Omnicom Group Inc. · NYSE:OMC
Omnicom — Q3 2008 Earnings Presentation
31 slides from Omnicom's earnings presentation, Oct 21, 2008
Slide 1: Omnicom Group Third Quarter 2008 Results
Omnicom Group THIRD QUARTER 2008 RESULTS Investor Presentation October 21, 2008 Exhibit 99.2
Slide 2: Forward-Looking Statements
The following materials have been prepared for use in the October 21, 2008 conference call on Omnicom’s results of operations for the period ended September 30, 2008. The call will be archived on the Internet at http://www.omnicomgroup.com/financialwebcasts . Forward-Looking Statements Certain of th
Slide 3: 2008 vs. 2007 P&L Summary
2008 vs. 2007 P&L Summary % % Revenue 3,316.2 $ 3,101.4 $ 6.9% 9,988.5 $ 9,068.1 $ 10.1% Operating Income 373.4 350.2 6.6% 1,241.0 1,127.3 10.1% % Margin 11.3% 11.3% 12.4% 12.4% Net Interest Expense 20.7 19.3 50.4 59.8 Profit Before Tax 352.7 330.9 6.6% 1,190.6 1,067.5 11.5% % Margin 10.6% 10.7% 11.
Slide 4: 2008 vs. 2007 Earnings Per Share
2008 vs. 2007 Earnings Per Share Earnings per Share: Basic Diluted Growth Rate, Diluted Weighted Average Shares (millions): Basic Diluted Dividend Declared Per Share $ 0.69 0.69 11.3 309.1 310.7 $0.150 Third Quarter $ 0.62 0.62 324.0 328.2 $0.150 $ 2.32 2.30 15.0 315.0 317.7 $0.450 Year to Date $ 2.
Slide 5: 2008 Total Revenue Growth
2008 Total Revenue Growth (a) To calculate the FX impact, we first convert the current period’s local currency revenue using the average exchange rates from the equivalent prior period to arrive at constant currency revenue. The FX impact equals the difference between the current period revenue in U
Slide 6: 2008 Revenue By Discipline
Advertising 42.8% PR 9.6% CRM 37.9% Specialty 9.7% Third Quarter Year to Date (a) “Growth” is the year-over-year increase or decrease from the prior period. 2008 Revenue By Discipline $ Mix % Growth(a) $ Mix % Growth(a) Advertising 1,382.0 6.9% Advertising 4,273.2 10.0% CRM 1,305.5 12.0% CRM 3,786.8
Slide 7: 2008 Revenue By Geography
Euro Markets 21.7% United States 51.8% UK 10.2% Other 16.3% Third Quarter 2008 Revenue By Geography Year to Date (a) “Growth” is the year-over-year increase or decrease from the prior period. $ Mix $ Growth(a) $ Mix $ Growth(a) United States 1,718.0 $ 63.1 $ United States 5,130.5 $ 272.1 $ Organic 4
Slide 8: 2008 Revenue By Industry
2008 Revenue By Industry Charts represent the amount of revenue attributable to each industry expressed as a percentage of the total revenue from Omnicom’s 1,000 largest clients for the period ended September 30, 2008.
Slide 9: Cash Flow – GAAP Presentation (condensed)
Cash Flow – GAAP Presentation (condensed) Net Income 729.3 $ 661.9 $ Share-Based Compensation Expense 44.3 53.4 Depreciation and Amortization 176.2 150.8 Other Non-Cash Items to Reconcile to Net Cash Provided by Operations 86.7 70.6 Other Changes in Working Capital (789.2) (752.6) Excess Tax Benefit
Slide 10: Current Credit Picture
Current Credit Picture (a) “EBITDA” and “Gross Interest Expense” calculations shown are the latest twelve month (“LTM”) figures for the periods specified. EBITDA is defined as operating income before interest, taxes, depreciation and amortization. Although EBITDA is a non-GAAP measure, we believe EB
Slide 11: Current Liquidity Picture
Current Liquidity Picture (a) Credit facility expires June 23, 2011. (b) Represents uncommitted facilities in the U.S., U.K. and Canada as of September 30, 2008. These amounts are excluded from our available liquidity for purposes of this presentation. Total Amount Of Facility Outstanding Available
Slide 12: Omnicom Debt Structure: Supplemental Information
Omnicom Debt Structure Supplemental Information
Slide 13: Omnicom Debt Structure
Omnicom Debt Structure The above chart reflects Omnicom’s debt outstanding at September 30, 2008. The amount reflected above for the 10 Year Notes represents the value of these notes at maturity on April 15, 2016.
