[Call Starts Abruptly] [Operator Instructions] As a reminder, this conference call is being recorded. At this time, I’d like to introduce you to your host for today’s conference, Senior Vice President, Investor Relations, Shub Mukherjee. Please go ahead.

Good morning. We hope you and your families are safe. Thank you for joining us on our first quarter 2020 earnings call, despite the difficulties posed by this crisis. On the call with me today is John Wren, our Chairman and Chief Executive Officer; and Phil Angelastro, Chief Financial Officer. We hope everyone has had a chance to review our earnings release. We have posted to www.omnicomgroup.com this morning’s press release along with the presentation covering the information that we will review this morning. This call is also being simulcast and will be archived on our website. Before we start, I’ve been asked to remind everyone to read the forward-looking statements and other information that we have included at the end of our presentation, and to point out, that certain of the statements made today may constitute forward-looking statements and these statements are our present expectation and that actual events or results may differ materially. I would also like to remind you that during the course of the call, we will discuss some non-GAAP measures in talking about Omnicom’s performance. You can find the reconciliation of those measures to the nearest comparable GAAP measures in the presentation material. We are going to begin this morning’s call with an overview of our business from John Wren, then Phil Angelastro will review our financial results for the quarter, and then, we will open the line for your questions. Over to you, John.

Good morning. I hope everyone on the call is staying safe and healthy. I’m pleased to speak to you this morning about our first quarter results and update you on how we are actively responding to the effects of COVID-19. First and foremost, I would like to recognize the healthcare workers, first responders and essential personnel around the world who are working 24/7 to help those in need. Their work is heroic and humbling, especially as the human toll continues to grow. As the impact of COVID-19 continues to evolve around the world, we’re focused on three key areas: the safety and well-being of our people; continuing to effectively serve our clients; and preserving the strength of our business. And while we don’t know today how this will fully play out, we will be as clear as we can in our remarks and in responding to your questions. Starting with the safety and well-being of our people. In mid-March, we moved to a global work-at- home policy and implemented our Business Continuity Plans. With few exceptions across our markets, our people from creatives to account management, media operations, production, IT and accounting and back office services and many others continue to work from home. This is no small feat and speaks to how well prepared we were as an organization. The transition has been all I could have asked for. Our people have stayed well connected to their colleagues and with their clients, and we have not lost a step in supporting them. In fact, our clients have expressed deep appreciation for how seamless to working with our agencies from home has been. Given the vast change in the way we are working and in our personal lives, the support we are providing is leading to deeper engagements and a…

Thanks, John, and good morning. I also want to take a moment to recognize our people, people at our agencies that are serving our clients as well as the people in our support functions around the world, for their tireless efforts over the past several weeks. The swift transition to mobilize and implement our work from home policy was done quickly and successfully. That success would not have been possible without our exceptional people, and we are proud of how well they’ve adapted to this new working environment. As John said, we are focused on aligning our business model to the realities of the new economic environment impacting us and our clients around the globe. We are continuing our process of reviewing our operations to realign our cost structures to meet changes in client demand as we manage through the crisis. We’ve also taken proactive steps to strengthen our liquidity and financial position, both before and after the end of the first quarter. These actions included, in early February, we amended and extended our $2.5 billion revolving credit facility. The facility was extended until February 2025. In mid-March, we suspended our share repurchase program. In February, we issued $600 million of 10-year 2.45% senior notes. And in March, we redeemed early, the remaining $600 million of 4.45% senior notes that were due in August of 2020. In early April, we issued an additional $600 million of 10-year 4.2% senior notes. And in early April, we also completed a $400 million, 364-day revolving credit facility, which is in addition to our existing $2.5 billion revolving credit facility. We view these actions as putting in place additional liquidity insurance during these uncertain times. And we should also note that we have no long-term debt maturing until May of 2022. Turning to our…

Thank you. [Operator Instructions] Your first question comes from the line of Alexia Quadrani from JPMorgan. Please go ahead.

Hi, thank you so much. Thank you guys for that color and hope you guys were all doing well. I wanted to sort of dig into some of the commentary you made about the declines you saw in March. Curious if you could share how much March’s organic revenue growth was down? And sort of how organic revenue growth was trending in April?

