Omnicom Group Inc. · NYSE:OMC
Omnicom — Q1 2018 Earnings Presentation
26 slides from Omnicom's earnings presentation, Apr 17, 2018
Slide 1: First Quarter 2018 Results
First Quarter 2018 Results April 17, 2018 Investor Presentation
Slide 2: 2018 vs. 2017 P&L Summary
2018 vs. 2017 P&L Summary First Quarter First Quarter 2018 (a) 2017 Revenue $ 3,629.6 $ 3,587.4 Operating Expenses (b) 3,207.9 3,171.7 Operating Profit 421.7 415.7 Net Interest Expense 46.9 45.4 Income Tax Expense 90.9 108.0 Tax Rate % 24.3% 29.2% Income from Equity Method Investments 0.8 0.1 Net In
Slide 3: 2018 vs. 2017 Earnings per Share – Diluted
2018 vs. 2017 Earnings per Share – Diluted First Quarter First Quarter 2018 (a) 2017 Net Income - Omnicom Group Inc. $ 264.1 $ 241.8 Net Income allocated to participating securities — (0.5) Net Income available for common shares $ 264.1 $ 241.3 Diluted Shares (millions) 231.5 236.5 Earnings per Shar
Slide 4: 2018 Total Revenue Change
2018 Total Revenue Change First Quarter $ %∆ Prior Period Revenue, as reported under ASC 605 $ 3,587.4 Foreign exchange rate impact (a) 151.1 4.2% Acquisition revenue, net of disposition revenue (b) (153.3) -4.2% Organic growth (c) 86.9 2.4% Impact of Adoption of ASC 606 (d) (42.5) -1.2% Current Per
Slide 5: 2018 Revenue by Discipline
2018 Revenue by Discipline First Quarter Healthcare 6.6% PR % Organic 9.5% $ Mix % Growth Growth (a) Advertising $ 1,901.3 -1.4% 1.6% CRM CRM Consumer 634.9 3.5% 6.9% Execution Experience & Support Advertising CRM Execution & 508.6 3.9% 1.2% 14.0% Support 52.4% PR 346.3 3.3% 0.7% CRM Healthcare 238.
Slide 6: 2018 Revenue by Region
2018 Revenue by Region First Quarter Latin Middle East America & Africa 3.0% 2.0% Asia Pacific % Organic 10.8% $ Mix % Growth Growth (a) North America $ 1,985.7 -7.2% -0.1% Euro UK 358.0 15.8% 3.1% Markets & Other 712.1 23.1% 9.7% Euro & Other Europe Europe 19.6% North Asia Pacific 392.0 4.5% 7.3% A
Slide 7: Revenue by Industry
Revenue by Industry First Quarter – 2018 First Quarter – 2017 T&E Auto T&E Auto 7% 10% 7% 9% Telcom Telcom 5% 5% Consumer Consumer Products Products 9% Tech 9% Tech 9% 9% Financial Financial Services Services 8% Retail 7% Retail 6% 6% Food & Food & Pharma & Beverage Pharma & Beverage Health 13% Heal
Slide 8: Cash Flow Performance
Cash Flow Performance Three Months Ended March 31 2018 2017 Net Income $ 284.7 $ 262.4 Depreciation and Amortization of Intangible Assets 69.4 72.7 Share-Based Compensation 17.5 19.3 Other Items to Reconcile to Net Cash Provided by Operating 3.7 0.9 Activities, net Free Cash Flow (a) $ 375.3 $ 355.3
Slide 9: Cash Flow Performance
Cash Flow Performance Three Months Ended March 31 2018 2017 Free Cash Flow (a) $ 375.3 $ 355.3 Primary Uses of Cash: Dividends paid to Common Shareholders 138.9 130.8 Dividends paid to Noncontrolling Interest Shareholders 16.3 10.3 Capital Expenditures 36.2 32.1 Acquisition of Businesses and Affilia
Slide 10: Current Credit Picture
Current Credit Picture Twelve months ended March 31 2018 2017 EBITDA (a) $ 2,368.6 $ 2,340.3 Gross Interest Expense on Indebtedness 227.1 212.9 EBITDA / Gross Interest Expense on Indebtedness 10.4 x 11.0 x Total Debt / EBITDA 2.1 x 2.1 x Net Debt (b) / EBITDA 1.0 x 1.0 x Debt Bank Loans (Due Less Th
Slide 11: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a): Twelve months ended March 31, 2018 21.3% Twelve months ended March 31, 2017 22.0% Return on Equity (b): Twelve months ended March 31, 2018 46.7% Twelve months ended March 31, 2017 52.0% (a) Return on Invested Capital is After Tax Reported Ope
Slide 12: Net Cash Returned to Shareholders through Dividends and Share Repurchases
Net Cash Returned to Shareholders through Dividends and Share Repurchases From 2008 through March 31, 2018, Omnicom distributed 106% of Net Income to shareholders through Dividends and Share Repurchases. 106% $12.0 105% $10.0 $10.3 106% $10.0 108% $8.9 3.6 3.7 108% $7.8 $8.0 3.1 $ In Billions 102% $
Slide 13: Supplemental Financial Information
Supplemental Financial Information April 17, 2018 12
Slide 14: Omnicom Debt Structure
Omnicom Debt Structure Bank Loans $9 2019 Senior Notes $500 2026 Senior Notes $1,400 2020 Senior Notes $1,000 2024 Senior Notes $750 2022 Senior Notes $1,250 The above chart sets forth Omnicom’s debt outstanding at March 31, 2018. The amounts reflected above for the 2019, 2020, 2022, 2024 and 2026 S
