Omnicom Group Inc. · NYSE:OMC
Omnicom — Q1 2019 Earnings Presentation
24 slides from Omnicom's earnings presentation, Apr 16, 2019
Slide 1: First Quarter 2019 Results
First Quarter 2019 Results April 16, 2019 Investor Presentation
Slide 2: 2019 vs. 2018 P&L Summary
2019 vs. 2018 P&L Summary First Quarter First Quarter 2019 2018 (b) Revenue $ 3,468.9 $ 3,629.6 Operating Expenses (a) 3,040.0 3,207.9 Operating Profit 428.9 421.7 Net Interest Expense 46.0 46.9 Income Tax Expense 102.7 90.9 Tax Rate % 26.8% 24.3% Income (Loss) from Equity Method Investments (0.5) 0
Slide 3: 2019 vs. 2018 Earnings per Share – Diluted
2019 vs. 2018 Earnings per Share – Diluted First Quarter First Quarter 2019 2018 (a) Net Income - Omnicom Group Inc. $ 263.2 $ 264.1 Net Income available for common shares $ 263.2 $ 264.1 Diluted Shares (millions) 224.2 231.5 Earnings per Share - Diluted $ 1.17 $ 1.14 Dividends Declared per Common S
Slide 4: 2019 Total Revenue Change
2019 Total Revenue Change First Quarter $ %∆ Prior Period Revenue $ 3,629.6 Foreign exchange rate impact (a) (122.0) -3.4% Acquisition revenue, net of disposition revenue (b) (130.1) -3.6% Organic growth (c) 91.4 2.5% Current Period Revenue $ 3,468.9 -4.4% (a) Foreign exchange rate impact: calculate
Slide 5: 2019 Revenue by Discipline
2019 Revenue by Discipline First Quarter Healthcare 7.4% PR 9.6% % Organic $ Mix % Growth Growth (a) CRM Advertising $ 1,921.3 1.1% 5.1% Execution CRM Consumer 605.8 -4.6% -0.6% & Support Experience 10.1% CRM Execution & 349.5 -31.3% -3.3% Advertising Support 55.4% PR 334.2 -3.5% -0.5% CRM Healthcar
Slide 6: 2019 Revenue by Region
2019 Revenue by Region First Quarter Latin Middle East America & Africa 2.6% 2.3% % Organic $ Mix % Growth Growth (a) Asia United States $ 1,884.1 0.2% 2.0% Pacific Other North 10.5% 105.1 0.4% 6.1% America UK 338.7 -5.4% 1.3% Euro Euro Markets & 606.8 -14.8% 4.0% Markets & Other Europe Other Asia P
Slide 7: Revenue by Industry
Revenue by Industry First Quarter – 2019 First Quarter – 2018 Auto Auto T&E T&E 11% 10% 7% 7% Telcom Telcom 5% 5% Consumer Consumer Products Products 9% Tech 9% 7% Tech 9% Financial Financial Services Retail Services 8% 5% 8% Retail 6% Food & Pharma & Food & Beverage Health Beverage Pharma & 13% 14%
Slide 8: Cash Flow Performance
Cash Flow Performance Three Months Ended March 31 2019 2018 Net Income $ 279.7 $ 284.7 Depreciation and Amortization of Intangible Assets 59.6 69.4 Share-Based Compensation 16.8 17.5 Other Items to Reconcile to Net Cash Used in Operating (15.4) 3.7 Activities, net Free Cash Flow (a) $ 340.7 $ 375.3
Slide 9: Cash Flow Performance
Cash Flow Performance Three Months Ended March 31 2019 2018 Free Cash Flow (a) $ 340.7 $ 375.3 Primary Uses of Cash: Dividends paid to Common Shareholders 134.8 138.9 Dividends paid to Noncontrolling Interest Shareholders 17.0 16.3 Capital Expenditures 27.2 36.2 Acquisition of Businesses and Affilia
Slide 10: Current Credit Picture
Current Credit Picture Twelve months ended March 31 2019 2018 EBITDA (a) $ 2,394.9 $ 2,368.6 Gross Interest Expense on Indebtedness 245.0 227.1 EBITDA / Gross Interest Expense on Indebtedness 9.8 x 10.4 x Total Debt / EBITDA 2.3 x 2.1 x Net Debt (b) / EBITDA 0.9 x 1.0 x Debt Bank Loans (Due Less Tha
Slide 11: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a): Twelve months ended March 31, 2019 25.0% Twelve months ended March 31, 2018 21.3% Return on Equity (b): Twelve months ended March 31, 2019 52.6% Twelve months ended March 31, 2018 46.7% (a) Return on Invested Capital is After Tax Reported Ope
Slide 12: Supplemental Financial Information
Supplemental Financial Information April 16, 2019 11
Slide 13: Omnicom Debt Structure
