Interpublic Group of Companies Q4 2022 Earnings Report

Interpublic Group of Companies EPS Results

• Actual EPS: $1.02
• Consensus EPS: $1.01
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $0.82

Interpublic Group of Companies Revenue Results

• Actual Revenue: $2.55 billion
• Expected Revenue: $2.55 billion
• Beat/Miss: Beat by +$720.00 thousand
• YoY Revenue Growth: +0.10%

Interpublic Group of Companies Announcement Details

• Quarter: Q4 2022
• Date: 2/9/2023
• Time: Before Market Opens
• Conference Call Date: Thursday, February 9, 2023
• Conference Call Time: 8:30AM ET

Interpublic Group of Companies (NYSE:IPG) (NYSE: IPG) is a leading global provider of marketing solutions and communications services. Through its portfolio of agencies and specialized networks, IPG delivers a broad spectrum of services, including advertising, digital marketing, media planning and buying, public relations, branding, and data analytics. Its creative agencies develop integrated campaigns that span television, print, social media, mobile, experiential and other emerging channels, while its media networks leverage proprietary tools and strategic partnerships to optimize audience targeting and performance.

Since its formation in 1961 as one of the first marketing services holding companies, Interpublic has expanded through strategic acquisitions and organic growth to become one of the so-called “Big Four” advertising conglomerates. The company’s origins date back to early 20th-century agencies such as McCann-Erickson, which was established in 1902 and later became the cornerstone of IPG’s Creative Boutique network. Over the decades, IPG has integrated a diverse mix of creative firms, media specialists and public relations consultancies to provide end-to-end marketing solutions for multinational clients.

Headquartered in New York City, Interpublic Group operates in more than 100 countries across the Americas, Europe, the Middle East, Africa and the Asia-Pacific region. Its global footprint allows clients to tap into local market expertise while benefiting from coordinated international campaigns. IPG’s media network, known as IPG Mediabrands, manages global media investments and deploys data-driven insights to maximize return on investment, while IPG Health focuses on healthcare and pharmaceutical communications. Additional units offer customer experience, commerce activation and crisis communications services.

Interpublic’s leadership team is anchored by Executive Chairman Michael I. Roth, who has guided the company’s strategic direction for over two decades, and Chief Executive Officer Philippe Krakowsky, who assumed the top operational role in 2021. Under their stewardship, the company has prioritized digital transformation, advanced analytics and diversity initiatives to meet evolving client needs. With a commitment to innovation and collaboration, IPG continues to shape the future of marketing by integrating creativity, technology and data across every discipline.

Interpublic Group of Companies Q4 2022 Earnings Call Transcript

Key Takeaways

• Strong FY22 performance: Full‐year organic net revenue growth of 7% and an adjusted EBITDA margin of 16.6%, with Q4 growth of 3.8% and a three‐year organic stack of 14%, demonstrating broad regional and sector gains.
• Board raised the quarterly dividend by 7% to $0.31 per share (11th consecutive increase) and authorized an additional $350 million share repurchase, following $777 million returned to shareholders in 2022.
• Took a $101.7 million non-cash real estate restructuring charge to reduce its footprint by 6.7% (~500k sq ft), expected to deliver $20 million of annual savings with no further restructuring charges planned.
• Acquired RafterOne, a leading e-commerce and Salesforce implementation partner, to bolster commerce and digital transformation capabilities alongside MRM, Reprise Media and IPG Platform Services.
• Anticipates headwinds in H1 2023 from telco sector challenges and the runoff of a large food & beverage client, even as it guides 2–4% organic growth and expanded adjusted EBITDA margin to 16.7%.

Presentation

[Operator]

Good morning, welcome to the Interpublic Group fourth quarter and full year 2022 conference call. All parties are in a listen-only mode until the question-and-answer portion. At that time, if you would like to ask a question, you may press star one. This conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Mr. Jerry Leshne, Senior Vice President of Investor Relations. Sir, you may begin.

[Jerry Leshne, Senior Vice President of Investor Relations at The Interpublic Group of Companies]

Good morning. Thank you for joining us. This morning, we are joined by our CEO, Philippe Krakowsky, and by Ellen Johnson, our CFO. We have posted our earnings release and our slide presentation on our website, interpublic.com. We will begin our call with prepared remarks to be followed by Q&A. We plan to conclude before market open at 9:30 A.M. Eastern Time.

[Jerry Leshne, Senior Vice President of Investor Relations at The Interpublic Group of Companies]

