IPG follows rivals with strong Q1 2022 – now investors will seek better long term growth

Interpublic (IPG) has more than matched its peer ad holding companies with net revenue of $2.23 billion, up 9.8% from 2021 with organic net revenue growth of 11.5%.

Organic revenue increases among the big five (WPP, Omnicom, IPG and Publicis with Dentsu yet to report) are on a scale from 9.5% (WPP) to Omnicom’s 12%.

IPG has raised its full year guidance to 6%, again in line with its rivals although Publicis is more conservative, possibly because of its greater exposure to Eastern Europe.

CEO Philippe Krakowsky (above), who’s just had a pay rise to $17m, says: “While macro uncertainty is still elevated as a result of geopolitical and public health issues, we recently refreshed our bottom-up outlook for the year with key clients and with our operating teams, and the tone of the business remains positive. As such, we are updating our outlook for the year, from the previously-announced expectation for 5% organic revenue growth in 2022 to approximately 6%, on this key metric.

“This would be an especially strong result, given that it compounds IPG’s outstanding multi-year growth stack. We are also re-iterating our expectation for adjusted EBITA margin of 16.6% for the full year.”

Back in the day such consistent results across a sector might have suggested the various bosses had gathered over a cocktail or two to agree how they were going to play things. That’s not allowed any more of course but, even so, these results are remarkably similar. IPG’s suggest a favourable return for shareholders.

What they all need to do is keep growth going as comparatives become rather harder from the depths of the pandemic and 6% (the consensus forecast for 2022) doesn’t seem especially ambitious.

Shareholders and the ever-lurking private equity gang, sitting on trillions of uninvested dolllars, will be looking for rather more. Q2 2022 results should be more interesting.

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