IPG » Topics » Michael Roth

This excerpt taken from the IPG 8-K filed Oct 29, 2009.
Michael Roth, Chairman of the Board and Chief Executive Officer:

First of all, what I said was that in terms of guidance, it wasn’t specifically guidance. What we were saying is that for the first half of the year we thought the rest of the year should be equal to around 10.5%, 11% negative revenue. What I said just now was that the third quarter obviously indicates a trend a little bit worse than that. And although it’s difficult, obviously, we’ll shoot to do better, but right now it looks like achieving that target will be a little bit more difficult.

As far as the verticals go, I think clearly we’ve already talked about the tech and telecom. That certainly has a big weight in terms of our performance. There, of course, it was scope reductions as well as some lost client assignment that we are all aware of. As well as automotive. Our strengths continue to be in our healthcare. We believe there is a lot of activity in that environment, and the third quarter, although was slightly down, we think that’s an important sector for us and we continue to perform well. Food and beverage and packaged goods continue to do well, and retail in fact was positive in the quarter. Financial services was negative, but, again, it only represents about 8% of our sectors, and there, as you know, MasterCard is a significant part of that. And it was encouraging to see R/GA win the global digital assignment in that area.

This excerpt taken from the IPG 8-K filed Aug 3, 2009.
Michael Roth, Chairman of the Board and Chief Executive Officer:

Thank you Alexia. The important thing to note is that in June our business continued to grow, if you will. The issue is the comps versus last year. We had a very strong second quarter last year, and therefore it accounts for a good percentage drop that you are seeing right now. It’s not that the business has fallen off a cliff, which is what you would first see. So we continue to see June versus May to be stronger as we have in the past. Q3 continues — will be a difficult comp as well. Last year Q3 was very difficult — which was very positive, which makes it difficult to overcome, which is why we are looking at it on a full-year basis. That’s why we believe that, given on a full-year basis, the negative 10, 10.5% is the organic number that we believe for the full year, and what’s important to note is that we believe that, given that decline, we can maintain or bring our margins within 7 to 7.5%.

This excerpt taken from the IPG 8-K filed May 4, 2009.
Michael Roth, Chairman of the Board and Chief Executive Officer:

Good morning, Alexia. Obviously, January was a difficult month for us. We continued — obviously, it’s still challenging, but we seen some improvement in February and March. Clearly with respect to the rest of the year we are monitoring very carefully, but gradually we hope to see some gradual improvement. But it’s still difficult to call.

This excerpt taken from the IPG 8-K filed Mar 5, 2009.
Michael Roth, Chairman of the Board and Chief Executive Officer:

All of that in two questions, Alexia, thank you. Let me take the second part, and then we will get into some of the details of the first part. Obviously, this is an evolving situation with respect to 2009. I think what we have shown, is that we have been quick to react to taking costs out of our business, and therefore we expect as the revenue declines persist, we will be taking actions in the first quarter, and particularly and obviously salary is an important part of that. So we do expect to see it, and in fact, you have seen recent announcements at some of our agencies, which showed some cutbacks already taking place.

So we are ahead of the curve, and frankly let me just address the major question. That is, for 2009, where do we think we are going to end up? And obviously it is hard to project what revenue will be for 2009, but our expectation is if revenue declines in the range of conservatively 2 to 3%, we think we can maintain margins by taking actions early on. If the revenue deteriorates at a greater rate than that, obviously we will be hard pressed to maintain our margins, but I think we have shown an ability to react and show that we are very aware of margin objectives within IPG.

This excerpt taken from the IPG 8-K filed Dec 11, 2008.
Michael Roth, Chairman of the Board and Chief Executive Officer:

Yes. It occurred in the third quarter. Everyone was expecting everything to fall off the table if you will. Of course, you’ve heard the prognosis already. And frankly you heard it from our research, Magna, with respect to what we see in the marketplace. Certainly for 2009 we’re assuming something similar to what you’ve already heard, and that is flat on an overall basis, somewhat down in the U.S.

But if you look at a lot of the write-ups and the way people are operating and thinking, they are thinking that the environment is a lot worse than that. And I think the reason for that is you have to really dig into the diversification we have as a company with respect to our sectors, as well as our geographic areas. In some areas, whether it be Asia, India if you will, and China and Latin America, we see some — we continue to see growth, although not be it the enormous growth that we saw before, but it’s still there.

And in fact in the United States we’re seeing companies willing to spend dollars, but it has to make sure that they are spending their dollars wisely, and it’s up to us to make sure we work with them to do that. So I think it’s a challenge. There’s no question about it. It’s not going to be as rosy a picture as we would like. But I do believe that there’re opportunities out there for best-in-class services, and that’s what we’re going to continue to offer.


