Omnicom Group Inc. · NYSE:OMC
Omnicom — Merger or Acquisition (July 2013)
34 slides from Omnicom's merger presentation, Jul 29, 2013
Slide 1: Publicis Omnicom Group: The New Industry Standard
Publicis Omnicom Group The New Industry Standard
Slide 2: Combination of Industry Leaders
Combination of Industry Leaders Top Best Clients Talent Leading Innovation The New If Industry not Standard 1
Slide 3: A merger of equals
A merger of equals Name of combined Publicis Omnicom Group entity Transaction Merger of equals structure 50/50 equity 1 Trading Traded on NYSE and Euronext Paris under the ticker symbol OMC Market Capitalizations 2 2012 Net Income 3 Equity values and earnings $17.4bn $17.7bn $998m / $998m $947m €13.
Slide 4: Strategic Rationale
Strategic Rationale 3
Slide 5: A New Company for a New World
A New Company for a New World Exponential development of new media giants Blurring of roles of all players Explosion of Big Data, analytics, insights Changing consumer behavior: social, sharing, co-creating content… New talent to emerge with the evolution of technology and science Access to new tool
Slide 6: Creating the new industry standard
Creating the new industry standard Compelling benefits for our clients Creating a portfolio of best-in-class advertising, digital, media, PR, CRM, healthcare, and other specialized marketing services Improving depth and scope of services across communications disciplines, geographies and industries
Slide 7: Accelerating value creation
Accelerating value creation Enhancing growth Optimizing synergies Full-range of service offerings Shared services Enhanced global footprint Production platforms Talent attraction, talent retention Optimization by country Acceleration in digital innovation Building on on-going cost Strong cross selli
Slide 8: Anticipating clients' needs in a fast-changing marketplace
Anticipating clients’ needs in a fast-changing marketplace Dramatically changing Evolving consumer + + New client needs competitive landscape behavior Growing importance of New devices and Media purchasing new media giants technology platforms migrating to real time bidding Media dollars shifting Pr
Slide 9: Powerful and innovative offerings
Powerful and innovative offerings In-depth understanding Enhanced and broader Strengthened client of consumer behavior + Digital offering + offering Significant client / Enriched innovative Expanded global consumer knowledge products leveraging reach Big Data (CRM, Enhanced investment Fulfillment, I
Slide 10: Innovative partnerships with new media giants
Innovative partnerships with new media giants Publicis Omnicom Group Key partner to interact with new media giants Integration of Big Data in added-value offerings Enhanced ability to generate real-time consumer insights Deliver at scale new story-telling, e- and m-commerce,… 9
Slide 11: Combining our strengths and values
Combining our strengths and values Globally Highly diversified regarded management senior leadership Innovative and Publicis Omnicom Group Client entrepreneurial One firm commitment spirit One vision and ethics One ambition Industry leading Rewarding creative talent talent 10
Slide 12: Creating an Industry Leading Portfolio
Creating an Industry Leading Portfolio 11
Slide 13: Industry leading agencies and talent
Industry leading agencies and talent 7 of the 15 most awarded Agency Networks in 2012 1 7 of the Top 10 most awarded Creative Agencies 1 4 of the top 10 most awarded Digital Agencies 1 3 of the top 5 global Media Networks 2 3 of top 5 global PR Agency Networks 3 Industry leading specialty healthcare
Slide 14: Best-in-class offerings across disciplines
Best-in-class offerings across disciplines Pure Play Creative Media CRM PR Specialty Digital 13
Slide 15: Deeper coverage across fast-growing geographies
Deeper coverage across fast-growing geographies Asia-Pacific $2.6 | €2.1 $1.6 | €1.2 $1.1 | €0.8 Publicis Omnicom Publicis Omnicom Group Latin America $1.0 | €0.8 $0.6 | €0.5 $0.4 | €0.3 Publicis Omnicom Publicis Omnicom Middle-East and Africa Group $0.5 | €0.4 $0.2 | €0.2 $0.2 | €0.2 Publicis Omnic
Slide 16: Combined Company Snapshot
Combined Company Snapshot 15
Slide 17: Side-by-side financials ($bn) 2012
Side-by-side financials ($bn) 2012 1/2 Omnicom Publicis Combined Revenues $14.2 $8.5 $22.7 EBITDA $2.1 $1.5 $3.6 EBITDA margin 14.7% 18.0% 15.9% Operating income $1.8 $1.3 $3.1 Operating income margin 12.7% 15.4% 13.7% Net income 3 $1.0 $0.9 $1.9 Free cash flow 4 $1.4 $1.1 $2.6 (1) Side-by-side and
