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Published: 2022-04-21 16:34:52 ET
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EX-99.1 2 exhibit991_segment8-kfin.htm EX-99.1 exhibit991_segment8-kfin
          Exhibit 99.1: Selected Segment Information.    We  are  providing  the  following  unaudited management  discussion  of  past  organic  revenue  performance “as  if” our new segments had existed  in their current configuration  in the years  2019, 2020, and 2021.         2021 Segment Net Revenue Organic Change  Our  consolidated  growth  of  organic  revenue was  11.9%  in  2021.  The  organic  growth  of our  Media, Data & Engagement Solutions segment was 13.7%, which was led by notably strong growth  in our Media, Data and Technology offerings. Growth was broadly shared across client sectors, led  by our Retail, Health Care,  Financial Services, and Technology & Telecom sectors. The organic  growth of our  Integrated Advertising & Creativity Led Solutions segment was 10.7%, which was  broad‐based across our global and domestic agency networks. Among client sectors, growth was  led by Health Care, followed by our Technology & Telecom, Retail and Other (mainly industrial  and  public)  sectors.  The  organic  growth  of  our  Specialized  Communications &  Experiential  Solutions  segment  was  10.3%,  which  was  led  by  the  recovery  of  our  Events  and  Sports  &  Entertainment disciplines from the prior‐year impact of the pandemic, as well as strong growth  in Public Relations. By client sector, the strongest growth was in our Other, Food & Beverage,  Auto & Transportation, and Health Care sectors.    2020 Segment Net Revenue Organic Change  Our  consolidated  change of organic  revenue was negative 4.8%  in 2020, due  to  the adverse  impact of the COVID‐19 global pandemic on the economy and our business. The organic decrease  of  our  Media,  Data  &  Engagement  Solutions  segment  was  5.4%;  that  decrease  was  predominantly driven by our project‐based digital specialist agencies. Our top performing client  sectors, which increased for the year, were Retail, Health Care and Financial Services. The organic  decrease of our  Integrated Advertising & Creativity  Led Solutions  segment was 0.9%, due  to  decreases  in our global and domestic advertising networks. Our  top performing sectors were  Health Care and Retail, both of which grew  in 2020. The organic decrease at our Specialized  Communications & Experiential Solutions segment was 13.0%, reflecting the significant impact 


 
          of  the  pandemic  on  our  Events  and  Sports  &  Entertainment  businesses  during  the  year.  Decreases were most significant in the Auto, Financial Services and Other sectors.    2019 Segment Net Revenue Organic Change  Our consolidated organic growth of net revenue was 3.3%  in 2019. The organic growth of our  Media, Data & Engagement Solutions segment was 5.9%, driven by notably strong performance  of our Media, Data &  Technology  services.  Segment  growth was  led by our Retail,  Financial  Services, Other, and Consumer Goods sectors; the Automotive sector was significantly impacted  in the year by a client loss.   The organic growth of our Integrated Advertising & Creativity Led  Solutions segment was 2.7%. Among our client sectors, growth was led by the Health Care sector,  followed  by  Financial  Services,  Technology  &  Telecom  and  Consumer  Goods.  The  organic  decrease at our Specialized Communications & Experiential Solutions segment was 0.5%, where  growth  in  Public  Relations  was  offset  by  decreased  revenue  in  our  Events  and  Sports  &  Entertainment businesses. Strong growth in our Health Care and Food & Beverage sectors was  offset by decreases in the Auto, Other and Consumer Goods sectors.