During this call, we will refer to certain Non-GAAP measures. We believe that these measures provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. We will also refer to forward-looking statements about our company. These are subject to the uncertainties and the cautionary statement that is 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 Philippe Krakowsky.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Thanks, Jerry, and thank you for joining us this morning. As usual, I'll start with a high-level view of our performance in the quarter and the full year and our outlook for the year ahead. Ellen will then provide additional detail, and I'll conclude with updates on key developments at our agencies, to be followed by Q&A. We're pleased to share another year of strong performance.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Before turning to the numbers, I'd like to once again thank our more than 58,000 colleagues around the world, whose dedication to our clients and one another are exceptional. Along with their expertise spanning creative marketing services, technology, and data management, that's what continues to be at the heart of our performance. Turning to our results for the full year, organic growth was 7%, and our adjusted EBITDA margin was 16.6%.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Both are at the levels we shared with you in our last update in October. It's worth noting that a year ago at this time, we looked ahead to full year 5% organic growth on top of very challenging multi-year comps, and performance throughout the year drove consistent increases to that 7%. We grew in every world region and broadly across client sectors. Our three-year organic growth stack therefore stands at 14%, a level of performance that speaks to the strength and relevance of our offerings, particularly in services and sectors demanding precision and accountability. In our fourth quarter, organic net revenue growth was 3.8%, which brings three-year growth performance to 9.7%. That means that, as expected, growth slowed in the fourth quarter, consistent with global macroeconomic and geopolitical crosswinds, which we're all aware of.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Notwithstanding slowdowns across the global economy, with that, a broadly more cautious marketing and media environment, our growth continued in every world region during the fourth quarter. Overall, U.S. organic growth was 2.4%, despite dilution from certain units in the portfolio, on top of a very strong 12.1% a year ago. Organic growth in our international markets was 6.1% on top of 11% a year ago. By sector, growth in the fourth quarter was led by our clients in the auto and transportation sector, followed by the retail, our other sector of industrials and government, and healthcare.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Going the other way, tech and telco, which for us is our second largest client sector, began to show the impact of what I guess we could refer as sector specific issues, which we're forecasting will continue to present headwinds for us for at least the first half of 2023. In Q4, we felt the largest quarterly impact of the late 2021 loss of a large food and beverage client, which will finish running off at the end of Q1 this year. Each of our operating segments grew organically in the quarter. In media data and engagement solutions, organic growth was 5%, led by double-digit growth at IPG Mediabrands. Decreases at our digital specialists, which we've called out previously, weighed significantly on segment and group-wide growth in the quarter and the year.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Our integrated advertising and creativity-led solutions segment grew 2.6% paced again by IPG Health, which posted high single-digit growth performance. Our segment of Specialized Communications & Experiential Solutions grew 3.5% organically, with leadership from the full range of our experiential and sports marketing offerings. Turning to profitability and expenses in the quarter, our teams continued their outstanding execution, effectively navigating today's complicated economic environment.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

This in turn led to the strong fourth quarter margin performance we're reporting today. We've been able to deliver this result while continuing to invest in our offerings and to take significant real estate actions in the quarter that will further our structural operating efficiencies going forward. Fourth quarter net income was $297.2 million as reported.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Our adjusted EBITDA was $568.4 million, which is before a non-cash charge in the quarter for those real estate actions. Adjusted EBITDA margin in the quarter was 22.3%, and that brings full year adjusted EBITDA to $1.57 billion, and margin on net revenue to 16.6%. I think it's worth reflecting that at that margin level, we've successfully consolidated 260 basis points of margin improvement over the last three years, along with that very strong three-year growth stat that I mentioned earlier. Fourth quarter diluted earnings per share was $0.76 as reported, and was $1.02 as adjusted for the real estate restructuring charge, intangible amortization, and the disposition of small non-strategic businesses.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

In sum, our fourth quarter completes a year of strong financial performance across the key performance metrics of growth, adjusted EBITDA and earnings per share. During the quarter, we also closed on the acquisition of RafterOne, a leading e-commerce implementation partner which brings additional scale and capability to our offerings in an area of growth and strategic importance.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Over the course of 2022, we also returned capital to shareholders in the amount of $777 million between dividends and share repurchases. Given the continuing strength of our operating results and confidence in our strategic trajectory, our board has once again raised IPG's quarterly dividend by 7% to $0.31 per share. This marks our 11th consecutive year of higher dividends, which, as you know, continued uninterrupted through the pandemic.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Our board also authorized an additional $350 million share repurchase program on top of the $80 million remaining in our previous authorization. Turning the discussion to 2023 and our outlook for the year, there remains a meaningful degree of macroeconomic uncertainty. Visibility, therefore, is somewhat challenged. I think it's fair to say that clients are approaching 2023 with equal parts conviction in the need to be in the market, as well as an increased level of conservatism. That's not to say that they're any less focused on the need to drive for growth into the new year or to invest in the transformation of their business. It's just that we're seeing budgeting decisions made with more deliberation. It's also fair to say that there's significant variability within our client portfolio from client to client.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

We're confident that the strongest growth areas of our business, such as consultative media services, healthcare marketing, experiential marketing, commerce, as well as data management and data sales, will continue to perform strongly despite the broader economic situation. We're also confident in our operational rigor and flexible cost model. Our actions in the fourth quarter to further reduce our occupied real estate footprint by nearly 7% demonstrates our consistent and ongoing focus on identifying and acting on opportunities to rethink our business model and improve efficiency. Bridging all of these moving parts together, we expect organic net revenue growth for 2023 of 2%-4% on top of those industry-leading multi-year comparators, and further expansion of our adjusted EBITDA margins to 16.7% for the full year. Our priorities for the year remain consistent.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

To build on IPG's strategic differentiation, which for us means to focus on the people, talent, and capabilities that enable us to solve a broader set of business problems and which further our evolution into a higher value solutions provider. Strong execution when it comes to integrating our agency's expertise through open architecture solutions.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

To combine those client-focused offerings with operational excellence, which is always important, but never more so than in an uncertain economic climate. Delivering on these goals and on our new financial targets, as well as our long-standing commitment to return of capital, should lead to another year of value creation for all of our stakeholders. At this point, I'm gonna hand things over to Ellen for a more in-depth view of our results.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

Thank you. I hope everyone is well. I would like to join Philippe and thank our people for their terrific accomplishments. As a reminder, my remarks will track to the presentation slides that accompany our webcast. Beginning on slide two of the presentation, fourth quarter net revenue was essentially flat from a year ago, with organic growth of 3.8%. That brings organic growth for the year to 7% and our three-year growth to 14%. Adjusted EBITDA in the quarter before a net restructuring charge was $568.4 million, and margin on net revenue was 22.3%. Our restructuring charge in the quarter resulting from having identified further opportunities to optimize our real estate portfolio. We reduced our occupied real estate footprint by approximately 500,000 sq ft or 6.7%.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

