Slide 1: Fourth Quarter 2017 Results
Fourth Quarter 2017 Results February 15, 2018 Investor Presentation
Slide 2: 2017 vs. 2016 P&L Summary - Fourth Quarter
2017 vs. 2016 P&L Summary Fourth Quarter Fourth Quarter 2017 2016 Revenue $ 4,176.6 $ 4,241.8 Operating Expenses (a) 3,556.5 3,639.9 Operating Profit 620.1 601.9 Net Interest Expense 43.6 40.2 (b) (c) Income Tax Expense (b) (c) 289.5 182.7 (b) (c) Tax Rate % (b) (c) 50.2% 32.5% Income from Equity Me
Slide 3: 2017 vs. 2016 Earnings per Share – Diluted - Fourth Quarter
2017 vs. 2016 Earnings per Share – Diluted Fourth Quarter Fourth Quarter 2017 2016 Net Income - Omnicom Group Inc. $ 254.4 $ 350.3 Net Income allocated to participating securities (0.3) (1.6) Net Income available for common shares (a) $ 254.1 $ 348.7 Diluted Shares (millions) 232.3 237.8 Earnings pe
Slide 4: 2017 vs. 2016 Non-GAAP Financial Measures - Impact of Tax Cuts and Jobs Act
2017 vs. 2016 Non-GAAP Financial Measures - Impact of Tax Cuts and Jobs Act Fourth Quarter 2017 2017 2016 Excluding Reported 2017 Tax Act (a) Reported Operating Profit $ 620.1 $ 620.1 $ 601.9 Income Tax Expense 289.5 183.2 182.7 Tax Rate % 50.2% 31.8% 32.5% Net Income - Omnicom Group Inc. 254.4 360.
Slide 5: 2017 vs. 2016 P&L Summary - Full Year
2017 vs. 2016 P&L Summary Full Year Full Year 2017 2016 Revenue $ 15,273.6 $ 15,416.9 Operating Expenses (a) 13,213.9 13,408.0 Operating Profit 2,059.7 2,008.9 Net Interest Expense 174.8 167.1 (b) (c) Income Tax Expense (b) (c) 696.2 600.5 (b) (c) Tax Rate % (b) (c) 36.9% 32.6% Income from Equity Me
Slide 6: 2017 vs. 2016 Earnings per Share – Diluted - Full Year
2017 vs. 2016 Earnings per Share – Diluted Full Year Full Year 2017 2016 Net Income - Omnicom Group Inc. $ 1,088.4 $ 1,148.6 Net Income allocated to participating securities (1.6) (6.5) Net Income available for common shares (a) $ 1,086.8 $ 1,142.1 Diluted Shares (millions) 233.9 239.2 Earnings per
Slide 7: 2017 vs. 2016 Non-GAAP Financial Measures - Impact of Tax Cuts and Jobs Act
2017 vs. 2016 Non-GAAP Financial Measures - Impact of Tax Cuts and Jobs Act Full Year 2017 2017 2016 Excluding Reported 2017 Tax Act (a) Reported Operating Profit $ 2,059.7 $ 2,059.7 $ 2,008.9 Income Tax Expense 696.2 589.9 600.5 Tax Rate % 36.9% 31.3% 32.6% Net Income - Omnicom Group Inc. 1,088.4 1
Slide 8: Total Revenue Change
2017 Total Revenue Change Fourth Quarter Full Year $ %∆ $ %∆ Prior Period Revenue $ 4,241.8 $ 15,416.9 Foreign exchange rate impact (a) 102.1 2.4% 42.9 0.3% Acquisition revenue, net of disposition (234.5) -5.5% (647.3) -4.2% revenue (b) Organic growth (c) 67.2 1.6% 461.1 3.0% Current Period Revenue
Slide 9: Revenue by Discipline
2017 Revenue by Discipline Fourth Quarter Full Year Healthcare Healthcare PR 5.6% 6.1% PR 8.7% 9.0% CRM CRM Execution Execution & Support & Support 14.2% Advertising 14.1% Advertising 54.1% 53.3% CRM CRM Consumer Consumer Experience Experience 17.4% 17.5% % Organic % Organic $ Mix % Growth Growth (a
Slide 10: Revenue by Region
2017 Revenue by Region Fourth Quarter Full Year Mideast Latin Mideast Latin & Africa America & Africa America 2.1% 3.6% 2.2% 3.2% Asia Asia Pacific Pacific 11.0% 10.8% Euro Euro Markets & Markets & Other Other Europe North North Europe 19.9% America America 17.9% 56.9% 54.2% UK UK 9.1% 9.1% February
Slide 11: Revenue by Region
2017 Revenue by Region Fourth Quarter Full Year % Organic % Organic $ Mix % Growth Growth (a) $ Mix % Growth Growth (a) North America $ 2,263.6 -8.2% -0.8% North America $ 8,686.0 -5.3% 0.6% UK 378.5 5.4% -0.7% UK 1,395.7 -0.9% 5.1% Euro & Other Europe 831.5 15.0% 8.2% Euro & Other Europe 2,732.2 9.