 
Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 FY 2020 Total Revenue ‐ As previously reported IAN 1,851.4$        2,077.8$      2,085.7$           2,404.5$      8,419.4$        7,410.1$      DXTRA  405.6             431.8           456.3                527.6           1,821.3          1,650.9        Total IPG Revenue 2,257.0$       2,509.6$      2,542.0$           2,932.1$      10,240.7$     9,061.0$      Total Revenue ‐ As recast  Media, Data & Engagement Solutions  871.5$           1,003.0$      1,001.5$           1,185.7$      4,061.7$        3,520.4$      Integrated Advertisting & Creativity Led Solutions    953.9             1,049.5        1,034.0             1,142.9        4,180.3          3,727.8        Specialized Communications & Experiential Solutions 431.6             457.1           506.5                603.5           1,998.7          1,812.8        Total IPG Revenue (1) 2,257.0$       2,509.6$      2,542.0$           2,932.1$      10,240.7$     9,061.0$       (1) Amounts were not impacted by changes in our reportable segments. Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 FY 2020 Net Revenue ‐ As previously reported IAN   1,734.1$        1,954.5$      1,942.7$           2,208.5$      7,839.8$        6,921.4$      DXTRA   293.6             315.1           319.0                340.4           1,268.1          1,143.1        Total IPG Net Revenue 2,027.7$       2,269.6$      2,261.7$           2,548.9$      9,107.9$       8,064.5$      Net Revenue ‐ As recast Media, Data & Engagement Solutions  849.8$           985.3$         980.0$              1,158.5$      3,973.6$        3,451.2$      Integrated Advertisting & Creativity Led Solutions    875.7             963.7           951.5                1,035.2        3,826.1          3,429.5        Specialized Communications & Experiential Solutions 302.2             320.6           330.2                355.2           1,308.2          1,183.8        Total IPG Net Revenue  (1) 2,027.7$       2,269.6$      2,261.7$           2,548.9$      9,107.9$       8,064.5$       (1) Amounts were not impacted by changes in our reportable segments. The Interpublic Group of Companies, Inc.  Segment Realignment ‐ Net Revenue (Unaudited) The Interpublic Group of Companies, Inc.  Segment Realignment ‐ Total Revenue (Unaudited) (Dollars in Millions)  (Dollars in Millions) 


 
Quarter  Ended  3/31/2020 Quarter  Ended  3/31/2021 Net Revenue Change ‐ As previously reported  Net Revenue  Foreign  Currency Net  Acquisitions/ (Divestitures) Organic  Net Revenue  Organic  Total IAN 1,664.5$        22.8$           (6.0)$                 52.8$           1,734.1$        3.2% 4.2% DXTRA 307.6             6.5                (5.7)$                 (14.8)            293.6             (4.8%) (4.6%) IPG Total 1,972.1$       29.3$           (11.7)$               38.0$           2,027.7$       1.9% 2.8% Quarter  Ended  3/31/2020 Quarter  Ended  3/31/2021 Net Revenue Change ‐ As recast Net Revenue  Foreign  Currency Net  Acquisitions/ (Divestitures) Organic  Net Revenue Organic  Total Media, Data & Engagement Solutions  811.7$           14.1$           ‐$                  24.0$           849.8$           3.0% 4.7% Integrated Advertisting & Creativity Led Solutions    838.8             9.3                (5.8)                    33.4              875.7             4.0% 4.4% Specialized Communications & Experiential Solutions 321.6             5.9                (5.9)                    (19.4)            302.2             (6.0%) (6.0%) IPG Total  (1) 1,972.1$       29.3$           (11.7)$               38.0$           2,027.7$       1.9% 2.8%  (1) Amounts were not impacted by changes in our reportable segments. The Interpublic Group of Companies, Inc.  Segment Realignment ‐ Net Revenue Change (Unaudited) (Dollars in Millions)  Components of Change  Change Components of Change  Change


