Omnicom Group Inc. · NYSE:OMC
Omnicom — Q3 2011 Earnings Presentation
30 slides from Omnicom's earnings presentation, Oct 18, 2011
Slide 1: Third Quarter 2011 Results
Investor Presentation Third Quarter 2011 Results October 18, 2011 Disclosure The following materials have been prepared for use in the October 18, 2011 conference call on Omnicom’s results of operations for the period ended September 30, 2011. The call will be archived on the Internet at http://www.
Slide 2: 2011 vs. 2010 P&L Summary
2011 vs. 2010 P&L Summary Third Quarter (a) Year to Date (a) 2011 2010 % ? 2011 2010 % ? Revenue $3,380.9 $2,994.6 12.9% $10,019.6 $8,955.7 11.9% EBITA (b) 397.1 332.1 19.6% 1,251.4 1,071.3 16.8% % Margin 11.7% 11.1% 12.5% 12.0% Amortization of Intangibles 23.7 18.0 67.7 50.7 Operating Income 373.4
Slide 3: 2011 Total Revenue Change
2011 Total Revenue Change Third Quarter Year to Date $ % ? $ % ? Prior Period Revenue $2,994.6 $8,955.7 Foreign Exchange (FX) Impact (a) 117.6 3.9% 322.5 3.6% Acquisition/Disposition Revenue (b) 53.7 1.8% 156.0 1.8% Organic Revenue (c) 215.0 7.2% 585.4 6.5% Current Period Revenue $3,380.9 12.9% $10,
Slide 4: 2011 Revenue by Discipline
2011 Revenue by Discipline Sales Specialty 8.1% PR 9.1% CRM 37.4% Advertising 45.4% To resize chart data range, drag lower right corner of range. Sales Specialty 8.7% PR 9.0% CRM 36.7% Advertising 45.6%To resize chart data range, drag lower right corner of range. $ Mix % Change (a) "% Organic Change
Slide 5: 2011 Revenue By Geography
2011 Revenue By Geography Sales U.K. 9.3% U.S. 50.4% Euro Markets 18.2% Other 22.1%To resize chart data range, drag lower right corner of range. Sales U.K. 9.0% U.S. 51.1% Euro Markets 18.5% Other 21.4%To resize chart data range, drag lower right corner of range. $ Mix $ Change(a) $ Mix $ Growth(a)
Slide 6: Revenue By Industry
Revenue By Industry Column1 Third Quarter Auto 8.0 Consumer Products 10.0 Financial Services 9.0 Food & Beverage 14.0 Other 18.0 Pharma. & Health 11.0 Retail 6.0 Technology 10.0 Telcom 7.0 T&E 7.0 To resize chart data range, drag lower right corner of range. Column1 Third Quarter Auto 8.0 Consumer P
Slide 7: Cash Flow Performance
Cash Flow Performance Nine Months Ended September 30 2011 2010 Free Cash Flow: Net Income (a) $753.2 $645.2 Depreciation and Amortization Expense 203.6 185.6 Share-based Compensation Expense 52.7 51.9 Gain on Remeasurement of Equity Interest in Clemenger Group (123.4) - Other Non-Cash Items to Recon
Slide 8: Current Credit Picture
Current Credit Picture Long-term Credit Ratings(a): BBB+ (S&P) Baa1 (Moody’s) Outlook(a): Stable (S&P and Moody’s) Twelve Months Ended September 30 2011 2010 EBITDA (b) $ 1,894.3 $ 1,674.7 Gross Interest Expense 157.4 130.1 EBITDA / Gross Interest Expense 12.0 x 12.9 x Total Debt / EBITDA 1.7 x 1.9
Slide 9: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a) % Twelve Months Ended September 30, 2011 15.7 Twelve Months Ended September 30, 2010 14.0 Return on Equity (ROE) (b) % Twelve Months Ended September 30, 2011 24.5 Twelve Months Ended September 30, 2010 19.9(a) Return on Invested Capital is Aft
Slide 10: Omnicom Debt Structure Supplemental Information
Omnicom Debt Structure Supplemental Information
Slide 11: Omnicom Debt Structure
Omnicom Debt Structure Bank Loans $17.00 2038 Convert $407.00 2032 Convert $253.00 2020 Senior Notes $1,000.00 2019 Senior Notes $500.00 2016 Senior Notes $1,000.00 The above chart sets forth Omnicom’s debt outstanding at September 30, 2011. The amounts reflected above for the 2016, 2019 and 2020 Se
Slide 12: Omnicom Debt Maturity Profile
Omnicom Debt Maturity Profile 1/1/2010 - - 5/31/2013 407 - 7/31/2012 253 - 10/31/2016 17 - 4/15/2016 1,000 - 12/31/2016 - - 7/15/2019 500 - 8/15/2020 1,000 - 6/21/2021 - -2032 Convert 2038 Convert 2016 Senior Notes Other Borrowings 2019 Senior Notes 2020 Senior Notes Our 2032 Convertible Notes are p
Slide 13: Current Bank Credit Facility
Current Bank Credit Facility On October 12, 2011 we amended our credit facility to increase the borrowing capacity to $2.5 billion and extend the term to October 12, 2016. Amount $2.5 Billion Type Unsecured Revolving Credit Term 5 Years October 2016 Facility Fee 15BP per annum Drawn Rate LIBOR +97.5
Slide 14: Senior Notes Due 2016
Senior Notes Due 2016 Principal Amount $1 Billion Co - Issuers Omnicom Group, Omnicom Finance, Omnicom Capital Date March 29, 2006 Maturity April 15, 2016 Security Unsecured, pari passu with Bank Facility Coupon 5.90% Spread Over Comparable Treasury at Issue 1.30% Rating Moody’s: Baa1 S&P: BBB+
Slide 15: Senior Notes Due 2019
Senior Notes Due 2019 Principal Amount $500 Million Co - Issuers Omnicom Group, Omnicom Finance, Omnicom Capital Date July 1, 2009 Maturity July 15, 2019 Security Unsecured, pari passu with Bank Facility Coupon 6.25% Spread Over Comparable Treasury at Issue 2.75% Rating Moody’s: Baa1 S&P: BBB+
