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SEC Filings

10-Q
INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 10-Q on 07/27/2017
Entire Document
 

Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)


 
 
 
Components of Change
 
 
 
Change
 
Three months ended
June 30, 2016
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 
Organic
 
Three months ended
June 30, 2017
Organic
 
Total
Consolidated
$
1,917.9

 
$
(21.3
)
 
$
(19.4
)
 
$
7.7

 
$
1,884.9

 
0.4
 %
 
(1.7
)%
Domestic
1,169.1

 
0.0

 
(16.5
)
 
7.9

 
1,160.5

 
0.7
 %
 
(0.7
)%
International
748.8

 
(21.3
)
 
(2.9
)
 
(0.2
)
 
724.4

 
0.0
 %
 
(3.3
)%
United Kingdom
155.7

 
(17.6
)
 
5.9

 
2.9

 
146.9

 
1.9
 %
 
(5.7
)%
Continental Europe
172.9

 
(5.4
)
 
(3.0
)
 
(4.4
)
 
160.1

 
(2.5
)%
 
(7.4
)%
Asia Pacific
217.7

 
(1.8
)
 
1.1

 
(2.4
)
 
214.6

 
(1.1
)%
 
(1.4
)%
Latin America
86.8

 
4.6

 
(7.6
)
 
0.0

 
83.8

 
0.0
 %
 
(3.5
)%
Other
115.7

 
(1.1
)
 
0.7

 
3.7

 
119.0

 
3.2
 %
 
2.9
 %
During the second quarter of 2017, our revenue decreased by $33.0, or 1.7%, compared to the second quarter of 2016, comprised of an organic revenue increase of $7.7, or 0.4%, offset by an adverse foreign currency rate impact of $21.3 and the effect of net divestitures of $19.4. Our organic revenue increase was primarily attributable to growth within the healthcare sector, partially offset by decreases in the technology and telecom sector. The organic revenue increase in our domestic market was driven by growth across most disciplines, most notably at our advertising and media businesses, partially offset by declines within our events businesses, primarily as a result of certain projects where we acted as principal that decreased in size or did not recur during the second quarter of 2017, the impact of which is also reflected as a comparable reduction in office and general expenses. In our international markets, organic revenue remained relatively flat, primarily attributable to increases at our media businesses in Latin America, the Asia Pacific region and our Other region, driven by growth in Canada, as well as growth within our advertising and media businesses in the United Kingdom, offset by decreases in our advertising businesses, most notably in the Asia Pacific region and Latin America, and our media businesses in Continental Europe.
 
 
 
Components of Change
 
 
 
Change
 
Six months ended
June 30, 2016
Foreign
Currency
 
Net
Acquisitions/
(Divestitures)
 
Organic
 
Six months ended
June 30, 2017
Organic
 
Total
Consolidated
$
3,659.9

 
$
(38.4
)
 
$
(36.6
)
 
$
53.9

 
$
3,638.8

 
1.5
 %
 
(0.6
)%
Domestic
2,260.3

 
0.0

 
(27.5
)
 
39.5

 
2,272.3

 
1.7
 %
 
0.5
 %
International
1,399.6

 
(38.4
)
 
(9.1
)
 
14.4

 
1,366.5

 
1.0
 %
 
(2.4
)%
United Kingdom
321.3

 
(40.2
)
 
11.1

 
3.2

 
295.4

 
1.0
 %
 
(8.1
)%
Continental Europe
320.5

 
(10.3
)
 
(9.3
)
 
5.5

 
306.4

 
1.7
 %
 
(4.4
)%
Asia Pacific
399.8

 
(1.5
)
 
2.6

 
(7.4
)
 
393.5

 
(1.9
)%
 
(1.6
)%
Latin America
152.1

 
11.9

 
(14.2
)
 
2.4

 
152.2

 
1.6
 %
 
0.1
 %
Other
205.9

 
1.7

 
0.7

 
10.7

 
219.0

 
5.2
 %
 
6.4
 %
During the first half of 2017, our revenue decreased by $21.1, or 0.6%, compared to the first half of 2016, comprised of an organic revenue increase of $53.9, or 1.5%, offset by an adverse foreign currency rate impact of $38.4 and the effect of net divestitures of $36.6. The organic increase in our domestic market was mainly driven by our media businesses and digital specialist agencies. In our international markets, the organic revenue increase was driven by our media businesses in all regions and our public relations businesses, most notably in the United Kingdom, partially offset by declines in our advertising businesses in the Asia Pacific region and our events businesses in the United Kingdom as a result of certain projects where we no longer act as principal.
Refer to the segment discussion later in this MD&A for information on changes in revenue by segment.

21