Sure. I’ll take that. We had approximately 3% organic growth through the end of February. So March was essentially a similar amount in a negative fashion. So, yes, a little bit less than that in the month of March. And in terms of April, I think that was your second question, we don’t have numbers for the month of April. We don’t collect weekly revenue numbers by agency and roll them up at the Omnicom level. But the expectation is that year-over-year revenues will be down in the month of April.

And then if I can follow-up, perhaps John or Phil, you guys both have great perspective having been on Omnicom through the last financial crisis. I guess, how is this different from 2009? And do you think the declines in revenue will be perhaps a lot worse, but maybe shorter lived? And can you do the same great job you guys did back in 2009 in terms of protecting profitability?

Yes, Alexia. Good morning. This situation is quite different than past situations because 2008, 2009, it started off as a financial sector issue. This sector – this turnaround it’s affecting the companies or the areas more specifically that we referred to in our remarks because of the total shutdown. The good news is if they do it intelligently, countries around the world are starting to bring people back in one capacity or another, which I think will be very, very positive. It may take us another couple of months, but will be very positive. The actions that we’ve taken so far, simply because this is different than anything we’ve faced in the past, have been, I guess, appropriate – well, they’ve been at an appropriate level to reflect what we think is going to happen to our revenues in the second quarter and then we’re always every day reevaluating what we think is going to happen beyond the second quarter. So the actions that we’ve put in place so far exceed those that we took in 2009, 2010, but we feel they’re appropriate and related to the revenue that we expect from the downfall or the cutbacks in revenue that we expect in the second quarter.

Yes. I think based on the data we have from our agencies to date and the forecast process is certainly an iterative process, we spent a lot of time with our senior managers at our networks and practice areas over the last month regular time with them. And we’re in the process of reforecasting the numbers for Q1 and the rest of the year yet again over the next few weeks. But I think we expect the initial impact to be a little deeper than it was back in 2008, 2009, initially. And we, like everybody else are – don’t have enough information yet to really know what to expect in terms of when the businesses will come back, but we’re certainly focused on making the decisions that we need to make now and preparing the businesses for when the economies open up and the opportunities that are going to be there for us to take advantage of.

The only thing I might add, Alexia, is it’s not all doom and gloom. If you look at our Healthcare sector, it’s probably up. If you look at the Healthcare sector within the public relations that [indiscernible] have, that’s very, very solid. So there are areas of our business despite all the difficulty that’s out there, that are, in fact, growing.

And I would assume that you get some incremental benefit to that point, John, of some of your clients wanting to revest it to their creative work to make it more appropriate for this environment. Is that continuing? Or is that really largely a March event?

No. I mean – I suspect almost every one of our clients. You can see it in some of the major clients and their advertising. The Pepsi, AT&T or some others, that they’re still actively engaged in trying to address themselves to their employees and to the public with messages of support of this. And our guys, ladies are doing this basically from home at this point. That’s the most fascinating and enlightening thing that I’ve seen through this whole process is just how well and how quickly we transitioned from working in the office with all the facilities an office would offer to working at home. And our people have been just, just amazing. It’s really been incredible. And thankfully, so.

Thank you very much.

Sure.

Your next question comes from the line of Craig Huber from Huber Research Partners. Please go ahead.

Yes. Hi, I think a few questions and it sounds like you guys are all safe. Phil, can you give us a sense – at the individual advertising agency level, what percent of cost would you say are variable that you can really attack, hold back cost there? First question.

I think as an overall matter, we’re certainly going to – we’re going to consider and address any and all cost components in the business. But we do have a significant portion of variable costs. I think if you look at the salary and service cost line, a significant portion of those costs, which are about 70 – a little under 75% of the cost structure of the business, certainly, we’re going to look at any and all of those costs. I don’t think there’s a way to say all of the 75% are actionable. And this situation is not as dire as that. But a significant portion of our costs are valuable as incentive comp in those numbers. Some of the service cost component of that cost line certainly is tied directly to revenue. And we’re looking at all those things. But we also are keeping in mind, we do have a business that continues to provide services to our clients and innovative creative ideas to our clients. So, there’s a significant component of that cost that will continue and support the revenue streams going forward. But I think if you look at that variable cost – the salary and service line, a significant component of that is, in fact, variable.

