Slide 1: Fourth Quarter 2014 Results
Fourth Quarter 2014 Results February 10, 2015 Investor Presentation
Slide 2: 2014 vs. 2013 P&L Summary – Fourth Quarter
2014 vs. 2013 P&L Summary – Fourth Quarter 1 February 10, 2015 (a) 2013 reported results include the impact of expenses incurred in relation to the terminated merger with Publicis S.A. (“ Publicis ”). See page 19 for the impact of these items on 2013 results. (b) EBITA is a non - GAAP financial meas
Slide 3: 2014 vs. 2013 P&L Summary – Fourth Quarter (continued)
2014 vs. 2013 P&L Summary – Fourth Quarter 2 February 10, 2015 2014 2013 (a) Operating Income $ 579.4 $ 551.2 Net Interest Expense 30.0 39.8 Income Taxes 182.2 176.3 Tax Rate % 33.2% 34.5% Income from Equity Method Investments 5.7 5.4 Noncontrolling Interests 43.4 40.0 Net Income - Omnicom Group $ 3
Slide 4: 2014 vs. 2013 Earnings Per Share – Fourth Quarter
2014 vs. 2013 Earnings Per Share – Fourth Quarter 3 February 10, 2015 (a) 2013 reported results include the impact of expenses incurred in relation to the terminated merger with Publicis . See page 21 for the impact of these items on 2013 results. 2014 2013 (a) Net Income - Omnicom Group $ 329.5 $ 3
Slide 5: 2014 vs. 2013 P&L Summary – Full Year
2014 vs. 2013 P&L Summary – Full Year 4 February 10, 2015 (a) 2014 and 2013 reported results include the impact of expenses incurred in relation to the terminated merger with Publicis . See page 22 for the impact of these items on 2014 and 2013 results . (b) EBITA is a non - GAAP financial measure.
Slide 6: 2014 vs. 2013 P&L Summary – Full Year (continued)
2014 vs. 2013 P&L Summary – Full Year 5 February 10, 2015 2014 (a) 2013 (a) Operating Income $ 1,944.1 $ 1,825.3 Net Interest Expense 134.1 164.4 Income Taxes 593.1 565.2 Tax Rate % 32.8% 34.0% Income from Equity Method Investments 16.2 15.9 Noncontrolling Interests 129.1 120.5 Net Income - Omnicom
Slide 7: 2014 vs. 2013 Earnings Per Share – Full Year
2014 vs. 2013 Earnings Per Share – Full Year 6 February 10, 2015 (a) 2014 and 2013 reported results include the impact of expenses incurred in relation to the terminated merger with Publicis . See page 24 for the impact of these items on 2014 and 2013 results. 2014 (a) 2013 (a) Net Income - Omnicom
Slide 8: Total Revenue Change – Fourth Quarter
2014 Total Revenue Change – Fourth Quarter 7 February 10, 2015 (a) To calculate the FX impact, we first convert the current period’s local currency revenue using the average exchange rates fro m t he equivalent prior period to arrive at constant currency revenue. The FX impact equals the difference
Slide 9: Total Revenue Change – Full Year
2014 Total Revenue Change – Full Year 8 February 10, 2015 (a) To calculate the FX impact, we first convert the current period’s local currency revenue using the average exchange rates fro m t he equivalent prior period to arrive at constant currency revenue. The FX impact equals the difference betwe
Slide 10: Revenue by Region
2014 Revenue by Region February 10, 2015 9 Fourth Quarter North America 56.9% UK 9.6% Euro Markets & Other Europe 18.3 % Asia Pacific 10.4% Latin America 3.0% Africa MidEast 1.8% Full Year North America 56.7% UK 9.8% Euro Markets & Other Europe 18.5 % Asia Pacific 10.5% Latin America 2.8% Africa Mid
Slide 11: Revenue by Region
