Omnicom Group Inc. · NYSE:OMC
Omnicom — Q1 2023 Earnings Presentation
22 slides from Omnicom's earnings presentation, Apr 18, 2023
Slide 1: 2023 First Quarter
2023 First Quarter April 18, 2023
Slide 2: First Quarter Highlights
First Quarter Highlights Revenue Income – 5.2% organic revenue growth – 13.5% Non-GAAP adjusted operating income – Broad-based growth across disciplines and margin geographies – 33.7% year-over-year growth in Diluted EPS, – On track to achieve full-year expectation of 12.2% year-over year growth in
Slide 3: Income Statement Summary - Adjusted
Income Statement Summary - Adjusted Three Months Ended March 31 Non-GAAP Non-GAAP Reported Non-GAAP Reported Non-GAAP Adjusted Adjusted 2023 Adjustments(a) 2022 Adjustments(b) 2023 2022 Revenue $ 3,443.3 $ — $ 3,443.3 $ 3,410.3 $ — $ 3,410.3 Operating Expenses 3,096.8 (119.2) 2,977.6 3,057.3 (113.4)
Slide 4: Revenue Change
Revenue Change First Quarter $ %∆ Prior Period Revenue $ 3,410.3 Foreign exchange rate impact(a) (110.0) (3.2)% Acquisition revenue, net of disposition revenue(b) (35.7) (1.0)% Organic growth(c) 178.7 5.2 % Current Period Revenue $ 3,443.3 1.0 % Note: In millions (a) Foreign exchange rate impact: ca
Slide 5: Revenue by Discipline
Revenue by Discipline First Quarter % Organic Revenue % of Rev % Growth Growth(a) Advertising & Media $ 1,776.5 51.6 % 0.4 % 5.1 % Precision Marketing 360.0 10.5 % 6.1 % 7.0 % Commerce & Brand 209.6 6.1 % (0.9)% 3.3 % Consulting Experiential 147.8 4.3 % 5.8 % 8.4 % Execution & Support 255.5 7.4 % (7
Slide 6: Revenue by Region
Revenue by Region First Quarter % Organic Revenue % of Rev % Growth Growth(a) United States $ 1,812.2 52.6 % 5.1 % 5.1 % Other North America 114.6 3.3 % 0.2 % 6.6 % United Kingdom 371.5 10.8 % (4.4)% 5.9 % Euro Markets & Other 580.4 16.9 % (3.8)% 5.4 % Europe Asia Pacific 405.7 11.8 % (5.6)% 2.8 % L
Slide 7: Revenue by Industry Sector
Revenue by Industry Sector Three Months Ended March 31 2023 2022 Pharmaceuticals and Healthcare 16% 15% Food and Beverage 16% 14% Auto 11% 10% Technology 8% 11% Consumer Products 8% 8% Financial Services 8% 7% Travel & Entertainment 7% 6% Retail 6% 6% Telecommunications 4% 4% Government 4% 4% Servic
Slide 8: Operating Expense Detail
Operating Expense Detail First Quarter 2023 % of Rev 2022 % of Rev Revenue $ 3,443.3 $ 3,410.3 Operating expenses: Salary and related service costs 1,778.0 51.6 % 1,794.6 52.6 % Third-party service costs (a) 639.3 18.6 % 581.8 17.1 % Third-party incidental costs(b) 125.6 3.6 % 115.4 3.4 % Total sala
Slide 9: Adjusted Non-GAAP Operating Income & Adjusted EBITA
Adjusted Non-GAAP Operating Income & Adjusted EBITA First Quarter Reported Non-GAAP Adjusted Reported Non-GAAP Adjusted 2023 Adjustments(b) 2023 2022 Adjustments(c) 2022 Revenue $ 3,443.3 $ — $ 3,443.3 $ 3,410.3 $ — $ 3,410.3 Operating Expenses 3,096.8 (119.2) 2,977.6 3,057.3 (113.4) 2,943.9 Operati
Slide 10: Cash Flow Performance
Cash Flow Performance Three Months Ended March 31 2023 2022 Free Cash Flow(a) $ 428.9 $ 339.7 Primary Uses of Cash: Dividends paid to Common Shareholders 142.3 147.4 Dividends paid to Noncontrolling Interest Shareholders 12.5 14.0 Capital Expenditures 23.1 23.2 Acquisition payments, including paymen
Slide 11: Credit & Liquidity
