Omnicom Group Inc. · NYSE:OMC
Omnicom — Q2 2013 Earnings Presentation
26 slides from Omnicom's earnings presentation, Jul 18, 2013
Slide 1: Second Quarter 2013 Results
Second Quarter 2013 Results July 18, 2013 Investor Presentation
Slide 2: 2013 vs. 2012 P&L Summary
2013 vs. 2012 P&L Summary Second Quarter Year to Date 2013 2012 % 2013 2012 % Revenue $ 3,637.0 $ 3,561.0 2.1% $ 7,035.9 $ 6,868.2 2.4% EBITA (a) 548.3 530.4 3.4% 945.4 916.8 3.1% % Margin 15.1% 14.9% 13.4% 13.3% Amortization of Intangibles 25.3 24.0 50.6 47.9 Operating Income $ 523.0 $ 506.4 3.3% $
Slide 3: 2013 vs. 2012 P&L Summary
2013 vs. 2012 P&L Summary Second Quarter Year to Date 2013 2012 % 2013 2012 % Operating Income $ 523.0 $ 506.4 3.3% $ 894.8 $ 868.9 3.0% % Margin 14.4% 14.2% 12.7% 12.7% Net Interest Expense 40.7 34.9 81.7 64.0 Income Taxes 163.6 161.9 272.7 271.2 % Tax Rate 33.9% 34.3% 33.5% 33.7% Income from Equit
Slide 4: 2013 vs. 2012 Net Income and Earnings Per Share
2013 vs. 2012 Net Income and Earnings Per Share Second Quarter Year to Date 2013 2012 2013 2012 Net Income - Omnicom Group $ 289.5 $ 282.7 $ 494.7 $ 487.3 Net Income - Participating Securities (7.8) (6.4) (13.4) (10.9) Net Income Available for Common Shares $ 281.7 $ 276.3 $ 481.3 $ 476.4 Diluted Sh
Slide 5: 2013 Total Revenue Change
2013 Total Revenue Change Second Quarter Year to Date $% $ % Prior Period Revenue $ 3,561.0 $ 6,868.2 Foreign Exchange (FX) Impact (a) (18.7) -0.6% (38.2) -0.6% Acquisition/Disposition Revenue (b) (4.3) -0.1% 11.1 0.2% Organic Revenue (c) 99.0 2.8% 194.8 2.8% Current Period Revenue $ 3,637.0 2.1% $
Slide 6: 2013 Revenue by Discipline
2013 Revenue by Discipline Second Quarter Year to Date Specialty Specialty 7.9% 7.7% PR PR 9.2% 9.3% Advertising Advertising 48.4% 48.5% CRM CRM 34.5% 34.5% % Organic % Organic $ Mix % Growth Growth (a) $ Mix % Growth Growth (a) Advertising $ 1,759.6 3.2% 4.3% Advertising $ 3,411.4 4.4% 5.1% CRM 1,2
Slide 7: 2013 Revenue by Geography
2013 Revenue by Geography Second Quarter Year to Date UK UK 9.0% 9.0% Rest of Rest of World World 23.0% 22.9% Euro Euro Markets Markets 15.7% 15.6% U.S. U.S. 52.3% 52.5% July 18, 2013 6
Slide 8: 2013 Revenue by Geography
2013 Revenue by Geography Second Quarter Year to Date $ Mix $ Growth % Growth $ Mix $ Growth % Growth United States $ 1,904.0 $ 44.4 2.4% United States $ 3,695.6 $ 116.6 3.3% Organic 51.1 2.7% Organic 121.2 3.4% Acquisition (6.7) -0.3% Acquisition (4.6) -0.1% International $ 1,733.0 $ 31.6 1.9% Inte
Slide 9: Revenue by Industry
Revenue by Industry Second Quarter – 2013 Second Quarter – 2012 Growth T&E Auto T&E Auto Auto -11.3% 7% 8% 6% 9% Telcom Telcom 6% Food & Beverage 2.5% 6% Consumer Consumer Products Products Consumer Products 7.2% Tech Tech 11% 10% 9% 9% Financial Services -2.4% Financial Services Financial Pharma &
Slide 10: Cash Flow Performance
Cash Flow Performance Six Months Ended June 30 2013 2012 Net Income $ 546.5 $ 540.2 Depreciation and Amortization Expense 141.9 138.7 Share-Based Compensation Expense 44.7 44.4 Other Non-Cash Items to Reconcile to Net Cash Provided by Operating (30.9) (59.2) Activities, net Free Cash Flow (a) $ 702.