My second question, Phil, when you sort of – I know it’s hard to know this, of course, but you guys obviously do an awful lot of long-term work for your clients. Is there anything that you’re thinking that the third quarter, the year-over-year percent decline in the organic revenue could be down worse than what you may be thinking what the second quarter could be? I know it’s hard to know for sure, but how do you sort of think about that? What quarter you guys think it could be the worst? Is it the second quarter?

I’ll give you my opinion, and then John can add to it. I think we just don’t know with any certainty, but all the discussions we’ve had with our businesses to date would lead us to conclude that the second quarter will bear the brunt of the decline in marketing spend by our clients as they pull back because of the shutdowns, global shutdowns. And I think as the economy slowly comes back, both in the U.S. and overseas, clients will want to grow again and they want to invest again. And we don’t expect the second half in terms of percentage decline to be as significant in the second quarter right now.

Yes. Yes, there’s not much I can add to that. That’s – in the preliminary forecast that we’ve looked at, and they are preliminary, we have to go back and dig deeper into. The second quarter was the most traumatic. And there was an assumption that many sectors would at least gradually reopen at some point during the third quarter, that seems to be playing out based upon what we’re hearing from the governments around the world. So the second quarter, at this point, is going to be I think the worst. From a cost point of view, though, we’ve taken a different view. We’ve taken – the reality of what we think the second quarter is going to be, plus, we’ve projected that a little bit more severely into the third quarter then our revenue expectations are. Just to assure ourselves that the actions that we’re taking are rightsized, and we’d rather be in a position later in the year. We’re reinstituting people as behind the revenue coming in as opposed to chasing a revenue decline for the full year.

And my last question if I could, maybe, help quantify for us how you sort of think about your employee headcount in terms of the percent of employees that have been furloughed or unfortunately laid off in this environment? Is it like a 15% number? Can you give us sort of sense ballpark, please?

I’m not sure I want to give you a number at the moment because it’s so fluid. You do recognize that the systems, where you are in the world are, in fact, different. If you take places like France and Germany, which are big markets for us, their governments look to support the population by keeping the employee attached to the company, which will make it very easy for us to recover when those markets, in fact, recover. In the U.S., not a political statement for better or worse. The U.S. requires you to make people redundant in order to get the benefits associated with what the government’s offering. We view the actions that we’ve taken, and we continue to analyze this as permanent for companies that we do not think will come back to spending during this calendar year. And furlough, even though they’re treated the same, they’re put on unemployment. And those people are the first – those people will be the first priority in terms of us bringing them back as soon as client revenues restored. So I don’t know if that helps you to fill in what you referred to.

Yes. So you certainly may be familiar with us already. But what John is referring to is there’s a number of countries in Europe, especially, but also in other parts of the world, Canada and certain Asian countries, where employees remain on our payroll and the government subsidizes that employees pay rather than have the employee terminated, because our clients have indicated that they’re going to reduce their spending near term. So whereas we might – in a typical quarter, client reduces their spending. If we had to take action at an agency and actually reduce our headcount, we would do that in this environment. In some countries, that isn’t permitted during a short period of time. So those employees will stay on the payroll and will get reimbursed, significant portion of their salaries, 70% or 80% in some cases. So those furloughs are what’s occurring in a number of the European countries, which hopefully, client spend comes back and those employees will be – they won’t need to be reinstated, they’ll continue on with the company in the same fashion as from before. If the business doesn’t come back, we’re going to have to reevaluate our decision. In the U.S., because the U.S., because the U.S. doesn’t have a similar approach in terms of furloughs – formal furloughs, we’ve taken a little bit of a different approach, but we have indicated to those people that where we believe, we’re hopeful that we’re going to bring them back, but – that we do, in fact, want to bring them back as soon as client spend comes back, but we have had to take the action of severing them from the payroll so that they could take advantage of the government programs to help them in the near-term.

The other thing I want to add, which kind of blows me away, and I’m very, very pleased with this, is the number of people in the United States, but across the world, who have taken a voluntary salary reduction, that’s – I mean, you have to be in my position, but it’s wonderful when you see what people are doing and what people are willing to offer up to help reduce the number of actions that we have to take and reflect the fact that this – unlike any other crisis in the past, is a shared experience.