 
Quarter  Ended  6/30/2020 Quarter  Ended  6/30/2021 Net Revenue Change ‐ As previously reported  Net Revenue  Foreign  Currency Net  Acquisitions/ (Divestitures) Organic  Net Revenue  Organic  Total IAN 1,585.7$        48.6$           (5.4)$                 325.6$         1,954.5$        20.5% 23.3% DXTRA  267.7             9.5                (2.6)                    40.5              315.1             15.1% 17.7% IPG Total 1,853.4$       58.1$           (8.0)$                 366.1$         2,269.6$       19.8% 22.5% Quarter  Ended  6/30/2020 Quarter  Ended  6/30/2021 Net Revenue Change ‐ As recast  Net Revenue  Foreign  Currency Net  Acquisitions/ (Divestitures) Organic  Net Revenue Organic  Total Media, Data & Engagement Solutions  766.9$           25.6$           ‐$                  192.8$         985.3$           25.1% 28.5% Integrated Advertisting & Creativity Led Solutions    814.4             23.6              (5.3)                    131.0           963.7             16.1% 18.3% Specialized Communications & Experiential Solutions 272.1             8.9                (2.7)                    42.3              320.6             15.5% 17.8% IPG Total  (1) 1,853.4$       58.1$           (8.0)$                 366.1$         2,269.6$       19.8% 22.5%  (1) Amounts were not impacted by changes in our reportable segments. Components of Change  Change Components of Change  Change The Interpublic Group of Companies, Inc.  Segment Realignment ‐ Net Revenue Change (Unaudited) (Dollars in Millions) 


 
Quarter  Ended  9/30/2020 Quarter  Ended  9/30/2021 Net Revenue Change ‐ As previously reported  Net Revenue  Foreign  Currency Net  Acquisitions/ (Divestitures) Organic  Net Revenue  Organic  Total IAN 1,685.5$        18.5$           (3.6)$                 242.3$         1,942.7$        14.4% 15.3% DXTRA 269.1             3.9                (4.0)                    50.0              319.0             18.6% 18.5% IPG Total 1,954.6$       22.4$           (7.6)$                 292.3$         2,261.7$       15.0% 15.7% Quarter  Ended  9/30/2020 Quarter  Ended  9/30/2021 Net Revenue Change ‐ As recast Net Revenue  Foreign  Currency Net  Acquisitions/ (Divestitures) Organic  Net Revenue Organic  Total Media, Data & Engagement Solutions  838.9$           7.5$              (0.1)$                 133.7$         980.0$           15.9% 16.8% Integrated Advertising & Creativity Led Solutions    836.8             11.3              (3.5)                    106.9           951.5             12.8% 13.7% Specialized Communications & Experiential Solutions 278.9             3.6                (4.0)                    51.7              330.2             18.5% 18.4% IPG Total  (1) 1,954.6$       22.4$           (7.6)$                 292.3$         2,261.7$       15.0% 15.7%  (1) Amounts were not impacted by changes in our reportable segments. Components of Change  Change The Interpublic Group of Companies, Inc.  Segment Realignment ‐ Net Revenue Change (Unaudited) (Dollars in Millions)  Components of Change  Change


 
Quarter  Ended  12/31/2020 Quarter  Ended  12/31/2021 Net Revenue Change ‐ As previously reported  Net Revenue  Foreign  Currency Net  Acquisitions/ (Divestitures) Organic  Net Revenue  Organic  Total IAN 1,985.7$        4.2$              (3.4)$                 222.0$         2,208.5$        11.2% 11.2% DXTRA 298.7             1.2                (4.5)                    45.0              340.4             15.1% 14.0% IPG Total  2,284.4$       5.4$             (7.9)$                 267.0$         2,548.9$       11.7% 11.6% Quarter  Ended  12/31/2020 Quarter  Ended  12/31/2021 Net Revenue Change ‐ As recast Net Revenue  Foreign  Currency Net  Acquisitions/ Divestitures  Organic  Net Revenue Organic  Total Media, Data & Engagement Solutions  1,033.7$        1.9$              ‐$                  122.9$         1,158.5$        11.9% 12.1% Integrated Advertising & Creativity Led Solutions    939.5             2.3                (3.4)                    96.8              1,035.2          10.3% 10.2% Specialized Communications & Experiential Solutions 311.2             1.2                (4.5)                    47.3              355.2             15.2% 14.1% IPG Total (1) 2,284.4$       5.4$             (7.9)$                 267.0$         2,548.9$       11.7% 11.6%  (1) Amounts were not impacted by changes in our reportable segments. Components of Change  Change Components of Change  Change The Interpublic Group of Companies, Inc.  Segment Realignment ‐ Net Revenue Change (Unaudited) (Dollars in Millions) 


