The Interpublic Group of Companies, Inc.

Good morning and welcome to the Interpublic Group fourth quarter and full year 2020 conference call. All parties are in a listen-only mode until the question and answer portion. At that time, if you would like to ask a question, you may press star 1. This conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Mr. Jerry Lushney, Senior Vice President of Investor Relations. Sir, you may begin.

Good morning. Thank you for being with us. This morning, we are joined by Philippe Krakowski, our CEO, and by Ellen Johnson, our Chief Financial Officer. As usual, we have posted our earnings release and our slide presentation on our website, interpublic.com. We will begin our call with prepared remarks to be followed by Q&A and plan to conclude before market open at 9.30 Eastern. During this call, we will refer to forward-looking statements about our company. These are subject to the uncertainties in the cautionary statement that is included in our earnings release and the slide presentation and further detailed in our 10-Q and other filings with the SEC. We will also refer to certain non-GAAP measures. We believe that these measures provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operational performance. At this point, it is my pleasure to turn things over to Philipp Krakowski.

Thank you, Jerry, and thank you all for joining us this morning. I'll begin with a high-level view of our performance in the quarter and for the full year. Ellen will then provide additional details. I'll conclude with some updates on our agencies and be followed by our usual Q&A. First and foremost, I hope that you and your families continue to remain safe and healthy during the pandemic. As we all know, across much of the globe, the virus is still very much a presence in our daily lives. As such, our first priority continues to be to mitigate the impact of the health crisis on our colleagues and our clients as well as on our business. It's important to acknowledge the fact that over the past year, across IPG, our people have been subject to a range of extraordinary challenges. Their achievements have been remarkable, and I want to very clearly express our admiration for their resilience, and our appreciation for their ongoing commitment and effort. Moving now to our results, we are pleased to report a solid fourth quarter under conditions that continue to be challenging and full-year performance that once again should place us at the top of our sector. In the fourth quarter, our organic growth change of net revenue was negative 5.4%. You'll recall that our Q4 2019 result was organic growth of 2.9%, which included significant headwinds from certain client losses. So, for context, it's worth noting that our continuing book of business from last year's fourth quarter, which we were essentially lapping in Q4 2020, was a 5.6% growth number. In the U.S., the organic decrease in the quarter was 1.8%, against a similarly challenging underlying U.S. comp of 6.4 percent growth in Q4 2019. In international markets, our organic decrease for fourth quarter 2020 was 10.5 percent. For the full year, our organic net revenue decrease was 4.8 percent. As you'd expect, those results continue to reflect the effect of the pandemic. which has had widely varying impacts on our businesses and clients. Our event companies in particular, which were typically strong in the fourth quarter, continue to bear the brunt of the health situation, given that restrictions on public gatherings remain in place in most markets around the world. Conversely, during the quarter, we continue to build positive momentum in disciplines such as media planning and investment. Additionally, Client sectors such as healthcare and retail, which have been our growth leaders for the duration of the health crisis, continued to perform strongly in the fourth quarter. With respect to operating expenses, our teams once again demonstrated outstanding discipline. As a result, we're pleased to report that our adjusted EBITDA margin for the quarter, which excludes a charge for restructuring, increased 70 basis points from a year ago, from 21.1 percent to 21.8 percent. For the quarter, our diluted earnings per share was 28 cents as reported and was 86 cents as adjusted for restructuring and other items. As is evident in our results this morning, we also continue to execute through to the close of the year with respect to our restructuring program. We had previously mentioned to you that our focus would be on driving strategic long-term actions, and expense reductions as we evolve our business model to new operating realities. A key component of that thinking is moving to a hybrid workplace environment with a reduced need for real estate and an increased role for work from home in the delivery of our services. During the year, our team was diligent in identifying a wide range of restructuring opportunities and related savings, so as to better position the business going forward into 2021 and beyond. As you can see, this led to a fourth quarter charge that was significant, though it is largely non-cash. We now expect that our restructuring actions for the full year will yield permanent annual operating expense reductions in the range of $160 million. While remaining very disciplined with respect to our expense structure, It's important to point out that we continue to invest in our business during the year in order to accelerate strategic development in areas of strongest secular opportunity and growth. That investment continues to result in differentiated capabilities and offerings, which are in demand and are driving success in the marketplace. We're aware that, as a result of the pandemic, the velocity of change picked up even further last year in the digital space. That's where consumers increasingly interact with brands and businesses. We're encouraged that our ability to create marketing and media solutions that bring together creativity, technology, and