The net charge in the quarter was $101.7 million, which we expect will result in $20 million of permanent expense savings, which will be realized as we move forward. There was no severance involved in these most recent actions. You'll recall that in 2020 we reduced our leased footprint by 1.7 million sq ft. The additional actions are a recognition that in the wake of the pandemic, our operating model has changed with respect to office space. While we will still continue to optimize our square footage in the normal course of our business, we do not anticipate additional restructuring charges. Our diluted earnings per share in the quarter was $0.76 as reported, and $1.02 as adjusted to exclude the restructuring charge, the amortization of acquired intangibles, and a small non-operating loss from business dispositions.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

Our adjusted diluted EPS was $2.75 for the full year. We concluded the year in a strong financial position, with $2.5 billion of cash on the balance sheet and with 1.6x gross financial debt to EBITDA as defined in our credit facility. We repurchased 3.2 million shares in the fourth quarter, bringing our full year repurchases to 10.3 million, returning $320 million to our shareholders in 2022. Our board increased our quarterly dividend to $0.31 and authorized another $350 million repurchase program, in addition to the $80 million remaining on our prior authorization. Turning to slide three, you'll see our P&L for the quarter. I'll cover revenue and operating expenses in detail on the slides that follow.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

Turning to the fourth quarter and full year revenue on slide four. Our net revenue in the quarter was $2.55 billion, an increase of $1.6 million from a year ago. Compared to Q4 2021, the impact of the change in exchange rates was negative 3.9%. Net acquisitions added 20 basis points. Our organic net revenue increase was 3.8%, which on the right-hand side of the slide brings us to 7% for the full year. Further down the slide, we break out segment net revenue performance. Our Media, Data and Engagement Solutions segment grew 5% organically, on top of 11.9% in the fourth quarter of 2021. As you can see on the slide, the segment is comprised of IPG Mediabrands, Acxiom, Kinesso, and our digital specialist agencies.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

IPG Mediabrands grew at double-digit rates. As first noted on our 3rd quarter call, R/GA and Huge are in the process of transforming their business models and had soft performance, which weighed significantly on the overall segment growth. That's something we will not lap until the back half of this year. At the right-hand side of this slide, organic growth was 6.4% for the full year.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

Organic growth at our Integrated Advertising and Creativity-Led Solutions segment was 2.6%, which was on top of 10.3% one year ago. As a reminder, the segment is comprised of IPG Health, McCann, MullenLowe, FCB, and our domestic integrated agencies. Our growth in the quarter was led by a strong increase at IPG Health, which grew in the high single digits. For the year, the segment grew 7.1% organically.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

At our Specialized Communications and Experiential Solutions segment, organic growth was 3.5%, which compounds 15.2% in last year's fourth quarter. The segment is comprised of Weber Shandwick, Golin, Jack Morton, Momentum, Octagon, and Dextra Health. We were led by high single-digit increases in our Experiential Solutions. For the year, the SC&E segment increased 8.5% organically.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

Moving to slide five, our revenue growth by region in the quarter. The U.S., which was 63% of our fourth quarter net revenue, grew 2.4% organically, on top of 12.1% in last year's fourth quarter. We had notably strong growth at IPG Mediabrands, IPG Health, MRM, and Jack Morton and Experiential. Decreases at our digital specialists, R/GA and Huge, weighed on our U.S. growth rates by 160 basis points in the quarter.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

International markets were 37% of our net revenue in the quarter and increased 6.1% organically. You'll recall the same markets increased 11% a year ago. In the U.K., organic growth in the quarter was 9.4%, led by notably strong performance in media, experiential

[Ellen Johnson, CFO at The Interpublic Group of Companies]

, and at MullenLowe. Continental Europe grew 5.7% organically. We were led by very strong growth in Spain, while Germany and France were relatively flat year-over-year. In Asia Pac, organic growth was 3% in the quarter, with strong results in Australia, Japan, and China, while India decreased. In LatAm, we grew 5.8% organically, on top of 22.5% a year ago.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

Our other international markets group, which consists of Canada, the Middle East, and Africa, grew 6.9% organically, on top of 18.7% a year ago, which reflects notably strong growth in the Middle East, followed by Canada. Moving on to slide six in operating expenses in the quarter. Our fully adjusted EBITDA margin in the quarter was 22.3% compared to 19.3% in 2021, an increase of 300 basis points.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

As you can see on this slide, we had operating leverage on each of our major cost lines. Our ratio of salary and related expenses as a percentage of net revenue was 61%, compared with 62.2% in last year's fourth quarter. Underneath that ratio, we delivered on our expenses for base pay, benefits and tax as headcount increased to support revenue growth.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

We ended the quarter with headcount of 58,400, an increase of 5% from a year ago. Our expenses for temporary labor, performance-based incentive compensation, and severance were all notably lower than a year ago. Our office and other direct expenses decreased as a percentage of net revenue by 160 basis points to 13.5%. That reflects leverage due to lower occupancy expenses.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

We also reduced all other office and other direct expense compared to last year as a % of net revenue, which reflects lower client service costs, consulting, and employee-related expenses. Our SG&A expense was 1.2% of net revenue, a decrease of 10 basis points. Turning to slide 7, we spread detail on adjustments to our reported fourth quarter results in order to give you better transparency and a picture of comparable performance.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

This begins on the left-hand side with our reported results and steps through to adjusted EBITDA, excluding restructuring and our adjusted diluted EPS. Our expense for the amortization of acquired intangibles in the second column was $22.1 million. The real estate restructuring charges were $101.7 million, and the related tax benefit was $26 million. The low operating expenses are losses on the disposition of small non-strategic businesses was $8.3 million, which is shown in column four. At the foot of the slide, you can see the after-tax impact for diluted share of these adjustments, which bridges our diluted EPS as reported at $0.76 to adjusted earnings of $1.02 for diluted share. Slide eight similarly depicts adjustments for the full year, again for continuity and comparability. Our amortization expense was $84.7 million.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