Omnicom Debt Structure Short-term Debt $11 2019 OFL Short-term Euro Notes $584 2026 Senior 2019 Senior Notes Notes $1,400 $500 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, 2019. The amounts reflected above
Slide 14: 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 Other Senior Borrowings $600 Notes $400 $200 $0 9 9 0 0 1 1 2 2 3 3 4 4 5 5 6 6 -1 -1 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 -2 n ec n ec n ec n ec n ec n ec n ec n ec
Slide 15: 2019 Acquisition Related Expenditures
2019 Acquisition Related Expenditures Three Months Ended March 31 Acquisition of Businesses and Affiliates (a) $ 0.7 Acquisition of Additional Noncontrolling Interests (b) 2.7 Contingent Purchase Price Payments (c) 3.8 Total Acquisition Expenditures (d) $ 7.2 (a) Includes acquisitions of a majority
Slide 16: Condensed Cash Flow
Condensed Cash Flow Three Months Ended March 31 2019 2018 Net Income $ 279.7 $ 284.7 Share-Based Compensation 16.8 17.5 Depreciation and Amortization of Intangible Assets 59.6 69.4 Other Items to Reconcile to Net Cash Used in Operating Activities, net (15.4) 3.7 Changes in Operating Capital (736.3)
Slide 17: Supplemental Information
Supplemental Information First Quarter 2019 % of Rev 2018 % of Rev Revenue $ 3,468.9 $ 3,629.6 Operating expenses: Salary and service costs 2,567.6 74.0% 2,712.8 74.7% Occupancy and other costs 309.2 8.9% 320.3 8.8% Cost of services 2,876.8 3,033.1 Selling, general and administrative expenses 103.6
Slide 18: Net Cash Returned to Shareholders through Dividends and Share Repurchases
Net Cash Returned to Shareholders through Dividends and Share Repurchases From 2009 through March 31, 2019, Omnicom distributed 105% of Net Income to shareholders through Dividends and Share Repurchases. 105% $12.0 104% $10.3 $10.6 107% $10.0 108% $9.0 4.1 110% $7.9 3.9 $8.0 3.4 $ In Billions 110% $
Slide 19: 2019 vs. 2018 Non-GAAP Financial Measures – EBITA
2019 vs. 2018 Non-GAAP Financial Measures – EBITA First Quarter 2019 2018 Revenue $ 3,468.9 $ 3,629.6 Operating expenses (a) 3,040.0 3,207.9 Operating Profit 428.9 421.7 Operating Profit Margin % 12.4% 11.6% Add back: Amortization of intangible assets 21.6 27.5 EBITA (b) $ 450.5 $ 449.2 EBITA Margin
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 2019 2018 2019 2018 Net Income - Omnicom Group Inc. $ 263.2 $ 264.1 $ 1,325.5 $ 1,110.7 Net Income Attributed to Noncontrolling Interests 16.5 20.6 110.0 103.8 Net Income 279.7 2
Slide 21: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Three Months Ended March 31 2019 2018 Net Cash Used in Operating Activities $ (395.6) $ (620.8) Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (736.3) (996.1) Free Cash Flow $ 340.7 $ 375.3 Three Months Ended March
Slide 22: Reconciliation of 2018 Non-GAAP Financial Measures
Reconciliation of 2018 Non-GAAP Financial Measures - Income Tax Expense & Net Income - Omnicom Group Inc. Three months ended March 31, 2018 Income Tax Expense, as reported $ 90.9 Add: Income tax expense reduction from successful resolution of foreign tax 13.3 claims Income Tax Expense, 2018 Non-GAAP
Slide 23: First Quarter Acquisition
First Quarter Acquisition TBWA\Worldwide has acquired a majority interest in De Vloer, an independent creative agency located in Antwerp, Belgium. Founded in 2013, De Vloer is a full-service creative agency offering a range of advertising and marketing services. De Vloer will operate as a separate b
Slide 24: Disclosure
Disclosure The preceding materials have been prepared for use in the April 16, 2019 conference call on Omnicom’s results of operations for the three months ended March 31, 2019. The call will be archived on the Internet at http:// investor.omnicomgroup.com/investor-relations/news-events-and-filings/