Omnicom Group Inc. · NYSE:OMC
Omnicom — Q4 2023 Earnings Presentation
23 slides from Omnicom's earnings presentation, Feb 6, 2024
Slide 1: 2023 Fourth Quarter & Full Year
2023 Fourth Quarter & Full Year February 6, 2024
Slide 2: Highlights
Highlights Revenue Income • 4.4% organic revenue growth in Q4 2023 • Adjusted operating income $661.2 million, up 2.9% yr/yr in Q4. Adjusted EBITA $682.6 • Advertising & Media, led by the performance of million, up 3.0% yr/yr in Q4(i) our global media businesses, had 9.3% organic growth in Q4 2023 •
Slide 3: Income Statement Summary
Income Statement Summary Fourth Quarter Full Year 2023 2022 2023 2022 Revenue $ 4,060.9 $ 3,868.2 $ 14,692.2 $ 14,289.1 Operating Expenses (a) 3,414.2 3,225.5 12,587.5 12,205.8 Operating Income 646.7 642.7 2,104.7 2,083.3 Net Interest Expense 26.8 25.9 111.8 137.9 Income Tax Expense(b) 164.2 163.5 5
Slide 4: Revenue Change
Revenue Change Fourth Quarter Full Year $ %∆ $ %∆ Prior Period Revenue $ 3,868.2 $ 14,289.1 Foreign exchange rate impact(1) 47.0 1.2 % (28.3) (0.2)% Acquisition revenue, net of disposition revenue(2) (25.6) (0.7)% (153.1) (1.1)% Organic growth(3) 171.3 4.4 % 584.5 4.1 % Current Period Revenue $ 4,06
Slide 5: Revenue by Discipline
Revenue by Discipline Fourth Quarter Full Year % Organic % Organic Revenue % of Rev % Growth Growth(3) Revenue % of Rev % Growth Growth(3) Advertising & Media $ 2,294.0 56.5 % 11.1 % 9.3 % Advertising & Media $ 7,891.2 53.7 % 6.2 % 6.5 % Precision Marketing 360.8 8.9 % 0.2 % (1.1)% Precision Marketi
Slide 6: Revenue by Region
Revenue by Region Fourth Quarter Full Year % Organic % Organic Revenue % of Rev % Growth Growth(3) Revenue % of Rev % Growth Growth(3) United States $ 1,940.0 47.8 % (0.6)% 0.6 % United States $ 7,471.6 50.9 % 1.4 % 2.6 % Other North America 122.2 3.0 % (3.2)% (1.3)% Other North America 479.4 3.3 %
Slide 7: Revenue by Industry Sector
Revenue by Industry Sector Fourth Quarter Full Year 2023 2022 2023 2022 Pharmaceuticals and Healthcare 17% 18% 16% 16% Food and Beverage 15% 14% 15% 14% Auto 11% 10% 12% 10% Technology 8% 10% 8% 11% Consumer Products 9% 7% 8% 8% Financial Services 7% 8% 8% 7% Travel & Entertainment 6% 7% 6% 7% Retai
Slide 8: Operating Expense Detail
Operating Expense Detail Fourth Quarter Full Year 2023 % of Rev 2022 % of Rev 2023 % of Rev 2022 % of Rev Revenue $ 4,060.9 $ 3,868.2 $ 14,692.2 $ 14,289.1 Operating expenses: Salary and related costs 1,906.1 46.9 % 1,853.4 47.9 % 7,212.8 49.1 % 7,197.9 50.4 % Third-party service costs(c) 884.0 21.8
Slide 9: Income Statement Summary - Non-GAAP Adjusted
Income Statement Summary - Non-GAAP Adjusted Fourth Quarter Full Year Non-GAAP Non-GAAP Non-GAAP Reported Non-GAAP Adjusted Reported Reported Non-GAAP Adjusted Reported Non-GAAP Adjusted 2023 Adjustments 2023 2022 2023 Adjustments 2023 2022 Adjustments 2022 Revenue $4,060.9 $ — $ 4,060.9 $3,868.2 $1
Slide 10: Cash Flow Performance
Cash Flow Performance Year Ended December 31, 2023 2022 Free Cash Flow(4) $ 1,884.8 $ 1,770.5 Primary Uses of Cash: Dividends paid to Common Shareholders 562.7 581.1 Dividends paid to Noncontrolling Interest Shareholders 70.9 79.5 Capital Expenditures 78.4 78.2 Acquisition payments, including paymen
Slide 11: Credit & Liquidity
Credit & Liquidity $ Millions Year Ended December 31, 2023 2022 EBITDA(5) $ 2,315.8 $ 2,302.7 Total Debt / EBITDA 2.4 x 2.4 x Net Debt(6) / EBITDA 0.5 x 0.5 x Debt Bank Loans (Due Less Than 1 Year) $ 10.9 $ 16.9 USD-denominated Senior Notes 4,150.0 4,150.0 EUR-denominated Senior Notes 1,106.0 1,069.
