IPG - NYSE

Good morning, and welcome to the Interpublic Group First Quarter 2023 Conference Call. [Operator Instructions] 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 Krakowsky; 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 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 Philippe Krakowsky.

Thank you, Jerry, and good morning. As usual, I'll begin our call with an overview of our performance in the quarter. Ellen will then provide additional details, and I'll conclude with updates on highlights at our agencies to be followed by your Q&A. Let's 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. It's also worth calling out that we've continued to win some of the largest competitive new account opportunities in markets 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 continued 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 6 of our 8 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 U.S. 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 & Engagement Solutions 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 & Creativity Led Solutions decreased 90 basis points organically. And there, we were again outpaced -- paced by growth at IPG Health while the decreases in the tech and telco sector weighed on overall segment performance. In Specialized Communications & 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 EBITA 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 $0.33 as reported and was $0.38 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 by 7%. 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. The current macro 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, remains strong at Interpublic. At this point, it seems appropriate to hand the call over to Ellen for a more detailed review of our results.

Thank you. I hope that everyone is well. As a reminder, my remarks will track to the presentation slides that accompany our webcast. Beginning with the highlights on Slide 2 of the presentation, our first quarter revenue, before billable expenses or net revenue, decreased 2.3% from a year ago, with an organic decrease of 20 basis points. Our organic net revenue decrease was 90 basis points in the U.S. which was partially offset by organic growth in our international markets of 1.2%. First quarter adjusted EBITA, before a small restructuring adjustment, was $210.8 million, and margin was 9.7%. Diluted earnings per share was $0.33 as reported and $0.38 as adjusted. The adjustments exclude the after-tax impact of the amortization of acquired intangibles, the small adjustment to our previous restructuring actions and nonoperating losses on the sales of certain small nonstrategic businesses. We repurchased 2.2 million shares during the quarter for $78 million. Turning to Slide 3, you'll see our P&L for the quarter. I'll cover revenue and operating expenses in detail in the slides that follow up. Turning to the first quarter revenue in more detail on Slide 4. Our net revenue in the quarter was $2.18 billion. Compared to Q1 '22, the impact of the change in exchange rates was negative 2.3%, with the dollar stronger against currency in nearly all of our international markets. Net acquisitions added 20 basis points. Our organic decrease of revenue before billable expenses, was $4 million or 20 basis points. At the bottom of this slide, we break out segment revenue. Our Media, Data & Engagement Solutions segment decreased 70 basis points organically against double-digit growth a year ago. Strong growth at our Media businesses was offset by decreases elsewhere in the segment. As we have previously noted, our digital specialist agencies are in the process of transforming their business models, and their performance weighed significantly on the overall segment growth at approximately the same level as in Q4. Our Integrated Advertising & Creativity Led Solutions segment decreased organically by 90 basis points against double-digit growth a year ago. Growth at IPG Health was offset by decreases at certain of our other creatively led integrated agencies. At our Specialized Communication & Experiential Solutions segment, organic growth was 3.3%. We grew across public relations and experiential offerings on top of double-digit growth in the first quarter of last year. Moving on to Slide 5, our organic net revenue growth by region. In the U.S., which comprised 68% of our revenue before billable expenses in the quarter, our organic decrease was 90 basis points against 12.2% growth a year ago. Our growth at Mediabrands, IPG Health and our public relations agencies was offset by decreases in our specialty digital offerings and at certain of our other agencies, mainly as a result of declines in the tech sector. International markets were 32% of our net revenue in the quarter, an increase of 1.2% organically on top of 10.2% growth last year. The UK increased 2.9% organically. We were led by strong increases at our median experiential offerings and at McCann. Continental Europe decreased 4% organically in the quarter, both in Spain and Portugal, was more than offset by decreases in Germany and France. Asia Pac decreased 2.6% organically. Japan, China and India were all lower, but Australia and New

