Omnicom Group Inc. · NYSE:OMC
Omnicom — Q4 2012 Earnings Presentation
27 slides from Omnicom's earnings presentation, Feb 12, 2013
Slide 1: Fourth Quarter 2012 Results
Fourth Quarter 2012 Results February 12, 2013
Slide 2: 2012 vs. 2011 P&L Summary
2012 vs. 2011 P&L Summary Fourth Quarter Full Year 2012 2011 % 2012 2011 % Revenue $ 3,944.5 $ 3,852.9 2.4% $ 14,219.4 $ 13,872.5 2.5% EBITA (a) 573.9 511.1 12.3% 1,905.3 1,762.5 8.1% % Margin 14.5% 13.3% 13.4% 12.7% Amortization of Intangibles 25.9 23.7 101.1 91.4 Operating Income $ 548.0 $ 487.4 1
Slide 3: 2012 vs. 2011 P&L Summary (Net Income)
2012 vs. 2011 P&L Summary Fourth Quarter Full Year 2012 2011 % 2012 2011 (b) % Operating Income $ 548.0 $ 487.4 12.4% $ 1,804.2 $ 1,671.1 8.0% % Margin 13.9% 12.7% 12.7% 12.0% Net Interest Expense 40.3 30.3 144.6 122.1 (a) (a) Income Taxes 137.3 156.8 527.1 505.8 % Tax Rate 27.0% 34.3% 31.8% 32.7% I
Slide 4: 2012 vs. 2011 Net Income and Earnings Per Share
2012 vs. 2011 Net Income and Earnings Per Share Fourth Quarter Full Year 2012 2011 2012 2011 Net Income - Omnicom Group $ 307.1 $ 271.9 $ 998.3 $ 952.6 Net Income - Participating Securities (7.2) (3.5) (22.5) (10.7) Net Income Available for Common Shares $ 299.9 $ 268.4 $ 975.8 $ 941.9 Diluted Share
Slide 5: 2012 Total Revenue Change
2012 Total Revenue Change Fourth Quarter Full Year $ % $ % Prior Period Revenue $ 3,852.9 $ 13,872.5 Foreign Exchange (FX) Impact (a) (28.2) -0.7% (310.0) -2.2% Acquisition/Disposition Revenue (b) 15.1 0.4% 95.0 0.7% Organic Revenue (c) 104.7 2.7% 561.9 4.0% Current Period Revenue $ 3,944.5 2.4% $ 1
Slide 6: 2012 Revenue by Discipline
2012 Revenue by Discipline Fourth Quarter Full Year Specialty Specialty 7.4% 7.3% PR PR 8.8% 9.1% Advertising Advertising 49.1% 47.6% CRM CRM 34.7% 36.0% % Organic % Organic $ Mix % Growth Growth (a) $ Mix % Growth Growth (a) Advertising $ 1,934.9 4.6% 5.4% Advertising $ 6,762.8 4.6% 6.6% CRM 1,368.
Slide 7: 2012 Revenue by Geography
2012 Revenue by Geography Fourth Quarter Full Year UK UK 8.7% 8.8% Rest of Rest of World World 23.2% 23.1% Euro Euro Markets Markets 16.7% U.S. 16.3% U.S. 51.4% 51.8% February 12, 2013 6
Slide 8: 2012 Revenue by Geography
2012 Revenue by Geography Fourth Quarter Full Year $ Mix $ Growth $ Mix $ Growth United States $ 2,026.6 $ 97.9 United States $ 7,363.7 $ 315.0 Organic 95.5 Organic 317.8 Acquisition 2.4 Acquisition (2.8) International $ 1,917.9 $ (6.3) International $ 6,855.7 $ 31.9 Organic 9.2 Organic 244.1 Acquis
Slide 9: Revenue by Industry
Revenue by Industry Full Year – 2012 Full Year – 2011 Growth T&E Auto T&E Auto Auto 14.7% 6% 8% 6% 7% Telcom Telcom 6% 7% Consumer Food & Beverage -0.1% Consumer Products Tech Products 9% 9% Consumer Products 4.1% 9% Tech Financial Financial 9% Services Financial Services -6.0% Services 9% Retail 9%
Slide 10: Cash Flow Performance
Cash Flow Performance Full Year 2012 2011 Net Income $ 1,117.5 $ 1,060.4 Depreciation and Amortization Expense 282.7 273.7 Share-Based Compensation Expense 80.8 74.5 Other Non-Cash Items to Reconcile to Net Cash Provided by Operating (54.9) (b) (161.3) (c) Activities, net Free Cash Flow (a) $ 1,426.
