Slide 1: Second Quarter 2017 Results
Second Quarter 2017 Results July 20, 2017 Investor Presentation
Slide 2: 2017 vs. 2016 P&L Summary Second Quarter
2017 vs. 2016 P&L Summary Second Quarter Second Quarter 2017 2016 Revenue $ 3,790.1 $ 3,884.9 Operating Expenses (a) 3,224.6 3,323.1 Operating Profit 565.5 561.8 Net Interest Expense 45.3 44.8 Income Tax Expense (b) 166.7 (b) 167.9 Tax Rate % (b) 32.0% (b ) 32.5% Income from Equity Method Investment
Slide 3: 2017 vs. 2016 Earnings per Share – Diluted
2017 vs. 2016 Earnings per Share – Diluted Second Quarter Second Quarter 2017 2016 Net Income - Omnicom Group Inc. $ 328.6 $ 326.1 Net Income allocated to participating securities (0.5) (2.0) Net Income available for common shares (a) $ 328.1 (a) $ 324.1 Diluted Shares (millions) 234.0 239.0 Earning
Slide 4: 2017 vs. 2016 P&L Summary Year to Date
2017 vs. 2016 P&L Summary Year to Date Year to Date 2017 2016 Revenue $ 7,377.6 $ 7,384.0 Operating Expenses (a) 6,402.1 6,430.1 Operating Profit 975.5 953.9 Net Interest Expense 84.9 84.9 Income Tax Expense (b) 274.7 (b) 283.4 Tax Rate % (b) 30.8% (b ) 32.6% Income from Equity Method Investments 1.
Slide 5: 2017 vs. 2016 Earnings per Share – Diluted
2017 vs. 2016 Earnings per Share – Diluted Year to Date Year to Date 2017 2016 Net Income - Omnicom Group Inc. $ 570.4 $ 544.5 Net Income allocated to participating securities (1.0) (3.6) Net Income available for common shares (a) $ 569.4 (a) $ 540.9 Diluted Shares (millions) 235.2 240.1 Earnings pe
Slide 6: Total Revenue Change
2017 Total Revenue Change Second Quarter Year to Date $ %∆ $ %∆ Prior Period Revenue $ 3,884.9 $ 7,384.0 Foreign exchange rate impact (a) (57.2) -1.5% (98.0) -1.3% Acquisition revenue, net of disposition (172.1) -4.4% (196.4) -2.7% revenue (b) Organic growth (c) 134.5 3.5% 288.0 3.9% Current Period
Slide 7: Revenue by Region
2017 Revenue by Region Second Quarter Year to Date Latin Africa Latin Africa America MidEast America MidEast 3.2% 2.0% 3.1% 2.1% Asia Asia Pacific Pacific 10.7% 10.6% Euro Euro Markets & Markets & Other North Other North Europe America Europe America 17.5% 57.4% 16.8% 58.5% UK UK 9.2% 8.9% July 20,
Slide 8: Revenue by Region
2017 Revenue by Region Second Quarter Year to Date % Organic % Organic (a) $ Mix % Growth Growth $ Mix % Growth Growth(a) North America $ 2,175.6 -6.6% 0.2% North America $ 4,314.9 -3.1% 0.6% UK 350.4 -3.7% 9.3% UK 659.6 -5.9% 8.7% Euro & Other Europe 662.1 5.1% 7.8% Euro & Other Europe 1,240.6 4.9%
Slide 9: Revenue by Discipline
2017 Revenue by Discipline Second Quarter Year to Date Specialty Specialty 7 .9% 7 .7% PR PR 9.0% 9.0% A dvertising Advertising 53.2% 53.4% CRM CRM 29.9% 29.9% % Organic % Organic (a) (a) $ Mix % Growth Growth $ Mix % Growth Growth Advertising $ 2,017.8 -2.3% 4.2% Advertising $ 3,938.6 1.8% 5.2% CRM
Slide 10: Revenue by Industry
Revenue by Industry Year to Date – 2017 Year to Date – 2016 T& E Auto T& E Auto 6% 9% 7% 8% Telcom Telcom 5% 5% Cons umer Cons umer Tech Pro ducts Products 10% 9% 10% Tech 9% Financial Retail Financial Services 6% Services Retail 7% 7% 6% Food & Pharm a & Food & Pharm a & Beverage Health Beverage He
Slide 11: Cash Flow Performance
Cash Flow Performance Six Months Ended June 30 2017 2016 Net Income $ 617.5 $ 588.2 Depreciation and Amortization Expense 143.8 147.2 Share-Based Compensation Expense 40.0 46.3 Other Items to Reconcile to Net Cash Used in Operating (3.8) (17.9) (b) Activities, net (a) Free Cash Flow $ 797.5 $ 763.8
Slide 12: Cash Flow Performance
Cash Flow Performance Six Months Ended June 30 2017 2016 Free Cash Flow (a) $ 797.5 $ 763.8 (b) Primary Uses of Cash: Dividends paid to Common Shareholders 260.7 242.9 Dividends paid to Noncontrolling Interest Shareholders 67.3 52.0 Capital Expenditures 67.9 77.9 Acquisition of Businesses and Affili
Slide 13: Current Credit Picture
Current Credit Picture Twelve Months Ended June 30 2017 2016 EBITDA (a) $ 2,320.0 $ 2,249.1 Gross Interest Expense 215.4 197.4 EBITDA / Gross Interest Expense 10.8 x 11.4 x Total Debt / EBITDA 2.1 x 2.2 x Net Debt (b) / EBITDA 1.3 x 1.6 x Debt Bank Loans (Due Less Than 1 Year) $ 19 $ 12 CP & Borrowi