That’s very good. Thank you very much.

Sure. Thank you.

Your next question comes from the line of Michael Nathanson from MoffettNathanson. Please go ahead.

Thanks. I guess I have two of you. I’ll be quick. So John, I wonder, just given what you guys both said about furloughing people. Omnicom has been known for having the best talent. Do you worry about maybe creating a bunch of free agents for some of your more challenged companies, competitors in Europe maybe swoop in and take some of the talent. So how do you guard against losing all the people who are on furloughed down the road to maybe competitors? And then Phil, you mentioned the working capital outflow. It was bigger than we’ve seen before. I realized that we’re in the midst of a global pandemic, but any color on what happened maybe in March? You referenced in your comments. And the kind of the sustainability of the working capital outflow as this year goes off?

Well, let me take the first question. People are free to do as they want to, and they’ve always been that way. I’m not – well, I’m not any more concerned than I would be prior to the crisis about our staff choosing to work for Omnicom as opposed to one of our competitors. And we’ve been very careful and thoughtful, I think. And unlike in past crises, communicating with our employee base and letting them know what are our priorities and what are our concerns and what to expect our actions to be and I find that when you do communicate with your employees that way, it creates a dialogue at a trust level that is terribly important to get us through this crisis. So – I mean I will be shocked if there’s depletion in the talent at Omnicom, I quite expect to be able to do just the opposite of what you’re suggesting. And probably hire people that we think are terribly talented in some of our competitors after this or as this settles down.

Yes. The only thing I would add is this isn’t a situation where there have been or will be indiscriminate reductions in the overall talent that we have at our agencies. So there are client situations, where they’ve reduced their spend. And we need to take actions at that agency. The answer isn’t simply whoever is servicing that client is unfortunately going to be part of the furloughs or terminations that need to be made, so that the overall agency can thrive in the future. There’s an evaluation that’s being made of who are our best people and do we have any underperformers that will be first on that list of either terminations or furloughs if that action has to be taken. So we are certainly working through this and doing everything we can to keep those who we think are best.

Yes. And one thing I want to point out is even to the level of leadership. We entered 2020 or DDB did with a difficult situation. We’ve just lost several large clients, thankfully to other parts of Omnicom. And we were a bit shocked and put off when Wendy Clark decided that she was going to move on in the middle of a crisis. But we were able to recover with no interruption at all because Chuck Brymer, who have been previously been the CEO and the Chairman of the company, was with us and ready to step back in and has done a magnificent job irrespective of whatever the behavior of his predecessor was. So I feel not only are we in fabulous situation when it comes to our employees, we’ve done a terribly good job of making certain that we can replace every single one of us and it’s truly a team effort.

So, to the second question, Michael, as far as working capital, a number of factors impacted us at March 31 at the end of the quarter. So one thing to start, as John had said in his prepared remarks, our cash balances as of yesterday are still in excess of the balance and cash that we had at 3/31/2020, $2.7 billion in cash we had at 3/31/2020. The cash we have on hand today is in excess of that number, and is right around that number, if you back out the $600 million in additional financing we raised, which closed on April 1. So, our performance in terms of working capital management and cash in the month of April has been very good. And essentially, what happened in the last week of March were a few things. Clients – a number of clients who have India-based AP processing centers. If you remember, India was in disarray the last basically week of March. And a number of their outsourced service providers were kind of caught in the middle of trying to transition their operations to work from home, which in India is very challenging, and a number of those service providers were not well prepared for that transition. And as a result, the cash payments from those clients that we expected in the last week of March came in April as opposed to as of the day March 31. And I think the other things that contributed were similar. Certainly, a lot of our clients were in transition or were working from home and the matter of a delay of two or three days at the end of the quarter doesn’t make a difference overall to our working capital management, but it does make a difference in terms of the cash balance that’s on the balance sheet at March 31 and the working capital disclosures and our statement of cash flow. So – and I think there’s probably a bit of certain clients holding on to their cash a little bit longer at the end of the quarter as they were sorting through what COVID-19 was really going to mean and what kind of an impact it was going to have on their business. So I think those are the primary factors that drove the $600 million of decline in working capital performance in the quarter as of March 31. And I think otherwise, the performance in April has been excellent, and we’ve certainly stepped up our interaction with our agencies on a daily and weekly level in terms of cash forecasting. And we’re very pleased with our performance in these first three-plus weeks of April. So we don’t have any concerns just from this snapshot as of March 31.