2014 Revenue by Region 10 Fourth Quarter Full Year February 10, 2015 $ Mix % Growth % Organic Growth (a) North America 2,386.5$ 7.8% 8.3% UK 401.1 6.9% 6.2% Euro & Other Europe 771.0 -6.8% 1.2% Asia Pacific 436.6 -1.8% 3.2% Latin America 126.4 -3.5% -0.5% Africa Mid East 73.5 11.4% 14.1% $ Mix % Gro
Slide 12: Revenue by Discipline
2014 Revenue by Discipline February 10, 2015 11 Fourth Quarter Specialty 7.3% PR 8.8% CRM 33.8% Advertising 50.1% Specialty 7.0% PR 9.1% CRM 34.3% Advertising 49.6% $ Mix % Growth % Organic Growth (a) Advertising $ 2,102.1 5.1% 8.5% CRM 1,418.6 -1.3% 1.0% PR 368.1 8.0% 8.5% Specialty 306.3 9.6% 9.4%
Slide 13: Revenue by Industry
Revenue by Industry February 10, 2015 12 Full Year – 2014 Auto 8% Consumer Products 10% Financial Services 7% Food & Beverage 13% Other 26% Pharma & Health 10% Retail 6% Tech 9% Telcom 5% T&E 6% Full Year – 2013 Growth Auto 3.2% Food & Beverage 1.5% Consumer Products 4.3% Financial Services 0.4% Pha
Slide 14: Cash Flow Performance
Cash Flow Performance 13 February 10, 2015 2014 2013 Net Income 1,233.1$ 1,111.6$ Depreciation and Amortization Expense 294.4 284.8 Share-Based Compensation Expense 93.5 86.3 Other Non-Cash Items to Reconcile to Net Cash Provided by Operating Activities, net (38.3) (25.0) Free Cash Flow (a) 1,582.7$
Slide 15: Cash Flow Performance – Uses of Cash
Cash Flow Performance 14 February 10, 2015 2014 2013 Free Cash Flow (a) 1,582.7$ 1,457.7$ Primary Uses of Cash: Dividends (b) 468.0 318.4 Dividends paid to Noncontrolling Interest Shareholders 111.3 100.6 Capital Expenditures 213.0 212.0 Acquisitions and Payments for Additional Interest in Controlle
Slide 16: Current Credit Picture
Current Credit Picture 15 February 10, 2015 (a) EBITDA is a non - GAAP financial measure. See page 39 for the definition of this measure and page 32 for the reconciliation of no n - GAAP measures. (b) Net Debt is a non - GAAP financial measure. See page 39 for the definition of this measure. (c) See
Slide 17: Historical Returns
Historical Returns 16 February 10, 2015 Return on Invested Capital (ROIC) (a) : Twelve Months Ended December 31, 2014 20.3% Twelve Months Ended December 31, 2013 18.1% Return on Equity (b) : 15 Twelve Months Ended December 31, 2014 34.3% Twelve Months Ended December 31, 2013 28.1% (a) Return on Inve
Slide 18: Net Cash Returned to Shareholders through Dividends and Share Repurchases
17 February 10, 2015 Net Cash Returned to Shareholders through Dividends and Share Repurchases From 2004 through 2014, Omnicom distributed over 100% of Net Income to shareholders through Dividends and Share Repurchases . $ In Billions 0.5 0.7 0.9 1.1 1.3 1.6 2.0 2.3 2.8 2.1 2.9 3.7 3.6 4.8 5.6 6.5 7
Slide 19: Supplemental Financial Information
Supplemental Financial Information February 10, 2015 18
Slide 20: 2014 vs. 2013 P&L Summary – Fourth Quarter
2014 vs. 2013 P&L Summary – Fourth Quarter 19 (a) 2013 “Non GAAP” amounts are non - GAAP financial measures. See the 2013 “Reported” amounts on this page for the GAAP presentation and page 25 for the reconciliation of non - GAAP measures and footnote definitions. (b) EBITA is a non - GAAP financial
Slide 21: 2014 vs. 2013 P&L Summary – Fourth Quarter (continued)
2014 vs. 2013 P&L Summary – Fourth Quarter 20 2014 Reported 2013 Non GAAP (a) 2013 Reported Operating Income $ 579.4 $ 564.5 $ 551.2 Net Interest Expense 30.0 39.8 39.8 Income Taxes 182.2 176.3 176.3 Tax Rate % 33.2% 33.6% 34.5% Income from Equity Method Investments 5.7 5.4 5.4 Noncontrolling Intere