Slide 11: Cash Flow Performance
Cash Flow Performance Six Months Ended June 30 2013 2012 Free Cash Flow (a) $ 702.2 $ 664.1 Primary Uses of Cash: Dividends (b) 106.7 153.5 Dividends paid to Noncontrolling Interest Shareholders 59.9 56.8 Capital Expenditures 69.0 112.8 Acquisitions and Payments for Additional Interest in Controlled
Slide 12: Current Credit Picture
Current Credit Picture Twelve Months Ended June 30 2013 2012 EBITDA (a) $ 2,116.0 $ 2,008.3 Gross Interest Expense 195.4 161.8 EBITDA / Gross Interest Expense 10.8 x 12.4 x Total Debt / EBITDA 1.9 x 2.0 x Net Debt (b) / EBITDA 1.2 x 1.1 x Debt Bank Loans (Due Less Than 1 Year) $13 $ 12 CP & Borrowin
Slide 13: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a) : Twelve Months Ended June 30, 2013 17.5% Twelve Months Ended June 30, 2012 16.0% Return on Equity (b) : Twelve Months Ended June 30, 2013 31.8% Twelve Months Ended June 30, 2012 28.2% (a) Return on Invested Capital is After Tax Operating Inco
Slide 14: 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 Q2 2013, Omnicom distributed over 100% of Net Income to shareholders through Dividends and Share Repurchases . 12.0 10.0 $9.68 $9.59 8.0 Billions
Slide 15: Supplemental Financial Information
Supplemental Financial Information July 18, 2013 14
Slide 16: Omnicom Debt Structure
Omnicom Debt Structure Bank Loans $13 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 June 30, 2013. The amounts reflected above for the 2016, 2019, 2020 and 2022 Senior Notes
Slide 17: 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, 2013 and annually in July thereafter until maturity. Other borrowings at June 30, 201
Slide 18: 2013 Acquisition Related Expenditures
2013 Acquisition Related Expenditures Year to Date Acquisitions of Businesses and Affiliates (a) $ 7.8 Additional Interest in Controlled Subsidiaries (b) 5.4 Earn -outs on acquisitions completed prior to January 1, 2009 (c) 14.4 Earn -outs on acquisitions completed after January 1, 2009 (c) 31.8 Tot
Slide 19: Condensed Cash Flow
Condensed Cash Flow Six Months Ended June 30 2013 2012 Net Income $ 546.5 $ 540.2 Share-Based Compensation Expense 44.7 44.4 Depreciation and Amortization 141.9 138.7 Other Non-Cash Items to Reconcile to Net Cash Provided by Operating Activities, net (30.9) (59.2) Changes in Operating Capital (635.7
Slide 20: Reconciliation of Non-GAAP Measures
Reconciliation of Non - GAAP Measures Three Months Ended June 30 Twelve Months Ended June 30 2013 2012 2013 2012 Revenue $ 3,637.0 $ 3,561.0 $ 14,387.1 $ 14,102.0 Operating Expenses, excluding Depreciation and Amortization 3,043.2 2,985.3 12,271.1 12,093.7 EBITDA 593.8 575.7 2,116.0 2,008.3 Deprecia
Slide 21: Reconciliation of Non-GAAP Measures
Reconciliation of Non -GAAP Measures Six Months Ended June 30 2013 2012 Net Free Cash Flow $ (71.2) $ (334.1) Cash Flow items excluded from Net Free Cash Flow: Changes in Operating Capital (635.7) (506.8) Repayment of Convertible Debt (406.7) - Proceeds from Short-term & Long-term Debt, net 6.9 749.
Slide 22: Supplemental Information
SUPPLEMENTAL INFORMATION Supplemental Information Second Quarter Year to Date 2013 2012 2013 2012 Salary and service costs $ 2,598.8 $ 2,541.3 $ 5,132.3 $ 4,975.8 Office and general expenses 515.2 513.3 1,008.8 1,023.5 Operating Expenses $ 3,114.0 $ 3,054.6 $ 6,141.1 $ 5,999.3 Interest Expense $ 49.
Slide 23: Second Quarter Acquisition: Brandzeichen
Second Quarter Acquisition Brandzeichen is a brand consultancy and communications agency. The agency’s core services include strategic brand consultancy, internal and external communications, as well as the development and execution of integrated social media campaigns. Brandzeichen is located in Du
Slide 24: Second Quarter Acquisition: JustOne
Second Quarter Acquisition JustOne is a direct marketing agency with extensive expertise in CRM, loyalty, one-to-one, retail and direct response marketing. JustOne is located in Auckland, New Zealand and will operate as part of the Clemenger Group within the BBDO Worldwide network. JustOne specializ
Slide 25: Second Quarter Acquisition: Kingsday
Second Quarter Acquisition Kingsday provides an integrated service offering to its clients, including advertising, PR, and digital services. The agency was founded in 2011 by an international award-winning team of four partners, experts in creating conversation value for leading brands. Kingsday is
Slide 26: Disclosure
Disclosure The preceding materials have been prepared for use in the July 18, 2013 conference call on Omnicom’s results of operations for the period ended June 30, 2013. The call will be archived on the Internet at http://www. omnicomgroup. com/financialwebcasts. Forward -Looking Statements Certain