Omnicom Group Inc. · NYSE:OMC
Omnicom — Q3 2013 Earnings Presentation
31 slides from Omnicom's earnings presentation, Oct 15, 2013
Slide 1: Third Quarter 2013 Results
Third Quarter 2013 Results October 15, 2013 Investor Presentation
Slide 2: 2013 vs. 2012 P&L Summary – Third Quarter
2013 vs. 2012 P&L Summary – Third Quarter Third Quarter 2013 2013 2012 Non GAAP (a) Reported Reported Revenue $ 3,490.5 $ 3,490.5 $ 3,406.6 EBITA (a) (b) 433.3 (c) 405.2 414.6 Margin % 12.4% (c) 11.6% 12.2% Amortization of Intangibles 25.8 25.8 27.3 Operating Income (a) $ 407.5 (d) $ 379.4 $ 387.3 M
Slide 3: 2013 vs. 2012 P&L Summary – Third Quarter
2013 vs. 2012 P&L Summary – Third Quarter Third Quarter 2013 2013 2012 Non GAAP (a) Reported Reported Operating Income (a) $ 407.5 (b) $ 379.4 $ 387.3 Net Interest Expense 42.8 42.8 40.3 Income Taxes (a) 122.6 (c) 116.2 118.7 Tax Rate % 33.6% (c) 34.5% 34.2% Income from Equity Method Investments 4.3
Slide 4: 2013 vs. 2012 Earnings Per Share – Third Quarter
2013 vs. 2012 Earnings Per Share – Third Quarter Third Quarter 2013 2013 2012 Non GAAP (a) Reported Reported Net Income - Omnicom Group (a) $ 217.7 (b) $ 196.0 $ 203.9 Net Income allocated to Participating Securities (a) (5.4) (c) (4.8) (4.5) Net Income available for common shares (a) $ 212.3 (d) $
Slide 5: 2013 vs. 2012 P&L Summary – Nine Months
2013 vs. 2012 P&L Summary – Year to Date Year to Date 2013 2013 2012 Non GAAP (a) Reported Reported Revenue $ 10,526.4 $ 10,526.4 $ 10,274.8 EBITA (a) (b) 1,378.6 (c) 1,350.5 1,331.4 Margin % 13.1% (c) 12.8% 13.0% Amortization of Intangibles 76.3 76.3 75.2 Operating Income (a) $ 1,302.3 (d) $ 1,274.
Slide 6: 2013 vs. 2012 P&L Summary – Nine Months
2013 vs. 2012 P&L Summary – Year to Date Year to Date 2013 2013 2012 Non GAAP (a) Reported Reported Operating Income (a) $ 1,302.3 (b) $ 1,274.2 $ 1,256.2 Net Interest Expense 124.6 124.6 104.3 Income Taxes (a) 395.3 (c) 388.9 389.9 Tax Rate % 33.6% (c) 33.8% 33.8% Income from Equity Method Investme
Slide 7: 2013 vs. 2012 Earnings Per Share – Nine Months
2013 vs. 2012 Earnings Per Share – Year to Date Year to Date 2013 2013 2012 Non GAAP (a) Reported Reported Net Income - Omnicom Group (a) $ 712.4 (b) $ 690.7 $ 691.2 Net Income allocated to Participating Securities (a) (18.7) (c) (18.1) (15.4) Net Income available for common shares (a) $ 693.7 (d) $
Slide 8: Total Revenue Change
2013 Total Revenue Change Third Quarter Year to Date $ % $ % Prior Period Revenue $ 3,406.6 $ 10,274.8 Foreign Exchange (FX) Impact (a) (21.7) -0.6% (59.9) -0.6% Acquisition/Disposition Revenue (b) (34.2) -1.0% (23.1) -0.2% Organic Revenue (c) 139.8 4.1% 334.6 3.2% Current Period Revenue $ 3,490.5 2
Slide 9: Revenue by Discipline
2013 Revenue by Discipline Third Quarter Year to Date Specialty Specialty 7.0% 7.5% PR PR 9.5% 9.4% Advertising Advertising 47.1% 48.0% CRM CRM 36.4% 35.1% % Organic % Organic $ Mix % Growth Growth (a) $ Mix % Growth Growth (a) Advertising $ 1,644.4 3.0% 4.8% Advertising $ 5,055.9 3.9% 5.0% CRM 1,27
Slide 10: Revenue by Geography
2013 Revenue by Geography Third Quarter Year to Date UK UK 9.4% 9.1% Rest of Rest of World World 22.8% 22.9% Euro Euro Markets Markets 15.8% 15.7% U.S. U.S. 52.0% 52.3% October 15, 2013 9