Slide 22: 2014 vs. 2013 Earnings Per Share – Fourth Quarter
2014 vs. 2013 Earnings Per Share – Fourth Quarter 21 (a) 2013 “Non GAAP” amounts are non - GAAP financial measures. See the 2013 “Reported” amounts on this page for the GAAP presentation and page 25 for the reconciliation of non - GAAP measures and footnote definitions. 2014 Reported 2013 Non GAAP (
Slide 23: 2014 vs. 2013 P&L Summary – Full Year
2014 vs. 2013 P&L Summary – Full Year 22 (a) 2013 “Non GAAP” amounts are non - GAAP financial measures. See the 2013 “Reported” amounts on this page for the GAAP presentation and page 26 for the reconciliation of non - GAAP measures and footnote definitions. (b) EBITA is a non - GAAP financial measu
Slide 24: 2014 vs. 2013 P&L Summary – Full Year (continued)
2014 vs. 2013 P&L Summary – Full Year 23 2014 Reported (c) 2013 Non GAAP (a) 2013 Reported Operating Income $ 1,944.1 $ 1,866.7 $ 1,825.3 Net Interest Expense 134.1 164.4 164.4 Income Taxes 593.1 571.7 565.2 Tax Rate % 32.8% 33.6% 34.0% Income from Equity Method Investments 16.2 15.9 15.9 Noncontrol
Slide 25: 2014 vs. 2013 Earnings Per Share – Full Year
2014 vs. 2013 Earnings Per Share – Full Year 24 2014 Reported (c) 2013 Non GAAP (a) 2013 Reported Net Income - Omnicom Group $ 1,104.0 $ 1,026.0 $ 991.1 Net Income allocated to Participating Securities (20.4) (26.0) (25.1) Net Income available for common shares $ 1,083.6 $ 1,000.0 $ 966.0 Diluted Sh
Slide 26: Reconciliation of Non-GAAP Measures – Fourth Quarter
Reconciliation of Non - GAAP Measures 25 February 10, 2015 2013 Reported Merger Expenses 2013 Non GAAP EBITA $ 575.7 $ 13.3 $ 589.0 Operating Income 551.2 13.3 564.5 Income Tax Expense 176.3 - 176.3 Net Income - Omnicom Group Inc. 300.5 13.3 313.8 Net Income allocated to participating securities 7.0
Slide 27: Reconciliation of Non-GAAP Measures – Full Year
Reconciliation of Non - GAAP Measures 26 February 10, 2015 2013 Reported Merger Expenses 2013 Non GAAP EBITA $ 1,926.1 $ 41.4 $ 1,967.5 Operating Income 1,825.3 41.4 1,866.7 Income Tax Expense 565.2 6.5 571.7 Net Income - Omnicom Group Inc. 991.1 34.9 1,026.0 Net Income allocated to participating se
Slide 28: Omnicom Debt Structure
Omnicom Debt Structure Bank Loans $8 2024 Senior Notes $750 2022 Senior Notes $1,250 2020 Senior Notes $1,000 2019 Senior Notes $500 2016 Senior Notes $1,000 27 February 10, 2015 The above chart sets forth Omnicom’s debt outstanding at December 31, 2014. The amounts reflected above for the 2016, 201
Slide 29: Omnicom Debt Maturity Profile
Omnicom Debt Maturity Profile 28 February 10, 2015 Other borrowings at December 31, 2014 include short - term borrowings of $8 million which are due in less than one year. For purposes of this presentation we have included these borrowings as outstandi ng through July 31, 2019, the date of expiratio
Slide 30: Historical Return Trends
Historical Return Trends 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 February 10, 2015 29 (a) Return on Equity (“ROE”) is Reported Net Income for the given period divided by the average shareholder
Slide 31: Acquisition Related Expenditures
