Good morning, and welcome to the Interpublic Group First Quarter 2021 Conference Call. 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..

Thank you. Good morning. We hope you are all well. Thank you for joining us. This morning, we are joined by Philippe Krakowsky, Interpublic's CEO; and by Ellen Johnson, our CFO. 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..

Thank you all for joining us this morning. I'll start with a high-level view of our performance in the quarter. Ellen will then provide additional details, and I'll conclude with updates on the highlights at our agencies to be followed by Q&A. First and foremost, as Jerry said, I hope that you and your families are keeping well.

As we all know, around the world, the pandemic is still with us to a significant degree. With all that entails, it bears mention that our people continue to navigate the many challenges, both personal and professional, presented by the health crisis.

Their extraordinary resilience and capacity for innovation as well as their care for one another and their commitment to our clients are inspiring. Against business conditions that continue to be demanding, our people have driven the solid growth and the high level of first quarter profitability that we are reporting today.

Turning to those results, beginning with revenue. We are pleased with our start to the year. First quarter organic net revenue growth was 1.9%. That reflects solid performance in the U.S., an organic decrease of 20 basis points and strong international growth of 6.3% with increases in every world region.

In the U.S., you'll recall that we are comparing to very strong underlying performance in the first quarter of 2020 when we face headwinds of nearly 4% due to certain 2019 client losses that we previously identified.

Domestically, during this year's first quarter, we saw increases in areas such as media, data services and technology and our health care specialist agencies. Our international performance was paced by 12.4% growth in Continental Europe, where we had a strong start to the year by our media, data and tech offerings as well as McCann Worldgroup.

Worldwide, our health care and retail client sectors, which were consistent outperformers last year were again our growth leaders in the first quarter..

Thank you. I hope that everyone is safe and healthy. I would like to join Philippe in recognition and, candidly, admiration of our people for their terrific accomplishments under very difficult circumstances. As a reminder, my remarks will track the presentation slides that accompany our webcast.

Beginning on Slide 2 of the presentation, our first quarter net revenue increased 2.8% from a year ago with organic growth of 1.9%. First quarter adjusted EBITDA before a small restructuring adjustment was $265.9 million and margin was 13.1%. These are levels that compare very favorably against any previous first quarter.

We returned to growth with variable expenses that are lagging the recovery in revenue, and we are additionally seeing the structural benefits of last year's restructuring program. Diluted earnings per share was $0.23 as reported and $0.45 as adjusted.

The adjustments exclude the after-tax impact of the amortization of acquired intangibles, a small restructuring refinement, nonoperating losses on sales of certain small nonstrategic businesses and the nonoperating loss on the early extinguishment of debt.

During the quarter, we refinanced $1 billion of senior notes that had been scheduled to mature over the next few years. We placed $1 billion in new notes maturing in 10- and 20-year tranches. The timing of those transactions initiated in mid-February was favorable in light of the subsequent rise in market rates.

We appreciate and value the support and the reception that we received. As you may have seen in late March, we also received upgrades to our outlook from both S&P and Fitch. 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. Turning to Q1 revenue on Slide 4.

Our net revenue in the quarter was $2.03 billion, an increase of $55.6 million. Compared to Q1 2020, the impact of the change in exchange rates was positive 1.5% with the dollar weaker against currencies in most of our largest markets. Net divestitures were negative 60 basis points. Our organic net revenue increase was 1.9%.

At the bottom of this slide, we break out segment revenue in the quarter. Our EM segment was -- grew 3.2% organically, a terrific result against last year largely non-COVID first quarter. We saw solid growth by our offerings in media, data and tech at FCB and at McCann Worldgroup.

At IPG DXTRA, the organic change in the quarter was negative 4.8%, which reflects the weight of live events and sports marketing within the segment, the disciplines that have been most significantly impacted by the pandemic. .

Thank you, Ellen. It's worth repeating that Q1 is our smallest seasonal quarter, but nonetheless, we are pleased by our start to the year.