Slide 11: Revenue by Geography
2013 Revenue by Geography Third Quarter Year to Date $ Mix $ Growth % Growth $ Mix $ Growth % Growth United States $ 1,815.5 $ 57.4 3.2% United States $ 5,511.1 $ 174.1 3.3% Organic 88.4 5.0% Organic 209.6 3.9% Acquisition (31.0) -1.8% Acquisition (35.5) -0.6% International $ 1,675.0 $ 26.5 1.6% Int
Slide 12: Revenue by Region
2013 Revenue by Region Third Quarter Year to Date Latin Africa Latin Africa America MidEast America MidEast 2.8% 1.6% 2.9% 1.6% Asia Asia Pacific Pacific 10.8% 11.0% North North Europe America Europe America 28.5% 56.1% 28.2% 56.5% October 15, 2013 11
Slide 13: Revenue by Region
2013 Revenue by Region Third Quarter Year to Date % Organic % Organic $ Mix % Growth Growth (a) $ Mix % Growth Growth (a) North America $ 1,956.8 3.0% 4.9% North America $ 5,945.8 3.2% 3.9% Europe 995.9 4.9% 2.6% Europe 2,965.7 2.2% 1.0% Asia Pacific 385.3 -2.8% 3.9% Asia Pacific 1,135.5 0.7% 4.5% L
Slide 14: Revenue by Industry
Revenue by Industry Third Quarter – 2013 Third Quarter – 2012 Growth T&E Auto T&E Auto Auto -0.4% 6% 9% 6% 9% Telcom Telcom 6% Food & Beverage 5.5% 7% Consumer Consumer Products Products Tech Consumer Products 3.9% Tech 9% 9% 9% 9% Financial Financial Financial Services -3.9% Services Services 7% Re
Slide 15: Cash Flow Performance
Cash Flow Performance Nine Months Ended September 30 2013 2012 Net Income $ 771.2 $ 773.9 Depreciation and Amortization Expense 212.9 210.6 Share-Based Compensation Expense 64.9 63.1 Other Non-Cash Items to Reconcile to Net Cash Provided by Operating (34.9) (81.6) Activities, net Free Cash Flow (a)
Slide 16: Cash Flow Performance
Cash Flow Performance Nine Months Ended September 30 2013 2012 Free Cash Flow (a) $ 1,014.1 $ 966.0 Primary Uses of Cash: Dividends (b) 212.6 235.4 Dividends paid to Noncontrolling Interest Shareholders 81.1 78.9 Capital Expenditures 123.3 158.7 Acquisitions and Payments for Additional Interest in C
Slide 17: Current Credit Picture
Current Credit Picture Twelve Months Ended September 30 2013 Reported 2012 Reported EBITDA (a) $ 2,107.2 $ 2,024.4 Gross Interest Expense 198.1 169.8 EBITDA / Gross Interest Expense 10.6 x 11.9 x Total Debt / EBITDA 1.9 x 2.2 x Net Debt (b) / EBITDA 1.2 x 1.2 x Debt Bank Loans (Due Less Than 1 Year)
Slide 18: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a) : Twelve Months Ended September 30, 2013 16.7% Twelve Months Ended September 30, 2012 15.7% Return on Equity (b) : Twelve Months Ended September 30, 2013 29.8% Twelve Months Ended September 30, 2012 28.3% (a) Return on Invested Capital is Afte
Slide 19: 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 Q3 2013, Omnicom effectively distributed 100% of Net Income to shareholders through Dividends and Share Repurchases. 12.0 10.0 $9.79 8.0 Billions
Slide 20: Supplemental Financial Information
Supplemental Financial Information October 15, 2013 19
Slide 21: Omnicom Debt Structure
Omnicom Debt Structure Bank Loans $19 2032 Convert $253 2016 Senior Notes $1,000 2022 Senior Notes $1,250 2019 Senior Notes $500 2020 Senior Notes $1,000 The above chart sets forth Omnicom’s debt outstanding at September 30, 2013. The amounts reflected above for the 2016, 2019, 2020 and 2022 Senior
