy expectations for the holdco, IPG’s stock picked up, closing almost 7% up at US$25.69.
The decrease in organic growth was “in line with expectations”, according to IPG’s CEO Philippe Krakowsky. He said the decline was due to “prior-year client account activity”.
Philippe Krakowsky
Broken down into disciplines, there was “strong performance” in media and healthcare in Q2. Public relations and sports marketing also saw growth.
“Our organization continues to evolve as we connect more of our capabilities to the strong foundational elements of data and technology,” Krakowsky said in a release.
“This includes continued progress in embedding artificial intelligence in our workflows and products, allowing us to deliver the benefits of our centers of excellence and platforms to clients through solutions that drive marketing and sales outcomes for their businesses.
Looking at Q2’s impact on H1, IPG’s net revenue is down 7.6% year-on-year at AU$6.36 billion (US$4.17 billion). For the first six months of the year, organic growth decreased a total of 3.6%.
Krakowsky said the holdco remains on track for its full-year expectation of an organic net revenue decrease of 1-2%.
“At this level, we expect to drive adjusted 2025 EBITA margin significantly ahead of the 16.6% we had previously shared, reflecting both structural and operating improvement,” he said.
The results come as IPG prepares to merge into Omnicom, following last year’s acquisition announcement. The deal has been approved by regulators in the US, New Zealand, and Australia.
The UK’s Competition and Markets Authority has also launched a review, with a preliminary decision expected in August.
Krakowsky said the holding companies also remain on track to see the deal completed in the second half of this year.
“The level of interest and support from clients continues to be strong, and there is enthusiasm on the part of practitioners across both organizations to unlock the value that the combination will create,” he said in the release.
“By bringing together our deep pools of talent, complementary capabilities, and geographic strengths, we can create an organization with unmatched ability to deliver business outcomes for marketers in every industry sector, around the world.”
Omnicom reported a better Q2 in comparison, with 3% organic revenue growth.
Broken down by discipline, year-on-year growth was 8.2% for media and advertising; 5% for precision marketing; 2.9% for experiential; and 1.5% for execution and support. This growth was partially offset by declines of 9.3% for public relations, 4.9% for healthcare, and 16.9% for branding and retail commerce.
Publicis Groupe continues to be the star performer of the holdcos, with 5.9% organic growth credited to an “unprecedented new business run” in the first six months of the year, including Coca-Cola, Nespresso, Lego, Paramount, and Spotify. In total, the group secured AU$8 billion (€4.46 billion) in new business in H1.
Havas will share its H1 results on July 29. WPP’s Q2 results will be on August 7, and Dentsu on August 14.
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