Slide 15: Omnicom Debt Maturity Profile
Omnicom Debt Maturity Profile 2026 Senior 2022 Notes $1,400 Senior Notes $1,200 2020 Senior Notes $1,000 2024 Senior $800 Notes 2019 $600 Senior Notes $400 $200 Other Borrowings $0 7 18 8 19 9 20 0 21 1 22 2 23 3 24 4 25 5 26 6 -1 -1 -1 -2 -2 -2 -2 -2 -2 -2 n- n- n- n- n- n- n- n- n- ec ec ec ec ec
Slide 16: 2018 Acquisition Related Expenditures
2018 Acquisition Related Expenditures Year to Date Acquisition of Businesses and Affiliates (a) $ 178.3 Acquisition of Additional Noncontrolling Interests (b) 23.0 Contingent Purchase Price Payments (c) 5.2 Total Acquisition Expenditures (d) $ 206.5 (a) Includes acquisitions of a majority interest i
Slide 17: Condensed Cash Flow
Condensed Cash Flow Three Months Ended March 31 2018 2017 Net Income $ 284.7 $ 262.4 Share-Based Compensation 17.5 19.3 Depreciation and Amortization of Intangible Assets 69.4 72.7 Other Items to Reconcile to Net Cash Provided by Operating Activities, net 3.7 0.9 Changes in Operating Capital (996.1)
Slide 18: 2018 P&L Summary – Impact of Adoption of ASC 606 on Reported Results
2018 P&L Summary – Impact of Adoption of ASC 606 on Reported Results First Quarter 2018 Excluding impact Reported under Adjustments of Adoption of ASC 606 ASC 606 Revenue $ 3,629.6 $ 42.5 $ 3,672.1 Operating Expenses 3,207.9 36.0 3,243.9 Operating Profit $ 421.7 $ 6.5 $ 428.2 The above table identif
Slide 19: 2018 vs. 2017 Non-GAAP Financial Measures – EBITA
2018 vs. 2017 Non-GAAP Financial Measures – EBITA First Quarter 2018 (a) 2017 Revenue $ 3,629.6 $ 3,587.4 Operating expenses (b) 3,207.9 3,171.7 Operating Profit 421.7 415.7 Operating Profit Margin % 11.6% 11.6% Add back: Amortization of intangible assets 27.5 30.4 EBITA (c) $ 449.2 $ 446.1 EBITA Ma
Slide 20: Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA
Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA Three Months Ended Twelve months ended March 31 March 31 2018 (a) 2017 2018 (a) 2017 Net Income - Omnicom Group Inc. $ 264.1 $ 241.8 $ 1,110.7 $ 1,172.0 Net Income Attributed to Noncontrolling Interests 20.6 20.6 103.8 100.8 Net Income
Slide 21: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Three Months Ended March 31 2018 2017 Net Cash Used in Operating Activities $ (620.8) $ (195.3) Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (996.1) (550.6) Free Cash Flow $ 375.3 $ 355.3 Three Months Ended March
Slide 22: Supplemental Information
Supplemental Information First Quarter 2018 (a) % of Rev 2017 % of Rev Revenue $ 3,629.6 $ 3,587.4 Operating expenses: Salary and service costs 2,712.8 74.7% 2,688.4 74.9% Occupancy and other costs 320.3 8.8% 302.0 8.4% Cost of services 3,033.1 2,990.4 Selling, general and administrative expenses 10
Slide 23: First Quarter Acquisition
First Quarter Acquisition Established in 2001, Snow Companies is a full service agency, specializing in patient storytelling on behalf of its Pharmaceutical clients. Snow Companies was the first in the industry to bring strategic, regulatory-compliant, real-life patient stories to direct-to-patient
Slide 24: First Quarter Acquisition
First Quarter Acquisition Founded in 2004, Brain Group services clients across a variety of industries through its three brands: Brainagency, which provides digital media strategy, planning, buying and research services; BrainConsulting, which specializes in digital transformation consulting; and Cr
Slide 25: 2017 Revenue by Discipline by Quarter
2017 Revenue by Discipline by Quarter Q1 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017 $ Mix $ Mix $ Mix $ Mix $ Mix Advertising $ 1,929.0 $ 2,027.2 $ 1,952.9 $ 2,266.8 $ 8,175.9 CRM Consumer Experience 613.5 654.7 634.3 713.4 2,615.9 CRM Execution & Support 489.3 517.3 541.0 588.2 2,135.8 PR 335.1 350.3 353
Slide 26: Disclosure
Disclosure The preceding materials have been prepared for use in the April 17, 2018 conference call on Omnicom’s results of operations for the period ended March 31, 2018. The call will be archived on the Internet at http:// investor.omnicomgroup.com/investor-relations/news-events-and-filings/. Forw