Slide 14: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a) : Twelve Months Ended June 30, 2017 19.9% Twelve Months Ended June 30, 2016 18.4% Return on Equity (b): Twelve Months Ended June 30, 2017 51.8% Twelve Months Ended June 30, 2016 45.3% (a) Return on Inv ested Capital is After Tax Reported Opera
Slide 15: Net Cash Returned to Shareholders through Dividends and Share Repurchases
Net Cash Returned to Shareholders through Dividends and Share Repurchases From 2007 through June 30, 2017, Omnicom distributed 107% of Net Income to shareholders through Dividends and Share Repurchases. 107% $12.0 106% $10.5 107% $9.9 $10.0 $8.7 107% $ In Billions $7.6 $8.0 102% 105% $6.5 7.7 7.2 99
Slide 16: Supplemental Financial Information
Supplemental Financial Information July 20, 2017 15
Slide 17: Omnicom Debt Structure
Omnicom Debt Structure Bank Loans $19 2019 Senior Notes $500 2026 Senior 2020 Senior Notes Notes $1,400 $1,000 2024 Senior 2022 Senior Notes Notes $750 $1,250 The abov e chart sets forth Omnicom’s debt outstanding at June 30, 2017. The amounts reflected above for the 2019, 2020, 2022, 2024 and 2026
Slide 18: 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 Senior $600 Notes $400 $200 Other Borrowings $0 Other borrowings at June 30, 2017 include short-term borrowings of $19 million which are due in less than one y ear. Fo
Slide 19: Acquisition Related Expenditures
2017 Acquisition Related Expenditures Year to Date (a) Acquisition of Businesses and Affiliates $ 19.5 (b) Acquisition of Additional Noncontrolling Interests 8.0 (c) Contingent Purchase Price Payments 71.2 (d) Total Acquisition Expenditures $ 98.7 (a) Includes acquisitions of a majority interest in
Slide 20: Condensed Cash Flow
Condensed Cash Flow Six Months Ended June 30 2017 2016 Net Income $ 617.5 $ 588.2 Share-Based Compensation 40.0 46.3 Depreciation and Amortization of Intangible Assets 143.8 147.2 Other Items to Reconcile to Net Cash Used in Operating Activities, net (3.8) (17.9) (a) Changes in Operating Capital (1,
Slide 21: 2017 vs. 2016 Non-GAAP Financial Measures – EBITA
2017 vs. 2016 Non-GAAP Financial Measures – EBITA Second Quarter Year to Date 2017 2016 2017 2016 Revenue $ 3,790.1 $ 3,884.9 $ 7,377.6 $ 7,384.0 Operating expenses (a) 3,224.6 3,323.1 6,402.1 6,430.1 Operating Profit 565.5 561.8 975.5 953.9 Operating Profit Margin % 14.9% 14.5% 13.2% 12.9% Add back
Slide 22: Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA
Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA 3 Months Ended June 30 6 Months Ended June 30 12 Months Ended June 30 2017 2016 2017 2016 2017 2016 Net Income - Omnicom Group Inc. $ 328.6 $ 326.1 $ 570.4 $ 544.5 $ 1,174.6 $ 1,115.4 Net Income Attributed to Noncontrolling 26.5 25.8 4
Slide 23: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Six Months Ended June 30 2017 2016 Net Cash Used in Operating Activities $ (331.0) $ (377.7) (a) Net Cash Used in Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (1,128.5) (1,141.5) Free Cash Flow $ 797.5 $ 763.8 (a)
Slide 24: Supplemental Information
Supplemental Information Second Quarter Year to Date % of % of % of % of 2017 Rev 2016 Rev 2017 Rev 2016 Rev Revenue $ 3,790.1 $ 3,884.9 $ 7,377.6 $ 7,384.0 Operating expenses: Salary and service costs 2,736.1 72.2% 2,824.0 72.7% 5,430.3 73.6% 5,447.3 73.8% Occupancy and other expenses 297.0 7.8% 31
Slide 25: Second Quarter Acquisition
Second Quarter Acquisition Founded in 2010, MOBILE STRATEGY is a creative full-service digital agency with expertise in Mobile CRM/loyalty, Mobile Commerce and Mobile Content & Campaigns. Its services include: mobile strategy and insights, mobile design, mobile app development and managed services.
Slide 26: Disclosure
Disclosure The preceding materials hav e been prepared f or use in the July 20, 2017 conference call on Omnicom’s results of operations for the period ended June 30, 2017. The call will be archiv ed on the Internet at http://investor.omnicomgroup.com/investor-relations/news-events-and-filings/. Forw