Thanks, Ellen. The results we're reporting today, as you heard, are in line with what we forecast coming into the year for the first quarter and consistent with the phasing of our full-year plans. That said, our top line performance in the quarter is not in keeping with our long-term track record or the growth we're collectively striving to achieve. As mentioned earlier, during the quarter, we won several of the highest profile and largest reviews in the industry, and these wins encompass a diverse set of client sectors and demonstrate our key role in the business transformation journey of marketers in a number of sectors across the economy. They will also increasingly benefit our growth as we move further into the year. We continue to invest in our emerging technology capabilities as well as expertise across the group and with external partners, with a focus on areas including Web 3.0 and artificial intelligence. We also recently launched a pilot program during the quarter with [D-Wave], quantum computing pioneer, to build advertising optimization equations based on our existing data sets, focusing first on an engagement with one of our top 20 clients. When it comes to AI and machine learning, IPG has been investing in this area for some time, Reprise media and network that specializes in search marketing and retail media marketplaces, onboarded a Chief AI Officer over 2 years ago, just as MRM was adding a Global Head of AI and Behavioral Sciences. Acxiom has also been a long-time user of AI in their data analytics practice to improve how companies reach consumers. All three of these entities fit on our AI Steering Committee, which recently launched a number of incubators and labs that leverage our enterprise agreements with a range of large technology partners. Turning to specific highlights from the quarter at the agency level. At our Media, Data & Engagement Solutions segment, we continue to see strong growth in industry recognition for our media operations. Notably, IPG Media brands was named the New Media AOR and Marketing Transformation Partner for GEICO in a highly competitive industry-wide review. Initiative continued outstanding performance was recognized by both Adweek, which named it Global Media Agency of the Year and Ad Age, where Initiative was A-List Media Agency of the Year. At UM, the network welcomed the new global CEO and won multiple honors at the Campaign's Global Agency of the Year Awards. Our Mediahub agency, now a part of Mediabrands, was named Media AOR for home appliances brand Bosch in Australia and New

[Operator Instructions] Our first question is from Steve Cahall with Wells Fargo.

So Philippe, it sounds like the U.S. trend should see sequential improvement throughout the year. I think your last quarter of cycling off a big loss, and I think you'll now be cycling on to some wins. So first off, is that right as we kind of think about the trend to organic growth as we move through the year? And then in the release, you mentioned some of the weakness in the tech sector. I imagine what's gone on recently in the financial sector probably hasn't helped. So in your mind, is there any new negatives in your technology exposure? Or are the expectations for that vertical kind of unchanged from where you were when you started the year? And then I have a follow-up for Ellen.

Sure. I think what we're seeing is consistent with what we shared with you back in February, right? So I think within tech and telco, it comes down to individual decision-making by actually a fairly tight number of clients or a handful of clients that's specific to either facts and circumstances in their business or clearly, the degree to which that sector is being impacted. And then in terms of how we are thinking about and kind of how the year phases, it's definitely the case that we think that the bulk of what we've indicated to you, so both the sector and tech and telco, I think, is probably about a 2% drag on organic growth at the worldwide level in Q1. So whether it's that or whether it's what's happening within those two kind of leading edge digital agencies in the portfolio that, that will cycle off starting the beginning of Q3.

Great. And then, Ellen, I think salaries were up more than 2 percentage points as a percentage of revenue in the quarter. Office [indirect] was up a little bit as well. Maybe how are you thinking about the ability to pass through some of the cost or wage inflation through organic growth? Is there any upside to EBITA margin guidance? And is there any more restructuring we should expect this year?

Maybe I'll start with your last question first. No, we do not plan on any more restructuring and then working backwards in inflation. So the vast majority of our clients and -- contracts do have clauses that allow us to come to the table and have discussions with our clients. But it's not [automatic], and it's a discussion. And our main objective with our clients, in addition to make sure that we get fairly paid for our services, is really to grow our share a lot with them. So it's a conversation but as we've said previously, it hasn't been a large part of our growth to date or in our forecast. Really, it's more organic growth with existing clients and our net new business wins. With our -- we're very comfortable with our margin targets for the year. If you look at it, when you look at base salaries, you're comparing it to a year ago, when growth was so strong and our headcount was lagging that growth. You'll also see higher return-to-office expenses in our numbers this year with T&E and meetings. But that said, you see us using our variable cost structure and flexing it. You see temp help down, performance-based comp is also lower. So we remain very confident in our margin target for the year.

Our next question is from David Karnovsky with JPMorgan.