Slide 12: Historical Returns
Historical Returns Return on Invested Capital (ROIC)(7) Return on Equity(8) Twelve months ended December 31, 2023 25.8 % Twelve months ended December 31, 2023 40.5 % Twelve months ended December 31, 2022 27.7 % Twelve months ended December 31, 2022 40.4 % In millions. See Definitions on page 13. 12
Slide 13: Notes
Notes Financial (a) For the year ended December 31, 2023, operating expenses included real estate operating lease impairment charges, severance, and other exit costs of $191.5 million ($145.5 million after tax) related to repositioning actions we took in the first and second quarters of 2023 to redu
Slide 14: Appendix
Appendix 14
Slide 15: Acquisition - Coffee & TV
Acquisition - Coffee & TV • November 2023 • A global, full-service, artist-led creative studio with locations in London, Los Angeles, and New York • Award-winning specialists in visual effect, design, and color across advertising, long-form, episodic and feature films • www.coffeeand.tv 15
Slide 16: Acquisition - Flywheel Digital
Acquisition - Flywheel Digital • Announced October 30, 2023, closed January 2, 2024 • e-commerce operations, retail media execution, and market intelligence across the world's leading digital marketplaces "By connecting Flywheel Commerce Cloud's product and transaction data with Omni's audience • Un
Slide 17: Free Cash Flow
Free Cash Flow Year Ended December 31, 2023 2022 Net Income $ 1,473.2 $ 1,403.8 Depreciation and Amortization of Intangible Assets 211.1 219.4 Share-Based Compensation 84.8 81.7 Real estate and other repositioning costs 191.5 — Gain on disposition of subsidiary (78.8) — Non-cash charge related to th
Slide 18: Operating Expense Detail - Constant $
Operating Expense Detail - Constant $ Fourth Quarter Full Year 2023 2023 C$(e) 2022 2023 2023 C$(e) 2022 Operating expenses: Salary and related costs $ 1,906.1 $ 1,876.9 $ 1,853.4 $ 7,212.8 $ 7,215.7 $ 7,197.9 Third-party service costs(c) 884.0 876.4 786.5 2,917.9 2,921.4 2,585.5 Third-party inciden
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Year Ended December 31, 2023 2022 Net Cash Used in Operating Activities $ 1,421.9 $ 926.5 Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (462.9) (844.0) Free Cash Flow $ 1,884.8 $ 1,770.5 Net Increase (Decrease) in Cash and Cash Equival
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Year Ended December 31 December 31 2023 2022 2023 2022 Net Income - Omnicom Group Inc. $ 425.7 $ 429.8 $ 1,391.4 $ 1,316.5 Net Income Attributed to Noncontrolling Interests 32.1 26.1 81.8 87.3 Income From Equity Method Investments 2.1 2.6 5.2 5.2 Income Ta
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 Net Income - Omnicom Group Inc.- Reported $ 425.7 $ 429.8 $ 1,391.4 $ 1,316.5 Net Income Attributed To Noncontrolling Interests 32.1 26.1 81.8 87.3 Income From Equity Method Investments 2.1 2.6 5.2 5
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations Fourth Quarter Full Year 2023 2022 2023 2022 Net Income - Omnicom Group Inc. - Reported $ 425.7 $ 429.8 $ 1,391.4 $ 1,316.5 Impact on Net Income related to: Real estate and other repositioning costs — — 145.5 — Charges arising from the effects of the war in Ukraine — — — 118
Slide 23: Disclosures
Disclosures The preceding materials have been prepared for use in the February 6, 2024 conference call on Omnicom’s results of operations for the three and twelve months ended December 31, 2023. The call will be archived on the Internet at http:// investor.omnicomgroup.com Forward-Looking Statements