Slide 1: Third Quarter 2018 Results
Third Quarter 2018 Results October 16, 2018 Investor Presentation
Slide 2: 2018 vs. 2017 P&L Summary
2018 vs. 2017 P&L Summary Third Quarter Third Quarter 2018 (a) 2017 Revenue $ 3,714.3 $ 3,719.5 Operating Expenses (b) (c) 3,212.0 3,249.3 Operating Profit 502.3 470.2 Net Interest Expense 56.7 52.4 Income Tax Expense (d) 115.3 132.0 Tax Rate % 25.9% 31.6% Income from Equity Method Investments 1.0 1
Slide 3: 2018 vs. 2017 Earnings per Share – Diluted
2018 vs. 2017 Earnings per Share – Diluted Third Quarter Third Quarter 2018 (e) (f) 2017 Net Income - Omnicom Group Inc. $ 298.9 $ 263.6 Net Income allocated to participating securities — (0.3) Net Income available for common shares $ 298.9 $ 263.3 Diluted Shares (millions) 225.9 232.7 Earnings per
Slide 4: 2018 vs. 2017 P&L Summary – Year to Date
2018 vs. 2017 P&L Summary Year to Date Year to Date 2018 (g) 2017 Revenue $ 11,203.5 $ 11,097.1 Operating Expenses (c) (h) 9,697.2 9,639.7 Operating Profit 1,506.3 1,457.4 Net Interest Expense 156.1 149.0 Income Tax Expense (i) 343.0 406.7 Tax Rate % 25.4% 31.1% Income from Equity Method Investments
Slide 5: 2018 vs. 2017 Earnings per Share – Diluted – Year to Date
2018 vs. 2017 Earnings per Share – Diluted Year to Date Year to Date 2018 (j) (k) 2017 Net Income - Omnicom Group Inc. $ 927.2 $ 834.0 Net Income allocated to participating securities (0.1) (1.4) Net Income available for common shares $ 927.1 $ 832.6 Diluted Shares (millions) 228.5 234.4 Earnings pe
Slide 6: Non-GAAP Financial Measures – Third Quarter
2018 vs. 2017 Non-GAAP Financial Measures - Excluding Impact on the Third Quarter of Dispositions, Repositioning Actions and the 2017 Tax Act Third Quarter Non-GAAP 2018 2018 (a) (b) Adjusted (a)(b) 2017 Operating Profit 502.3 473.3 470.2 Net Interest Expense 56.7 56.7 52.4 Income Tax Expense (d) 11
Slide 7: Non-GAAP Financial Measures – Third Quarter EPS
2018 vs. 2017 Non-GAAP Financial Measures - Excluding Impact on the Third Quarter of Dispositions, Repositioning Actions and the 2017 Tax Act Third Quarter Non-GAAP 2018 2018 (e) (f) Adjusted (e) (f) 2017 Net Income - Omnicom Group Inc. $ 298.9 $ 280.7 $ 263.6 Net Income allocated to participating s
Slide 8: Non-GAAP Financial Measures – Year to Date
2018 vs. 2017 Non-GAAP Financial Measures - Excluding Impact on the Third Quarter of Dispositions, Repositioning Actions and the 2017 Tax Act Year to Date Non-GAAP 2018 2018 (g) (h) Adjusted (g) (h) 2017 Operating Profit 1,506.3 1,477.3 1,457.4 Net Interest Expense 156.1 156.1 149.0 Income Tax Expen
Slide 9: Non-GAAP Financial Measures – Year to Date EPS
2018 vs. 2017 Non-GAAP Financial Measures - Excluding Impact on the Third Quarter of Dispositions, Repositioning Actions and the 2017 Tax Act Year to Date 2018 (j) (k) Non-GAAP 2018 Adjusted (j) (k) 2017 Net Income - Omnicom Group Inc. $ 927.2 $ 909.0 $ 834.0 Net Income allocated to participating se
Slide 10: Total Revenue Change – Third Quarter
2018 Total Revenue Change Third Quarter $ %∆ Prior Period Revenue, as reported under ASC 605 $ 3,719.5 Foreign exchange rate impact (a) (61.8) -1.7% Acquisition revenue, net of disposition revenue (b) (34.6) -0.9% Organic growth (c) 108.3 2.9% Impact of Adoption of ASC 606 (d) (17.1) -0.4% Current P
Slide 11: Total Revenue Change – Year to Date
2018 Total Revenue Change Year to Date $ %∆ Prior Period Revenue, as reported under ASC 605 $ 11,097.1 Foreign exchange rate impact (a) 168.0 1.5% Acquisition revenue, net of disposition revenue (b) (225.6) -2.0% Organic growth (c) 272.5 2.5% Impact of Adoption of ASC 606 (d) (108.5) -1.0% Current P
Slide 12: Revenue by Discipline
2018 Revenue by Discipline Third Quarter Year to Date Healthcare Healthcare 7.1% 6.9% PR PR 9.6% 9.5% CRM CRM Execution Execution & Support & Support Advertising Advertising 12.5% 13.1% 53.6% 53.2% CRM CRM Consumer Consumer Experience Experience 17.2% 17.3% % Organic % Organic $ Mix % Growth Growth
Slide 13: Revenue by Region