Slide 12: Revenue by Industry
Revenue by Industry Full Year – 2017 Full Year – 2016 T&E Auto T&E Auto Telcom 6% 10% 7% 8% Telcom 5% 5% Consumer Consumer Products Tech Products Tech 10% 9% 10% 9% Financial Financial Services Retail Services Retail 7% 6% 7% 6% Food & Pharma & Food & Pharma & Beverage Health Beverage Health 13% 12%
Slide 13: Cash Flow Performance
Cash Flow Performance Full Year 2017 2016 Net Income $ 1,192.2 $ 1,246.7 Depreciation and Amortization of Intangible Assets 282.1 292.9 Share-Based Compensation 80.2 93.4 Impact of 2017 Tax Act (a) 106.3 — Other Items to Reconcile to Net Cash Provided by Operating 14.6 16.6 (c) Activities, net Free
Slide 14: Cash Flow Performance
Cash Flow Performance Full Year 2017 2016 Free Cash Flow (a) $ 1,675.4 $ 1,649.6 (b) Primary Uses of Cash: Dividends paid to Common Shareholders 515.2 505.4 Dividends paid to Noncontrolling Interest Shareholders 101.7 87.2 Capital Expenditures 156.0 165.5 Acquisition of Businesses and Affiliates, Ac
Slide 15: Current Credit Picture
Current Credit Picture Full Year 2017 2016 EBITDA (a) $ 2,341.8 $ 2,301.8 Gross Interest Expense 224.5 209.7 EBITDA / Gross Interest Expense 10.4 x 11.0 x Total Debt / EBITDA 2.1 x 2.2 x Net Debt (b) / EBITDA 0.5 x 0.8 x Debt Bank Loans (Due Less Than 1 Year) $ 12 $ 29 CP & Borrowings Issued Under R
Slide 16: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a) : Twelve months ended December 31, 2017 24.1% Twelve months ended December 31, 2016 24.3% Return on Equity (b): Twelve months ended December 31, 2017 45.6% Twelve months ended December 31, 2016 49.8% (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 2008 through December 31, 2017, Omnicom distributed 105% of Net Income to shareholders through Dividends and Share Repurchases. 105% $12.0 106% $10.0 $10.0 108% $8.9 108% 3.6 $7.8 $8.0 3.1 $ In Billions 102% $6.7 2.6 106%
Slide 18: Supplemental Financial Information
Supplemental Financial Information February 15, 2018 17
Slide 19: Omnicom Debt Structure
Omnicom Debt Structure Bank Loans $12 2019 Senior Notes $500 2026 Senior Notes $1,400 2020 Senior Notes $1,000 2024 Senior Notes $750 2022 Senior Notes $1,250 The above chart sets forth Omnicom’s debt outstanding at December 31, 2017. 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 $600 Senior Notes $400 $200 Other Borrowings $0 7 18 8 19 9 20 0 21 1 22 2 23 3 24 4 25 5 26 6 -1 -1 -1 -2 -2 -2 -2 -2 -2 -2 n- n- n- n- n- n- n- n- n- ec ec ec ec ec
Slide 21: Acquisition Related Expenditures
2017 Acquisition Related Expenditures Full Year Acquisition of Businesses and Affiliates (a) $ 26.3 Acquisition of Additional Noncontrolling Interests (b) 17.0 Contingent Purchase Price Payments (c) 108.4 Total Acquisition Expenditures (d) $ 151.7 (a) Includes acquisitions of a majority interest in