The return to organic revenue growth is a signed that our clients have begun to pivot to an investment mindset as they look to build their brands and grow their businesses in line with the broader economic recovery.

Our performance is also a reflection of the strength of our people, our offerings and of long-term strategies that have helped us drive consistently strong performance over time. We all know that the pandemic has accelerated a range of underlying trends, whether in business or society at large.

As a result, many of our clients are undertaking meaningful transformation of their companies. This means adopting new ways in which they go to market in order to keep pace with rapid digitization of consumer behavior and economic activity.

In a world that's more cluttered than ever with messages and channel all vying for our attention, the most critical challenge is to combine great ideas that come from the human storytelling side of our business with strategies and insights that can be generated by our technology and data capabilities.

We've increasingly seen the amounts of time people spend online, picking up content that's engaging informative, entertaining or some combination of all 3. Content is undoubtedly more important than ever, and that's what makes the creative side of our business so vital.

Equally important is getting those messages to people in ways that are relevant, respectful of their privacy and ultimately connect with them in meaningful ways.

It's also key to take the information flow that results from all those digital interactions and apply it at every step along the process from audience definition to creative ideation in order to better understand the impact that our clients' communications are having on their businesses.

Our differentiated capabilities include a range of data-driven offerings that can do this both at scale and at speed. As you know, we've been developing a data and tech infrastructure that underpins the full portfolio of our agencies and deliver solutions to a broad range of business problems through what we call the open architecture model.

All of our major clients are seeing the benefits of this integrated approach as our prospective clients. During the quarter, it was gratifying to see that the Kinesso behavioral sciences teams are engaging with more of our advertising and marketing services agencies than at any time since we launched those offerings.

Despite the challenging external circumstances that we continue to deal with in the quarter, certain key elements of our business remain constant. We will always succeed by adapting rapidly in our ways of working and how we are meeting the needs of clients.

Since the start of the year, we onboarded or promoted top talent across the organization, once again received high levels of industry recognition and saw solid new business performance, where we remain net positive for the past 12 months.

As you've seen in our results, growth in the quarter was driven by contemporary offerings in which we've consistently invested, including media, data and tech, health care and digital user experience. Another area where IPG has invested significant resources is in our environmental, social and governance programs.

For some time, we focused on building a culture of high ethical standards by adhering to a set of values centered around respect for every individual as a company responsible for creating some of the world's most well-known marketing campaign.

We have an obligation to ensure that the work we do as well as how we deliver it supports the long-term well-being of our communities. This quarter, IPG released its sixth annual sustainability report using the global reporting initiative standards framework.

The report can be found on our website, and it represents another step forward for us in our commitment to ESG. In terms of climate action, we track IPG's global energy usage and greenhouse gas emissions across our entire portfolio.

Next month, we plan to announce several strategic priorities focused on tackling climate change including a science-based target for reducing our emissions globally. The report also aligns with the UN Global Compact and focuses on human capital disclosures.

Further, we make clear that we operate with a core expectation that individuals deserve control over their data and that we are responsible for promoting high ethical standards in terms of data privacy and security. Equity and inclusion also remain areas of focus for us.

Our agencies are attuned to this priority, and they are held accountable because we have to show further progress when it comes to diversity in our ranks. IPG's latest MSCI ESG ratings report, which is a key ESG data provider for our various stakeholders, saw an increase in our company's score to an A rating.

Our improvement was the result of increased disclosure when it comes to human capital management, our position and capabilities related to data privacy and certain governance enhancements. More recently, we joined Civic Alliance, as well as many of our clients, in calling for the protection of voting access here in the United States.

We continue to be committed to promoting democracy, and we'll work to support safe, accessible and fair elections as well as to encourage our employees to participate in civic life.

As a business in which attracting top talent and advising clients is crucial to our success, a robust approach to ESG is a key part of our long-term strategy and important to all stakeholders. Turning now to highlights from our portfolio.