Mr. Schachter:

So in the most recent earnings call, you had mentioned that — I believe you mentioned that if you were able to maintain flat organic growth, you could continue to see margins going in the right direction. Any update on that? And then how should we think about that into ’09 as well?

Mr. Roth:

We are in the midst of finalizing our plans for 2009, and obviously our message to our units is to do exactly that, and that is continue to show margin improvement. And whether you do it through cost containment or revenue, so be it. And our units are focused on that. We are still in the middle of wrapping it all up, but we are hopeful that we can continue to do that.







Mr. Schachter:

This is for either you or Frank. When I first started looking at the Company, there was always a discussion of how much of the year you know already at the beginning of the year. And I think back then you had told me, really, by this point you know what next year’s going to look like in large part. How is that different now in this environment? And roughly what percentage do you think you know of next year already?

Mr. Roth:

You know, this question of visibility — and I know everyone asks the question — do we have visibility? We have visibility, obviously. We are in the midst of rolling up our businesses, and we roll up our businesses from the bottom up. We don’t do it from the top down. So all the various business units put together what they, from a client basis, see, where their revenue is coming.

The issue and the reason why people are saying maybe you don’t have visibility or not, is that all of that can change very quickly. So therefore even though you have visibility, you’re kind of reluctant to say it’s all locked in because, come Monday, something might happen where clients may pull back, and when they go through their own budgets, they may see a cutback. I think we’re seeing more of that than we have in the past.

But nonetheless, we’re in the process of doing our planning right now, and we have — it’s the best visibility we have in the environment that we are experiencing.


Mr. Schachter:

Not to stay too much on the current quarter, but again, the discussion was around special projects in Q4 and how that was going to impact the quarter. I was just wondering if you can give any update on how those projects have rolled out, what have been really the key drivers to either make those things a go or have them pull back.

Mr. Roth:

What we said on the call was, project-based is the first thing to go. And that is a reality. When people have to show improvements and reductions in their budgets, it’s a lot easier to cut back on a project than an overall integrated offering if you will. So we in fact have seen some of that. And we probably will continue to see that for the rest of the year. We don’t give out any specific numbers with that, but all of that is built into our view on margin improvement and revenue growth.

Do you want to add anything?

This excerpt taken from the IPG 8-K filed Nov 3, 2008.
Michael Roth, Chairman of the Board and Chief Executive Officer:

Actually, Alexia, September was a strong month for us. So it wasn’t that we were seeing deterioration. Obviously, I referenced in my remarks some drop offs in special projects in October, but we don’t see that as a major pattern.

This excerpt taken from the IPG 8-K filed Aug 5, 2008.
Michael Roth:

And historically our fourth quarter has always been a key quarter for us, so that’s, that’s something that obviously we have to watch very carefully. And the PR business, for example, is very much project-oriented, and those are the things we, we monitor very closely.




Frank Mergenthaler:

I mean seasonality-wise our fourth quarter as been running over the past few years, 29 to 30% of our annual revenue.

This excerpt taken from the IPG 8-K filed Mar 5, 2008.
Michael Roth, Chairman of the Board and Chief Executive Officer:

Thank you, Jerry. And thank you all for joining us this morning as we review both the fourth quarter and full year 2007.

I’ll begin with an overview and some of the key takeaways from our performance, and then Frank will take us through the results in detail. After his remarks, I’ll return with some closing comments before we move on to the Q&A.

I believe that the most important headline is that in 2007 our company’s financial performance was strong and consistent with our objectives. We saw a significant improvement in profitability, driven by organic revenue growth and cost control. The business was cash flow positive. Net income was at the highest levels we have seen in years, as was EPS of $0.26 per diluted share, our best results since 2000.

Organic revenue growth of 3.8% for the year demonstrates real progress in the competitiveness of our offerings. Operating margin of 5.3% compares very favorably to 2006, and is a significant improvement to the substantial losses we posted in 2005 and prior years. We were also successful in remediating every one of the company’s 18 material control weaknesses and achieving Sarbanes-Oxley compliance. These are all






major accomplishments, and it is gratifying to see such dramatic improvements in so many facets of our business.

In terms of the organic growth results for 2007, there are a number of things that we need to be called out.

First, organic revenue performance includes wins in a broad cross section of our agencies. Performance is strong or improving across our portfolio.