Credit & Liquidity $ Millions Twelve Months Ended March 31 2023 2022 EBITDA(a) $ 2,294.9 $ 2,299.5 Total Debt / EBITDA 2.5 x 2.5 x Net Debt(b) / EBITDA 1.0 x 0.7 x Debt Bank Loans (Due Less Than 1 Year) $ 18.5 $ 12.4 USD-denominated Senior Notes 4,150.0 4,150.0 EUR-denominated Senior Notes 1,090.6 1
Slide 12: Historical Returns
Historical Returns Return on Invested Capital (ROIC)(a) Return on Equity(b) Twelve months ended March 31, 2023 24.1 % Twelve months ended March 31, 2023 44.8 % Twelve months ended March 31, 2022 26.4 % Twelve months ended March 31, 2022 41.7 % (a) Return on Invested Capital is After Tax Reported Ope
Slide 13: Appendix
Appendix 13
Slide 14: Free Cash Flow
Free Cash Flow Three Months Ended March 31 2023 2022 Net Income $ 243.9 $ 194.6 Depreciation and Amortization of Intangible Assets 53.9 55.2 Share-Based Compensation 20.7 20.0 Real estate repositioning costs 119.2 — Non-cash charge related to the effects of the war in Ukraine — 65.8 Other Items to R
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended March 31 2023 2022 Net Cash Used in Operating Activities $ (522.1) $ (544.5) Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (951.0) (884.2) Free Cash Flow $ 428.9 $ 339.7 Net Decrease in Cash and Cash Equivalents $ (1
Slide 16: Operating Expense Detail - Constant $
Operating Expense Detail - Constant $ First Quarter 2023 2023 C$(e) 2022 Operating expenses: Salary and related service costs $ 1,778.0 $ 1,834.8 $ 1,794.6 Third-party service costs (a) 639.3 656.8 581.8 Third-party incidental costs(b) 125.6 130.6 115.4 Salary and service costs 2,542.9 2,622.2 2,491
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Twelve Months Ended March 31 March 31 2023 2022 2023 2022 Net Income - Omnicom Group Inc. $ 227.5 $ 173.8 $ 1,370.2 $ 1,293.8 Net Income Attributed to Noncontrolling Interests 16.4 20.8 82.9 102.4 Income (Loss) From Equity Method Investments 0.1 (0.1) 5.4
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Non-GAAP Adjusted Non-GAAP Adjusted Operating Operating EBITA EBITA Income Income Net Income - Omnicom Group Inc.- reported $ 227.5 $ 227.5 $ 173.8 $ 173.8 Net Income Attributed To Noncontrolling Interests 1
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations First Quarter 2023 2022 Net Income - Omnicom Group Inc. - Reported $ 227.5 $ 173.8 Real estate repositioning costs 119.2 — Tax expense on real estate repositioning costs (28.2) — Charges arising from the effects of the war in Ukraine — 113.4 Income tax expense related to cha
Slide 20: Revenue by Discipline - 2022 & 2021 Full Year
Revenue by Discipline - 2022 & 2021 Full Year 2022 Full Year 2021 Full Year % Organic % Organic $ Mix % Growth Growth(a) $ Mix % Growth Growth(a) Advertising & Media $ 7,433.9 (6.7)% 7.3 % $ 7,966.2 5.9 % 10.6 % Precision Marketing 1,426.6 18.4 % 17.0 % 1,205.2 26.1 % 18.5 % Commerce & Brand Consult
Slide 21: Revenue by Discipline - 2022 Quarterly
Revenue by Discipline - 2022 Quarterly Three Months Ended Q1 2022 Q2 2022 Q3 2022 Q4 2022 Advertising & Media $ 1,770.2 $ 1,834.4 $ 1,764.9 $ 2,064.4 Precision Marketing 339.2 363.9 363.3 360.2 Commerce & Brand Consulting 211.4 207.0 211.9 217.8 Experiential 139.7 152.0 120.6 223.3 Execution & Suppo
Slide 22: Disclosures
Disclosures The preceding materials have been prepared for use in the April 18, 2023 conference call on Omnicom’s results of operations for the three months ended March 31, 2023. The call will be archived on the Internet at http:// investor.omnicomgroup.com Forward-Looking Statements Certain stateme