During the quarter, we issued our second media responsibility audit, addressing in a structured and consistent manner one of the most topical issues in the digital media ecosystem. This framework and the principle it sets forth continue to be well received by clients as well as key industry groups.

Mediabrands' MAGNA unit also hosted a first-of-its-kind equity upfront, a week-long event intended to raise visibility and receptivity for black owned media and media that serves Black audiences. In addition, the network announced that it would be joining forces with TikTok for a creator and content accelerator.

Two of our most dynamic units were in the media space. where we continue to leverage our deep data resources and capabilities. We're seeing strong growth in Matterkind, which is customizing addressable media activation at scale for more of our clients.

At Reprise commerce we have rapidly scaled operations on a global basis as we address growing needs in e-commerce, particularly for insight, content and analytics. Following on a series of new business wins, Initiative elevated its U.S. leader to global CEO, where we believe she will have an even greater impact on the network success.

At UM during the quarter, we added a global rental car client as well as an auto OEM in EMEA and HBO Max in LatAm. UM was also named an outstanding company for working mothers, and 3 of its executives were named Adweek Media All Stars, a distinction that was also earned by leaders of Reprise and Mediahub.

At our creative integrated global agencies, both McCann Worldgroup and FCB were named to the top 5 most awarded networks of 2020 in the Drum's world creative rankings. Both also had work in the Super Bowl that was well received in a number of polls and rankings.

Following the implementation of our succession plan, at the end of 2020, McCann Worldgroup posted a solid first quarter. Along with most awarded networks of 2020 in the Drum rankings, McCann New York came in at #4 on that list In terms of the top 100 agencies worldwide.

At MRM, the agency was again named a leader in Gartner's 2021 Magic Quadrant for global marketing agencies based on their ability to serve as key strategic business partners for clients and to execute on critical marketing priorities. Huge and R/GA also featured on that list.

The health operations at McCann and FCB performed strongly in the quarter and continue to take share in the marketplace. The notable program I'd like to call out was FCB Health's launch of the trial for #clinicalequality to shine a light on racial bias in clinical oncology trial.

In MullenLowe Group, Mediahub continued on its new business streak for the addition of Global wins Slack and -- as well as New Balance in the U.K. Mediahub also introduced its inaugural diversity own Media Day and revamped its U.S. leadership team with a series of internal promotions.

The MullenLowe advertising network continues to be a leader in purpose-driven work. Partnering with several independent casting agencies, The agency recently launched a campaign for Unilever's Dove to promote inclusivity in commercial testing.

In the U.K., the agency has continued to do important work on behalf of the government to inform and educate the British public concerning the pandemic. The campaign U.S. Agency of the Year awards, the Martin Agency was recognized with multiple honors. And the agency also teamed with Mediahub for an integrated win of Terminix in Q1.

Huge posted strong results during the quarter and saw two big wins, adding Coppertone and Wakefern to its client roster. The agency also announced the return of its Huge XD school with a renewed equity centered purpose that seeks to use education to increase the participation of underrepresented identities in the design industry.

And in R/GA, the agency's Venture Studio program announced the launch of a new coalition venture studio with a mission to support Black start-up founders. IPG DXTRA companies continue to deliver specialized capabilities and integrated solutions for clients in our evolving world. Bowen was once again a standout in new business arena.

Weber Shandwick was named PR Agency of the Year of the Campaign U.S. Awards, and the agency also launched the planned VX open playbook, a communications program that draws on extensive vaccination and public health communications expertise to help companies play a role in getting America vaccinated.

At Octagon, leader in sports marketing, we recently promoted a longtime executive to the role of CEO. Performance at Acxiom was consistent with our expectations and in line for a year of solid growth in 2021. The company continues to carve out a position as an authority in the integration of marketing and advertising technology.