2018 Revenue by Region Third Quarter Year to Date Latin Middle East Latin Middle East America & Africa America & Africa 2.7% 1.7% 2.9% 1.8% Asia Asia Pacific Pacific 11.8% 11.3% Euro Euro Markets & Markets & Other Other Europe United United Europe 17.7% States 19.2% States 53.7% 52.4% UK 9.6% UK 9.6
Slide 14: Revenue by Region
2018 Revenue by Region Third Quarter Year to Date % Organic % Organic $ Mix % Growth Growth (a) $ Mix % Growth Growth (a) United States $ 1,992.7 —% 0.6% United States $ 5,864.6 -3.3% 0.1% Other North 102.8 -10.7% -5.4% Other North 314.0 -12.1% -5.9% America America UK 357.3 -0.1% -0.3% UK 1,078.8 6
Slide 15: Revenue by Industry
Revenue by Industry Year to Date – 2018 Year to Date – 2017 T&E Auto T&E Auto 7% 10% 6% 10% Telcom Telcom 5% 5% Consumer Consumer Products Products 9% 10% Tech Tech 9% 9% Financial Financial Services Services 8% 7% Retail Retail 6% 6% Food & Food & Beverage Pharma & Beverage Pharma & Health 13% Heal
Slide 16: Cash Flow Performance
Cash Flow Performance Nine Months Ended September 30 2018 2017 Net Income $ 1,010.8 $ 904.4 Depreciation and Amortization of Intangible Assets 202.7 212.4 Share-Based Compensation 53.9 60.6 Net gain from dispositions of subsidiaries (178.4) — Impact of 2017 Tax Act 28.9 — Other Items to Reconcile to
Slide 17: Cash Flow Performance – Uses of Cash
Cash Flow Performance Nine Months Ended September 30 2018 2017 Free Cash Flow (a) $ 1,133.0 $ 1,171.3 Primary Uses of Cash: Dividends paid to Common Shareholders 413.7 387.9 Dividends paid to Noncontrolling Interest Shareholders 104.7 87.1 Capital Expenditures 116.2 108.3 Acquisition of Businesses a
Slide 18: Current Credit Picture
Current Credit Picture Twelve months ended September 30 2018 2017 EBITDA (a) $ 2,405.1 $ 2,350.0 Gross Interest Expense on Indebtedness 235.0 221.3 EBITDA / Gross Interest Expense on Indebtedness 10.2 x 10.6 x Total Debt / EBITDA 2.0 x 2.1 x Net Debt (b) / EBITDA 1.1 x 1.3 x Debt Bank Loans (Due Les
Slide 19: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a): Twelve months ended September 30, 2018 20.6% Twelve months ended September 30, 2017 20.4% Return on Equity (b): Twelve months ended September 30, 2018 48.2% Twelve months ended September 30, 2017 48.9% (a) Return on Invested Capital is After
Slide 20: Supplemental Financial Information
Supplemental Financial Information October 16, 2018 19
Slide 21: Net Cash Returned to Shareholders through Dividends and Share Repurchases
Net Cash Returned to Shareholders through Dividends and Share Repurchases From 2008 through September 30, 2018, Omnicom distributed 105% of Net Income to shareholders through Dividends and Share Repurchases. 105% $12.0 105% $10.9 106% $10.0 $10.0 108% $8.9 4.0 3.6 108% $7.8 $8.0 3.1 $ In Billions 10
Slide 22: Omnicom Debt Structure
Omnicom Debt Structure Bank Loans $11 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 September 30, 2018. The amounts reflected above for the 2019, 2020, 2022, 2024 and 2
Slide 23: 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 24: Acquisition Related Expenditures
2018 Acquisition Related Expenditures Year to Date Acquisition of Businesses and Affiliates (a) $ 326.3 Acquisition of Additional Noncontrolling Interests (b) 41.3 Contingent Purchase Price Payments (c) 66.4 Total Acquisition Expenditures (d) $ 434.0 (a) Includes acquisitions of a majority interest
Slide 25: Condensed Cash Flow
Condensed Cash Flow Nine Months Ended September 30 2018 2017 Net Income $ 1,010.8 $ 904.4 Share-Based Compensation 53.9 60.6 Depreciation and Amortization of Intangible Assets 202.7 212.4 Other Items to Reconcile to Net Cash Used in Operating Activities, net 15.1 (6.1) Net gain from dispositions of
Slide 26: 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 Third Quarter Without the Reported under Adjustments Adoption of ASC ASC 606 606 Revenue $ 3,714.3 $ 17.1 $ 3,731.4 Operating Expenses 3,212.0 20.7 3,232.7 Operating Profit $ 502.3 $ (3.6) $ 498.7 Year to Date Without the Reported
Slide 27: Non-GAAP Financial Measures – 2018 Excluding Net Gain on Dispositions and Repositioning