 
Year Ended  12/31/2020 Year Ended  12/31/2021 Net Revenue Change ‐ As previously reported  Net Revenue  Foreign  Currency Net  Acquisitions/ Divestitures  Organic  Net Revenue  Organic  Total IAN 6,921.4$        94.1$           (18.1)$               842.4$         7,839.8$        12.2% 13.3% DXTRA 1,143.1          21.1              (16.8)                 120.7           1,268.1          10.6% 10.9% IPG Total 8,064.5$       115.2$         (34.9)$               963.1$         9,107.9$       11.9% 12.9% Year Ended  12/31/2020 Year Ended  12/31/2021 Net Revenue Change ‐ As recast Net Revenue  Foreign  Currency Net  Acquisitions/ Divestitures  Organic  Net Revenue Organic  Total Media, Data & Engagement Solutions  3,451.2$        49.2$           (0.1)$                 473.3$         3,973.6$        13.7% 15.1% Integrated Advertising & Creativity Led Solutions    3,429.5          46.3              (17.7)                 368.0           3,826.1          10.7% 11.6% Specialized Communications & Experiential Solutions 1,183.8          19.7              (17.1)                 121.8           1,308.2          10.3% 10.5% IPG Total  (1) 8,064.5$       115.2$         (34.9)$               963.1$         9,107.9$       11.9% 12.9%  (1) Amounts were not impacted by changes in our reportable segments. Components of Change  Change Components of Change  Change The Interpublic Group of Companies, Inc.  Segment Realignment ‐ Net Revenue Change (Unaudited) (Dollars in Millions) 


 
Year Ended  12/31/2019 Year Ended  12/31/2020 Net Revenue Change ‐ As previously reported  Net Revenue  Foreign  Currency Net  Acquisitions/ (Divestitures) Organic  Net Revenue Organic  Total IAN 7,328.8$          (66.9)$            (73.3)$               (267.2)$          6,921.4$          (3.6%) (5.6%) DXTRA 1,296.3            (1.6)                 (5.8)                    (145.8)            1,143.1            (11.2%) (11.8%) IPG Total  8,625.1$          (68.5)$            (79.1)$               (413.0)$          8,064.5$          (4.8%) (6.5%) Year Ended  12/31/2019 Year Ended  12/31/2020 Net Revenue Change ‐ As recast Net Revenue  Foreign  Currency Net  Acquisitions/ (Divestitures) Organic  Net Revenue Organic  Total Media, Data & Engagement Solutions  3,685.5$          (33.5)$            ‐$                  (200.8)$          3,451.2$          (5.4%) (6.4%) Integrated Advertisting & Creativity Led Solutions    3,568.7            (32.5)              (72.8)                 (33.9)              3,429.5            (0.9%) (3.9%) Specialized Communications & Experiential Solutions 1,370.9            (2.5)                 (6.3)                    (178.3)            1,183.8            (13.0%) (13.6%) IPG Total  (1) 8,625.1$          (68.5)$            (79.1)$               (413.0)$          8,064.5$          (4.8%) (6.5%)  (1) Amounts were not impacted by changes in our reportable segments. Components of Change  Change The Interpublic Group of Companies, Inc.  Segment Realignment ‐ Net Revenue Change (Unaudited) (Dollars in Millions)  Components of Change  Change


