The Interpublic Group of Companies, Inc.

Good morning and welcome to the Interpublic Group First Quarter 2023 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 Leshne, Senior Vice President of Investor Relations. Sir, you may begin.

Good morning. Thank you for joining us. This morning, we are joined by our CEO, Philippe Krakowski, and by Ellen Johnson, our CFO. 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. We 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 and the cautionary statement that is included in our earnings release and the slide presentation. These are further detailed in our 10Q 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 Khalid Krakowski.

Khalid Krakowski Thank you, Jerry, and good morning. As usual, I'll begin our call with an overview of our performance in the quarter. Alan will then provide additional details. And I'll conclude with updates on highlights at our agencies to be followed by your Q&A. To start at the top with revenue, the organic change of our revenue before billable expenses was a decrease of 20 basis points against last year's very strong first quarter organic growth of 11.5%. That performance is consistent with our internal forecast, not only for IPG as a whole, but across our operating segments and at the individual agency level. Back in February, we called out for you the puts and takes specific to our diverse portfolio of services and within client sectors, which would be impacting our results during the first half of this year. So, it's fair to say the year is tracking as we expected. In keeping with our typical calendar, we recently refreshed our outlook with our operators and we remain comfortable at the midpoint of the growth range we shared with you on our February call, which is 2% to 4% organic revenue growth for the full year. Specifically, during the first quarter, the services and sectors that have led our substantial multiyear growth, notably media and healthcare, continue to perform strongly. Our experiential and public relations businesses also continued their growth into the new year. Both are worth calling out that we've continued to win some of the largest competitive new account opportunities in market so far this year. These wins encompass a diverse set of client sectors, including financial services, pharma, and autos. And as they come on stream, they'll build on the large client win in the retail sector, which closed out last year. Taken together and given the advanced client briefs increasingly in play, New account activity further demonstrates our role in the business transformation agendas of the world's most sophisticated marketers. As we've called out in recent conversations with you, the performance of our digital specialist agencies continue to weigh on growth in the first quarter. Transformation underway at those businesses does continue to progress, and we will begin to cycle their revenue decreases in our third quarter. You'll also recall that in our most recent call, we underscored the evolving impact of a more challenging environment specific to the technology sector, which is one of our largest client sectors. We've all seen it in the headlines, most prominently with respect to employment in technology. That austerity and cost focus did continue to weigh on our revenue results in the first quarter. Notwithstanding that impact and a macro that since the beginning of Q4 of last year has been somewhat more cautious, it's notable that six of our eight client sectors grew in the quarter on top of very strong performance a year ago. We were led by growth in our other sector of diversified industrials and government clients with growth in consumer goods, financial services, autos, healthcare, and food and beverage. As discussed, our tech and telecom sector decreased in the quarter, as did to a much lesser degree retail. Both were comping against double digit gains a year ago. Regionally, the US decreased 90 basis points organically in the quarter. And this is largely the result of agency and sector specific challenges that we've just called out and came against 12% growth in Q1 of 2022. Our international markets grew 1.2% organically on top of 10% growth a year ago. In terms of our segments, each was cycling double digit growth a year ago. Our media, data and engagement solution segment decreased 70 basis points organically in the quarter. Strong growth in our media offerings. was offset by the underperformance at the digital specialty agencies. Our segment of integrated advertising and creativity-led solutions decreased 90 basis points organically, and there we were again outpaced, excuse me, paced by growth at IPG Health, while the decreases in the tech and telco sector weighed on overall segment performance. In specialized communications and experiential solutions, we grew 3.3% organically, highlighted by increases across our experiential and public relations offerings. As we navigate the near term, our team has demonstrated over a period of many years that we have the financial and management talent, tools, and business model to successfully manage margin in a range of business environments. Q1 adjusted EBITDA margin was 9.7% in our smallest seasonal quarter, and that result compares favorably to our pre-pandemic first quarter 2019 margin of approximately 5%, which means we're seeing both structural efficiencies and meaningful leverage on our growth over the last several years. As expected, margin decreased from a year ago, when expenses for travel and entertainment were still unusually low due to the impact of the pandemic, as well as additions to headcount, which had lagged the robust growth environment. We are effectively managing our flexible operating model. This is clear in our expense for temporary labor, performance-based incentive compensation, and SG&A. Each was notably lower than a year ago. Our expense for severance was also elevated in this year's first quarter, and we'll begin to see the benefit to margin of those actions going forward. Further, we continue to see the impact from actions that we've taken over the last few years on our real estate portfolio, where we've reduced occupied square footage by approximately 30%. As with the top line target, we remain committed to our margin target for the year of 16.7%. Diluted earnings per share in the quarter was 33 cents as reported and was 38 cents as adjusted for intangibles and amortization and other items. During the quarter, we repurchased 2.2 million shares using $78 million. In February, our board authorized another $350 million share repurchase program and increased our common share dividend. Our ability to create marketing and media solutions that bring together creativity, technology, and data at scale is responsive to the evolving needs of marketers for more advanced and integrated services. We're consistently bringing together our differentiated resources to deliver precise, accountable, and audience-led thinking and solutions. may be creating a moment in which for certain clients, efficiency is prevailing at the expense of increasing effectiveness in order to power business growth. But in the mid and longer term, we remain confident that the fundamental drivers of value for our clients, employees, shareholders, and the communities in which we operate remain strong and in Republic. At this point, It seems appropriate to hand the call over to Ellen for a more detailed review of our results.