Omnicom Group Inc. · NYSE:OMC
Omnicom — Q1 2024 Earnings Presentation
22 slides from Omnicom's earnings presentation, Apr 16, 2024
Slide 1: 2024 First Quarter
2024 First Quarter April 16, 2024
Slide 2: Highlights
Highlights Revenue Income • 4.0% organic revenue growth in Q1 2024 • Operating income $478.9 million (13.2% • Advertising & Media +7.0%, Precision margin). EBITA $500.4 million (13.8% margin) Marketing +4.3% in Q1 2024 +4.1% from prior year non-GAAP adjusted EBITA(i) • Tailwind of +1.5% in Q1 2024 f
Slide 3: Income Statement Summary
Income Statement Summary First Quarter 2024 2023 Revenue $ 3,630.5 $ 3,443.3 Operating Expenses (a) 3,151.6 3,096.8 Operating Income 478.9 346.5 Net Interest Expense 26.8 19.3 Income Tax Expense(b) 116.0 83.4 Income from Equity Method Investments 0.9 0.1 Net Income Attributed to Noncontrolling Inter
Slide 4: Revenue Change
Revenue Change First Quarter $ %∆ Prior Period Revenue $ 3,443.3 Foreign exchange rate impact(1) (2.7) (0.1)% Acquisition revenue, net of disposition revenue(2) 53.0 1.5 % Organic growth(3) 136.9 4.0 % Current Period Revenue $ 3,630.5 5.4 % In millions. See Definition (1) through (3) on page 13. 4
Slide 5: Revenue by Discipline
Revenue by Discipline First Quarter % Organic Revenue % of Rev % Growth Growth(3) Advertising & Media $ 1,906.8 52.5 % 7.3 % 7.0 % Precision Marketing 438.2 12.1 % 21.7 % 4.3 % Public Relations 390.3 10.8 % 3.9 % (1.1)% Healthcare 323.6 8.9 % 1.6 % 2.1 % Branding & Retail Commerce 200.2 5.5 % (4.5)%
Slide 6: Revenue by Region
Revenue by Region First Quarter % Organic Revenue % of Rev % Growth Growth(3) United States $ 1,925.9 53.0 % 6.3 % 4.3 % Other North America 115.0 3.2 % 0.3 % 1.1 % United Kingdom 403.2 11.1 % 8.5 % 3.2 % Euro Markets & Other Europe 602.6 16.6 % 3.8 % 3.5 % Asia Pacific 407.7 11.2 % 0.5 % 3.0 % Lati
Slide 7: Revenue by Industry Sector
Revenue by Industry Sector First Quarter 2024 2023 Pharmaceuticals & Healthcare 16% 16% Food & Beverage 16% 16% Auto 11% 11% Consumer Products 9% 8% Technology 7% 8% Financial Services 7% 8% Travel & Entertainment 7% 7% Retail 6% 6% Telecommunications 4% 4% Government 4% 4% Services 3% 3% Oil, Gas &
Slide 8: Operating Expense Detail
Operating Expense Detail First Quarter 2024 % of Rev 2023 % of Rev Revenue $ 3,630.5 $ 3,443.3 Operating expenses: Salary and related costs 1,847.3 50.9 % 1,778.0 51.6 % Third-party service costs(c) 698.2 19.2 % 639.3 18.6 % Third-party incidental costs(d) 147.1 4.1 % 125.6 3.6 % Total salary and se
Slide 9: Income Statement Summary - Non-GAAP Adjusted
Income Statement Summary - Non-GAAP Adjusted First Quarter Non-GAAP Non-GAAP Reported Reported Adjustments Adjusted 2023 2024 2023 Revenue $ 3,630.5 $ 3,443.3 $ — $ 3,443.3 Operating Expenses: Real estate repositioning costs(a) 119.2 (119.2) — Operating Expenses(a) 3,151.6 3,096.8 (119.2) 2,977.6 Op
Slide 10: Cash Flow Performance
Cash Flow Performance Three Months March 31, 2024 2023 Free Cash Flow(4) $ 415.1 $ 428.9 Primary Uses of Cash: Dividends paid to Common Shareholders 138.8 142.3 Dividends paid to Noncontrolling Interest Shareholders 13.3 12.5 Capital Expenditures 23.1 23.1 Acquisition payments, including payment of
Slide 11: Credit & Liquidity
Credit & Liquidity $ Millions Twelve Months Ended March 31, 2024 2023 EBITDA(5) $ 2,453.9 $ 2,294.9 Total Debt / EBITDA 2.6 x 2.5 x Net Debt(6) / EBITDA 1.3 x 1.0 x Debt Bank Loans (Due Less Than 1 Year) $ 11.2 $ 18.5 USD-denominated Senior Notes 4,150.0 4,150.0 EUR-denominated Senior Notes 1,726.1
