Slide 1: Fourth Quarter 2016 Results
Fourth Quarter 2016 Results February 7, 2017 Investor Presentation
Slide 2: 2016 vs. 2015 P&L Summary Fourth Quarter
2016 vs. 2015 P&L Summary Fourth Quarter Fourth Quarter 2016 2015 Revenue $ 4,241.8 $ 4,153.3 (a) Operating Expenses 3,639.9 3,577.8 Operating Profit 601.9 575.5 Margin % 14.2% 13.9% Addback: Amortization of Intangibles 29.5 28.5 EBITA (b) $ 631.4 $ 604.0 Margin % 14.9% 14.5% (a) Additional informat
Slide 3: 2016 vs. 2015 P&L Summary (continued) Fourth Quarter
2016 vs. 2015 P&L Summary (continued) Fourth Quarter Fourth Quarter 2016 2015 Operating Profit $ 601.9 $ 575.5 Net Interest Expense 40.2 36.8 Income Taxes 182.7 176.7 Tax Rate % 32.5% 32.8% Income from Equity Method Investments 1.4 2.2 Noncontrolling Interests 30.1 32.6 Net Income - Omnicom Group $
Slide 4: 2016 vs. 2015 P&L Summary (continued) Fourth Quarter
2016 vs. 2015 P&L Summary (continued) Fourth Quarter Fourth Quarter 2016 2015 Net Income - Omnicom Group $ 350.3 $ 331.6 Net Income allocated to participating securities (1.6) (3.3) Net Income available for common shares $ 348.7 $ 328.3 Diluted Shares (millions) 237.8 243.8 EPS - Diluted $ 1.47 $ 1.
Slide 5: 2016 vs. 2015 P&L Summary Full Year
2016 vs. 2015 P&L Summary Full Year Full Year 2016 2015 Revenue $ 15,416.9 $ 15,134.4 (a) Operating Expenses 13,408.0 13,214.3 Operating Profit 2,008.9 1,920.1 Margin % 13.0% 12.7% Addback: Amortization of Intangibles 115.2 109.3 EBITA (b) $ 2,124.1 $ 2,029.4 Margin % 13.8% 13.4% (a) Additional info
Slide 6: 2016 vs. 2015 P&L Summary (continued) Full Year
2016 vs. 2015 P&L Summary (continued) Full Year Full Year 2016 2015 Operating Profit $ 2,008.9 $ 1,920.1 Net Interest Expense 167.1 141.5 Income Taxes 600.5 583.6 Tax Rate % 32.6% 32.8% Income from Equity Method Investments 5.4 8.4 Noncontrolling Interests 98.1 109.5 Net Income - Omnicom Group $ 1,1
Slide 7: 2016 vs. 2015 P&L Summary (continued) Full Year
2016 vs. 2015 P&L Summary (continued) Full Year Full Year 2016 2015 Net Income - Omnicom Group $ 1,148.6 $ 1,093.9 Net Income allocated to participating securities (6.5) (12.4) Net Income available for common shares $ 1,142.1 $ 1,081.5 Diluted Shares (millions) 239.2 245.2 EPS - Diluted $ 4.78 $ 4.4
Slide 8: Total Revenue Change
2016 Total Revenue Change Fourth Quarter Full Year $ %∆ $ %∆ Prior Period Revenue $ 4,153.3 $ 15,134.4 (a) Foreign Exchange (FX) Impact (74.7) -1.8% (283.8) -1.9% (b) Acquisition/Disposition Revenue 13.9 0.3% 38.2 0.3% (c) Organic Revenue 149.3 3.6% 528.1 3.5% Current Period Revenue $ 4,241.8 2.1% $
Slide 9: Revenue by Region
2016 Revenue by Region Fourth Quarter Full Year Latin Africa Latin Africa America MidEast America MidEast 3.2% 2.2% 2.8% 1.8% Asia Asia Pacific Pacific 10.6% 10.9% Euro Euro Markets & Markets & Other Other Europe Europe North 16.2% North 17.0% America America 58.2% UK 59.5% UK 9.1% 8.5% February 7,
Slide 10: Revenue by Region
2016 Revenue by Region Fourth Quarter Full Year % % Organic Organic (a) (a) $ Mix % Growth Growth $ Mix % Growth Growth North America $ 2,467.1 0.3% 0.6% North America $ 9,174.0 1.6% 2.4% UK 359.1 -11.0% 8.5% UK 1,407.7 -6.8% 4.9% Euro & Other Europe 723.1 4.5% 6.2% Euro & Other Europe 2,496.5 2.6%
Slide 11: Revenue by Discipline
2016 Revenue by Discipline Fourth Quarter Full Year Specialty Specialty 6.9% 7.2% PR PR 8.5% 8.9% Advertising Advertising 55.5% CRM 53.2% 29.1% CRM 30.7% % Organic % Organic (a) (a) $ Mix % Growth Growth $ Mix % Growth Growth Advertising $ 2,352.6 5.0% 4.6% Advertising $ 8,194.5 4.7% 5.9% CRM 1,235.