So we wanted to see if you could dig in a bit on the digital specialist agencies, R/GA and Huge. We've seen some articles in the trade is about ongoing restructurings there. So wondering where you think you are in terms of getting these agencies to where they need to be? And would you expect them, in the longer term, to return to being growth engines for the company or have some of what were very unique capabilities a few years ago, just kind of been adapted by our other networks?

That's a fair question. I think it's clearly in the nature of their offerings, where you have a lot more innovation hanging, sort of taking place. And so I think that whether it is -- it's funny because if you really think about it, we're really seeing the macro in very specific in few and specific places. So we've seen it impact tech. And then clearly, these are agencies that are probably -- have greater exposure to that sector than other parts of the portfolio. But I think what you've got there is you've got 2 entities with premium positioning. The field has become somewhat more crowded. And then the timing in terms of when they were hitting a cycle at which there needed to be a reinvention, happens to be as we're going through this period where there is some uncertainty. So the thinking is to get them more focused. As I mentioned, you did see news of a leadership change at R/GA. Huge is further along in terms of what the next value proposition is going to be for them. And essentially, it's going to market with more of a consultative model, where it's less people and hours and more of a product and solutions approach. So that's in market now. And then, I don't think that it's an issue that's sort of intrinsic to this space. So we do expect them to get back to being growth drivers for us. I think, to be a growth leader, you increasingly -- no matter where you sit in the portfolio, you have to be linked into the data stack into what we're doing around precision and accountability. But both of them, I think, have that predisposition, given the nature of what they do. As we've been clear as well, I think that some of those losses, again, where we saw that impact us or begin to impact us, we see that falling off as we start the second half of the year.

Okay. And then for Ellen, you had a decent-sized reduction in net interest expense for the quarter. I just wanted to see if there's any guidance you can give on how that might progress for the year?

Sure. Interest income was higher, but that's really due to the rising interest environments that we're in and the amount of return we're able to earn on our cash balances, which we actively manage. So really, it's a factor of where interest rates go, but there is nothing that I would highlight other than that.

The next question is from Tim Nollen with Macquarie.

Can you hear me okay?

Yes.

Philippe, I hope you don't mind if I push one more time on the tech and the Huge, R/GA question. I just want to see how much the two are related. I went back to my notes from last quarter, and I think you said that those 2 agencies, Huge and R/GA, were 1.6% drag on Q4 organic growth. And I think I heard you say just now that the tech and telco sectors were a 2% drag worldwide in Q1. I just want to make sure I understand how much is tech and telco and Huge, R/GA related. Or are they...

When we say tech and telco, we're talking about the client sector. So that 2% does impact other parts of the portfolio. And that is the organic -- the drag to organic growth is that client sector. If we were to quantify the digital specialists and their impact on Q1 to us, I think either in the U.S. or globally, that was very marginally north of 1%. And there's some overlap there. So both of those combined probably cost us a hair under 3% of organic revenue. Hopefully, that helps.

That's great. I wasn't even hoping -- I wasn't even thinking to get that kind of a number from you, so that's great to hear. So separate, but related issues. Could I ask another question on margins? You beat our estimate on operating margin, I think, probably ahead of what you were kind of pointing people towards. Was that some real estate savings from the Q4 events that are already working through? And I think you also mentioned on the last call, you still expect to be net hiring in 2023. I wonder if that is still the case? So how do we think about that?

I'll start, and then I'll pass it over to Ellen. I think what you do see is you see where we've been taking a very large business over time. We've been evolving it. We do have disparate results across the portfolio. And so yes, we're definitely hiring because within the number, you've got the business [as will] segment. We talked about the growth we're seeing, strong growth with Media brands, with media and data-informed solutions at healthcare, so you're seeing that. And then obviously, you're seeing the places in the business that we've called out for you, where we've got some challenges and some, which are probably anywhere in between those. And in terms of margins, I'll just start by talking about the fact that we've been clear with you all about the degree to which the model does flex. And the fact that we're very focused on and very disciplined about all of the levers and all the component parts, that help us ensure that we're on top of that. And I think I'll ask Ellen to then just fill in the specific pieces underneath that.

