Global advertising group IPG lifted its dividend payout after posting organic revenue growth of 11.7% for the December quarter.
Compared to the same quarter in pre pandemic 2019, the organic increase was 5.7%.
Net revenue in the three months to December 2021 was better-than-expected, up 11.6% to $U2.55 billion.
Fourth quarter US organic growth was 12.1% and international 11%.
Australia had a “strong performance” along with other parts of the region including Singapore, India and Japan.
Over the full year to December organic net revenue growth was 11.9%
The company, with 55,000 staff globally, expects to deliver “strong growth” in 2022, with a target of 5%.
However, IPG shares fell in US trading. A short time ago, they were down almost 10% to $US35.62
CEO Philippe Krakowsky: “Heading into 2020, we're confident that the continuing strength of our offerings has us well positioned in an environment of dynamic change for media and marketing, which is coupled with a solid global macroeconomic environment.
“Of course, we are aware that the year ahead of uncertainties and challenges from COVID to inflation and geopolitical risk.
“Yet as we look ahead, we anticipate that 2022 will be another year of strong growth, on top of multi-year industry-leading comparables.”
The IPG board of directors approved a 7.4% increase in quarterly dividends to 29 cents a share and resumed a share repurchase program.
Salary costs are on the rise. The company noted “significant increase in performance-based compensation” and severance costs were also higher as IPG further improved “the efficiency of our operations”.
Krakowsky: “As is evident in our results, the combination of strategy, talent and culture we have built at IPG continues to drive a high level of innovation, collaboration and creativity.
“Our strong performance reflects more than the cyclical economic recovery, it further validates the growing role we are playing with marketers as they adapt and enhance their businesses to meet the challenges and opportunities of the digital economy.
“Clients are increasingly looking for partners with expertise in first-party data management, performance media, creative ad tech and direct-to-consumer commerce, areas in which we remain very well-positioned.
“During the quarter and throughout the year, our best-in-class agency brands increasingly tapped into IPG’s foundational technology and data layer.
“Across marketing disciplines, channels and use cases, our combination of data, technology and creativity is resulting in a growing range of effective marketing and media solutions that help our clients to grow their brands and build their businesses.
“As we look ahead, we anticipate that 2022 will be another year of strong growth, on top of our multi-year, industry-leading performance. As such, we are targeting full-year organic growth of 5% in 2022.
“With that level of growth, we expect that in 2022 we will consolidate the significant gains achieved in adjusted EBITA margin over the past two years, at a level of approximately 16.6%.”
December quarter 2021 numbers:
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