During the quarter, Acxiom expanded its partnership to better manage and measure campaign execution through the cloud in order to provide tangible improvements in campaign efficiency and speed. Acxiom is also accelerating its development in client verticals where it sees opportunities.

Recently, Fortune named Acxiom one of 2021's Best Workplaces in Technology. Working closely with the Acxiom data teams, Kinesso deployed its enhanced identity solution with half a dozen large clients. This has already driven double-digit lifts in campaign efficiency.

Kinesso also expanded its range of direct data integrations with prominent platforms and ad tech companies. As I mentioned earlier, we are pleased to see the Kinesso API connecting data and analytics capabilities across more of the IPG portfolio. Since we see this as a growth driver for our business and a source of potential new revenue streams.

Acxiom, Kinesso and Matterkind, are working together to bring end-to-end data and identity solutions to clients in collaboration with a number of IPG agencies, We've seen the impact of this recently in new wins and expanded assignments in the telecom, auto, health care and financial services sectors.

Looking forward, we will stay focused on unlocking the enormous opportunities that exist due to the changes and disruptions that have accelerated during these past 12 months. We worked over the years to embed digital capabilities throughout our organization and build a foundational layer of tech and data infrastructure that informs all our work.

As a result, we have a deep understanding of audiences at the individual level based on the strong legacy of ethical data practices. Personalization, privacy and accountability are only going to grow in importance and value going forward.

Our vision is, therefore, for IPG to become a key partner in ensuring that clients businesses thrive in the digital economy. The success we have seen at the start of the year is thanks to the talent, efforts and commitment of our people.

As you'd expect, we are focused on supporting their physical and mental well-being and listening to them in planning a return to office. That likely is to begin the meaningful degree in September, dependent on continued progress and matters related to resolving the public health crisis.

It will be a gradual and iterative process in which we obviously were going to have test and learn as we go.

As such, on the cost drivers that go hand-in-hand with live collaboration with colleagues as well as calling on clients in person, which have, of course, been reduced as a result of lockdowns, we'll begin to work their way back into our ways of working as well as our operating results.

We've already shared with you our perspective on the balance of the year, which is based on the assumption that there will continue to be a reasonably steady course of macro recovery. As is clear, we view our current performance and long-term strategy as significant factors that will continue to enhance shareholder value.

As always, we're committed to sound financial fundamentals, including debt reduction as well as continuing to grow our dividend. We also remain focused on getting back to our share repurchase program when appropriate. We will, of course, keep you apprised of progress as the year develops.

As always, we very much want to thank our clients and our people who are the key drivers of our success. Thank you all for the time this morning. And with that, let's open the call for questions..

Our first question is from Alexia Quadrani with JPMorgan..

I guess my first question really is on the guidance, sort of clarifying a bit more at 5% to 6% organic revenue growth. I think you mentioned -- I think you just mentioned sort of a steady recovery is the assumption behind it.

But I'm wondering if you're anticipating things like sports and events come back later in the year sort of the -- in your assumptions for that guide. And then just a follow-up question is really on the new business activity.

I'm wondering if there was maybe a low in 2020 and that has created kind of a pent-up demand or backlog, a more robust pipeline potentially for 2021, which could ultimately have an outsized influence to the full year organic growth..

Thanks, Alexia. Let me start -- I guess, it doesn't matter which one we take first, right? And so as you know, sports and events are actually a fairly small part of the portfolio. I think we're talking about sub 5% of overall revenue.

And so in essence, we do believe that there's going to be some resumption in that area probably towards the third quarter, definitely in the fourth quarter, but I don't think that's a significant factor that impacted where and how we got to that expectation about what we think the year looks like.

I think Ellen and I both mentioned in our remarks the frequency with which we meet with the operators to discuss financial forecast, that was way up last year. We've largely kept to that cadence So that and client conversations is what's really informed our belief of what we can discover -- sorry, what we can deliver for the full year.

I think that's really the function of it and then, obviously, the underlying revenue trends which we talked about, whether it's geographic, whether it's client driven or the progression over the course of the first few months of the year.