Our charge for restructuring was $102.4 million. Dispositions over the course of the year resulted in a book loss of $3.8 million. The result is adjusted EBITDA of $1.57 billion and diluted EPS of $2.75. Our adjusted effective tax rate for the full year was in line with our expectations at 24.8%. On Slide 9, we turn to cash flow for the full year. Cash from operations was $608.8 million. Cash used in working capital was $672.3 million, compared with cash generated from working capital of $743.4 million a year ago. As we've pointed out in the past, working capital is volatile.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

In each of the previous three years, we had very strong working capital results, and over the last four years, we've generated a total of $1.4 billion. Our investing activities used $460 million. That mainly reflects our acquisition of RafterOne and our CapEx in the year. Our financing activities used $869.5 million, representing our common stock dividend and repurchases of our shares. Our net decrease in cash for the year was $719.1 million. Slide 10 is the current portion of our balance sheet. We ended the year with $2.5 billion of cash and equivalents. Slide 11 depicts the maturities of our outstanding debt and our diversified maturity schedule. Total debt at year-end was $2.9 billion.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

As you can see on this schedule, we have $250 million maturity in 2024. Our next scheduled maturity is not until 2028. In summary, on slide 12, our teams continue to execute at a high level. I would like to again recognize the accomplishments of our people and the strength of our balance sheet and liquidity have us well positioned to continue our track record of success, both financially and commercially. With that, I'll turn it back to Philippe.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Thanks, Ellen. As you can see from our results, our strategy, talent, and culture continue to drive innovation, creativity, and collaboration that fuel our clients' success in an increasingly digital economy. Over the past three years, we've organically added $1.2 billion of revenue to our business, as well as increased adjusted EBITDA by over $360 million since the start of 2020. Credit to our teams for those very strong results.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Throughout this period, what we're seeing play out are the accelerated technology-driven shifts in media and consumer behavior that our company had anticipated and against which we've made significant investments. Our expertise in first-party data management, performance media, and accountable marketing solutions are all areas relevant to marketers looking to build their brands while also delivering business outcomes.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Vital to our strong performance are our media, data, and healthcare offerings. These specialized assets have evolved their offerings to combine marketing services with emerging communication channels and technology so as to help clients find new ways to identify and interact with individual consumers. As you saw in October, we continued to look for strategic areas of investment. With our RafterOne acquisition, we brought a talented and specialized team into the IPG network to architect and implement scaled Salesforce solutions that connect brands with customers through end-to-end commerce experiences in both B2B and B2C settings. The RafterOne team will help us deliver creative campaigns that work smarter for our clients by building meaningful relationships in digital marketing platforms.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Enterprise marketing suites like Salesforce and Adobe form the foundation of so many brands' marketing technology stacks, and our company can serve as a bridge between those brands, their consumers, and these platforms, strengthening every touch point on the customer journey. We continue to invest in this important growth area and recently announced that we've brought on board our first chief commerce strategy officer. He joins us from Accenture, where he oversaw their omni-channel commerce practice.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

At IPG, he'll connect our existing channel and platform expertise, including strong and scaled teams at MRM, RafterOne, Reprise Media, and IPG Platform Services, as well as others across our entire portfolio. He'll orchestrate how our company supports clients as they build out commerce solutions and integrate them with the full breadth of their marketing programs. Turning now to the highlights of agency-level performance in Q4.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

As we've mentioned, results were once again led by our media data and technology offerings. Media performed very strongly to close out a successful year. During the quarter, we saw a series of notable wins, including Celebrity Cruises at Mediahub, Energy Australia, the retention of major client Merck, the addition of assignments on AWS at Initiative, and the onboarding of MoneySuperMarket Group at UM, where earlier this week, we also announced that we welcome the global CEO to the agency. As we speak, IPG Mediabrands is also hosting their third annual Equity Upfront, which provides opportunities for clients and our agencies to engage directly with diverse-owned media partners, including Black, API, Hispanic, and LGBTQIA-owned media, which is vital to establishing the kinds of partnerships that can change buying patterns in the industry.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Acxiom continues to be a strong contributor to the performance of our media agencies, as well as others in the group who've incorporated audience-led methodologies into how they develop strategic insights and creative work. During the quarter, Acxiom brought in new logo wins and contract renewals in the automotive, CPG, financial services, insurance, retail, and travel and entertainment sectors.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

They were recognized as a leader in the Snowflake Modern Marketing Stack report and also launched a new integration with a customer data platform, Tealium, to enhance deterministic modeling capabilities. Turning to IPG Health, that network continued to deliver strong results for us in the quarter, compounding very strong trailing growth since we created the group approximately 15 months ago. While growing with nearly every existing client, IPG Health also focused on expanding its presence globally through some strategic alliances, notably in Europe.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

The caliber of their creative work was honored at the 2022 MM+M Awards, where the network was named Large Healthcare Network of the Year. At our global advertising networks, we continue to see the benefit of our investment in strong, differentiated agency cultures, which are driving distinctive ideation and creativity, and we're seeing that recognized again and again in the industry. FCB won significant accolades during its first full year under its new leadership team, it was named as one of the 10 most innovative advertising agencies of 2022 by Fast Company. It was honored as the number two network overall in Cannes and was once again named the festival's top-ranked North America network, thanks to powerhouse offices in New York, Chicago, and Toronto, which it bears noting are all leaders in leveraging data to power audience insights and creativity.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

