IPG improves forecast as Q2 sets a path for recovery

The holding company reported strong organic growth compared to both pre- and mid-pandemic quarters.
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IPG’s Q2 results have it feeling optimistic about the rest of 2021.

Net revenue for the three months ending June 30 was $2.3 million USD, up 22.5% year-over-year, with organic growth of 19.8%.

While IPG was upfront with the fact that its results benefited from a comparison to Q2 2020 – which had the harshest declines of the pandemic – Philippe Krakowsky, CEO of IPG, also pointed to a favourable comparison with Q2 2019 to show “the continued evolution and vitality of our offerings.” Net revenue in Q2 2021 was 6.8% higher than Q2 2019, when it reported $2.1 million USD.

One of the biggest rebounds was in IPG’s “all other markets” segment, which includes Canada, Africa and the Middle East and had organic revenue growth of 29.2%, though it remains the holding company’s second-smallest market segment. In the U.S., IPG’s biggest market, organic revenue grew by 17.4%, while combined international markets grew by 24.4%.

All of those measures significantly outpace the organic growth IPG reported for the first six months of 2021, showing an ongoing growth trajectory. As a result, the company also upgraded its forecasts, believing it will deliver between 9% and 10% organic growth for the full year.

Organic revenue at IPG’s integrated advertising network – which includes the McCann, FCB and MullenLowe networks, as well as the IPG Mediabrands family of media agencies – grew by 20.5%. Organic revenue in the DXTRA group of specialist agencies – including Weber Shandwick, Octagon, Golin and its healthcare offering – grew by 15.1%. The company also said all of its “major client sectors” grew by double-digit percents.

The company also continued to cut costs, contributing to its results. Occupancy expenses now total 5% of its net revenue, down from 6.6% in Q2 2020, while base salaries are 53% of net revenue, down from 59.2% in Q2 2020.