2018 Non-GAAP Financial Measures - 2018 Excluding Net Gain on Dispositions, Repositioning Actions and Tax Reform Act Adjustments Third Quarter Year to Date Non-GAAP Non-GAAP Non-GAAP Non-GAAP 2018 Adjustments 2018 2018 Adjustments 2018 Adjusted Adjusted Operating Profit (a) $ 502.3 $ 29.0 $ 473.3 $
Slide 28: Non-GAAP Financial Measures – EBITA
2018 vs. 2017 Non-GAAP Financial Measures – EBITA Third Quarter Year to Date 2018 (a) 2017 2018 (a) 2017 Revenue $ 3,714.3 $ 3,719.5 $ 11,203.5 $ 11,097.1 Operating expenses (b) 3,212.0 3,249.3 9,697.2 9,639.7 Operating Profit 502.3 470.2 1,506.3 1,457.4 Operating Profit Margin % 13.5% 12.6% 13.4% 1
Slide 29: Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA
Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA Three Months Ended Nine Months Ended Twelve months ended September 30 September 30 September 30 2018 (a) 2017 2018 (a) 2017 2018 (a) 2017 Net Income - Omnicom Group Inc. $ 298.9 $ 263.6 $ 927.2 $ 834.0 $ 1,181.6 $ 1,184.3 Net Income At
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Nine Months Ended September 30 2018 2017 Net Cash Used in Operating Activities $ (238.6) $ (156.0) Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (1,371.6) (1,327.3) Free Cash Flow $ 1,133.0 $ 1,171.3 Nine Months En
Slide 31: Supplemental Information
Supplemental Information Third Quarter Year to Date % of % of % of % of 2018 Rev 2017 Rev 2018 Rev 2017 Rev Revenue $ 3,714.3 $ 3,719.5 $ 11,203.5 $ 11,097.1 Operating expenses: Salary and service costs 2,834.2 76.3 % 2,764.5 74.3 % 8,319.9 74.3 % 8,184.6 73.8 % Occupancy and other costs 376.8 10.1
Slide 32: Operating Expenses – Impact of Net Gain on Dispositions and Repositioning Actions
2018 Operating Expenses – Impact of Net Gain on Dispositions and Repositioning Actions Increase (Decrease) Repositioning Net Gain on Total Actions Dispositions Operating expenses: Salary and service costs $ 73.7 $ — $ 73.7 Occupancy and other costs 73.5 — 73.5 Net gain on dispositions of subsidiarie
Slide 33: Reconciliation of Non-GAAP Financial Measures – Operating Profit
Reconciliation of Non-GAAP Financial Measures – Operating Profit Three Months Ended Nine Months Ended September 30 September 30 2018 (a) 2017 2018 (a) 2017 Net Income - Omnicom Group Inc. $ 298.9 $ 263.6 $ 927.2 $ 834.0 Net Income Attributed to Noncontrolling Interests 32.4 23.3 83.6 70.4 Net Income
Slide 34: Reconciliation of 2018 Non-GAAP Financial Measures – Net Income
Reconciliation of 2018 Non-GAAP Financial Measures - Net Income - Omnicom Group Inc. Three Months Nine Months Ended Ended September 30, September 30, 2018 2018 Net Income - Omnicom Group Inc., as reported $ 298.9 $ 927.2 Net gain from dispositions before income tax expense (178.4) (178.4) Reposition
Slide 35: Third Quarter Acquisition – Credera
Third Quarter Acquisition Omnicom Precision Marketing Group acquired a majority stake in Credera. Credera’s offerings to its clients include: management consulting services, customer experience development & improvement, technology solutions design & implementation and ROI analysis. Credera's focus
Slide 36: Third Quarter Acquisition – Levo Digital
Third Quarter Acquisition Clemenger Group has acquired a majority interest in Levo Digital, an Australian marketing services and technology business. Founded in 2005, Levo Digital helps its clients innovate, expand and transform their organizations through the effective implementation and use of tec
Slide 37: Selected Footnotes
Selected Footnotes (a) Q3 2018 QTD ASC 606 - On January 1, 2018, we adopted FASB ASC Topic 606 “Revenue from Contracts with Customers” ("ASC 606"). ASC 606 was applied using the modified retrospective method, where the cumulative effect of initial application is recognized as an adjustment to openin
Slide 38: Disclosure
Disclosure The preceding materials have been prepared for use in the October 16, 2018 conference call on Omnicom’s results of operations for the three and nine months ended September 30, 2018. The call will be archived on the Internet at http://investor.omnicomgroup.com/investor-relations/news-event