Omnicom Group Inc. · NYSE:OMC
Omnicom — Q3 2023 Earnings Presentation
22 slides from Omnicom's earnings presentation, Oct 17, 2023
Slide 1: 2023 Third Quarter
2023 Third Quarter October 17, 2023
Slide 2: Third Quarter Highlights
Third Quarter Highlights Revenue Income – 3.3% organic revenue growth in Q3 2023, 4.0% – 15.7% operating income margin YTD, in line with full-year expectations – 16.2% EBITA margin – Strong organic growth rates in Advertising & Media, Precision Marketing, and Healthcare – 5.1% growth in Q3 diluted E
Slide 3: Income Statement Summary
Income Statement Summary Third Quarter Year to Date 2023 2022 2023 2022 Revenue $ 3,578.1 $ 3,443.4 $ 10,631.3 $ 10,420.9 Operating Expenses (a) 3,017.3 2,897.4 9,173.3 8,980.3 Operating Income 560.8 546.0 1,458.0 1,440.6 Net Interest Expense 38.3 29.1 85.0 112.0 Income Tax Expense(b) 136.1 134.7 36
Slide 4: Revenue Change
Revenue Change Third Quarter Year to Date $ %∆ $ %∆ Prior Period Revenue $ 3,443.4 $ 10,420.9 Foreign exchange rate impact(1) 59.1 1.7 % (75.3) (0.7)% Acquisition revenue, net of disposition revenue(2) (37.5) (1.1)% (127.5) (1.2)% Organic growth(3) 113.1 3.3 % 413.2 4.0 % Current Period Revenue $ 3,
Slide 5: Revenue by Discipline
Revenue by Discipline Third Quarter Year to Date % Organic % Organic Revenue % of Rev % Growth Growth(3) Revenue % of Rev % Growth Growth(3) Advertising & Media $ 1,909.2 53.4 % 8.2 % 6.1 % Advertising & Media $ 5,597.2 52.6 % 4.2 % 5.4 % Precision Marketing 383.7 10.7 % 5.6 % 4.3 % Precision Market
Slide 6: Revenue by Region
Revenue by Region Third Quarter Year to Date % Organic % Organic Revenue % of Rev % Growth Growth(3) Revenue % of Rev % Growth Growth(3) United States $ 1,868.8 52.2 % 1.1 % 2.7 % United States $ 5,531.6 52.0 % 2.1 % 3.3 % Other North America 114.4 3.2 % (5.6)% (1.7)% Other North America 357.2 3.4 %
Slide 7: Revenue by Industry Sector
Revenue by Industry Sector Nine Months Ended September 30 2023 2022 Pharmaceuticals and Healthcare 16% 16% Food and Beverage 15% 14% Auto 12% 10% Technology 8% 11% Consumer Products 8% 8% Financial Services 8% 7% Travel & Entertainment 7% 7% Retail 6% 6% Telecommunications 4% 5% Government 4% 3% Ser
Slide 8: Operating Expense Detail
Operating Expense Detail Third Quarter Year to Date 2023 % of Rev 2022 % of Rev 2023 % of Rev 2022 % of Rev Revenue $ 3,578.1 $ 3,443.4 $ 10,631.3 $ 10,420.9 Operating expenses: Salary and related service costs 1,756.7 49.1 % 1,749.1 50.8 % 5,306.7 49.9 % 5,344.5 51.3 % Third-party service costs(c)
Slide 9: Income Statement Summary - Non-GAAP Adjusted
Income Statement Summary - Non-GAAP Adjusted Third Quarter Year to Date Non-GAAP Non-GAAP Reported Reported Reported Non-GAAP Reported Non-GAAP Adjusted Adjusted 2023 2022 2023 Adjustments 2022 Adjustments 2023 2022 Revenue $3,578.1 $3,443.4 $10,631.3 $ — $ 10,631.3 $10,420.9 $ — $ 10,420.9 Operatin
Slide 10: Cash Flow Performance
Cash Flow Performance Nine Months Ended September 30, 2023 2022 Free Cash Flow(4) $ 1,348.1 $ 1,232.5 Primary Uses of Cash: Dividends paid to Common Shareholders 424.0 437.7 Dividends paid to Noncontrolling Interest Shareholders 47.0 62.9 Capital Expenditures 64.2 65.6 Acquisition payments, includin
Slide 11: Credit & Liquidity
Credit & Liquidity Twelve Months Ended $ Millions September 30, 2023 2022 EBITDA(5) $ 2,312.7 $ 2,282.1 Total Debt / EBITDA 2.4 x 2.4 x Net Debt(6) / EBITDA 1.2 x 0.9 x Debt Bank Loans (Due Less Than 1 Year) $ 14.5 $ 10.2 USD-denominated Senior Notes 4,150.0 4,150.0 EUR-denominated Senior Notes 1,05
Slide 12: Historical Returns
Historical Returns Return on Invested Capital (ROIC)(7) Return on Equity(8) Twelve months ended September 30, 2023 22.6 % Twelve months ended September 30, 2023 46.7 % Twelve months ended September 30, 2022 25.0 % Twelve months ended September 30, 2022 43.2 % In millions. See Definitions on page 13.