 
Year Ended  12/31/2018 Year Ended  12/31/2019 Net Revenue Change ‐ As previously reported  Net Revenue  Foreign  Currency Net  Acquisitions/ (Divestitures) Organic  Net Revenue Organic  Total IAN 6,720.9$          (124.5)$        465.5$              266.9$         7,328.8$          4.0% 9.0% DXTRA 1,310.7            (18.6)            2.3                     1.9                1,296.3            0.1% (1.1%) IPG Total  8,031.6$          (143.1)$        467.8$              268.8$         8,625.1$          3.3% 7.4% Year Ended  12/31/2018 Year Ended  12/31/2019 Net Revenue Change ‐ As recast Net Revenue  Foreign  Currency Net  Acquisitions/ (Divestitures) Organic  Net Revenue Organic  Total Media, Data & Engagement Solutions  3,042.7$          (67.2)$          531.0$              179.0$         3,685.5$          5.9% 21.1% Integrated Advertisting & Creativity Led Solutions    3,597.3            (58.1)            (67.2)                 96.7              3,568.7            2.7% (0.8%) Specialized Communications & Experiential Solutions 1,391.6            (17.8)            4.0                     (6.9)              1,370.9            (0.5%) (1.5%) IPG Total  (1) 8,031.6$          (143.1)$        467.8$              268.8$         8,625.1$          3.3% 7.4%  (1) Amounts were not impacted by changes in our reportable segments. Components of Change  Change The Interpublic Group of Companies, Inc.  Segment Realignment ‐ Net Revenue Change (Unaudited) (Dollars in Millions)  Components of Change  Change


 
Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 FY 2020 Segment EBITA ‐ As previously reported  IAN 254.3$           382.9$         352.0$              476.1$         1,465.3$        699.1$         DXTRA 40.4               54.7              53.3                   38.1              186.5             56.5              Corporate and Other  (30.1)              (31.6)            (32.3)                 (35.4)            (129.4)            (81.3)            Total IPG Adjusted EBITA (1) 264.6$           406.0$         373.0$              478.8$         1,522.4$        674.3$         Segment EBITA ‐ As recast Media, Data & Engagement Solutions  135.8$           201.6$         198.5$              282.1$         818.0$           385.7$         Integrated Advertisting & Creativity Led Solutions    118.1             183.1           152.9                192.1           646.2             329.2           Specialized Communications & Experiential Solutions 40.8               52.9              53.9                   40.0              187.6             40.7              Corporate and Other (1) (30.1)              (31.6)            (32.3)                 (35.4)            (129.4)            (81.3)            Total IPG Adjusted EBITA (1)(2) 264.6$           406.0$         373.0$              478.8$         1,522.4$        674.3$          (1) Amounts were not impacted by changes in our reportable segments. Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 FY 2020 Segment EBITA Margin on Net Revenue ‐ As previously reported IAN 14.7% 19.6% 18.1% 21.6% 18.7% 10.1% DXTRA 13.8% 17.4% 16.7% 11.2% 14.7% 4.9% Total IPG Adjusted EBITA Margin on Net Revenue  (1) 13.0% 17.9% 16.5% 18.8% 16.7% 8.4% Segment EBITA Margin on Net Revenue ‐ As recast Media, Data & Engagement Solutions  16.0% 20.5% 20.3% 24.4% 20.6% 11.2% Integrated Advertisting & Creativity Led Solutions    13.5% 19.0% 16.1% 18.6% 16.9% 9.6% Specialized Communications & Experiential Solutions 13.5% 16.5% 16.3% 11.3% 14.3% 3.4% Total IPG Adjusted EBITA Margin on Net Revenue  (1)(2) 13.0% 17.9% 16.5% 18.8% 16.7% 8.4%  (1) Amounts were not impacted by changes in our reportable segments. (2) Adjusted EBITA is a financial measure that is not defined by U.S. GAAP.  Refer to Non‐GAAP reconciliation for details of Adjusted EBITA calculation. (1) Adjusted EBITA is a financial measure that is not defined by U.S. GAAP.  Refer to Non‐GAAP reconciliation for details of Adjusted EBITA calculation. (2) Adjusted EBITA is a financial measure that is not defined by U.S. GAAP.  Refer to Non‐GAAP reconciliation for details of Adjusted EBITA calculation. (1) Adjusted EBITA is a financial measure that is not defined by U.S. GAAP.  Refer to Non‐GAAP reconciliation for details of Adjusted EBITA calculation. (Dollars in Millions)  The Interpublic Group of Companies, Inc.  Segment Realignment ‐ Segment EBITA (Unaudited) The Interpublic Group of Companies, Inc.  Segment Realignment ‐ Segment EBITA Margin on Net Revenue (Unaudited)