Second, a fact that I mentioned on each of our previous 2007 quarterly calls: our revenue growth would not be linear; therefore it’s difficult to use a single quarter’s results to extrapolate future performance. Full growth is a better barometer of our performance. The 3.8% organic revenue growth we posted, like our EPS, is IPG’s best since 2000. And it’s at the high end of the 3 to 4% range of market expectations that was in place for us going into 2007. While organic revenue performance in the fourth quarter moderated relative to very strong results in Q2 and Q3, we see no evidence of a pullback in 2008.

Importantly, the tone of the business to date in 2008 remains solid. This is evident in new business wins such a Unilever ice cream, Hyundai/Kia, and Cadbury Schweppes media, China Mobile and the Cadillac account in China, as well as from dialogs with our existing clients.

Of course it goes without saying that clients are cautious due to the broader economic concerns. As such, they continue to evaluate the best ways to maximize the effectiveness of their marketing spend. But what we are not seeing are signs of a real pullback, and this is true in all regions, including the U.S., where we are very strong, as evidenced by last year’s organic revenue growth in excess of 6%.

So as we enter the new year, the talent we have added throughout the organization, the strategic actions we have taken during the past year, and the strong 2007 financial performance gives us confidence that we are well-positioned to achieve the 2008 financial objectives we shared with you back in November. That is, competitive revenue and an 8.5 to 9% margin.

Turning to the operational side of things, it is clear the Worldgroup continues as a force to be reckoned with among the global, full-service marketing networks that provide integrated solutions to major multinationals. The investments in talent that we have made at McCann, Momentum and MRM have helped take their game to the highest level.

That’s also true of the companies in our CMG Group — Weber Shandwick, GolinHarris, Jack Morton, FutureBrand and Octagon — which distinguished themselves this year, as did a number of our integrated U.S. independents, and Frank will have more specifics on our operating unit results in his comments.

During 2007 the merger of Draft and FCB was completed with minimal client loss due to conflicts. The agency rolled up its sleeves and rolled out its new model around the world, which led to wins like the U.S. Census and the defense of Qwest and which positions Draftfcb for success as we enter 2008.






Lowe saw further stabilization of key accounts and its “High Value Ideas” offering has begun to show signs of progress, as evidenced in some significant recent wins and an increasingly active new business pipeline.

The implementation and evolution of our aligned media strategy is going very well and contributed to dramatically improve performance at both Initiative and Universal McCann in 2007. A number of our major first-quarter wins have been in the media area, something we just would not have been able to do 12 to 18 months ago.

Our increased focus on emerging digital media has led to a strategy that will see us embed digital expertise across all our portfolio of companies. This includes the major global networks and U.S. independents, as well as the fast-growth marketing service companies, which are combining their core competency with extensions in areas such as social networking, the creation of digital assets, targeted mobile marketing and digital analytic capabilities.

As we discussed with you in our last quarterly call, these initiatives require investment in people, training and technology, but they are necessary to ensure that we build our organic revenue momentum, a vital component of achieving our turnaround.

Of course we will also continue to support and develop outstanding specialist digital capabilities, such as R/GA and MRM, Reprise Media and Ansible, and we’ll keep building alliances with leading-edge technology companies and thought leadership in digital marketing through the Emerging Media Lab.

In 2007, we also took significant steps to cement our leadership position in India by acquiring the remaining stakes in both Lowe Lintas and FCB Ulka. Both are outstanding agencies, and we have already begun to see the benefits of these transactions in the offerings we can bring to clients across the full range of the marketing spectrum.

Going forward, we will remain focused on the important BRIC markets, where investment in talent and some targeted M&A activity should help us better meet the needs of our clients and to capitalize on the higher growth rates in these emerging economies.

At this point I would like to hand things over to Frank for an in-depth review, and I will come back to you after. Frank?


This excerpt taken from the IPG 8-K filed Aug 9, 2007.

Michael Roth:

Thank you.







And that was the final question, gentlemen.

Mr. Roth:

Well, I thank you all for participating, obviously, we’ll be available to answer some additional questions and we look forward to talking with you at the end of next quarter. Thank you.

*         *         *






This excerpt taken from the IPG 8-K filed May 15, 2007.
Michael Roth , Chairman of the Board and Chief Executive Officer

Thank you, Jerry, and thank you all for joining us this morning as we review our first quarter results.

I'd like to begin with some brief general remarks, after which Frank will take us through the specifics of our financial performance. Then I'll return after his presentation with some closing comments before we open up the lines for Q&A.

The first thing I'd like to address is revenue since it's critical to our turnaround efforts.

During 2006 we reversed a multi-year organic revenue decline and put the company back on a positive organic trajectory. This was a significant accomplishment and it came about as a result of actions that we've been focused on for some time.