Okay. Thanks, guys. I appreciate the honesty.

Thank you.

Your next question comes from the line of Julien Roch from Barclays. Please go ahead.

Yes, good morning. Thank you for taking my questions. I have a couple. I’ll ask them one by one, if that’s okay with you. You gave no indications of Q2 trading. I understand it’s really difficult. Things are changing every day. But I guess investors’ expectations are, I believe, for an organic decline of 25% to 30% for agencies in Q2. How does that sound? Likely outcome, potentially worse, potentially better?

Well, this is going to be a very short answer compared to the answers we were giving your previous questions. Certainly, we’re looking at a Q2 downfall, which could be – well, certainly will be double digits. We’re not prepared to discuss – I’m not prepared to discuss anything that happens beyond that. In the year, it will depend on how quickly businesses reopen from car dealerships to food franchises to all sources of activity. We can take a pretty good estimate that some of our events businesses will be affected for a longer period of time. But oddly enough, we’re going to get into a situation where people are going to start to get extremely creative, because I think sports in one form or another are going to come back, maybe not attendance at stadiums or people viewing it. But our event people are not – which are clearly they are most affected to this whole thing, are coming up with incredible ways that I, as an individual, could have never even imagined that we would be able to do. So, we’re taking this – the first thing that we did in this crisis is we went out and we increased without sacrificing our credit rating, our liquidity, to make sure and make certain that versus every single one of our competitors, we have far more resources that may do because some of them because of the acquisitions that they’ve made in the past or recent past. So that, from my experience in prior crisis, is the key, the fundamental to making sure that your company prospers and recovers from this situation. Then what we’ve done is we’ve gone out very thoughtfully in taking advantage of every single government program that’s out there. And then finally, as a result, we’ve had to adjust our payrolls in anticipation of what our clients – we think our client is going to spend and when they’re going to come back. I don’t think it’s going to be rosy, but we do fully expect to bring many of those people back as we get later and later into the year. So, I’m not prepared to give you numbers yet, but I can assure you that the actions that we’ve taken have been thoughtful and with a view, a very strong view that when a recovery starts, we’ll be well resourced to recover quickly. I don’t know if Phil wants to add anything to that?

Yes. I think it’s hard, Julien, for us to give a – an insightful and meaningful number, if you will, as to what we expect in Q3.

Sorry, my question was just for Q2, just Q2.

So, in Q2, I think just to add to John’s comments, to give you a sense for some size. Certainly, the Events businesses and the field marketing businesses we have were and will be most affected most quickly. And those businesses are – the Events business is probably roughly 4% of our revenue, and the field marketing business is less than 3% in the first quarter, as an example. And some of the businesses within events and field marketing, we found, interestingly, in the last few weeks and month as some of those clients while they certainly have reduced their spend pretty quickly, they do want to keep our talented people around and are willing to work out some solutions with us to keep them on the payroll and keep them working on virtual programs and things like that for their brands. So, it isn’t all doom and gloom, even within those disciplines. But I think John’s assessment of directional guidance of double digits for the second quarter is probably about as much as we’re willing to say at the moment, given the uncertainty still.

Okay, sure and thanks for that. The second question, I have three. You said that you were up roughly three in the first two months and down three in March. But I guess the second half of March is quite different because that’s when the lockdown started in many countries. Can we have organic trends in the last two weeks of March? And I guess, some countries are different, so either you give us a global number or by countries, but some color on the last two weeks of March, please?

Julien, I wish we were that good. Let me tell you what I think because I haven’t wasted a single moment of my time analyzing what happened in the last two weeks of March. But we knew – I mean some of our events businesses, for instance, are very – have been very profitable, and we expect them to be, again, especially in China and other markets around the world. They were canceled. I think we even mentioned that in our year-end call, which we talked about in early February. We saw the impact of those cancellations and certainly, in March, to the extent they were scheduled in March, we’ve also seen them sent. So, I’m pretty proud actually and pretty delighted that we came out of the first quarter with 0.3% organic growth. I mean, because we were doing just fine. So – but in terms of doing an analysis of what happened in the last two weeks of March. I have to tell you, with everything else that’s going on, that has not been one of my areas of focus. I don’t know if Phil wants to add anything?