Slide 11: Cash Flow Performance: Uses of Cash
Cash Flow Performance Full Year 2012 2011 Free Cash Flow (a) $ 1,426.1 $ 1,247.3 Primary Uses of Cash: Dividends (b) 397.8 269.1 Dividends paid to Noncontrolling Interest Shareholders 98.4 101.3 Capital Expenditures 226.3 185.5 Acquisitions and Payments for Additional Interest in Controlled Subsidia
Slide 12: Current Credit Picture
Current Credit Picture Full Year 2012 2011 EBITDA (a) $ 2,086.9 $ 1,944.8 Gross Interest Expense 179.7 158.1 EBITDA / Gross Interest Expense 11.6 x 12.3 x Total Debt / EBITDA 2.1 x 1.6 x Net Debt (b) / EBITDA 0.8 x 0.7 x Debt Bank Loans (Due Less Than 1 Year) $ 6 $ 10 CP & Borrowings Issued Under Re
Slide 13: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a) : Twelve Months Ended December 31, 2012 18.6% Twelve Months Ended December 31, 2011 18.8% Return on Equity (b) : Twelve Months Ended December 31, 2012 28.7% Twelve Months Ended December 31, 2011 26.9% (a) Return on Invested Capital is After Ta
Slide 14: Net Cash Returned to Shareholders through Dividends and Share Repurchases
Net Cash Returned to Shareholders through Dividends and Share Repurchases Omnicom’s Revenues and Net Income has doubled since 2002 (a) . From 2002 through 2012, Omnicom distributed over 99% of Net Income to shareholders through Dividends and Share Repurchases. 10.0 9.0 $9.12 $9.05 8.0 7.0 $6.79 Bill
Slide 15: Supplemental Financial Information
Supplemental Financial Information February 12, 2013 14 DRAFT
Slide 16: Omnicom Debt Structure
Omnicom Debt Structure Bank Loans $6 2032 Convert 2038 Convert $253 $407 2016 Senior Notes $1,000 2019 Senior Notes 2022 Senior Notes $500 $1,250 2020 Senior Notes $1,000 The above chart sets forth Omnicom’s debt outstanding at December 31, 2012. The amounts reflected above for the 2016, 2019, 2020
Slide 17: Omnicom Debt Maturity Profile
Omnicom Debt Maturity Profile 2022 Senior Notes $1,250 2016 2020 Senior Notes Senior Notes $1,000 $750 2019 Senior Notes $500 2038 Convert 2032 Convert $250 Other Borrowings $0 Our 2038 Convertible Notes are putable in June 2013, 2018, 2023 and annually thereafter until maturity. Our 2032 Convertibl
Slide 18: 2012 Acquisition Related Expenditures
2012 Acquisition Related Expenditures Full Year Acquisitions of Businesses and Affiliates (a) $ 101.1 Additional Interest in Controlled Subsidiaries (b) 32.0 Earn-outs on acquisitions completed prior to January 1, 2009 (c) 31.7 Earn-outs on acquisitions completed after January 1, 2009 (c) 32.2 Total
Slide 19: Condensed Cash Flow
Condensed Cash Flow Full Year 2012 2011 Net Income $ 1,117.5 $ 1,060.4 Share-Based Compensation Expense 80.8 74.5 Depreciation and Amortization 282.7 273.7 Gain on Remeasurement of Equity Interest in Clemenger Group - (123.4) Gain on Remeasurement of Equity Interest in Affiliates (2.1) (15.1) Impair
Slide 20: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 3 Months Ended December 31 Full Year 2012 2011 2012 2011 Revenue $ 3,944.5 $ 3,852.9 $ 14,219.4 $ 13,872.5 Operating Expenses, excluding Depreciation and Amortization 3,324.4 3,295.3 12,132.5 11,927.7 EBITDA 620.1 557.6 2,086.9 1,944.8 Depreciation 46.2 46.5 181.6
Slide 21: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Full Year 2012 2011 Net Free Cash Flow $ (316.7) $ (457.3) Cash Flow items excluded from Net Free Cash Flow: Changes in Operating Capital 25.2 68.0 Proceeds from Short-term & Long-term Debt, net 1,269.9 (43.1) Repayment of Convertible Debt - (0.1) Other Financing
Slide 22: Fourth Quarter Acquisition: Promise Corporation
Fourth Quarter Acquisition Established in 2003, Promise Corporation is a co-creation consultancy specializing in innovation, brand strategy and customer insights. Co-creation is the act of bringing together multiple stakeholder groups to help solve business challenges and take advantage of opportuni
Slide 23: Fourth Quarter Acquisition: Capstrat
Fourth Quarter Acquisition Established in 1995, Capstrat is a strategic communications firm. The Company provides an integrated service offering to their clients that includes Public Relations, Public Affairs and Marketing Communications (branding, identity development, graphic design, etc). Also in
Slide 24: Fourth Quarter Acquisition: Mother Tongue Writers
Fourth Quarter Acquisition Formed in 1992, Mother Tongue Writers specializes in marketing translation, creative adaptation of advertising copy and transcreation services. It has an international network of experienced copywriters and is recognized for quality, speed and cost effectiveness, ensuring
Slide 25: Fourth Quarter Acquisition: Magnon Group
Fourth Quarter Acquisition Founded in 2000, Magnon Group is an award winning digital agency specializing in graphic design for web and mobile, digital marketing including search and social media optimization, applications development, online brand strategy consulting, and eCommerce solutions. Magnon
Slide 26: Fourth Quarter Acquisition: Toinen Helsinki
Fourth Quarter Acquisition Founded in 2005, Toinen Helsinki was created with the mission to create powerful engagements between brands and consumers across all areas of media. Ainoa, a subsidiary company, was founded in 2008 to focus on online campaign implementation, optimization and analytics. Toi
Slide 27: Disclosure
Disclosure The preceding materials have been prepared for use in the February 12, 2013 conference call on Omnicom’s results of operations for the period ended December 31, 2012. The call will be archived on the Internet at http://www.omnicomgroup.com/financialwebcasts. Forward-Looking Statements Cer