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IPG organic revenue grows at 5.5% for FY14 and 4.8% for Q4

IPG organic revenue grows at 5.5% for FY14 and 4.8% for Q4

Author | exchange4media News Service | Monday, Feb 16,2015 9:18 AM

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IPG organic revenue grows at 5.5% for FY14 and 4.8% for Q4

Interpublic has announced full year and fourth quarter 2014 results. Company posted FY14 revenue of $7.54 billion, with organic revenue growth of 5.5% for FY14 and 4.8% for Q4. Operating margin expanded to 10.5% for FY14 and to 19.6% for Q4. FY14 operating income increased 20% over adjusted results in 2013. FY14 diluted EPS was $1.12 – FY14 adjusted diluted EPS rose 26% to $0.98. Management targets 3-4% organic revenue growth and 80-100 basis points of operating margin improvement for FY15. Board approves 26% increase in quarterly dividend and additional $300 million toward share repurchase program.

Summary

Revenue

• Full year 2014 revenue was $7.54 billion, compared to $7.12 billion in 2013, with an organic revenue increase of 5.5% compared to the prior-year period. This was comprised of an organic revenue increase of 6.6% internationally and 4.7% in the U.S.

• Fourth quarter 2014 revenue was $2.21 billion, compared to $2.12 billion in the fourth quarter of 2013, with an organic revenue increase of 4.8% compared to the prior-year period. This was comprised of an organic revenue increase of 6.4% internationally and 3.4% in the U.S.

Operating Results

• For the full year 2014, operating income was $788.4 million, compared to $598.3 million in 2013 which included a fourth quarter pre-tax restructuring charge. Operating margin was 10.5% for the full year 2014, compared to 9.3% for the full year 2013 excluding the impact of restructuring and related costs.

Operating income in the fourth quarter of 2014 was $433.0 million, compared to $324.4 million in 2013 which included a pre-tax restructuring charge. Operating margin was 19.6% for the fourth quarter of 2014, compared to 18.1% for the fourth quarter of 2013 excluding the impact of restructuring and related costs.

Net Results

• Full year 2014 net income available to IPG common stockholders was $477.1 million, resulting in earnings of $1.14 per basic and $1.12 per diluted share. This compares to net income available to IPG common stockholders of $259.2 million, or $0.62 per basic and $0.61 per diluted share a year ago. Excluding the impact of the net valuation allowance reversal of $67.6 million on deferred tax assets in Continental Europe in the fourth quarter of 2014 and the charge for early extinguishment of the 6.25% Senior Unsecured Notes due 2014 (the "6.25% Notes") in the second quarter of 2014, diluted earnings per share was $0.98 in 2014, compared to $0.78 per share in 2013 excluding the impact of restructuring and related costs in the fourth quarter of 2013 and the charge for early extinguishment of the 10.00% Senior Unsecured Notes due 2017 (the "10.00% Notes") in the third quarter of 2013.

• Fourth quarter 2014 net income available to IPG common stockholders was $308.9 million, resulting in earnings of $0.75 per basic and $0.73 per diluted share. This compares to net income available to IPG common stockholders of $193.1 million, or $0.45 per basic and $0.44 per diluted share a year ago. Excluding the impact of the net valuation allowance reversal on deferred tax assets in Continental Europe, diluted earnings per share was $0.57 in 2014, compared to $0.56 in 2013 excluding the impact of restructuring and related costs.

"We are pleased to report strong 2014 results that reflect significant progress in the marketplace and exceeded our growth and margin targets. The competitiveness of our agencies, digital capabilities and offerings in key growth markets — combined with our ability to deliver custom integrated solutions to our clients — is evident in the group's continued strong organic growth and positive new business momentum," said Michael I. Roth, Interpublic's Chairman and CEO. "Equally important is the 120 basis points improvement in operating margin that we delivered. This is an area on which we remain closely focused, and represents significant opportunity as we drive toward our goal of fully-competitive 13% operating margins. Going forward, we will continue to invest in talent and behind the growth sectors of our industry, so as to further enhance our portfolio of offerings, which is highly relevant in today's dynamic and complex consumer media landscape. We also remain committed to our robust capital return programs, as evident in the actions our Board has taken today to increase the dividend and authorization for share repurchase. These will continue to be drivers of value creation. Looking to 2015, we believe the tone of the business is solid, yet there remains macro uncertainty relating to both the currency environment and Europe. For Interpublic Group 1114 Avenue of the Americas New York, NY 10036 212-704-1200 tel 212-704-1201 fax 2015, we are therefore targeting 3 – 4% organic revenue growth, and 80 – 100 basis points of operating margin expansion. Coupled with strong capital returns, we are confident that achieving these targets will allow us to build on our strong track record of enhancing shareholder value."
 

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