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8-K
INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 8-K on 07/26/2017
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results. So that’s where we see the visibility in the second half of the year. This is not 2008 or anything like that.
And, again, some of our results are particularly relevant to particular clients. So, for example, the weakness that we saw in Continental Europe related to the SEAT loss that we had, and we’re flowing through that. So some of it is client-specific, and that’s why I say we’re addressing our major clients and see opportunities in the second half.
I’m not belittling the comments about the consumer goods environment. There’s no question that that had an impact in the second quarter on our results. Candidly - I don’t know whether I’m supposed to say this - but it had about almost a 1%, about a 0.8%, impact on our revenue growth in the consumer goods side of the business. There, too, we think that our clients are overreacting, frankly, in their cuts. And, in fact, you see some of our clients officially say that they’ll be spending stronger in the second half of the year.
So when you put all that together, that’s why we’re maintaining the 3 - 4, albeit on the lower end of the scale. What’s also important is we have extreme focus on our ability to deliver on the margin. Because that - as you know, we have a variable cost structure, and we’ve already started actions to bring our expense line in line with the revenue.
Ms. Quadrani:
Thank you, Michael, that was super helpful. And just one real quick follow-up, and I think you just started to touch on this on the margin and the margin target for the year, which you’ve committed to.
Mr. Roth:
Right.
Ms. Quadrani:
I think you highlighted in your opening comments, maybe Frank did, that one of the reasons for the softness in profitability in the quarter was the weakness in Continental Europe. It sounds like from what you’re saying that, even if that weakness in Continental Europe persists, you feel that with the cutting, with the cost cuts, you’re comfortable with the target still? Or is it predicated on maybe a bit of improvement in Continental Europe?
Mr. Roth:
Yes, we don’t see a big recovery in Continental Europe. Over 60% of our revenue is in the U.S., so even though our industry is seeing some softness in the U.S, we had 1.7%, if you exclude the pass-throughs, organic growth in the second quarter, and we had, what, 1.8% in the first half in the U.S. So we need stronger growth in the second half, but we’re not starting from a zero base in the U.S. Frankly, some of our peers are. So obviously, we believe our U.S. business is very solid and something we believe should turn around a bit, particularly on the project side of the business, in the second half.
Ms. Quadrani:
Thank you so much.
Mr. Roth:
Thank you.


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