data is resulting in growth with existing clients as well as new client wins. For some time now, we have spoken about the importance of our culture in making IPG a destination for top industry talent. This includes our commitment to strong agency brands with clearly defined identities and core capabilities. In recent years, we have developed very strong and differentiated data resources and data management capabilities. We bring these offerings together on behalf of clients in customized integrated solutions for our open architecture platform, which has been evolving over a period of many years. Another key pillar of our culture is our commitment to doing better when it comes to equity and inclusion. This is something I will remain focused on personally in my new role. It also bears mention that IPG has taken a strong position when it comes to transparency and ethics in all of our business practices, well ahead of the current scrutiny on the digital media ecosystem and growing concerns regarding consumer privacy. These are our strategic priorities going forward. And at this point, I thought it might be helpful to provide a few highlights of how they are coming together in the work we do on behalf of our clients. As you know, in May of last year, we launched Matterkind, an innovative offering that optimizes client media investment holistically and in real time across all addressable media channels. With access to unique data resources at Axiom, and patented algorithmic software created at Kineso. Matterkind played a role in several new account wins and client retentions during the back half of last year. In the auto sector, a leading global OEM awarded an open architecture team several multi-year contracts to oversee their CRM activity. The first in North America, as well as two others in China. some of Asia's largest national markets. This resulted from a pitch that included teams from our global ad networks and digital specialty agencies, as well as capabilities from Axiom, Kineso, and our global production studio. In the creative arena, we had a sizable healthcare win with an existing global client in Q4, which brought together a number of our specialist healthcare and consumer advertising agencies, again backed by Axiom in an open architecture pitch. Also within the creative space in the CPG sector, we expanded our remit and doubled the size of our client relationship by using data-driven insights to generate creative ideas tailored to specific audiences. In tech and telecom, we proactively proposed an integrated solution to an existing domestic client of one of our large PR and one of our independent advertising agencies. This resulted in adding responsibility for media, as well as a data layer to inform all marketing decision-making, again, nearly doubling our projected annualized revenue on this engagement. The common denominator in each of these examples is our ability to broaden the range of business issues that we can help clients address. Our goal is to become a more strategic partner, supporting client needs as they seek to derive more value from connecting marketing and technology to power their businesses. Over time, we believe this should also have the effect of opening new performance and IP-based revenue streams for us. Another key area of focus for us is e-commerce and connected commerce. where we deliver on the promise of digital business transformation by bringing together marketplace analysis, data services, tech-enabled creative and customer experience work, systems integration, and performance media offerings. This is another area where open architecture is a vital approach, since those capabilities reside within a range of our digital and media specialist agencies. It's also an area that has seen significant acceleration as a result of the health crisis. Heading into 2021, we are confident of the strength and competitiveness of our offerings and the talent within our group. The range of services we provide is growing in terms of the potential impact it has for our clients and their businesses. This means that looking ahead, we remain well positioned to fully participate in a global economic recovery. There remains, however, significant uncertainty driven by macro conditions that are beyond any of our control because the timing and magnitude of economic recovery clearly hinges on the resolution of the health crisis. We fully expect to return to positive organic growth over the course of this year and to post full year 2021 growth consistent with the industry on top of our relatively stronger 2020 performance. But from our vantage point today, based on our bottom-up approach to building a financial plan, as well as conversations with clients, it's fair to say that visibility to the full year 2021 remains challenged. To be clear, this is a question of timing and a function of the macro situation. and not of the caliber or relevance of our offerings, which we feel are both strong and complete. We will, of course, continue to align expenses with realized revenue in the disciplined way you've come to expect of us. Further, we will see the benefit of significant expense savings from our restructuring. As always, during our quarterly calls, we will regularly review our perspective and provide details on the year as it unfolds. Underscoring our confidence in our longer-term prospects, we are pleased to announce this morning our Board's decision to raise IPG's quarterly dividend by 6% to 27 cents per share. This marks our ninth consecutive year of dividend increases, over which time our quarterly dividend per share has more than quadrupled. In summary, we believe that the drivers of long-term value for all of IPG's stakeholders are in place. namely the quality of our people and our resources, our operating capabilities, and that together these will continue to fuel our collective success. On that note, I'll now hand things over to Ellen for a more in-depth view of our results.