Slide 22: 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 2032 Convert $250 Other Borrowings $0 Our 2032 Convertible Notes are putable on July 31, 2014 and annually in July thereafter until maturity. Other borrowings at September 30
Slide 23: Acquisition Related Expenditures
2013 Acquisition Related Expenditures Year to Date Acquisitions of Businesses and Affiliates (a) $ 12.0 Additional Interest in Controlled Subsidiaries (b) 11.0 Earn-outs on acquisitions completed prior to January 1, 2009 (c) 14.5 Earn-outs on acquisitions completed after January 1, 2009 (c) 68.9 Tot
Slide 24: Condensed Cash Flow
Condensed Cash Flow Nine Months Ended September 30 2013 2012 Net Income $ 771.2 $ 773.9 Share-Based Compensation Expense 64.9 63.1 Depreciation and Amortization 212.9 210.6 Other Non-Cash Items to Reconcile to Net Cash Provided by Operating Activities, net (34.9) (81.6) Changes in Operating Capital
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Third Quarter 2013 Merger 2013 Reported Expenses Non GAAP (a) EBITA $ 405.2 $ 28.1 $ 433.3 Operating Income 379.4 28.1 407.5 Income Tax Expense 116.2 6.4 122.6 Net Income - Omnicom Group Inc. 196.0 21.7 217.7 Net Income allocated to participating securities 4.8 0.
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 3 Months Ended September 30 12 Months Ended September 30 2013 Reported 2012 Reported 2013 Reported 2012 Reported Revenue $ 3,490.5 $ 3,406.6 $ 14,471.0 $ 14,127.7 Operating Expenses, excluding Depreciation and Amortization 3,040.1 2,947.4 12,363.8 12,103.3 EBITDA
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Nine Months Ended September 30 2013 2012 Net Free Cash Flow $ 15.7 $ (379.9) Cash Flow items excluded from Net Free Cash Flow: Changes in Operating Capital (654.2) (665.9) Repayment of Convertible Debt (406.7) - Proceeds from Short-term & Long-term Debt, net 12.6
Slide 28: Supplemental Information
Supplemental Information Third Quarter Year to Date 2013 2012 2013 2012 % % Reported Reported Reported Reported Operating expenses: Salary and service costs $ 2,579.2 $ 2,515.8 2.5% $ 7,711.5 $ 7,491.5 2.9% Office and general expenses: Amortization of Intangibles 25.8 27.3 76.3 75.2 Depreciation 45.
Slide 29: Third Quarter Acquisition – Bruce Clay Australia
Third Quarter Acquisition Founded in 2006, Bruce Clay Australia is a leading performance marketing agency, specializing in search engine optimization, website analytics, conversion rate optimization, social media marketing and design and information architecture. Located in Sydney, Bruce Clay Austra
Slide 30: Third Quarter Acquisition – HDI Youth Marketeers
Third Quarter Acquisition HDI Youth Marketeers is a specialty marketing agency based in South Africa. It was established in 1996 and is a brand connections specialist focusing on youth marketing, utilizing its own proprietary platforms for campaigns that connect clients to youth consumers for the mu
Slide 31: Disclosure
Disclosure The preceding materials have been prepared for use in the October 15, 2013 conference call on Omnicom’s results of operations for the period ended September 30, 2013. The call will be archived on the Internet at http://www.omnicomgroup.com/financialwebcasts. Forward-Looking Statements Cer