With a new CEO in place at the beginning of the fourth quarter, McCann saw new business wins with Smirnoff, which make it part of the Diageo roster and Post Consumer Brands. McCann also launched work for recently won clients Converse and Prudential. Additionally, the agency was named Network of the Year at the 2022 Epica Awards for the fifth time in six years. McCann New York won Epica's Innovation Grand Prix for Mastercard's Touch Card, the accessible card standard for blind and partially sighted people. More recently, McCann also announced a series of senior organizational changes, elevating key internal leaders and adding new executives to the agency. MullenLowe Group continued to secure new business as it had throughout the year, with the addition of Ferrero International, Tetley Tea, National Highways in England, Lifestyle Fashion in India, and the Barcelona Football Club in Spain.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

We also announced a new global CEO for MullenLowe, promoting a key female leader from within our organization who's known across the industry as a champion of creativity, a strong growth driver. Someone fully committed to diversity and inclusion. Among our domestic independent agencies, as part of the agency's goal to help reshape our industry, The Martin Agency announced their commitment to hire a minimum of 50% directorial and editorial talent from underrepresented groups for all their video content production. At our earn and experiential agencies, performance was led by Octagon, Jack Morton, and Momentum, all of which posted strong growth in the quarter. With more than three decades of World Cup experience, Octagon was very active with a range of clients at this year's tournament.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

For example, with longtime client Budweiser, the agency ran a range of on-site activations in Doha, managed complex global influencer campaigns, and hosted nearly half a million consumers who were fans at viewing events around the world. Jack Morton continued to deliver outstanding performance and launched a sponsorship consulting practice, which it has dubbed Jack 39, and continued to build out Jack X, which is their global experience innovation practice, which creates events that combine content with Web 3.0 techs.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Among our public relations firms during the quarter, Golin had several wins, including a product launch for a new alcohol brand, corporate communications work for a food products and services brand, and in being named the influencer AOR for a household appliances manufacturer globally. Weber Shandwick announced new client wins with HP in North America and IKEA in the U.K.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

The network also launched what it's calling the Business Society and Society Futures, which is a C-suite offering that combines public affairs, corporate affairs, as well as organizational design and consultancy. During the quarter, Dextra Health posted strong gains, winning a large global oncology assignment for a major pharma client. In addition, its leader was named to PRWeek's Health Influencers 30, which is the annual list of most influential individuals in healthcare communications. At the holding company level, as you know, we have a long-standing commitment to ESG and DE&I as key strategic priorities. As you may have seen last week, we announced that IPG has been included on the Bloomberg Gender-Equality Index for the fourth consecutive year and was recognized for the first time as a top-rated ESG performer by Sustainalytics.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

We were also once again included in the FTSE4Good Index and Newsweek's America's Most Responsible Companies 2023. Forbes featured us on both its America's Best Large Employers list, as well as the World's Top Female-Friendly Company for 2022. As a business in which human capital is so vital to our success, our culture, including an intentional approach to ESG, has long been an important part of our strategy for attracting and retaining top talent, whether in strategic, creative, data analytics, or engineering roles, or across a range of other skill sets that have become key to our evolving offerings. Looking ahead, we believe IPG remains well positioned for the future. Much of our growth in recent years, as well as in 2022, was fueled by disciplines that most actively tap into our data and precision marketing capabilities, as well as our exceptional healthcare marketing offerings.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

These are growing parts of our portfolio that continue to develop into more structural and secular revenue streams. We know the world in which we live is increasingly digital and that more than ever, clients need help from us in using audience-led thinking to solve for a widening set of business problems and opportunities. We've been leaders in this space. Twenty twenty-three will be a year in which we consolidate those gains and prepare to further evolve the way in which we deliver this expertise to marketers, so as to elevate the value of the services and solutions we provide. In addition, we're confident that our commerce and experiential disciplines, which not today figuring as large in our revenue mix, will continue to grow going forward.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

As stated earlier, despite the broader uncertainty that we're seeing at a macroeconomic level, we expect to deliver growth in 2023 of 2%-4%, on top of a very strong record that has compounded for a number of years. Consistent with that level of growth, we foresee adjusted EBITA margin expansion to 16.7%. Of course, another key area of value creation remains our strong balance sheet and liquidity. Our ongoing commitment to capital returns is clear in the actions that were announced by our board today, which also speaks to the confidence in our strategic position and future prospects. Part of our balanced approach to capital allocation, we'll continue to further invest behind the growth of our businesses by developing our people and continuing to differentiate our offerings.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

This includes a disciplined approach to M&A, focusing on opportunities that are consistent with strategic growth areas, primarily commerce and performance media, business transformation, and consultancy. We thank our clients, our people, and those of you on this call for your continued support. With that, let's open the floor, you know, for questions.

[Operator]

Thank you. To ask a question, please press star one, unmute your phone, and record your name clearly. If you need to withdraw your question, press star two. Again, to ask a question, please press star one. One moment for the first question. Our first question is from David Karnovsky with JPMorgan. You may go ahead.

[David Karnovsky, Senior Research Analyst at JPMorgan]

Hi. Thank you. Philippe, you know, you noted client uncertainty at a conviction to stay invested. wanted to see if you could provide some insight into your conversations with marketers, how they manage that balance, and kind of what factors, you know, are keeping them tipped into the side of remaining in the market. Just on the guide overall, that range is a little wider than we're used to seeing. You know, is that all due to the economy? Should we think of macro as maybe the main driver in pushing you toward the lower or upper end?