Sure. I would just point out that we have extended our margin 260 basis points over the last several years. So we really have a good sense on how to do this. You did see that severance was elevated in the quarter. And as Philippe pointed out, we are hiring where we have growth, but we're also adjusting the business in places that we do both for either rightsizing or upscaling talent. We expect that will continue in Q2, but we'll see the savings from that as we move forward through the year. As you mentioned, we are seeing the savings from the real estate actions as well, as well as using temp help as we should as a lever. So I think all of those things together keep us -- make us feel good about our margin targets for the year and our ability to expand them, going forward.

Our next question is from Michael Nathanson with MoffettNathanson.

I have a two-parter. First, Ellen. What is in your billable expenses? And why was it such a variability between net and gross revenues? And can you remind me if you take a principal position in media buying? [indiscernible] on answer, I have one for Philippe.

So our -- is truly pass-through expense. And the reason we do net accounting is because there is not a margin in those billable expenses. So it just varies, based upon how our clients are spending, and that's the variability.

Okay. So there's not a media buying position in there. And Philippe, I think, in the past, you guys have not been pretty clear, right? So given that others are now doing it, it looks like with some success, why maintain that posture when it seems like it's now more standard?

It's interesting because in my comments, I talked about the degree to which we might be at a moment in time when efficiency is perhaps trumping effectiveness and there had really been a focus and it has clearly worked in our favor for a number of years now to solutions, where that data layer and the ability to be really, really precise and be smarter in terms of how you put that investment to work. It's clearly a fair question, and it's something that we will look at because we want to be able to operate in as many modes as possible in order, to your point, to take advantage of whatever at a secular level the marketplace tells us is working, right? So our model has worked well for us, to your point. Something seems to be out there that indicates that you want to be looking at different modalities, and that's something that we're leaning into.

The next question is from Lina Ghayor with BNP Paribas.

Ellen, Philippe. I hope you are well. I have three questions on my side. The first one is, can you give us an update on the momentum for Acxiom? The second one is around your investments in headcount for this quarter? And how do you think about staff cost for the rest of the year, notably in the bonus pool front? And lastly, and marginally, how would you qualify your clients' marketing EBITA at the moment? Are there some delays, phasing, calculation, cushion or optimism? But any color would be appreciated.

Sure. I'm not sure in what order. So perhaps I'll start with the first and the last and then pass the question in the middle to Ellen. Acxiom is growing. Acxiom is, I think, different than the data asset that exists within one of our competitors because at least my understanding is that there's a media component to that. Whereas for us, Acxiom is a first-party data management business and -- where we plug it into -- and it works closely with others of our agency businesses. We then see more attractive growth within those businesses. So to the extent that Media is our strongest performer, and one can assume that it's growing well ahead of the overall number for us. We're seeing Acxiom fuel strong results. It's core business, where it sells these very large software engagements to handle first-party data for clients, those are multiyear contracts, those take a while to sell in. And that is, to our mind, always going to be a business that has probably mid to slightly below mid-single-digit growth. That's really not the purpose of it. It is the engine on which we drive a lot of the others. And then in terms of your question about clients, I think it's quite consistent with what we shared with you the last time we spoke. So I think that at the time, we did say that there was a sense at that point, a palpable sense that there had been more of a caution or that clients were looking for a level of flexibility and contingency planning. But I don't think that there's really been a change since that time as we go into this point in the year. And I think the thing that I would also sort of point out, if you try to dimensionalize the macro, is we take you through the client sectors. You can assume that those are probably in the order of the growth at which they're coming in, and we said 6 of the 8 sectors were growing. And I guess if you wanted sort of further quantification, you've got three of them at the top end that are growing north of 5% and 3 that are growing 3% to 5%. And so the tech and telco is clearly the drain on us, but I don't think we're seeing a macro that is dramatically different than what we shared with you when we last spoke.

And going to staff cost ratios, we're starting the year in our seasonally smallest quarter. So staff cost ratios in this quarter are typically high. It is something we have a track record of managing very effectively. We never get ahead of revenue growth in our hiring. And as you've seen, we use temporary labor as a good lever in that as well. And then I've also pointed out that severance is high and will be in this first half of the year, and we do expect to see savings from that in the back half of the year as well.

Our next question is from Julien Roch with Barclays.