Slide 22: Condensed Cash Flow
Condensed Cash Flow Full Year 2017 2016 Net Income $ 1,192.2 $ 1,246.7 Share-Based Compensation 80.2 93.4 Depreciation and Amortization of Intangible Assets 282.1 292.9 (b) Other Items to Reconcile to Net Cash Provided by Operating Activities, net 14.6 16.6 Impact of 2017 Tax Act (a) 106.3 — Changes
Slide 23: 2017 vs. 2016 Non-GAAP Financial Measures – EBITA
2017 vs. 2016 Non-GAAP Financial Measures – EBITA Fourth Quarter Full Year 2017 2016 2017 2016 Revenue $ 4,176.6 $ 4,241.8 $ 15,273.6 $ 15,416.9 Operating expenses (a) 3,556.5 3,639.9 13,213.9 13,408.0 Operating Profit 620.1 601.9 2,059.7 2,008.9 Operating Profit Margin % 14.8% 14.2% 13.5% 13.0% Add
Slide 24: Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA
Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA Three Months Ended December 31 Full Year 2017 2016 2017 2016 Net Income - Omnicom Group Inc. $ 254.4 $ 350.3 $ 1,088.4 $ 1,148.6 Net Income Attributed to Noncontrolling Interests 33.4 30.1 103.8 98.1 Net Income 287.8 380.4 1,192.2 1,24
Slide 25: Non-GAAP Financial Measures - Impact of Tax Cuts and Jobs Act
2017 Non-GAAP Financial Measures - Impact of Tax Cuts and Jobs Act Fourth Quarter 2017 2017 2017 Impact of 2017 Excluding Reported Tax Act (a) 2017 Tax Act (a) Operating Profit $ 620.1 $ — $ 620.1 Income Tax Expense 289.5 106.3 183.2 Tax Rate % 50.2% 31.8% Net Income - Omnicom Group Inc. 254.4 (106.
Slide 26: Non-GAAP Financial Measures - Impact of Tax Cuts and Jobs Act
2017 Non-GAAP Financial Measures - Impact of Tax Cuts and Jobs Act Full Year 2017 2017 2017 Impact of 2017 Excluding Reported Tax Act (a) 2017 Tax Act (a) Operating Profit $ 2,059.7 $ — $ 2,059.7 (b) Income Tax Expense 696.2 106.3 589.9 (b) Tax Rate % 36.9% 31.3% Net Income - Omnicom Group Inc. 1,08
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Full Year 2017 2016 (a) Net Cash Provided by Operating Activities $ 2,023.9 $ 1,952.4 Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital 348.5 302.8 (a) Free Cash Flow $ 1,675.4 $ 1,649.6 Full Year 2017 2016 Net Increas
Slide 28: Supplemental Information
Supplemental Information Fourth Quarter Full Year % of % of % of % of 2017 Rev 2016 Rev 2017 Rev 2016 Rev Revenue $ 4,176.6 $ 4,241.8 $ 15,273.6 $ 15,416.9 Operating expenses: Salary and service costs 3,048.9 73.0 % 3,141.7 74.1 % 11,249.7 73.7 % 11,440.6 74.2 % Occupancy and other costs 316.3 7.6 %
Slide 29: Disclosure
Disclosure The preceding materials have been prepared for use in the February 15, 2018 conference call on Omnicom’s results of operations for the period ended December 31, 2017. The call will be archived on the Internet at http://investor.omnicomgroup.com/investor-relations/news-events-and-filings/.