Slide 13: Notes
Notes Financial (a) For the nine months ended September 30, 2023, operating expenses included real estate operating lease impairment charges, severance, and other exit costs related to repositioning actions we took in the first and second quarters of 2023 to reduce our real estate requirements, reba
Slide 14: Appendix
Appendix 14
Slide 15: Acquisitions - Q3 2023
Acquisitions - Q3 2023 OMC Discipline • PLUS Communications is a top public affairs firm and FP1 Strategies is a leading political consultancy. Based in Washington D.C., the companies expand Public Relations our U.S. expertise in public affairs and crisis communications with particular strength in t
Slide 16: Free Cash Flow
Free Cash Flow Nine Months Ended September 30, 2023 2022 Net Income $ 1,015.4 $ 947.9 Depreciation and Amortization of Intangible Assets 157.4 164.8 Share-Based Compensation 63.6 61.3 Real estate and other repositioning costs 191.5 — Gain on disposition of subsidiary (78.8) — Non-cash charge related
Slide 17: Operating Expense Detail - Constant $
Operating Expense Detail - Constant $ Third Quarter Year to Date 2023 2023 C$(e) 2022 2023 2023 C$(e) 2022 Operating expenses: Salary and related service costs $ 1,756.7 $ 1,721.8 $ 1,749.1 $ 5,306.7 $ 5,338.8 $ 5,344.5 Third-party service costs(c) 678.8 667.9 588.2 2,033.9 2,045.0 1,799.0 Third-par
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations Nine Months Ended September 30, 2023 2022 Net Cash Used in Operating Activities $ (379.1) $ (250.6) Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (1,727.2) (1,483.1) Free Cash Flow $ 1,348.1 $ 1,232.5 Net Decrease in Cash and Cash Equi
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Nine Months Ended Twelve Months Ended September 30 September 30 September 30 2023 2022 2023 2022 2023 2022 Net Income - Omnicom Group Inc. $ 371.9 $ 364.5 $ 965.7 $ 886.7 $ 1,395.5 $ 1,302.9 Net Income Attributed to Noncontrolling Interests 16.4 18.8 49.7
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Nine Months Ended September 30 September 30 2023 2022 2023 2022 Net Income - Omnicom Group Inc.- Reported $ 371.9 $ 364.5 $ 965.7 $ 886.7 Net Income Attributed To Noncontrolling Interests 16.4 18.8 49.7 61.2 Income From Equity Method Investments 1.9 1.1 3.
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Third Quarter Year to Date 2023 2022 2023 2022 Net Income - Omnicom Group Inc. - Reported $ 371.9 $ 364.5 $ 965.7 $ 886.7 Impact on Net Income related to: Real estate and other repositioning costs — — 145.5 — Charges arising from the effects of the war in Ukraine — — — 118.2
Slide 22: Disclosures
Disclosures The preceding materials have been prepared for use in the October 17, 2023 conference call on Omnicom’s results of operations for the three and nine months ended September 30, 2023. The call will be archived on the Internet at http:// investor.omnicomgroup.com Forward-Looking Statements