Philippe, Ellen, two questions. The first one is Q1 was light, but you said it's absolutely fine. It's all in line with our phasing because, one, we're going to cycle out Huge and R/GA. And you were kind enough to tell you that the drug was 1% in Q1. And two, you said that you won quite a few things that will contribute more and more throughout the year. So is it possible to have a number, like for Huge in R/GA, on the new business contribution for the full year, so we can work out the phasing? That's my first question. And then the second one, lots and lots of comments on AI in many industries, generative AI that is. If you had to kind of say, what would be the potential biggest positive for Interpublic coming from generative AI? And also, what could be the biggest potential negative?

I don't think we're unique on the latter question. So obviously, when you think about a lot of the modeling work and the analytics work that is taking place in our Data business, in our Media business, as we mentioned on the prepared remarks, increasingly, where our Health business is also incorporating that, we've been using machine learning for some time there. And so I think there continue to be opportunities there. I think that the commerce space for us is still opportunity. There's a great deal that we can do there. And you saw us, towards the end of the year last year, make an acquisition in that space. You saw us add a leader for that space at the holding company level. So I think that in a number of areas, it's going to enhance the nature of the services that we provide to clients. And then that I think the question or the challenge is how do you incorporate it into your processes and then how do you enhance what you're doing on the creative side of things by perhaps reinvesting some of the dollars it frees up because it will, doubtless, make it possible to do some of the things that we're doing inside of the creative agencies differently, faster, perhaps more efficiently. And then on the new business question, that would be a tough one because as I said, the real opportunities in the places where we're seeing new business come up is either in media, in large integrated opportunities, where data and media are important components of our offering. But I don't think that we are going to start breaking down the new business at the agency level because I'd rather people spend time actually with clients and focused on growth than sort of that level of performance kind of granularity, back to you guys. But it's not -- the falloff there, the fact that it ends up and we begin to cycle off of that in the third quarter, what is cycling on, we've had wins in integrated consumer advertising, work in financial services, in auto and then we've had wins in media, also in financial services and in pharma. But what's coming in and what's going out isn't necessarily the same.

Sorry, maybe I wasn't clear. I was asking for an indication at the overall company level, maybe I wasn't clear.

I mean as I said, we went into the year net new business with a headwind. And at this point, we have managed to retire that. And all -- and the wins will start coming on stream shortly but definitively and stronger in the back half.

And our last question comes from Ben Swinburne with Morgan Stanley.

This is Cameron McVeigh on for Ben. A couple. Just on your recent appointment of your Chief Commerce Strategy Officer, I was wondering if you could talk a bit about the retail media opportunity and how your clients are approaching that? And then secondly, on the M&A environment, curious if your appetite has changed for M&A at all, if there's any specific type of strategic acquisitions you guys are focused on in the near term?

Sure. Retail Media, definitely a high-growth medium. I think it has any number of benefits, whether it's that it's closer to where purchases are being made or that it gives our clients a different tool so that they're not as reliant on either the advertising technology ecosystem or so that they're getting a different first-party data set with which to enhance their own first-party data. So we continue to see that as an area that has a lot of growth to it. And as I mentioned, we've got a retail media marketplace business inside of Mediabrands at Reprise, but we are also doing quite a bit of the work that surrounds retail media at a number of our agencies like at MRM, obviously, RafterOne, which was the acquisition. And I think it is a place where we continue to look. So whether it's performance media, whether it's commerce, retail media, those are clearly places where we will continue to look at and for M&A. And then the individual we brought across from Accenture has been spending a lot of time on the ground with operators and thinking about how to align or connect the various component parts we've got across the holding company. We've got shopper marketing businesses. Shoppable commerce happens in the PR space. Clearly, media is a part of it. So that's definitely a place where we believe there's a lot of opportunity.

Thank you. And that was our last question. I'll now turn it back to Philippe for any final thoughts.

Well, again, thank you. We appreciate the time. I think I'd say that while results in Q1 are consistent with, as we said to you, our internal forecast and we believe ourselves to be on track, I'll just repeat something I said a bit earlier, they're not consistent with our long-term track record of growth or what we're expecting ourselves. So that's clearly the focus here. Thank you.