2019 A Letter from Our Chairman 2019 HIGHLIGHTS To our shareholders: Increased net revenue 7.4% to While 2019 was a successful year for IPG, our focus at present is on the $8.63 billion current crisis we all are facing together. As the world responds to the outbreak of COVID-19, our thoughts are with Delivered industry-leading organic the people affected and the medical professionals working around the clock net revenue growth of 3.3% to help those most in need. At IPG, we’re working to do our part by ensuring the safety of our employees, developing creative ideas to protect the health and well-being of our communities, and setting up our people to help them Expanded adjusted EBITA1 margin do their best work for our clients while working remotely. by 50 basis points to 14.0% During this time, we have seen our agencies and our people rally around one another and our clients, harnessing our individual and collective talents Returned $363 million to to create work that is raising awareness around many of the issues related to shareholders through dividends, COVID-19. This communal effort has been both inspiring and effective. bringing capital returns to our owners to $4.4 billion since 2011 At some point soon, we hope to return to business-as-usual. For the last several years, we have shown in our performance when compared to our peers that IPG is in a class of its own thanks to our people, our differentiated Completed the successful offering, and our modern marketing solutions. We expect to be in a strong Ìi}À>ÌvčVÝÌLiiwÌ position to continue this level of performance. clients and position IPG for the future 2019 FINANCIAL HIGHLIGHTS 7iÜiÀi«i>Ãi`ÌÀi«ÀÌÃÌÀ}vÕÞi>Àw>V>ÀiÃÕÌÃÌ >Ì`iÛiÀi` Marked our eighth consecutive year our targets. Our results again demonstrated that IPG remains highly relevant of dividend increases to marketers in an increasingly crowded and complex environment. We have a strong portfolio of companies that combine marketing expertise and future- 1 See full reconciliations of adjusted results included at the end of this Annual Report. facing media, data and technology capabilities, which we can deliver through our collaborative open architecture model. Our differentiated culture and strategy are key reasons our long-term trajectory has been so strong, which has helped us to deliver leading organic growth and margin improvement in recent years. ƂÌÌ iÌ«vÕÀw>V> } } ÌÃ]iÌÀiÛiÕiÀ}>V}ÀÜÌ vÀÌ ivÕ year was 3.3%, which exceeded the high end of our targeted range for the year, and again placed us at the forefront of our industry. In each of the past wÛiÞi>ÀÃ]ÕÀ}ÀÜÌ À>Ìi >ÃÌ««i`Ì i`ÕÃÌÀÞ>ÛiÀ>}i°7i>Ài«ÀÕ`v ÕÀVÃÃÌiÌiÛiv>V iÛiiÌ>`Ã}wV>ÌV >}iÕÀ`ÕÃÌÀÞ and the dynamic environment in which we are all operating. Our strong operating disciplines continued to contribute to our results, as we attained full year adjusted EBITA1 of $1.2 billion, an increase of 11.3%. Our adjusted EBITA1 margin in 2019 was 14.0%, an increase of 50 basis points from a year ago, the high end of our targeted range for the year. Full year 2019 diluted reported earnings per share was $1.93 as adjusted1, which is comparable to $1.86 per share in the prior year. Along with this strong performance, we have continued our investments in outstanding talent across our agencies, and in the tools and capabilities that keep us on the leading edge of our industry. This is especially true in key areas like digital, data services and analytics, strategy and creative. 1 INVESTING IN OUR COMPANY FOR THE FUTURE ORGANIC GROWTH1 For some time, we’ve seen our key role as supporting and nurturing strong agency brands so they can continue to produce great advertising for our clients. Simultaneously, we have never lost sight of the evolving landscape and 2015 6.1% the disruption taking place in marketing, media and communications. 3.4% To address these challenges, we have invested in key areas to create an IPG that is positioned for the future. These have included embedded digital expertise 2016 5.0% across the portfolio, leading-edge media and data capabilities, and open 2.4% architecture solutions. All of which have helped us build a future-facing company. Today’s IPG is in a preeminent position to help brands reach consumers in 2017 1.5% } ÞivwViÌ>`ÀiiÛ>ÌÜ>Þð"ÕÀV«>ÞV>ÕÌi`>Ì>ÜÌ VÀi>ÌÛÌÞ] 1.0% to deliver advertising that is valued by consumers and valuable for brands. 7iV> i«LÕÃiÃÃi>`iÀÃw`ÌÀÀܽÃ}ÀÜÌ Ì ÀÕ} Ì iVL>Ì 2018 5.5% of technology, craft and collaboration. And we have created a modern holding 0.8% company with a culture of integrity and transparency, where IPG sets the standard regarding conscious and respectful privacy, accountability and brand safety. 