Yes. I mean just to be clear, we actually don’t have access to that data. We don’t close our books weekly. It’s a different – in the professional services business, it’s a different type of business than a retail example or a business like that, where they do have a process in place where they are tracking sales daily or weekly. The numbers just don’t come together in that way. But I think, certainly, the discussions we had and have had with our businesses, as John referred to, there was a much greater sense near the end of March of the impact this was going to have, and we’ve been dealing with it in real-time ever since.

Okay, very good. Last question, you’ve given no indication of cost, but WGP has highlighted £700 million of cost savings and Publicis €700 million. I don’t know, can you give us an indication of cost savings? Or if you can’t do that, maybe operational gearing, each three points of organic decline is impacting operating profit margin by X basis points. I mean some numerical colors on cost would be welcome.

I’ve never spoken about this publicly anyway. In 2013, when we were going through the proposed merger of Omnicom and Publicis, the magic number for synergies was always $500 million. Just humorous to see it again in 2020. The cost cuts we’ve taken and the annual impact of them have been appropriate to the level of revenue expectation that we have. We’ll be in a much, much better position later in the quarter to tell you what those actions were and what they weren’t. We’re not setting an object, a goal that we’re willing to announce in public as to the amount of savings that we’re about to – that we’re going to achieve by decimating parts of our staff. What we’re doing is thoughtfully looking at a client-by-client, office-by-office and taking the appropriate actions to make certain that we restore our profitability as quickly as possible. So, I cannot join my colleagues in giving you a number to cheer about or to put down so we can measure ourselves about did we get to it or not?

Yes. I think, I think the only thing I would add to John’s comments is that the approach that we’re taking is one that’s going to be agency-by-agency, region – market-by-market, region-by-region, business-by-business. And the approach is going to have to be different based on all those factors. And it really is about the processes about trying to realign our cost structure at the lowest level, the agency level with the revenues at that level. And when you add up all the numbers, they’re going to add up to a big number if our revenues come down by a big number relative to our past history is what I’m referring to in terms of big. So that number is going to change from what it was a week ago and what it will be a week from now because it’s an iterative process. And we’re going to try and do the right thing, the right thing for our people and the right thing for long-term sustainability of our business. And we’ll have a number, certainly when we talk to you next.

And the only thing I might add is, I’m not offended by the question at all. I think it’s the foolishness of my competitors to have thrown out a number to you when they don’t even know what is going to be required to rightsize their business. Unless they were holding on to adjustments that they couldn’t justify to in the past and throw them out and using COVID-19 as an excuse. So some of its experience probably, but it’s all nonsense at this point. We’ll let you know as soon as we do, when we do. Thanks.

All right. Very good. Thank you very much.

You’re welcome.

Your next question comes from the line of Benjamin Swinburne from Morgan Stanley. Please go ahead.

Thanks. Good morning. I have two questions for John. First, we’ve sort of seen this kind of gradual increase in sort of trade barriers and protectionists, at least rhetoric around the world. And it does seem like COVID-19 maybe increasing some of those trends. And as a company who deals with multinationals and global trade is important to the overall business, I’m just wondering, when you look at this crisis, John, if you think about that having a long-term impact on the business, or maybe you think we’re overreacting and it’s, again, mostly political rhetoric, but you guys are sort of uniquely positioned in sort of media to think about these things and what they might mean. So I would love to get your thought on that question. And secondly, you guys have been disposing assets over the last couple of years. I’m wondering under the sort of umbrella of structural long-term changes as a result of COVID-19 to the agency business, if you think this may prove to be an accelerant in either further asset sales or maybe actually even consolidation, just given some of the weaker competitors of yours out there, who have declining revenues heading into this situation. So, two kind of bigger questions I’d love to get your thoughts on.

