IPG profits down 8.6% after 2011 losses hit revenues
Interpublic Group (IPG), the US-based owner of McCann Worldgroup and UM, made pre-tax profits of $674.8m (£441.8m), a decrease of 8.6% year on year, reversing the positive trend reported by Publicis Groupe and Omnicom.
Last week, Publicis Groupe, the owner of Saatchi & Saatchi, reported pre-tax income of €1.02bn (£882.9m), an increase of 18.7% year on year, while BBDO-owner Omnicom’s pre-tax profits were $1.66bn (£1.1bn), up 7.1% year on year.
According to results published today, IPG’s total global revenue was $6.96bn (£4.5bn) in 2012, a decrease of 0.8% from $7.01bn (£4.6bn) in 2011. In the final three months of the year IPG’s revenue was $2.06bn (£1.3bn), a decrease of 0.4% year on year.
In 2012, IPG’s revenue from businesses outside the US was $3.15bn (£2.06bn), an increase of 0.8% year on year, while its revenue in its US heartland was $3.80bn (£2.50bn), a decrease of 2.2% year on year.
IPG said on an organic basis its global revenue increased 0.7% after organic revenue growth in its international business, which includes the UK, was partially offset by the impact of business lost in the US in 2011.
Increased revenue from existing clients and new business wins in high-growth geographic markets helped international revenue grow by 3.8% on an organic basis, while IPG’s revenue declined by 1.8% on an organic basis in the US.
IPG reported pre-tax profits of $476.8m (£312.2m) for the final three months of 2012, an increase of a whopping 28.7% year on year after IPG made $95m (£62m) from the sale of Facebook shares in November 2012.
Michael Roth, chairman and chief executive of IPG, said: "2012 challenged us in terms of growth, due in large part to account losses suffered in 2011, but we demonstrated our ability to control expenses and drive significant value creation through our strong balance sheet and the return of capital to our owners.
"Our offerings are highly competitive and we are coming into this year in a much stronger position with respect to client retention and new business activity."
In comparison, Publicis Groupe’s revenue across 2012 was €6.61bn (£5.7bn), up 13.6% year on year, and Omnicom’s revenue was $14.22bn (£9.31bn), up 2.5% year on year.
Roth said by continuing to build on key growth areas, such as emerging economies and digital capabilities, and remaining vigilant in managing costs, IPG expected to return to organic revenue growth performance "commensurate with our peers" in 2013.
This article was first published on campaignlive.co.uk
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