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Maybe I'll take them backwards, if that's okay with you. I mean, I think if you think about our budgeting process, right? It's bottoms up with our operators. We do, in fact, as you suggest, go client by client. We look at pipeline. Then with our larger clients, obviously we're able to engage with them directly. I think what we're pointing out there is just that I think what's happening is that, you know, the caution that we're seeing is less a function of the specifics of what's going on right now. I think it's just the open-endedness, the concern about a potential downturn somewhere along the line as we get further into 2023.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Again, if, you know, you go back to how we build the budget, you know, that bottoms up look at clients, factor in the pipeline, clearly factor in a view of the macro. You know, we're gonna have a geographic or a client or even a business mix that's specific to us. Then we did call out a couple of places. As you know, I think we're quite direct and kind of clear about what's going on in the business, where are we taking the business. We called out a couple of places where some things require attention and some things are having an impact as we look at the year ahead. I would say that that's how we got to the range. The fact that the range is broader than one would see in other years is reflective of that sense of uncertainty. I think you're seeing broader ranges when, you know, companies are going out there, and I would say we're comfortable at the midpoint of that range.

[David Karnovsky, Senior Research Analyst at JPMorgan]

Okay. Then maybe one for Ellen. I wanted to ask a question about longer term margins. As IPG pushes to become more of a higher value solutions partner, as you guys phrased it, you know, how does that potentially impact your margin trajectory? Should we necessarily think of higher value services as translating to higher margins in addition to higher growth? Or are there other kind of considerations like specialized labor that could offset that we should consider?

[Ellen Johnson, CFO at The Interpublic Group of Companies]

Sure. Thank you for the question. Very optimistic about the opportunity to increase our margins going forward. I would point to, we have a long track record of doing so. I mean, if you look at the past couple of years, we've increased our margins 260 basis points since 2019. I think it's a combination of several factors. One, as you point out, I think high value services is a continued opportunity for us. Also I think we have a good track record of translating growth profitably into margin expansion. We manage our costs in a very disciplined way, and, you know, we're continuously looking at opportunities on business transformation. We have a large portion of our revenue in shared services. We manage our real estate portfolio centrally. Put all those things together, I do think that there is opportunity for margin expansion as we move ahead.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

One just quick add there, David, is just that, you know, across the senior teams, whether it's corporate or any of the units, our incentives are fully aligned to that objective, right? The plan is modestly more heavily weighted to margin than revenue. To our mind, that ensures that where there's growth, there's profitable growth, and that when we're in a circumstance that's got more uncertainty, we're still able to, as Ellen said, make good on that, you know, consistent record of where there's growth, we've demonstrated that we can convert it to incremental profit.

[David Karnovsky, Senior Research Analyst at JPMorgan]

Thank you.

[Operator]

Thank you. The next question is from Lina Ghayor with BNP Paribas. You may go ahead.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Hey, Lina.

[Lina Ghayour, Equity Research Analyst at BNP Paribas]

Hi. Good morning, Philippe, Ellen, and Jerry.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Hey.

[Lina Ghayour, Equity Research Analyst at BNP Paribas]

Thank you for taking my questions. I have 3, please. The first one is on the guidance. Could you elaborate a tiny bit more on the guidance regarding the impact of inflation on the revenue? More generally, what shape do you expect the growth to be, for example, H1 versus H2? The second one perhaps for Ellen on wage inflation. How much was it wage inflation in 2022? What have you taken for 2023 in your assumptions? Lastly, Philippe, just to come back on your point at the beginning of your remark, could you comment on the performance by sector? I think you mentioned telecoms. Could you elaborate? More generally, what is the attitude of your clients by sector ahead of 2023? Thank you.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Sure. That's a lot. I guess there are two inflation questions. I will take the... in terms of inflation vis-à-vis our growth, yes, the majority of our contracts have written into them the ability to, as the world changes, sort of go back to clients and talk about the costs of the services that we provide to them. That's not something that triggers automatically. It requires that you enter into a conversation or ultimately kind of a negotiation with clients.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

If I were to talk about what's gone into our thinking and how we build the forecast that leads to the guidance, revenue growth is primarily from growing scope with our existing clients, and we definitely believe that there is that the primary avenue for growth, the one that we are most keen on, is growth with existing clients. Deepen the relationship, bring additional services. Secondarily, clearly you have the opportunity to add when there are new business opportunities, and pitches. I think that that's really what is baked into it.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

You know, as we've discussed, we are beginning to, in some instances, be able to go to clients with some of these services that are new services based on the data and the technology part of what we've been building. I think that's one part of the question. Ellen, I'll let Ellen take the cost of as it bakes into our business and then the second part, and then I'll come back for your third piece on sectors.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

As far as inflation on our cost base, we've been very transparent that there's been modest inflation in the salary line, but ones that we feel are very manageable and that will not take us off the growth trajectory on our margins and nor deter us from expanding them accordingly. That was factored into our guidance for 23 and going forward.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

I guess on sectors, auto and transportation is strong and we see it continuing. Healthcare, financial services for us, given the mix of clients that we've got in retail, you know, that has continued to be a place where we've got quite progressive, modern clients. The other category, as I mentioned, I think a lot of the headlines and a lot of the sort of sector-specific issues that we're seeing in tech are manifesting in conversations with clients. There what we're seeing is, you know, clients either taking reductions or being, you know, not committing for a full year. I think as we said, what we saw there was something that I think is we're seeing the impact, the duration on that is perhaps open-ended.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Food and beverage for us will have the runoff of a very large industry consolidation that took place at the holding company level in late 2021. As we said, it impacted Q4 most heavily, but we'll still see some impact. In terms of the revenue deltas, you know, it's definitely for us, the items that we've identified for you, which we are addressing, are definitely gonna impact first half, whether it's the digital agencies and where they are in their cycle of transformation as the macro, you know, becomes a bit more challenged, and then some of these client items. For us, it's definitely a stronger back half is very much, you know, where and how we've gotten to that guidance.

