IPG reports 14.2% drop in organic revenue

by Arif Durrani, mediaweek.co.uk 28-Oct-09, 16:20

LONDON - Interpublic, parent to Mediabrands agencies Universal McCann and Initiative, has posted a 14.2% drop in organic revenue for the third quarter and has parted ways with 5,100 employees in the past 12 months.

Group revenue for the nine months to September was down 12.5 %, excluding severance paid to 11% of its former workforce.

Michael Roth, chairman and chief executive of Interpublic, admitted the "economic downturn continued to weigh on our results", but celebrated the group's ability to "effectively manage costs to protect margins".

He added: "Our professional offerings remain competitive, as evident in recent wins from a broad cross-section of our agencies in a new business environment that has become more active of late."

Interpublic's operating income for the third quarter of 2009 was $58.3m, with a 4.1% operating margin.

For the first nine months of 2009, operating income was $73.3m, with a 1.7% operating margin.

The group reported "client sentiment has stabilised", but remains cautious moving into 2010.

Roth said: "We are aligning our cost base against conservative top line assumptions and are positioned to deliver significantly improved profitability next year."