 
Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 FY 2020 Restructuring Charges ‐ As previously reported IAN 0.5$               ‐$             (0.6)$                 3.1$             3.0$               317.9$         DXTRA 0.8                  (0.3)              (0.6)                   9.8                9.7                  78.8             Corporate and Other  ‐                 0.1                (2.3)                   0.1                (2.1)                17.1             Total IPG Restructuring Charges  1.3$               (0.2)$            (3.5)$                 13.0$           10.6$             413.8$         Restructuring Charges ‐ As recast Media, Data & Engagement Solutions  ‐$               0.2$             (0.4)$                 0.3$             0.1$               159.9$         Integrated Advertisting & Creativity Led Solutions    0.4                  (0.4)              (0.2)                   2.8                2.6                  148.1           Specialized Communications & Experiential Solutions 0.9                  (0.1)              (0.6)                   9.8                10.0               88.7             Corporate and Other (1) ‐                 0.1                (2.3)                   0.1                (2.1)                17.1             Total IPG Restructuring Charges  (1) 1.3$               (0.2)$            (3.5)$                 13.0$           10.6$             413.8$          (1) Amounts were not impacted by changes in our reportable segments. The Interpublic Group of Companies, Inc.  Segment Realignment ‐ Restructuring Charges (Unaudited) (Dollars in Millions) 


 
Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2021 FY 2020 Non‐GAAP Reconciliation ‐ As previously reported Net Revenue 2,027.7$        2,269.6$      2,261.7$           2,548.9$      9,107.9$        8,064.5$      Adjusted EBITA Reconciliation:  Net Income Available to IPG Common Stockholders  91.7$             263.3$         239.9$              357.9$         952.8$           351.1$         Add back:  Provision for Income Taxes  23.8                86.7              73.9                   67.4              251.8              8.0                Subtract:  Total (expenses) and other income  (126.6)            (30.3)             (33.2)                  (24.0)             (214.1)            (227.1)          Equity in net (loss) income of unconsolidated affiliates  (0.2)                 0.4                0.2                      2.1                2.5                  0.9                Net income attributable to noncontrolling interests  (0.7)                 (4.5)               (4.7)                    (10.1)             (20.0)               (3.1)               Operating Income  243.0              384.4            351.5                 457.3            1,436.2          588.4            Add back:  Amortization of acquired intangibles  21.6                21.6              21.5                   21.5              86.2                85.9              Total IPG Adjusted EBITA (1) 264.6$           406.0$         373.0$              478.8$         1,522.4$        674.3$         Adjusted EBITA Margin on Net Revenue 13.0% 17.9% 16.5% 18.8% 16.7% 8.4% Restructuring Charges 1.3                  (0.2)               (3.5)                    13.0              10.6                413.8            Adjusted EBITA before Restructuring Charges  (1) 265.9$           405.8$         369.5$              491.8$         1,533.0$        1,088.1$      Adjusted EBITA before Restructuring Charges on Net Revenue  13.1% 17.9% 16.3% 19.3% 16.8% 13.5% (1) Adjusted EBITA and Adjusted EBITA before restructuring Charges are financial measures that are not defined by U.S. GAAP.  Adjusted EBITA is calculated as net income available to IPG common stockholders  before provision for income taxes, total (expenses) and other income, equity in net (loss) income of unconsolidated affiliates, net income attributable to noncontrolling interests and amortization of acquired  intangibles.  Adjusted EBITA before restructuring charges is calculated as Adjusted EBITA, as defined previously, before restructuring changes. The Interpublic Group of Companies, Inc.  Non‐GAAP Reconciliation ‐ Adjusted Results (Unaudited) (Dollars in Millions)