Omnicom Group Inc. · NYSE:OMC
Omnicom — Q4 2008 Earnings Presentation
29 slides from Omnicom's earnings presentation, Feb 10, 2009
Slide 1: Fourth Quarter 2008 Results
Exhibit 99.2 Investor Presentation Fourth Quarter 2008 Results February 10, 2009
Slide 2: Disclosure
Disclosure The following materials have been prepared for use in the February 10, 2009 conference call on Omnicom’s results of operations for the period ended December 31, 2008. The call will be archived on the Internet at http://www.omnicomgroup.com/financialwebcasts .. Forward-Looking Statements C
Slide 3: 2008 vs. 2007 P&L Summary
2008 vs. 2007 P&L Summary Fourth Quarter Full Year 2008 2007 % 2008 2007 % Revenue $ 3,371.3 $ 3,626.0 -7.0% $ 13,359.9 $ 12,694.0 5.2% Operating Income 448.4 531.9 -15.7% 1,689.4 1,659.1 1.8% % Margin 13.3% 14.7% 12.6% 13.1% Net Interest Expense 23.9 14.3 74.3 74.0 Profit Before Tax 424.5 517.6 -18
Slide 4: 2008 vs. 2007 Earnings per Share
2008 vs. 2007 Earnings per Share Fourth Quarter Full Year 2008 2007 2008 2007 Earnings per Share: Basic $ 0.88 $ 0.97 $ 3.20 $ 2.99 Diluted 0.88 0.96 3.17 2.95 Growth Rate, Diluted -8.3% 7.5% Weighted Average Shares (millions): Basic 307.2 323.2 313.0 326.0 Diluted 307.2 327.0 315.4 330.4 Dividend D
Slide 5: 2008 Total Revenue Growth
2008 Total Revenue Growth Fourth Quarter Full Year $ % $ % Prior Period Revenue $ 3,626.0 $12,694.0 Foreign Exchange (FX) Impact (a) (210.7) -5.8% 163.9 1.3% Acquisition Revenue (b) 39.2 1.1% 128.1 1.0% Organic Revenue (c) (83.2) -2.3% 373.9 2.9% Current Period Revenue $ 3,371.3 -7.0% $13,359.9 5.2%
Slide 6: 2008 Revenue by Discipline
2008 Revenue by Discipline $ Mix % Growth (a) $ Mix % Growth (a) Advertising $ 1,458.6 -7.6% Advertising $ 5,731.8 4.9% CRM 1,298.0 -3.3% CRM 5,084.9 9.5% PR 304.9 -10.2% PR 1,267.4 -0.4% Specialty 309.8 -15.3% Specialty 1,275.8 -2.7% (a) “Growth” is the year-over-year increase or decrease from the
Slide 7: 2008 Revenue By Geography
2008 Revenue By Geography Fourth Quarter Full Year U.K. U.K. 8.8% 9.9% Other Other 16.2% 16.2% U.S. U.S. 52.2% 51.6% Euro Markets Euro Markets 22.8% 22.3% $ Mix $ Growth(a) $ Mix $ Growth(a) United States $ 1,759.5 $ (86.4) United States $ 6,890.0 $ 185.8 Organic (106.4) Organic 115.5 Acquisition 20
Slide 8: Cash Flow – GAAP Presentation (condensed)
Cash Flow – GAAP Presentation (condensed) Full Year 2008 2007 Net Income $ 1,000.3 $ 975.7 Share-Based Compensation Expense 59.3 68.7 Depreciation and Amortization 235.9 208.6 Other Non-Cash Items to Reconcile to Net Cash Provided by Operations 123.6 119.7 Other Changes in Working Capital (12.0) 243
Slide 9: Current Credit Picture
Current Credit Picture Full Year 2008 2007 EBITDA (a) $ 1,925 $ 1,868 Gross Interest Expense (a) $ 124.6 $ 106.9 EBITDA / Gross Interest Expense 15.4 x 17.5 x Total Debt / EBITDA 1.6 x 1.6 x Debt: Short-term borrowings (Due Less Than 1 Year) $ 16 $ 12 (b) CP Issued Under $2.5B - 5 Year Revolver Due
Slide 10: Current Liquidity Picture
Current Liquidity Picture As of December 31, 2008 Total Amount Outstanding Available of Facility Committed Facilities 5 Year Revolver (a) $ 2,500 $ — $ 2,500 Other Committed Credit Facilities 16 16 — Total Committed Facilities 2,516 16 2,500 Uncommitted Facilities (b) 354 — — (b) Total Credit Facili
Slide 11: Omnicom Debt Structure
Omnicom Debt Structure Supplemental Information
Slide 12: Omnicom Debt Structure
Omnicom Debt Structure Other Debt $20 Short-term 2038 Convert Borrowings $16 $467 2032 Convert $727 10 Year Notes 2031 Convert $1,000 $847 The above chart reflects Omnicom’s debt outstanding at December 31, 2008. The amount reflected above for the 10 Year Notes represents the principal amount of the
Slide 13: Omnicom Debt Structure
Omnicom Debt Structure The Bank Facility and Commercial Paper Program together provide liquidity in the event any convertible notes are put. We then have flexibility to refinance in different debt capital markets. $1,200 $2.04 Billion $1.0 Billion Senior Convertible Notes 10-Year Note $1,000 2031 $8
Slide 14: Current Credit Picture Update
Current Credit Picture Update On February 9, 2009 $841 million of the 2031 notes were put back to us for purchase. The below amounts reflect how we financed the purchase of these bonds and do not reflect any other financing activities that occurred subsequent to December 31, 2008. Debt at Updated to