And then in terms of new business, I think that there is a general consensus that last year, there was, as you say, kind of a damping down in that regard just because, obviously, going through that process, whether you're either going through it in a kind of lockdown purely virtual setting or whether it's just not a disruption that clients were really, I think, particularly open to given that there was so much uncertainty.

So I think we have begun to see an increase, an uptick in that regard, and it's to be seen whether that continues, I think that, at the moment, that's the expectation. We're seeing some indications of that, but there may be more to come..

And then if I could ask one more.

On the buyback, is that still -- we should still think about that as sort of maybe something for -- in 2022 or the tail end of this year? How should we think about the timing of that?.

Well, look, I mean, you know that we've got a very strong track record when it comes to capital return. And I think as we've been very, very clear that, that continues to be something we're very focused on and a priority. I'm going to I'm going to quote Ellen. She said something on our last call about revenue, which was -- it's not if but when.

And so I think I'm going to say the same applies to share repurchase. I'm not sure that what else Ellen would care to add in that regard in terms of balance sheet or how we're thinking about the progression..

Thank you. No, listen, I will reiterate that we believe capital return is very, very important. I believe we have a track record of showing that. We were very pleased to see the rating agencies change their outlook on us. We have a debt paydown in October, and we will continue to be focused and analyze the situation.

And yes, I really do believe it's not a question of if but when..

And you saw us increase dividend last year, notwithstanding the challenges. And to our mind, we want a balanced approach to this, and so we do want to get back to that..

The next question is from John Janedis with Wolfe Research..

So your confidence level around the $160 million of structural cost savings seems obviously pretty high given the margin outlook.

So can you talk a little more around the time line of hitting it? Is there potentially some upside given lower business travel and expenses you talked about? And to what extent does real estate create maybe another potential for the talent?.

Look, I mean I think there are lots of ins and outs here, so we can obviously unpack that for you. I would sort of say we've been clear that, that $160 million is a commitment that we, as a management team, have signed up for. So that's definitely the case. You see growth in Q1.

So the strategic structural actions are beginning to kind of, in essence, get leverage, and so that's clearly very encouraging.

And then we also talked about the fact that a lot of that $160 million would be evident in the '21 results and that real estate actions would not all be realized that we'd see some in '22 depending on the pace of the subleases, right? So the stated objective of we want to emerge from the pandemic as a stronger company, it feels to me like we have early indications given the quarterly results that, that's clearly what we're doing.

And then there are clearly other factors at play. So the ins and the outs of -- independent of the restructuring over a bunch of years, we've demonstrated the ability to grow margins with revenue growth. So there's growth now.

So there's -- some of what's in the results just shows what Ellen and her team and what our operators are able to do in terms of discipline and focus on operating leverage, And then we're also starting to get into some higher value services and revenue streams.

And the tailwind that is -- I think the unknown is that growth has come back prior to normalization of what, I guess, we'd call kind of pre-pandemic business travel meetings and all the costs that are associated with that. And I think that, over time, that's going to reverse. We go back to office, we go back to in-person interactions.

And those are positives. I think there will be things that come out of those ways of working that will be good for the business and for what we're able to do with clients. And as some of those then costs come back into the model, then real estate savings materialize as we go into '22.

So on all of those moving parts, I think we've got more detail in the various categories that had significant positive impact on margin. I think Ellen can probably unpack some of that with a lot of specificity for us..

Sure. I mean if you look at the first quarter, again, I think it illustrates and demonstrates how confident we are that we can drive margins. If you look at -- we gained 480 basis points between base payroll, benefits and tax and the occupancy, and that was largely due to the restructuring.

As Philippe has mentioned and as I've said, real estate is not linear. So some of that benefit will accrue to next year as well and beyond as the subleases take hold. But unpacking some of the more variable costs like T&E, I mean it did benefit us 150 basis points for the quarter.

