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INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 8-K on 10/30/2017
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Michael Roth, Chairman of the Board and Chief Executive Officer:
I think there’s no question that China, a lot of the expectations for growth in China were overblown. And I think what we’re seeing in China is coming back to a more normal expectation for growth in China. That said, there’s growth in China. We were negative in China in the quarter. I think those were - I know those were - more client-specific than industry. And you’re correct: local businesses have had an impact on the pullback in that. Our multinationals in China will continue to spend in China. But local businesses are something that we have to focus on. And there, those are very much project-oriented.

The good news is in Australia. We saw very strong impact in the third quarter, particularly at R/GA, which is, again, one of those digital-type project-based businesses, where we see, when we win them and the clients pull the trigger, it has a very positive impact on our business. And I think that’s what we’re going to be seeing. Also, we saw a strong, we saw strength in Singapore last quarter, and this quarter, we haven’t seen such strength. And remember, our comps were much, a little more difficult from last year.

But the tone in China is more realistic than the high growth. And I think you’re right to focus on local, which is why we’ve added - for example, McCann, we added a lot of new talent in China, too, and the same in FCB, to focus on local markets.

Mr. Janedis:
Anything on India, and also on the project side?

Mr. Roth:
India, historically, India has been one of our stronger markets. I think you have to look at India as being very client-specific. Again, it’s not that large, but it’s one of our stronger markets. And in particular, we were cycling and had some negative impact on clients in India. I don’t think it’s an overall industry or economic issue, it’s very client-specific to us. Frankly, we lost a client in India, and we’re seeing the impact of that.

Mr. Janedis:
Any more color on the project side, Michael? Back to my question before, it feels like we tend not to hear much about projects in 2Q and 3Q. And so, is there any kind of read on a going forward basis into 4Q, meaning is it more confidence that - I know you talked about it - but that some of the projects in 3Q actually get done in 4Q, or any kind of read for us to think about?

Mr. Roth:
Well, yes. Again, the reason we adjusted our numbers is because it’s hard to project when these projects are going to be going online and when clients are going to pull the trigger. And we, all of a sudden, didn’t get much smarter now than we were before on projects. Clients surprise us. When we put out our forecast in the second quarter, we had these projects ready to go, and that’s why we put out the numbers that we did. And clients just pulled back. So yes, you’re right, fourth quarter’s typically project-based businesses. But I think what we’re seeing is these large projects are all year long, not just the fourth quarter, and we’re dependent on the timing when clients are going to pull them onstream.

The good news is, take, for example, R/GA. R/GA had a lot of new business wins in the third quarter, and they will flow through. Now, whether they’ll flow through in the fourth quarter or in the first quarter of next year, we’re still mapping out. So I can’t really answer that question. But the good news is, they’re winning business, and the question of timing of that is something that is a little more difficult now given the project environment that we’re in.