2019 3.3% DATA SCIENCE AS A BUSINESS STRATEGY -0.2% Understanding data and its power is absolutely essential, and has been a priority for us over many years, well before we acquired Acxiom. Today’s IPG >ÃÌ i>LÌÞÌ i«V«>iëÌâiÌ iÛ>ÕivÌ iÀÜwÀÃÌ«>ÀÌÞ IPG Peer Average data in the service of enhancing the customer experience, and in helping our clients reach their business goals. Thanks to our long-term strategy, there are 1 For Omnicom Group, growth on total revenue is used. many more use cases with which we are increasingly involved, ranging from powering e-commerce to the execution of omnichannel media. To further enhance our media, data and tech offering, in 2019 we launched Kinesso, a marketing technology company that leverages our data science skills to provide services that help marketers make media activation faster and more effective. Kinesso is creating new software and products that deliver marketing intelligence, including data-driven campaign optimization and precision audiences. Currently, the new company is working in close partnership with IPG Mediabrands, where there is the most adjacency and therefore the greatest opportunity. However, Acxiom and Kinesso capabilities are being brought to bear on all of our major clients and new business opportunities. CORPORATE PURPOSE IS MORE IMPORTANT THAN EVER For years now, we have articulated a corporate purpose that acknowledges our responsibility around the world’s most pressing challenges. We have worked on issues that align with the UN’s Sustainable Development Goals, with a particular focus on SDG#6, access to water and sanitation for all, and including work in gender equality, zero hunger, health and well-being. Now more than ever, a focus on purpose and our role in society must continue. The COVID-19 crisis has posed an unprecedented challenge to modern society, and a unique one to the private sector. This at a time when we have joined with The Business Roundtable in its restatement on the purpose of a corporation, which includes the notion that businesses should support the communities in which we work, respect the people in our communities and protect the environment by embracing sustainable practices across our businesses. 2 Interpublic Group 2019 Annual Report Accordingly, we will continue to act constructively across a range of issues, including expanding our role in protecting the environment, promoting `ÛiÀÃÌÞ>`VÕÃ]>` i«}ÕÀViÌÃÌvÕwÌ iÀÜ>À}iÀ corporate missions. For as long as our company has been in existence, we have worked on issues that matter to all of our stakeholders. Our history of purpose-driven work includes our stewardship of Smokey Bear for more than 75 years, our work on “Love Has No Labels,” one of the most-watched PSAs of all time, and our more recent work in support of encouraging people around the world to stay home to stave the spread of COVID-19, and to focus on the facts of the disease rather than on particular groups of people. SUSTAINABILITY IPG continues to strengthen its commitment to environmental sustainability— working to reduce our carbon footprint, and to work with our clients to create demand for sustainable products among consumers. We continue to report on our sustainability initiatives utilizing the Global Reporting (GRI) framework, and this year, have expanded the measurement of our emissions and other environmental impacts using GHG Protocol Standards. And, in terms of our greenhouse gas emissions, we remain committed to our Scope 2 relative intensity target for 10% reduction by 2030 in metric tons CO2e per employee. We once again renewed our support of the United Nations Global Compact and committed to uphold the Compact’s 10 principles in the areas of environmental sustainability, fair labor practices, human rights and anti-corruption. Throughout the year, IPG agencies continue to engage on issues of concern in their local communities and globally. Recent projects as we have started the year have included our #IStayHomeFor and #WashtheHate campaigns around COVID-19 precautions and racism associated with the virus, breaking down gender stereotypes and bringing awareness to mental health. DIVERSITY, EQUITY AND INCLUSION The single most important factor in our company’s success is talent—our human capital. And our talent is drawn from people of varying ages, backgrounds, cultures, faiths, genders, physical abilities, races, gender identity, and sexual orientations—to name but a few of the qualities that make each of us unique. As part of our human capital management, IPG has committed substantial resources and expertise to increasing diversity in our ranks and to forging a sustainable culture of inclusion at our company. Furthering our commitment to a diverse and welcoming workplace, IPG agencies also apply a diversity lens on succession planning and leadership development across our network. IPG also supports diverse suppliers, and partners with minority businesses and women-owned organizations.