How quickly that comes back is really some things that are largely out of our control depending upon the health crisis, But I do believe there will be learnings from this period of time in the pandemic that we will benefit from in the future. And will it ever come back to the extent that we travel previously? Probably not.

The other one-off I would call, last year, we had elevated bad debt expense in the first quarter. So that really created a tailwind this quarter of about 130 basis points. And lastly, I would add, not only do we have a track record of managing margin, but we're incentivized to do so.

All of our incentive plans are aligned with this objective, which gives us even that more confidence that we'll get there..

That's helpful. And then maybe if I could shift gears. I was surprised that all of your international regions put up positive organic growth. Obviously, there are headlines in some markets, like India or Europe around COVID resurgence.

Is it your sense from your people on the ground that you've turned the corner and that growth generally is sustainable?.

Well, I mean, I think there's an implicit answer in the fact that we're telling you what we think we can accomplish for the year. I think that international is interesting because the impact of the pandemic is so disparate and sector-driven.

So I would look at a couple of things internationally that do give us comfort and give us reason to feel that there's something that's consistent here. So the decision of top-tier clients, so if you look at Europe, for example, we saw strength from a number of large clients in food and beverage, in CPG, in health care and in financial services.

And so in a sense, I almost think -- and this is anecdotal, but you said is there anything you're hearing on the ground. I think even round two of lockdowns comes with less uncertainty in a sense.

whether that's because clients have already pivoted to a better sense of how they're going to connect to consumers and drive demand through, say, e-com or it comes with somewhat less uncertainty because the vaccines are out there.

And even though the pace at which vaccinations are proceeding in a number of countries, again, thinking about Europe where we had a lot of strength, people do have a sense that they're on a path to something, whereas the first time around, there was a lot of uncertainty, and so you could understand where clients we were wary of making any kind of commitment.

So in a sense, I do think that, that gives us a sense that internationally, we can continue to deliver.

And then the other thing is if you look at the offerings that are driving that strong international performance, there's consistent contributions, whether it's media tech, whether it's on the advertising side of things, McCann or whether it's the health care agencies..

The next question is from Michael Nathanson with MoffettNathanson..

I have a couple. So Philippe, on your revenue guide of 5% to 6%, that kind of takes you back to where you guys were a couple of years ago when you were leading the industry in growth.

I wonder, given your view of the future, all the moving pieces on e-commerce and changes in consumption, do you think your company's growth will stay at that level? Or can you see acceleration structurally from some of the decisions you've made to reposition the company for maybe a faster-growing segment? So I want to know that.

And then secondly -- the question Alexia asked about buybacks is even return to buybacks, there's a good amount of cash cushion that you guys will build. So can you talk a bit about your philosophy on M&A? I know you were the architect of the Acxiom deal.

But do you favor small tuck-ins? Or should we expect down the road maybe another large acquisition to further reposition the company? So those are my questions..

Two small questions, wow. So I guess on the latter, Michael, I'd say to you that for quite some time, what we clearly believed was the right course of action was to invest in talent and to build the capabilities and embed them across the portfolio. And so I think that, largely speaking, we're pretty -- we're confident in what we can control.

And so we don't see gaps in the portfolio. We see that we've got a full suite of offerings. We like the assets of those offerings, and we think we've got great people. And then integration, open architecture feels like it's always going to be a work in progress, but relatively, we see it as a strength.

And then underlying that now, we have kind of data and tech powering all of that. So I would assume that we will get back to an M&A posture that is more what you would have anticipated for us -- from us in the past.

And we'll definitely look for areas where the technical skills that are required or the rates of growth we're seeing are such that we do want to make bets to supplement what we've got going on. And it could be that an area like e-com is one of them. But I don't see some of the need for something really dramatic and significant at this point.

And a few years from now, we'll ask again. In terms of kind of the first question, we are compounding kind of a number of years of consistent outperformance, and clearly, we're seeing a shift in where the demand is.