Slide 12: Revenue by Industry
Revenue by Industry Full Year – 2016 Full Year – 2015 T&E Auto T&E Auto 7% 8% 6% 8% Telcom Telcom 5% 5% Consumer Consumer Products Products Tech 10% Tech 10% 9% 10% Financial Financial Services Services Retail 7% Retail 7% 6% 6% Food & Food & Pharma & Beverage Pharma & Beverage Health 13% Health 13%
Slide 13: Cash Flow Performance
Cash Flow Performance Full Year 2016 2015 Net Income $ 1,246.7 $ 1,203.4 Depreciation and Amortization Expense 292.9 291.1 Share-Based Compensation Expense 93.4 99.4 Other Items to Reconcile to Net Cash Provided by Operating (24.8) 20.8 Activities, net Free Cash Flow (a) $ 1,608.2 $ 1,614.7 Addition
Slide 14: Cash Flow Performance
Cash Flow Performance Full Year 2016 2015 Free Cash Flow (a) $ 1,608.2 $ 1,614.7 Primary Uses of Cash: Dividends 505.4 496.7 Dividends paid to Noncontrolling Interest Shareholders 87.2 129.4 Capital Expenditures 165.5 202.7 Acquisition of Businesses and Affiliates, Acquisition of Additional Noncontr
Slide 15: Current Credit Picture
Current Credit Picture Full Year 2016 2015 EBITDA (a) $ 2,301.8 $ 2,211.2 Gross Interest Expense 209.7 181.1 EBITDA / Gross Interest Expense 11.0 x 12.2 x Total Debt / EBITDA 2.2 x 2.1 x Net Debt (b) / EBITDA 0.8 x 0.9 x Debt Bank Loans (Due Less Than 1 Year) $ 29 $ 6 CP & Borrowings Issued Under Re
Slide 16: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a) : Twelve Months Ended December 31, 2016 24.3% Twelve Months Ended December 31, 2015 21.5% Return on Equity (b): Twelve Months Ended December 31, 2016 49.8% Twelve Months Ended December 31, 2015 41.3% (a) Return on Invested Capital is After Tax
Slide 17: Net Cash Returned to Shareholders through Dividends and Share Repurchases
Net Cash Returned to Shareholders through Dividends and Share Repurchases From 2007 through December 31, 2016, Omnicom distributed 106% of Net Income to shareholders through Dividends and Share Repurchases. 106% $12.0 107% $9.9 $10.0 107% $8.7 $ In Billions 102% $7.6 $8.0 105% $6.5 99% 7.2 $5.5 $6.0
Slide 18: Supplemental Financial Information
Supplemental Financial Information February 7, 2017 17
Slide 19: Omnicom Debt Structure
Omnicom Debt Structure Bank Loans $29 2019 Senior Notes $500 2026 Senior 2020 Senior Notes Notes $1,400 $1,000 2024 Senior 2022 Senior Notes Notes $750 $1,250 The above chart sets forth Omnicom’s debt outstanding at December 31, 2016. The amounts reflected above for the 2019, 2020, 2022, 2024 and 20
Slide 20: 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 Senior $600 Notes $400 $200 Other Borrowings $0 Other borrowings at December 31, 2016 include short-term borrowings of $29 million which are due in less than one year.
Slide 21: Acquisition Related Expenditures
2016 Acquisition Related Expenditures Full Year (a) Acquisition of Businesses and Affiliates $ 308.8 (b) Acquisition of Additional Noncontrolling Interests 72.7 (c) Contingent Purchase Price Payments 110.5 Total Acquisition Expenditures (d) $ 492.0 (a) Includes acquisitions of a majority interest in
Slide 22: Condensed Cash Flow
Condensed Cash Flow Full Year 2016 2015 Net Income $ 1,246.7 $ 1,203.4 Share-Based Compensation Expense 93.4 99.4 Depreciation and Amortization 292.9 291.1 Other Items to Reconcile to Net Cash Provided by Operating Activities, net (24.8) 20.8 Changes in Operating Capital 323.0 557.6 Net Cash Provide
Slide 23: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 3 Months Ended December 31 Full Year 2016 2015 2016 2015 Revenue $ 4,241.8 $ 4,153.3 $ 15,416.9 $ 15,134.4 Operating Expenses, excluding Depreciation and Amortization 3,567.3 3,505.4 13,115.1 12,923.2 EBITDA 674.5 647.9 2,301.8 2,211.2 Depreciation 43.1
Slide 24: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Full Year 2016 2015 Free Cash Flow $ 1,608.2 $ 1,614.7 Items excluded from Free Cash Flow: Changes in Operating Capital 323.0 557.6 Net Cash Provided by Operating Actvities $ 1,931.2 $ 2,172.3 Full Year 2016 2015 Net Free Cash Flow $ (203.4) $ (43.9) Cas
Slide 25: Supplemental Information
Supplemental Information Fourth Quarter Full Year % of % of % of % of 2016 Rev 2015 Rev 2016 Rev 2015 Rev Revenue $ 4,241.8 $ 4,153.3 $ 15,416.9 $ 15,134.4 Operating expenses: Salary and service costs 3,148.7 74.2% 3,089.0 74.4% 11,453.2 74.3% 11,248.7 74.3% Occupancy and other Costs 297.8 7.0% 300.
Slide 26: Fourth Quarter Acquisition
Fourth Quarter Acquisition BBDO Worldwide has acquired a controlling interest in Grupo Sancho, which operated as an affiliate of the BBDO network in Colombia since 2000. Grupo Sancho’s agencies provide award-winning brand advertising and media services, as well as specialized offerings in CRM, digit
Slide 27: Disclosure
Disclosure The preceding materials have been prepared for use in the February 7, 2017 conference call on Omnicom’s results of operations for the period ended December 31, 2016. The call will be archived on the Internet at http://investor.omnicomgroup.com/investor-relations/news-events-and-filings/.