Sure. In terms of globalization and the impacts of this, it is going to have, I think, a profound impact on what companies do moving forward. Our consumer-facing clients are going to want to continue to expand into those markets because of the population and the potential growth there. Where I’ve heard the most concern, I guess, or reevaluation is companies where their supply chain has been put in place, principally because of the basis of where the lowest cost provider was. And people seeing that in this type of an environment that free type of access to every single market in the world without consideration to any pandemic or other type of pandemic interruption is something that we’re going to have to rethink as we come out of this. But our clients in China are spending because China is basically back open again. People are actually going to car dealerships in China, where they’re not allowed to go to car dealerships that are closed in the United States. So there’s going to be very, very thoughtful and long considerations about not so much, once you get pass where the consumer is. Some of the ways that companies have operated up until now, and we’ll have to reevaluate. Your second question was…

Dispositions or consolidation in the industry? Is this a catalyst for either of those in your mind?

Certainly, not a catalyst. I mean we made at this for close to three years.

Yes.

Yes. And I’m not going anywhere, but I did have a secret book. I was going to leave through to my successor as to what I thought should happen. But I can assure you, I’m not going anywhere during this. So we’re going to be looking at markets. We’re going to be looking – I don’t think we’re going to be exiting markets, but we’re going to look to see how we should present ourselves in those markets and how we should service our international clients in those markets and what the local market potential is for the brands that we have represented there. So yes, in a funny way, we’re going to use this event to properly size our business and to take whatever adjustments we need to take to make it – that is absolutely stronger coming out of this than it was going into this. And we’re in pretty good shape going into it.

Thanks a lot.

Sure. I think given the market is going to open shortly, I think we have time for one more question, operator.

Okay. That question comes from the line of Tim Nollen from Macquarie. Please go ahead.

Thanks very much. Let me – if I can just kind of tie a few things together here. So it sounds like the Q2 revenue impact is probably going to be worse than we’ve ever seen at least in our memories. But you’re taking as aggressive a cost action as probably you certainly did versus 2009. When I looked back at my numbers and you were down 120 basis points peak to trough 2007 to 2009 and full year. Like you’re on track to do perhaps even better than that now. I guess the question then is, are there permanent changes that might come out of this on the cost side? John, you mentioned real estate. You’ve talked a lot about the use of technology. We’ll see what happens with staffing levels, et cetera, and people come back after furloughs. But are there permanent margin positive impacts that could come out of this?

Well, the good news is the same management, unfortunately, that was here in 2009 and took all those actions is still here now. So we are taking, I think, what the appropriate actions are. Yes, I think every aspect of our business is going to change. What – in addition to all of the actions and all the immediate day-to-day things that we’ve been engaged with during the last five weeks, especially. During that same period of time, I established three separate committees: one to look at the media business; one to look at the advertising business; and other to look at the Public Relations business, to go away, forget the day-to-day of what’s happening and to – in a blue sky type of way with a clean sheet of paper, tell me how those services should be performed in the future without any consideration of costs and adjustments, but just to give me a very clear sight as to the things we should be looking towards as we emerge from this. And I’m expecting some dramatic answers and goals and objectives that we can look to accomplish. So yes, I do think that the business is going to change. I think once we get through all the restructuring costs and everything else that people are going to have to take, it will be positive. And you are correct. I mean, fixed costs, for instance, like real estate, we have absolutely proven that people can work from home. We believe that at the corporate level going into this and had resistance from maybe some of our operating people who weren’t so quick to accept that kind of point of view, but they’ve all learned and they’ve been fascinated and amazed at the resilience of their staff in the way that they’ve been able to do that. So that’s only one aspect. We’ve also gotten without having to go through the rhetoric or the procedure of having production houses and postproduction houses and those capabilities, which delay the moment from when an idea is created and a brief is created to the execution of that. It’s been fascinating to see how the people who have traditionally thought in those terms have changed the way that they think and when the difference between getting a brief and having an executed super idea to put out has really collapsed in a very positive way. So I think the organization that will emerge from this will be incredibly strong and it will be – and it will have adjusted to the environment that we’re going to be working in going forward. So despite all those actions that we have to take and all this other stuff, I’m incredibly optimistic about the business as we move in and out of this period and into the future.

Thanks a lot.

Okay. Thank you all for joining us on the call. We appreciate it. Take care.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T teleconference. You may now disconnect.