But to answer the question about whether we can get to these consistently kind of next level or higher growth numbers this early in the stages of kind of an economic recovery feels like it is probably premature to make that determination, right? I mean it's clearly, aspirationally, we see that, as I said, higher value services are definitely something we want to lean into.

But everything works well because it's part of an integrated whole, right? And so we've been successful because we've evolved the offerings, not because we've kind of tried to jump to a whole other model of how we serve clients and how do we deliver value for clients. So I think that we'll see that play out over time..

The next question is from Julien Roch with Barclays..

Yes. Philippe, Ellen Jerry, congrats on the results, especially the margin. My first question is on organic and the second one on margin. Anything that would change the 2-year run rate in Q2? So in Q1, 0.3 last year, 1.9 this year. So about 2% 2-year run rate, which would put Q2 up about 12% last year minus 10.

So is 12% a better real estimate in Q2? That's my first question. And then the second one is on the margin. What has changed in terms of your thinking regarding margin? The new full year '21 guidance is quite ahead of consensus.

Could it be that return to work is taking longer, so the savings are there for longer in 2021? And if that is the main explanation, could margin fall next year? Or would they be at least flat? So some more color on the significant upgrade in the margin perspective..

Well, I'm going to reiterate that, on margin, we committed to all of you that we would come through this crisis as a company that was stronger and, in a sense, more fit for purpose given where the world is going.

And so as I said, we're pleased that we're seeing early indications because a lot of those restructuring decisions that were made were strategic in nature. They were about how do we make our companies nimbler, how do we make them able to provide services to clients but in a way that is more contemporary.

So I do think that there's something that's happening that's underlying here. But as I think I mentioned, when Alexia asked the question, it's -- with so many ins and outs, you're asking a very fair question. You're asking a question we're asking ourselves.

But I don't know that we've got a clear line of sight as to when are those costs going to start coming back in. As Ellen said earlier, what's going to be new normal in terms of in-person engagement, travel, things of that nature.

So we clearly believe that where we're going is a better place, the extent to which we can give you that level of granularity right now. Ellen, I don't know what else you'd care to add on that margin question..

No, listen, given the big assumption, right, that the economic recovery is steady, we feel pretty confident in the 5% to 6% revenue growth. And with that, we feel pretty confident that we can deliver the 15.5 margin. And that's from a bottoms approach, meeting with our operators very frequently. So we will continue to do that for..

And then I think that becomes the floor from which to then ask ourselves what is possible beyond that because, as I think I also said earlier, we've got a long track record of where there is growth, we find ways to grow margin.

Now on your revenue question, I think there's just -- there's a lot of kind of -- from a quarter-to-quarter basis, there's a lot of noise in the system in a sense. So obviously, our -- not that I would trade out of the position we're in, but our comps are quite challenging relative to peers.

But we still feel strong enough that we're saying to you what we think the year looks like. And then the thing that is maybe masking the strength of the U.S. finishes rolling off at the end of Q2. But sequentially, every region, U.S. included, saw improvement. And then in a sense, the underlying book of business in the U.S.

with plus 8, which is maybe, I think, probably 300 basis points better than kind of the other end of the spectrum for Q1 last year and then those '19 losses, so the underlying book of business in the U.S. grew about 4.5-ish this quarter. International, you've seen and we talked a bit and unpacked a bit about what's driving that.

And then I'd say that there's improved tone in terms of conversations with clients and operators as the quarter progressed. But we don't manage quarter-to-quarter, so I'm not sure I can tell you precisely. I think that, as I said, we're going to see recovery, and then there's -- it's not going to be linear..

And that was our last question. I'll now turn the call back over to Philippe for any closing thoughts..

Look, thank you all for joining us this morning. We are pleased with these results. We're appreciative of the support, and we look forward to taking you through our results when we meet again. Until then, I hope everybody stays well..

Thank you. This concludes today's conference. You may disconnect at this time..