Slide 16: Senior Notes Due 2020
Senior Notes Due 2020 Principal Amount $1 Billion Co - Issuers Omnicom Group, Omnicom Finance, Omnicom Capital Date August 5, 2010 Maturity August 15, 2020 Security Unsecured, pari passu with Bank Facility Coupon 4.45% Spread Over Comparable Treasury at Issue 1.55% Rating Moody’s: Baa1 S&P: BBB+
Slide 17: 2032 Convertible Notes
2032 Convertible Notes Principal Amount $253 Million Co - Issuers Omnicom Group, Omnicom Finance, Omnicom Capital Date March 6, 2002 Maturity July 31, 2032, with a put in July 2012 and annually thereafter until maturity Security Unsecured, pari passu with Bank Facility Coupon 0.00% Conversion Price
Slide 18: 2038 Convertible Notes
2038 Convertible Notes Principal Amount $407 Million Co - Issuers Omnicom Group, Omnicom Finance, Omnicom Capital Date June 10, 2003 Maturity July 1, 2038 with puts in June of 2013, 2018, 2023 and annually thereafter until maturity Security Unsecured, pari passu with Bank Facility Coupon 0.00% Conve
Slide 19: Supplemental Financial Information
Supplemental Financial Information
Slide 20: 2011 vs. 2010 Earnings Per Share
2011 vs. 2010 Earnings Per Share Third Quarter Year to Date 2011 2010 2011 2010 Net Income per Common Share - Omnicom Group: Basic $0.73 $0.58 $2.41 $1.90 Diluted 0.72 0.57 2.37 1.88 Net Income Available for Common Shares: Net Income - Omnicom Group $203.7 $174.6 $680.7 $581.2 Net Income Allocated t
Slide 21: Condensed Cash Flow
Condensed Cash Flow Nine Months Ended September 30 2011 2010 Net Income $753.2 $645.2 Share-Based Compensation Expense 52.7 51.9 Depreciation and Amortization 203.6 185.6 Gain on Remeasurement of Equity Interest in Clemenger Group (123.4) - Other Non-Cash Items to Reconcile to Net Cash Provided by O
Slide 22: 2011 Acquisition Related Expenditures
2011 Acquisition Related Expenditures Year to Date New Subsidiary Acquisitions (a) $145 Affiliates to Subsidiaries (b) 95 Affiliates (c) 2 Additional Interest in Controlled Subsidiaries (d) 29 Earn-outs (e) 72 Total Acquisition Expenditures (f) $343 (a) Includes acquisitions of a majority interest i
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 3 Months Ended September 30 12 Months Ended September 30 2011 2010 2011 2010 Revenue $ 3,380.9 $ 2,994.6 $ 13,606.5 $ 12,221.6 Operating Expenses, excluding Depreciation and Amortization 2,937.7 2,618.0 11,712.2 10,546.9 EBITDA 443.2 376.6 1,894.3 1,674.7 Deprecia
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Nine Months Ended September 30 2011 2010 Net Free Cash Flow $(429.7) $(72.1) Cash Flow items excluded from Net Free Cash Flow: Changes in Operating Capital (865.1) (799.3) (Repayments of) / Proceeds from Short-term & Long-tem Debt, net (35.7) 1,023.5 Repayment of
Slide 25: Impact of Remeasurement Gain and Repositioning Actions on Operating Expenses
2011 Non-GAAP Measures – Impact of Remeasurement Gain and Repositioning Actions on Operating Expenses 2011 YTD As Reported Remeasurement Gain Repositioning Actions 2011 YTD As Adjusted Salary & Service Expenses $7,395.8 $- $(92.8) $7,303.0 Office and General Expenses, excluding Depreciation and Amor
Slide 26: Impact of Remeasurement Gain and Repositioning Actions on Income Taxes
2011 Non-GAAP Measures – Impact of Remeasurement Gain and Repositioning Actions on Income Taxes Income Before Income Taxes Income Taxes Tax Rate 2011 Year to Date, As Reported $1,091.9 $349.0 32.0% Adjustments: Less: Gain on Remeasurement of Equity Interest in Clemenger Group (123.4) (2.8) 2.3% Plus
Slide 27: Third Quarter Acquisition: Sampark Group
Third Quarter Acquisition Established in 1994, Sampark Group is one of the premier PR agencies in India. Primarily recognized for excellent corporate and finance work, Sampark has a balanced portfolio of practices focused on corporate and brand reputation management that covers all major industries
Slide 28: Third Quarter Acquisition: TouchCast
Third Quarter Acquisition Founded in 2006, TouchCast is a digital brand activation company, delivering advertising and marketing solutions across all digital media platforms. The company currently specializes in small to midsize digital campaigns. TouchCast is located in Wellington, New Zealand and
Slide 29: Third Quarter Acquisition: Biz Group
Third Quarter Acquisition Founded in 2001, Biz Group provides integrated marketing and communication services including public relations, sampling, brand activation, event management, experiential marketing, direct marketing, field marketing, and digital marketing. Biz Group has been an affiliate of
Slide 30: Third Quarter Acquisition: JUMP!
Third Quarter Acquisition Formed in 2008, JUMP! specializes in below-the-line communication (offline and online). It is strong in fast-lane solutions, primarily handling retail clients, producing direct mail, brochures and free standing inserts. The Agency’s specializes in servicing retail brands in