Slide 14: Omnicom Debt Structure
Omnicom Debt Structure The Bank Facility and Commercial Paper Program together provide liquidity in the event any convertible notes are put. We then have flexibility to refinance in different debt capital markets. Our 2031 Notes are putable annually, with the next put date in February 2009. Our 2032
Slide 15: Senior Notes Due 2016
Senior Notes Due 2016 Principal Amount $1 Billion Co - Issuers Omnicom Group, Omnicom Finance, Omnicom Capital Date March 29, 2006 Maturity April 15, 2016 Security Unsecured, pari passu with Bank Facility Coupon 5.90% Spread Over Comparable Treasury at Issue 1.30% Rating Moody’s: Baa1 S&P: A- Fitch:
Slide 16: 2031 Convertible Notes
2031 Convertible Notes Principal Amount $847 Million Co - Issuers Omnicom Group, Omnicom Finance, Omnicom Capital Date February 7, 2001 Maturity February 7, 2031 with annual puts each February Security Unsecured, pari passu with Bank Facility Coupon 0.00% Conversion Price $55 Rating Moody’s: Baa1 S&
Slide 17: 2032 Convertible Notes
2032 Convertible Notes Principal Amount $727 Million Co - Issuers Omnicom Group, Omnicom Finance, Omnicom Capital Date March 6, 2002 Maturity July 31, 2032 with puts each July Security Unsecured, pari passu with Bank Facility Coupon 0.00% Conversion Price $55 Rating Moody’s: Baa1 S&P: A- Fitch: A-
Slide 18: 2038 Convertible Notes
2038 Convertible Notes Principal Amount $467 Million Co - Issuers Omnicom Group, Omnicom Finance, Omnicom Capital Date June 10, 2003 Maturity June 15, 2038 with puts in June of 2010, 2013, 2018, 2023 and annually thereafter until maturity Security Unsecured, pari passu with Bank Facility Coupon 0.00
Slide 19: Current Bank Credit Facility
Current Bank Credit Facility Amount $2.5 Billion Type Unsecured Revolving Credit Maturity 5 Years – June 2011 Facility Fee 13BP per annum Drawn Rate Libor +17BP Covenants -Maximum Debt to EBITDA 3:1 -Minimum Interest Coverage 5:1
Slide 20: Current Bank Credit Facility – Distribution of 32 Banks
North America Bank of America ($200) Wells Fargo ($175) Northern Trust ($50) PNC ($50) Union Bank of California ($50) US Bancorp ($50) Scotia ($40) Comerica ($25) Key ($25) Fifth Third ($15) Europe Societe Generale ($150) Deutsche ($150) BNP Paribas ($130) BBVA ($100) Commerzbank ($80) Barclays ($50
Slide 21: Current Omnicom Credit Ratings
Moody’s S&P Fitch Current Omnicom Credit Ratings Long Term Ratings Baa1 A- A- Short Term Ratings P2 A2 F2 Outlook Stable Stable Stable
Slide 22: Reconciliation of Operating Income to EBITDA
Reconciliation of Operating Income to EBITDA The covenants contained in our credit facility are based on the EBITDA ratios as presented on page 9 of this presentation. The above reconciles our GAAP Operating Income to EBITDA for the periods presented. EBITDA is a non-GAAP financial measure within th
Slide 23: Acquisitions Summary
Acquisitions Summary
Slide 24: Acquisition Related Expenditures
Acquisition Related Expenditures Note: See appendix for acquisition profiles. Includes acquisitions of a majority interest in agencies resulting in their consolidation. Includes acquisitions of additional equity interests in existing affiliate agencies resulting in their majority ownership and conso
Slide 25: Potential Earn-out Obligations
Potential Earn-out Obligations The following is a calculation of future earn-out obligations as of September 30, 2008, assuming that the underlying acquired agencies continue to perform at their current levels: (a) (a) The ultimate payments will vary as they are dependent on future events and change
Slide 26: Potential Obligations
Potential Obligations (a) The ultimate payments will vary as they are dependent on future events and changes in FX rates. In conjunction with certain transactions, Omnicom has agreed to acquire (at the sellers’ option) additional equity interests. If these rights are exercised, there would likely be
Slide 27: Third Quarter Acquisitions: Barefoot
Third Quarter Acquisitions Barefoot Barefoot is a fully integrated interactive marketing communication agency. The company’s service programs include strategy, on-line, consumer promotion, planning and advertising. From this platform the company offers high quality end to end service in brand strate
Slide 28: Third Quarter Acquisitions: Paul Wilmot Communications
Third Quarter Acquisitions Paul Wilmot Communications Paul Wilmot Communications provides public relations, communications and publicity services within the fashion and luxury goods arenas. The agency is comprised of five divisions: Fashion, Beauty & Wellness, Accessories, Culture & Lifestyle and Sp
Slide 29: Third Quarter Acquisitions: TRO
Third Quarter Acquisitions TRO TRO (The Russell Organization) is a leading experiential marketing and events agency, specializing in the use of face-to-face communication and the live medium. TRO designs, produces and delivers brand experiences and environments which achieve real results for B2C and
Slide 30: Third Quarter Acquisitions: The Eleven Agency
Third Quarter Acquisitions The Eleven Agency The Eleven Agency is a field marketing communications company specializing in Sales Training, Training Video Production, E-Learning, Recruiting, Assisted Sales at Retail, Retail Merchandising and Field & Event Marketing. The Eleven Agency is located in Ir
Slide 31: Third Quarter Acquisitions: Tarek Nour
Third Quarter Acquisitions Tarek Nour The DDB network acquired a 49% affiliate interest in TN Holdings, the holding company for the Tarek Nour group. Established in 1978, TN Holdings is one of Egypt’s largest marketing and corporate communications companies. The group’s twenty companies provide a wi