Slide 12: Historical Returns
Historical Returns Return on Invested Capital (ROIC)(7) Return on Equity(8) Twelve months ended March 31, 2024 22.3 % Twelve months ended March 31, 2024 44.3 % Twelve months ended March 31, 2023 24.1 % Twelve months ended March 31, 2023 44.8 % In millions. See Definitions (7) and (8) on page 13. 12
Slide 13: Notes
Notes Financial (a) For the three months ended March 31, 2023, operating expenses include $119.2 million ($91.0 million after-tax) related to real estate repositioning costs, which decreased diluted net income per share - Omnicom Group Inc. by $0.45. (b) Income tax for the three months ended March 3
Slide 14: Appendix
Appendix 14
Slide 15: Free Cash Flow
Free Cash Flow Three Months Ended March 31, 2024 2023 Net Income $ 337.0 $ 243.9 Depreciation and Amortization of Intangible Assets 59.6 53.9 Share-Based Compensation 22.1 20.7 Real estate repositioning costs — 119.2 Other Items to Reconcile to Net Cash Used in Operating Activities, net (3.6) (8.8)
Slide 16: Operating Expense Detail - Constant $
Operating Expense Detail - Constant $ First Quarter 2024 2024 C$(e) 2023 Operating expenses: Salary and related costs $ 1,847.3 $ 1,844.1 $ 1,778.0 Third-party service costs(c) 698.2 703.1 639.3 Third-party incidental costs(d) 147.1 148.1 125.6 Total salary and service costs 2,692.6 2,695.3 2,542.9
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended March 31, 2024 2023 Net Cash Used in Operating Activities $ (618.5) $ (522.1) Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (1,033.6) (951.0) Free Cash Flow $ 415.1 $ 428.9 Net Increase (Decrease) in Cash and Cash Eq
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended March 31, 2024 2023 Net Income - Omnicom Group Inc.(a)(b) $ 318.6 $ 227.5 Net Income Attributed to Noncontrolling Interests 18.4 16.4 Income From Equity Method Investments 0.9 0.1 Income Tax Expense 116.0 83.4 Income Before Income Taxes and Income From Equ
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended March 31, 2024 2023 Net Income - Omnicom Group Inc.- Reported $ 318.6 $ 227.5 Net Income Attributed To Noncontrolling Interests 18.4 16.4 Income From Equity Method Investments 0.9 0.1 Income Tax Expense 116.0 83.4 Income Before Income Taxes and Income 452.
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations First Quarter 2024 2023 Net Income - Omnicom Group Inc. - Reported $ 318.6 $ 227.5 Impact on Net Income related to: Real estate repositioning costs — 91.0 Amortization of acquired intangible assets and internally developed 15.9 11.0 strategic platform assets (after-tax) Non-
Slide 21: Amortization of Intangible Assets
Amortization of Intangible Assets $ Millions 2023 2023 2022 Q1 Q2 Q3 Q4 Full Year Full Year Acquired intangible assets and internally developed strategic $ 14.8 $ 14.7 $ 15.7 $ 16.6 $ 61.8 $ 58.8 platform assets Other purchased and internally developed software 4.5 4.6 4.6 4.8 18.5 21.5 Total Amorti
Slide 22: Disclosures
Disclosures The preceding materials have been prepared for use in the April 16, 2024 conference call on Omnicom’s results of operations for the three months ended March 31, 2024. The call will be archived on the Internet at http://investor.omnicomgroup.com Forward-Looking Statements Certain statemen