[Lina Ghayour, Equity Research Analyst at BNP Paribas]

Thank you.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Thank you.

[Operator]

Thank you. The next question is from Steven Cahall with Wells Fargo. You may go ahead.

[Steven Cahall, Managing Director and Senior Equity Research Analyst at Wells Fargo]

Thank you. Good morning. Maybe just to follow up on that theme a little bit first. Philippe, can you give us an idea of what the net new business impact is for 2023? It sounds like it's probably modestly negative, just wanna make sure I'm piecing all that together. I'd love to include some components of this question, which is, how does kind of healthcare set up from a growth rate perspective in 2023 since that's such a big part of the revenue mix? RGA and Huge, you know, it sounds like those will be drags this year. Historically, they've kind of been some real superstar agencies for IPG. I guess, how do you kind of think about, you know, the journey of these digitally native agencies? Is it still an area of investment?

[Steven Cahall, Managing Director and Senior Equity Research Analyst at Wells Fargo]

How do they kind of fit in the portfolio going forward?

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Sure. Look, I think, I think you're right. They're premium providers. It's a largely project-based business, which is, I think both of those, A, premium provider of uncertain macro project-based business. Again, you know, projects showed up in Q4 for us at a very solid level. I'd say in line with overall Q4 growth. Experiential was strong. PR was maybe a bit below the segment growth, but the digital projects that you would see at those very high-end agencies, were definitely not, you know, at the levels they were weak. I think that, every 3-5 years, these agencies need to kind of reinvent and reconfigure because they are, to your point, at the leading edge. I think that in the current environment, you know, that's where we find ourselves with them.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

PS, they're also Probably more exposed to tech than many of our businesses. You know, we've seen client attrition and lower growth there. Huge has a pretty clear line of sight into what their new value proposition is, and, you know, that'll be going, you know, in the market probably towards the end of the first quarter here. They've also had been, because of the strength that you call out, tying them more into whether it's open architecture or whether it's the kind of the overall data stack that we've built is clearly something that we need to focus on. It may be that long-term success and a measure of independence is something that, you know, is gonna need to be addressed.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

On the question around new business, again, we now see new business in the big media pitches and then in some of the more traditional parts of the business, probably the creative ad agencies and to some degree PR. We don't see the new business within health very much. A lot of what's going on, as I said, has become project specific. I'd say we are going into the year, exactly as you said, with a modest headwind. Was there one piece of the question that I'm forgetting at this point? Oh, and then health.

[Steven Cahall, Managing Director and Senior Equity Research Analyst at Wells Fargo]

Yeah.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

I think we see health at scale now, having put these assets together. As we said, trailing very, very strong performance, doing high single-digit in the quarter. That's probably consistent with what they did for the year. That's consistent with the expectation that we have for them, as we go into 2023.

[Steven Cahall, Managing Director and Senior Equity Research Analyst at Wells Fargo]

Great. Maybe just a short follow-up for Ellen. Working capital was a big use in 2022. I think it was favorable in 2021. You know, I know the timing of the year can be a strange line to draw in the sand, but should we expect it to then be back to probably a benefit in 2023? Thank you.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

As we've pointed out, you know, working capital is volatile. You know, whether you get paid on the 31st or the 1st, right, when you print your balance sheet and cash flow makes a big difference. It is something that we spend a lot of time and have a lot of discipline around and carefully manage. If you go back over the past four years, I think we've generated $1.4 billion in working capital. I would expect going forward it will normalize. You know, you're right. In any one year, you can get an aberration.

[Steven Cahall, Managing Director and Senior Equity Research Analyst at Wells Fargo]

Thank you.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Thank you.

[Operator]

Thank you. Our next question is from Michael Nathanson with MoffettNathanson. You may go ahead.

[Michael Nathanson, Senior Research Analyst at MoffettNathanson]

Thank you. Good morning, Philippe.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

How are you?

[Michael Nathanson, Senior Research Analyst at MoffettNathanson]

I'm good. How are you?

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

I'm all right.

[Michael Nathanson, Senior Research Analyst at MoffettNathanson]

Cool. I wanna ask you about the RafterOne acquisition.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Yeah.

[Michael Nathanson, Senior Research Analyst at MoffettNathanson]

I believe it's the biggest deal since Acxiom. If you go back through the history of the company, it's probably one of the biggest deals we've seen, right? Can you talk a little bit more about the necessity to do it, the multiples, the skill sets, and whether or not like this is the beginning, and it's probably a critique, but the beginning of maybe more tuck-in acquisitions like that. For Ellen, you know, given the FX volatility, what's your thinking on the year ahead for FX and any impact from acquisitions and investments to revenue this year? Thanks.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Look, I think that's a really, I mean, that's a very apt observation, right? I can definitely speak to RafterOne and what it is about them and why, right? you know, to our mind, a very strong asset in a very specific space that is growing very fast, right? obviously, Salesforce as a platform means a lot more to more of our clients, so they're ascendant. you know, for the dollars that go into a major Salesforce implementation, there's a multiple, there's, you know, a $4 or $5 that goes to the service provider. there's a large service economy around that, and we're very strong in Adobe.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

To us, we were building that Salesforce capability, started working with, you know, this company as a partner, got to know them. It was actually preemptive on our part because I don't know that their ownership was, you know, their owners were necessarily thinking that this was a moment in time at which they would trade the asset. You know, from where we sit, tech implementation, direct-to-consumer work, the internal platform services group that we've created so that we are bringing kind of bigger presence into those kinds of engagements. You know, I think Salesforce... I mean, RafterOne is 500 experts, I think 800 or 900 certifications and both B2B and B2C expertise.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

I think what you said that's very accurate is that, you know, we're a bigger company by a fair bit as of the last three years, you know. You used to think of us as doing tuck-ins, and they were quite small, and they were much more sort of agency-like. To our mind, I think we wanna concentrate that buying power and then focus on these areas where what you've got is sort of a hybrid of marketing expertise. Some measure of creativity against an emerging channel and then some piece of what they do, which brings some technology expertise. I think you probably will see us do fewer and, you know, scale-wise, they'll have gotten, you know, bigger. What tuck-in means will be, I think, more like this.

