Omnicom Group Inc. · NYSE:OMC
Omnicom — Q2 2009 Earnings Presentation
26 slides from Omnicom's earnings presentation, Jul 23, 2009
Slide 1: Second Quarter 2009 Results
Investor Presentation Second Quarter 2009 Results July 23, 2009
Slide 2: Disclosure
Disclosure The following materials have been prepared for use in the July 23, 2009 conference call on Omnicom’s results of operations for the period ended June 30, 2009. The call will be archived on the Internet at http://www.omnicomgroup.com/financialwebcasts. Forward-Looking Statements Certain of
Slide 3: 2009 vs. 2008 P&L Summary
2009 vs. 2008 P&L Summary Second Quarter Year to Date 2009 2008 % 2009 2008 % Revenue $ 2,870.7 $ 3,476.9 -17.4% $ 5,617.3 $ 6,672.3 -15.8% Operating Income (a) 398.1 516.8 -23.0% 680.5 867.6 -21.6% % Margin 13.9% 14.9% 12.1% 13.0% Net Interest Expense 21.9 18.7 43.3 29.7 Income Before Tax 376.2 498
Slide 4: 2009 Total Revenue Change
2009 Total Revenue Change Second Quarter Year to Date $ % $ % Prior Period Revenue $ 3,476.9 $ 6,672.3 Foreign Exchange (FX) Impact (a) (234.7) -6.8% (487.0) -7.3% Acquisition Revenue (b) 5.6 0.2% 19.7 0.3% Organic Revenue (c) (377.1) -10.8% (587.7) -8.8% Current Period Revenue $ 2,870.7 -17.4% $ 5,
Slide 5: 2009 Revenue by Discipline
2009 Revenue by Discipline Second Quarter Year to Date Specialty Specialty 9.3% 9.2% PR PR 9.5% 9.5% Advertising Advertising 44.6% 44.6% CRM CRM 36.7% 36.6% $ Mix % Change (a) $ Mix % Change (a) Advertising $ 1,280.6 -15.5% Advertising $ 2,505.1 -14.3% CRM 1,054.8 -18.7% CRM 2,059.8 -16.0% PR 271.7
Slide 6: 2009 Revenue By Geography
2009 Revenue By Geography Second Quarter Year to Date U.K. U.K. 8.8% 8.6% Other Other 16.1% 15.6% U.S. 53.1% U.S. Euro 54.4% Euro Markets Markets 21.4% 22.0% $ Mix $ Change(a) $ Mix $ Change(a) United States $ 1,524.5 $ (226.8) United States $ 3,056.7 $ (355.7) Organic (225.9) Organic (366.0) Acquis
Slide 7: Cash Flow – GAAP Presentation (condensed)
Cash Flow – GAAP Presentation (condensed) 6 Months ended June 30, 2009 2008 Net Income $ 432.0 $ 574.6 Share-Based Compensation Expense 35.7 27.8 Depreciation and Amortization 113.7 115.7 Other Non-Cash Items to Reconcile to Net Cash Provided by (Used in) Operating Activities, net 6.0 (10.0) Other C
Slide 8: Current Credit Picture
Current Credit Picture 12 Months ended June 30, 2009 2008 EBITDA (a) $ 1,736 $ 1,976 Gross Interest Expense (a) 122.0 106.3 EBITDA / Gross Interest Expense 14.2 x 18.6 x Total Debt / EBITDA 1.4 x 1.6 x Debt (b): Bank Loans (Due Less Than 1 Year) $ 42 $ 23 CP Issued Under $2.5B Revolver Due 6/23/11 -
Slide 9: Current Liquidity Picture
Current Liquidity Picture As of June 30, 2009 Total Amount Outstanding Available of Facility Committed Facilities Revolver & Commercial Paper (a) $ 2,500 $ 200 $ 2,300 Other Committed Credit Facilities 42 42 - Total Committed Facilities 2,542 242 2,300 Uncommitted Facilities(b) 380 - - (b) Total Cre
Slide 10: Omnicom Debt Structure
Omnicom Debt Structure Supplemental Information
Slide 11: Omnicom Debt Structure Update
Omnicom Debt Structure Update Short-term Borrowings Other Debt $42 $19 2038 Convert $467 2016 Senior Notes $1,000 2032 Convert $727 2019 Senior Notes $500 2031 Convert $6 The above chart sets forth Omnicom’s adjusted debt outstanding at June 30, 2009. The adjustment reflects the July 1, 2009 issuanc
Slide 12: Omnicom Debt Structure Update
Omnicom Debt Structure Update 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 $1,000 $800 $600 $400 $200 $0 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
Slide 13: Current Credit Picture Update
Current Credit Picture Update On July 1, 2009 the Company completed the issuance of $500 million of Senior Notes due July 15, 2019. The following table sets forth the Company’s debt position as of June 30, 2009 and as adjusted assuming a portion of the net proceeds from the issuance of the notes was
Slide 14: 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% Moody’s: Baa1 Ratings S&P: A- Fitch:
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: 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 17: 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 18: 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 July 23, 2009 17
Slide 19: 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 Negative Stable Note: Reflects credit ratings as of July 15, 2009, subsequent to the issuance by the Company on July 1, 2009 of the Senior Notes due 2019, noted on pages 12 and 13
Slide 20: Supplemental Financial Information
Supplemental Financial Information
Slide 21: 2009 vs. 2008 Earnings Per Share
2009 vs. 2008 Earnings Per Share (a) Second Quarter Year to Date 2009 2008 2009 2008 Net Income per Common Share - Omnicom Group: Basic $ 0.75 $ 0.96 $ 1.28 $ 1.60 Diluted 0.75 0.95 1.27 1.59 Earnings Available for Common Shares: Net Income - Omnicom Group $ 233.4 $ 307.0 $ 397.9 $ 515.6 Earnings Al
Slide 22: Acquisition Related Expenditures
Acquisition Related Expenditures Six Months YTD 2009 New Subsidiary Acquisitions (a) $ 5 Affiliates to Subsidiaries (b) 1 Affiliates (c) - Existing Subsidiaries (d) 4 Earn-outs (e) 57 Total Acquisition Expenditures $ 67 Note: See pages 23-25 for acquisition profiles. (a) Includes acquisitions of a m
Slide 23: Reconciliation of Operating Income to EBITDA
Reconciliation of Operating Income to EBITDA 12 Months ended June 30, 2009 2008 Operating Income $ 1,502 $ 1,750 Depreciation 179 178 Amortization 55 48 EBITDA $ 1,736 $ 1,976 The covenants contained in our credit facility are based on the EBITDA ratios as presented on pages 7 & 17 of this presentat
Slide 24: Second Quarter Acquisitions
Second Quarter Acquisitions Jigsaw International is a qualitative research agency based in Shanghai, China. The company provides consumer data and qualitative analysis of the Chinese consumer to its multinational and locally based clients to assist them with their communications and brand and produc
Slide 25: Second Quarter Acquisitions
Second Quarter Acquisitions TOTAL Total Advertising and Communications is a full service media agency offering an integrated suite of services to primarily domestic clients in Australia. Its offering includes media strategy, planning and buying across all media channels. Located in Sydney, Australia
Slide 26: Second Quarter Acquisitions
Second Quarter Acquisitions L DDB South Africa is a full-service advertising agency. Founded in 1992, the agency has operated as a non-equity associate agency of the DDB Worldwide Communications Group since 1998. The agency provides services to both multinational and local South African clients. DDB