First and most important, we've been focused on attracting and developing talent. This is an area in which we've been very successful over the last 18 to 24 months. As significant, we were not shy about taking a hard look at our portfolio of offerings and the strategic alignment of our capabilities so as to ensure that we can meet the needs of our clients.

In light of all this hard work, it's gratifying to see that the company began to build on last year's progress on the top line. Organic growth for the first quarter was 1.6%, led by the Worldgroup along with our marketing service assets and a number of our integrated U.S. independent agencies. Domestically, organic revenue growth was 4.2% in the quarter.

We continue to perform well in the new business arena and believe that our pipeline is competitive and that we'll be included in the preponderance of reviews that are taking place in the market place.

Organic revenue performance this quarter was consistent with our operating plan. That plan calls for us to increase the rate of improvement in organic growth over the balance of 2007, since one of the primary turnaround goals we set last year is to deliver competitive organic growth.

In order to meet our growth targets, we have to deliver on the demand in the market place. We must harness the wide range of communication tools that now exist and that allow us to reach consumers anywhere, anytime and in increasingly measurable ways.





Essentially, the conversations we are having with senior client management all come down to three things. They want us to provide integrated solutions, they want to get their arms around the many different channel choices that are out there and they want greater accountability in their marketing programs.

I'm pleased to say that the investments we've made to address these key trends are beginning to pay out.

The growth we're seeing is led by domestic advertising, marketing services, media and digital — areas which have been significantly upgraded in terms of leadership over the past couple of years.

Our new approach to media and our focus on channel planning have played a part in recent wins and initiatives and are helping Universal McCann grow its business with existing clients. We also continue to see very positive momentum at R/GA and among our other offerings in the digital space, such as MRM. Organic growth was strong at CMG, where Weber Shandwick, GolinHarris and FutureBrand led the way in the first quarter.

Draftfcb’s accountable agency model has been behind a strong new business performance of late. And the integrated offerings at our U.S. independents, notably Martin, Hill Holiday, Deutsche, Campbell-Ewald and Mullen, drove major wins in late 2006 and during the first three months of this year.

Our commitment to breaking down silos is leading to greater collaboration across our agencies.

Our progress in creating offerings that are responsive to clients and in growing revenue has been the result of significant culture change. Meeting our goals when it comes to profitability is also about shaking up the culture that has been slow to change.

We took the first cut at this when we addressed our control environment. We've since taken on professional fees. As you can see from this quarter's results, we continue to have success in bringing these down dramatically. They were a key driver in helping to narrow our net loss compared to the first quarter of 2006.

Going forward, we must aggressively address staff costs. This quarter, the picture was somewhat complicated due to the timing of some long-term equity grants and the accounting for a one-time performance-based program. These are further indications that we are keeping our pledge to move to more long-term equity-based incentive programs. Our plan calls for lower cash incentives at target compared to last year's payments. For the full year 2007, we still see the staff cost metric trending downward to a normalized number below our current run rate.

The investments we've made in people to support high growth capabilities and to upgrade certain of our offerings have been vital to reigniting organic revenue increases. But revenue increases at first quarter levels coupled with cuts in office and general won't be enough to get us where we want to be by the end of 2008. Our entire organization is aware of the need to intensify progress on salaries and related, and we are managing accordingly.

This, therefore, is a logical point for me to hand things over to Frank, and I will come back to you after his presentation.

This excerpt taken from the IPG DEF 14A filed Apr 25, 2007.
MICHAEL I. ROTH became Chairman of the Board and Chief Executive Officer of Interpublic, effective January 19, 2005. Prior to that time Mr. Roth served as Chairman of the Board of Interpublic from July 13, 2004 to January 2005. Mr. Roth served as Chairman and Chief Executive Officer of The MONY Group Inc. from February 1994 to June 2004. On September 1, 2006, Mr. Roth also serves on the Board of Directors of Pitney Bowes Inc. and Gaylord Entertainment Company. Mr. Roth has been a director of Interpublic since February 2002. Age 61.

This excerpt taken from the IPG 8-K filed Mar 6, 2007.

Michael Roth

Thank you, Jerry, and thank you all for joining us, especially on this very active morning, I am sure, for all of you. Frank will be taking us through the numbers in a bit. I will begin with brief remarks, highlighting key developments in 2006, and then return with closing comments before we go to the Q&A.

It is clear from the results we are reporting today that this past year represented a period of steady progress. This was true in areas that range from our financial performance and our control environment, to the continued strengthening of our talent base and the strategic deployment of our assets. A year ago our Company was emerging from a difficult 2005 in which our primary focus had, by necessity, been on controls and a large and complex restatement. We also experienced some significant client losses, and we had work to do in shoring up certain of our offerings.