[Michael Nathanson, Senior Research Analyst at MoffettNathanson]

Okay. Thanks.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

With regards to FX, 2022 was a larger impact than what we typically see with -3% on revenue growth and actually 20 basis points on margin. For the most part, our revenue expenses, you know, if you look historically, are pretty well matched. Going forward, we're expecting, you know, based on what the rates are today, you know, a flat impact on revenue and a de minimis impact on margin.

[Michael Nathanson, Senior Research Analyst at MoffettNathanson]

Ellen, can I follow up? I remember asking you when you started about that question about margin. Why was there a drag on margin from FX this year? I think you answered previously there wasn't much difference. What happened this year on margin that didn't happen in the past?

[Ellen Johnson, CFO at The Interpublic Group of Companies]

It was more of a impact of what happened in the currency markets, right? If you look at 22, the currency markets moved more than they historically do. For the very, you know, vast majority of our businesses, revenue expenses are matched by currency. That was probably the largest impact we've seen in a very long time, and we do not expect that type of impact at all going forward.

[Michael Nathanson, Senior Research Analyst at MoffettNathanson]

Okay. Thanks.

[Operator]

Thank you.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Thank you.

[Operator]

Our next question is from Tim Nollen with Macquarie. You may go ahead.

[Tim Nollen, Director and Senior Analyst at Macquarie]

Hi. Thanks very much. Could I ask a couple of cost-related questions, please? If my math is right, your $20 million in real estate savings equates to about 30 basis points of margin. Is that the kind of scope of upside we could expect in 2023? Maybe an offset to that or maybe a boon to that, I don't know, would be any comments you could make on staff. I heard your comment on managing the staff cost inflation versus the revenue growth. It sounds like you guys, maybe net might still be hiring rather than reducing staff, and there's a lot of talent now available from all these layoffs at lots of other companies. I'm just wondering what you could say about your expectations in terms of staffing levels and growth in cost this year.

[Tim Nollen, Director and Senior Analyst at Macquarie]

Thanks.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

Sure. Maybe I'll start with your second question first. Hiring always lags revenue growth. You know, we are forecasting growth for next year, and underneath growth, we will hire responsibly in a disciplined fashion. Conversely, you know, when we have contractions, we take actions. As far as the real estate, I think your math is a little bit aggressive on the 30 basis points. The $20 million that we noted on the call will happen over more than one year. You need to sublease some of the properties in order to realize the full benefit. We're very optimistic about the numbers we put out there. We feel really good that we've taken another look and really have been able to optimize our real estate portfolio.

[Ellen Johnson, CFO at The Interpublic Group of Companies]

I mentioned, it's a very centralized process in the way we manage it here, and we've really, you know, taken the learnings that we've had over the last couple of years and then applied it in a way to become more efficient.

[Tim Nollen, Director and Senior Analyst at Macquarie]

Great. Thanks a lot.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Thank you.

[Operator]

Thank you. Our next question is from Jason Bazinet with Citi. You may go ahead.

[Jason Bazinet, Managing Director at Citi]

Got a quick question.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Hey, Jason.

[Jason Bazinet, Managing Director at Citi]

In terms of the macro. How's it going? In terms of the macro uncertainty, is there anything that you would call out in terms of either higher or lower risk profile as it relates to account reviews? It just doesn't seem like it's been as active as I would have thought, but I'd love any color that you have.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

You know, that's an interesting question and a fair one, right? We've all been assuming that there was gonna be a backlog going all the way back to, you know, pandemic, understandable that there were fewer, but everybody sort of waited for the floodgates to open. I think 2021 there was just a great deal of opportunity, growing with your existing clients, doing more of the kind of new services that we have been building for some period of time. The word is that there likely will be, as I said, scale reviews these days tend to come in media and then to some extent in healthcare. At the moment, it's more kind of in the murmurs than the reality. We'll obviously all know.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

I mean, our folks on the ground at agencies, our, you know, growth leader here at the center are all saying that they believe that it will begin to pick up steam. Right now, I don't have a ton of hard data that says that's the case.

[Jason Bazinet, Managing Director at Citi]

Okay. Thank you very much.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Please.

[Operator]

Thank you. That was our last question. I will now turn it back to Philippe for any final thoughts.

[Philippe Krakowsky, CEO at The Interpublic Group of Companies]

Thank you, Sue. Thank you all for the time and the interest. We're looking forward to the year. We've got a lot of work to do. We'll keep you posted as we go. Thanks again.

[Operator]

Thank you. That does conclude today's conference. Thank you all for participating. You may disconnect at this time.

Participants

Executives

• Ellen Johnson, CFO
• Jerry Leshne, Senior Vice President of Investor Relations
• Philippe Krakowsky, CEO

Analysts

• David Karnovsky, Senior Research Analyst at JPMorgan
• Jason Bazinet, Managing Director at Citi
• Lina Ghayour, Equity Research Analyst at BNP Paribas
• Michael Nathanson, Senior Research Analyst at MoffettNathanson
• Steven Cahall, Managing Director and Senior Equity Research Analyst at Wells Fargo
• Tim Nollen, Director and Senior Analyst at Macquarie