2014 Acquisition Related Expenditures 30 February 10, 2015 (a) Includes acquisitions of a majority interest in agencies resulting in their consolidation, including additional interest in e xis ting affiliate agencies resulting in majority ownership. (b) Includes the acquisition of additional equity
Slide 32: Condensed Cash Flow
Condensed Cash Flow 31 February 10, 2015 2014 2013 Net Income 1,233.1$ 1,111.6$ Share-Based Compensation Expense 93.5 86.3 Depreciation and Amortization 294.4 284.8 Impairment Charge on Equity Interest in Egyptian Affiliate, net - 10.7 Other Non-Cash Items to Reconcile to Net Cash Provided by Operat
Slide 33: Reconciliation of Non-GAAP Measures
Reconciliation of Non - GAAP Measures 32 February 10, 2015 The above reconciles EBITDA, EBITA excluding merger expenditures and EBITA to the GAAP financial measures for the periods pre sen ted. EBITDA, EBITA and EBITA excluding acquisition expenses incurred primarily in connection with Omnicom’s ter
Slide 34: Reconciliation of Non-GAAP Measures
Reconciliation of Non - GAAP Measures February 10, 2015 33 2014 2013 Net Free Cash Flow (410.3)$ 245.9$ Cash Flow items excluded from Net Free Cash Flow: Changes in Operating Capital (106.2) 351.3 Repayment of Convertible Debt (252.7) (406.7) Proceeds from/(repayments of) Short-term & Long-term Debt
Slide 35: Supplemental Information
Supplemental Information 34 February 10, 2015 (a) Merger expenses relate to costs incurred in connection with Omnicom’s terminated merger with Publicis and are comprised prima ril y of professional fees. 2014 Reported 2013 Reported % ∆ 2014 Reported 2013 Reported % ∆ Operating expenses: Salary and s
Slide 36: Fourth Quarter Acquisitions – DDC Advocacy
Fourth Quarter Acquisitions February 10, 2015 35 Founded in 1996, DDC Advocacy conducts advocacy campaigns for major corporations, trade associations, business coalitions and non - profit organizations. Among its comprehensive suite of services and products, DDC Advocacy offers advocacy strategy, gl
Slide 37: Fourth Quarter Acquisitions – Ketchum Brazil
Fourth Quarter Acquisitions February 10, 2015 36 Ketchum, a leading global public relations consultancy, has purchased a controlling interest in its affiliate agency in Brazil, Ketchum Estratégia. The company has recognized public relations expertise in brand marketing, technology, digital , sports
Slide 38: Fourth Quarter Acquisitions – GRA Everingham
Fourth Quarter Acquisitions February 10, 2015 37 GRA Everingham is a bipartisan strategic advisory firm at the forefront of government relations, regulatory and public affairs in Australia. GRA Everingham specializes in providing companies and institutions with strategic advice about government, pub
Slide 39: Fourth Quarter Acquisitions – Marketforce
Fourth Quarter Acquisitions February 10, 2015 38 Marketforce is an Australian agency that provides fully integrated marketing solutions to its clients. For over 40 years Marketforce has represented clients in many industries, including consumer goods, health and general insurance, local and state go
Slide 40: Forward-Looking Statements
The preceding materials have been prepared for use in the February 10, 2015 conference call on Omnicom’s results of operation s f or the period ended December 31, 2014. The call will be archived on the Internet at http://www.omnicomgroup.com/financialwebcasts. Forward - Looking Statements Certain st