Slide 15: 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% Moody’s: Baa1 Rating S&P: A- Fitch:
Slide 16: 2031 Convertible Notes
2031 Convertible Notes Principal Amount $847 Million Co - Issuers Omnicom Group, Omnicom Finance, Omnicom Capital Date February 7, 2001 Maturity February 7, 2031 with annual puts each February Security Unsecured, pari passu with Bank Facility Coupon 0.00% Conversion Price $55 Moody’s: Baa1 Rating S&
Slide 17: 2032 Convertible Notes
2032 Convertible Notes Principal Amount $727 Million Co - Issuers Omnicom Group, Omnicom Finance, Omnicom Capital Date March 6, 2002 Maturity July 31, 2032 with annual puts each July Security Unsecured, pari passu with Bank Facility Coupon 0.00% Conversion Price $55 Moody’s: Baa1 Rating S&P: A- Fitc
Slide 18: 2038 Convertible Notes
2038 Convertible Notes Principal Amount $467 Million Co - Issuers Omnicom Group, Omnicom Finance, Omnicom Capital Date June 10, 2003 June 15, 2038 with puts in June of 2010, 2013, 2018, 2023 Maturity and annually thereafter until maturity Security Unsecured, pari passu with Bank Facility Coupon 0.00
Slide 19: Current Bank Credit Facility
Current Bank Credit Facility Amount $2.5 Billion Type Unsecured Revolving Credit Maturity 5 Years – June 2011 Facility Fee 13BP per annum Drawn Rate Libor +17BP -Maximum Debt to EBITDA 3:1 Covenants -Minimum Interest Coverage 5:1 February 10, 2009 18
Slide 20: Current Bank Credit Facility – Distribution of 33 Banks
Current Bank Credit Facility – Distribution of 33 Banks Global Citigroup ($100) • JP Morgan ($200) • HSBC ($200) • Royal Bank of Scotland ($150) Europe Asia North America Societe Generale ($150) Sumitomo ($100) Bank of America ($200) Deutsche ($150) Bank of Tokyo ($50) Wells Fargo ($175) BBVA ($100)
Slide 21: Current Omnicom Credit Ratings
Current Omnicom Credit Ratings Moody’s S&P Fitch Long Term Ratings Baa1 A- A- Short Term Ratings P2 A2 F2 Outlook Stable Stable Stable February 10, 2009 20
Slide 22: Reconciliation of Operating Income to EBITDA
Reconciliation of Operating Income to EBITDA Full Year 2008 2007 Operating Income $ 1,689 1,659 Depreciation 183 164 Amortization 53 45 EBITDA $ 1,925 1,868 The covenants contained in our credit facility are based on the EBITDA ratios as presented on pages 8 & 18 of this presentation. The above reco
Slide 23: Acquisitions Summary
OmnicomGroup Acquisitions Summary
Slide 24: Acquisition Related Expenditures
Acquisition Related Expenditures Full Year 2008 New Subsidiary Acquisitions (a) $ 89 Affiliates to Subsidiaries (b) 37 Affiliates (c) 88 Existing Subsidiaries (d) 99 Earn-outs (e) 179 Total Acquisition Expenditures $ 492 Note: See pages 26-28 for acquisition profiles. a) Includes acquisitions of a m
Slide 25: Potential Earn-out Obligations
Potential Earn-out Obligations The following is a calculation of future earn-out obligations as of December 31, 2008, assuming that the underlying acquired agencies continue to perform at their current levels: (a) 2009 2010 2011 2012 Thereafter Total $ 118 $ 99 $ 53 $ 33 $ 12 $ 315 (a) The ultimate
Slide 26: Potential Obligations
Potential Obligations In conjunction with certain transactions, Omnicom has agreed to acquire (at the sellers’ option) additional equity interests. If these rights are exercised, there would likely be an increase in our net income as a result of our increased ownership and the reduction of minority
Slide 27: Fourth Quarter Acquisitions
Fourth Quarter Acquisitions Access Communications is a full service public relations agency that provides comprehensive, integrated marketing programs, focusing in the hi- tech and consumer-tech area. The company’s services include strategic planning, social media relations including blogger relatio
Slide 28: Fourth Quarter Acquisitions
Fourth Quarter Acquisitions New Performance is a full service healthcare advertising agency, creating integrated healthcare campaigns for global as well as local clients within Germany. A member of the DAS affiliate network for the past three years, New Performance has collaborated with many Omnicom
Slide 29: Fourth Quarter Acquisitions
Fourth Quarter Acquisitions Yellowwood Future Architects is a marketing and brand strategy agency established in 1997. One of the most respected entities in its field in South Africa, Yellowwood Future Architects’ offering includes brand and marketing strategy, brand insights and intelligence, brand