Today we are disclosing that we have remediated eight of our control weaknesses, ahead of our plan, which called for remediating three. We are also on track to meet our objectives of Sarbanes-Oxley 404 compliance with the filing of our 2007 10-K. We are reporting underlying organic revenue growth, which is notable because it means we overcame a big hurdle created by past client losses. We have also begun to show improving margins, driven by early returns from key corporate initiatives.

Fourth quarter net income compares to a loss in last year's period, and EPS from continuing operations was $0.11 per diluted share, versus a loss of $0.10 a year ago. Net loss for the full year improved dramatically relative to 2005, down from a loss of $263 million, to about $32 million.

What we are delivering is right in-line with the plan for achieving our turnaround, a plan which Frank and I have consistently communicated to you during the course of many meetings and conferences that we attended throughout this past year.

Equally important, during 2006, we took a number of major steps that positioned the Company to move forward and meet the needs of our clients during one of the most dynamic periods of change in the history of media and marketing. The most significant of these strategic decisions


was the merger of Draft and FCB to create a modern model of accountable integrated marketing. We were also responsive to the market when we reorganized our media operations, to align strategic communications planning more closely with our two global network agencies, and to build out our digital media capabilities.

In another strategic move, we dramatically improved our capital structures through the ELF transaction, and our debt exchanges in the fourth quarter. This affords us greater financial flexibility, which in turn will allow us to participate more actively in both the digital space and in building on businesses in key emerging economies, particularly in Asia. As I have mentioned before, we are very focused on these areas. We have strong offerings in India, in which we continue to invest, we are solid in Brazil and are making strategic upgrades in that market that will have benefits for us throughout the Latin American region, and we are looking at a number of avenues to accelerate our presence and our growth in China.

Digital is also key for us. It is an area we cover off with each of our operating units as we review forward plans. We are also in constant discussions with potential partners and doing innovative deals to align ourselves with technology companies adjacent to the marketing space.

During recent discussions with a number of our major clients, these high growth areas are very much top of mind. I continue to be pleased to hear that our agencies are making valuable contributions when it comes to helping marketers leverage their brands and forge deeper and more lasting connections with consumers. Ultimately, it is our ability to meet these evolving client needs that will drive our long-term success. It is certainly what allowed us to post positive organic revenue performance in 2006.

The vitality of our agency was apparent across the board, and consistently at every point throughout the year. We saw important wins at McCann, Draftfcb and Lowe. Within CMG, every one of our units made contributions, with particular strength in PR and signs of a real recovery in the corporate identity sector. Our independent agents were regulars on both new business pitch lists and in the winner's circle. We have reestablished relationships with a number of our major clients that had previously been with us, including work from Bank of America, Gateway, Ikea and DirecTV. And we kept the positive momentum going into the new year, with recent wins like Wal-Mart, Saturn and the Bayer media consolidation. This performance is evidence that the investments we have been making in people, and our focus on emerging areas within the business, are beginning to pay out.

On costs and controls we are also seeing early indicators that our investments in talent and infrastructure will bear fruit. Professional fees continue to step down as we said they would. The remediation of multiple material weaknesses demonstrates that we are coming to grips with the control environment. Frank and the entire financial team deserve much of the credit for this impressive progress. By improving our control environment, we can better focus on managing the business and delivering further improvements in operating performance. This will be necessary for us to deliver on our 2008 margin commitments, which we continue to believe we are on track to reach.

At this point, I will turn it over to Frank and return to you after his comments.


This excerpt taken from the IPG DEF 14A filed Apr 27, 2006.
MICHAEL I. ROTH   became Chairman of the Board and Chief Executive Officer of Interpublic, effective January 19, 2005. Prior to that time Mr. Roth served as Chairman of the Board of Interpublic from July 13, 2004 to January 2005. Mr. Roth served as Chairman and Chief Executive Officer of The MONY Group Inc. from February 1994 to June 2004. Mr. Roth has been a director of Interpublic since February 2002. He is also a director of Pitney Bowes Inc. and Gaylord Entertainment Company. Age 60.

Chairman of the Executive Committee.

This excerpt taken from the IPG DEF 14A filed Oct 21, 2005.
MICHAEL I. ROTH became Chairman of the Board and Chief Executive Officer of Interpublic, effective January 19, 2005. Prior to that time Mr. Roth served as Chairman of the Board of Interpublic from July 13, 2004 to January 2005. Mr. Roth served as Chairman and Chief Executive Officer of The MONY Group Inc. from February 1994 to June 2004. Mr. Roth has been a director of Interpublic since February 2002. He is also a director of Pitney Bowes Inc. and Gaylord Entertainment Company. Age 59.

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