Slide 18: Side-by-side financials (€bn) 2012
Side-by-side financials (€bn) 2012 1/2 Omnicom Publicis Combined Revenues €11.1 €6.6 €17.7 EBITDA €1.6 €1.2 €2.8 EBITDA margin 14.7% 18.0% 15.9% Operating income €1.4 €1.0 €2.4 Operating income margin 12.7% 15.4% 13.7% Net income 3 €0.8 €0.7 €1.5 Free cash flow 4 €1.1 €0.9 €2.0 (1) Side-by-side and
Slide 19: Increased weight in benchmark indices
Increased weight in benchmark indices S&P 500 CAC 40 Ranking by Market Capitalization $bn 1/2 Ranking by Market Capitalization €bn 1/2 Illinois Tool Works #119 Schneider Electric #11 Deere & Co #120 Air Liquide #12 Publicis Omnicom Group #121 Publicis Omnicom Group #13 Yum! Brands #122 Societe Gener
Slide 20: Positioned for best-in-class profitability
Positioned for best-in-class profitability Expected run-Levers Drivers of efficiencies rate savings 1 Scalability Savings on third party services from increased scale and elimination of duplication $260m Efficiencies from pooling of resources and infrastructure Internal $240m (procurement, productio
Slide 21: Transaction Structure
Transaction Structure 20
Slide 22: Transaction structure
Transaction structure Name of combined Publicis Omnicom Group entity Merger of equals Transaction 50/50 equity 1 structure Expected to be tax free to Omnicom and Publicis shareholders Omnicom shareholders: for each Omnicom share, 0.813 shares Shareholder of the new company and a special dividend of
Slide 23: Governance – A true merger of equals
Governance – A true merger of equals Maurice Lévy & John Wren: Co-CEOs for 30 months Senior After 30 months: management Non-executive Chairman, Maurice Lévy CEO, John Wren Single Board structure with equal representation Bruce Crawford, initial Chairperson for first year, and Elisabeth Badinter for
Slide 24: Robust capital structure
Robust capital structure Capital Strong balance sheet structure Prudent financial leverage Publicis Omnicom Group expects to maintain BBB+ rating Credit rating Consistent with Publicis’s and Omnicom’s current ratings Intention is to maintain credit facilities in place at Publicis and Financing Omnic
Slide 25: Strong cash flow generation and return to shareholders
Strong cash flow generation and return to shareholders Publicis Omnicom Group Dividend payout ratio (%) Omnicom ~ c. 35% Publicis 33% 30% 24% 25% 2011 2012 Dividend policy Publicis Omnicom Group expected dividend policy: ~35% dividend payout ratio 24
Slide 26: Expected next steps
Expected next steps Regulatory filings AFM, AMF (passporting) and SEC Prospectus filings Publicis and Omnicom shareholder meetings Expected closing and listing of new shares: Q4 2013 / Q1 2014 25
Slide 27: Conclusion
Conclusion 26
Slide 28: Built for success!
Built for success! Providing what they need… Everywhere they are… Clients As a leader in a rapidly changing environment Strict firewalls to protect client confidentiality People The largest pool of highly recognized and awarded talent across five continents Client focused Developing talent Culture C
Slide 29: Appendix
APPENDIX 28
Slide 30: Side-by-side financials – 2012 Income Statement
Side-by-side financials – 2012 Income Statement 1/2 In $m In €m Omnicom Publicis Combined Omnicom Publicis Combined Revenue $14,219 $8,492 $22,712 €11,068 €6,610 €17,678 Operating Expenses (12,133) (6,963) (19,096) (9,443) (5,420) (14,863) EBITDA 2,087 1,529 3,616 1,624 1,190 2,814 % of Revenue 14.7
Slide 31: Side-by-side financials – H1 2013 Income Statement
Side-by-side financials – H1 2013 Income Statement 1/2 In $m In €m Omnicom Publicis Combined Omnicom Publicis Combined Revenue $7,036 $4,399 $11,435 €5,360 €3,351 €8,711 Operating Expenses (5,999) (3,712) (9,712) (4,570) (2,828) (7,398) EBITDA 1,037 687 1,723 790 523 1,313 % of Revenue 14.7% 15.6% 1
Slide 32: Side-by-side financials – Balance Sheet as at June 2013
Side-by-side financials – Balance Sheet as at 30 June 2013 1/2 In $m In €m Omnicom Publicis Combined Omnicom Publicis Combined Cash & Cash Equivalents 1,415 976 2,390 1,088 750 1,838 Other Current assets 8,874 10,439 19,313 6,822 8,026 14,848 Current Assets 10,288 11,415 21,703 7,910 8,776 16,686 No
Slide 33: Safe harbor Statement
Safe harbor Statement Forward-Looking Statements This presentation contains forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning Omnicom, Publicis, Publicis Omnicom Group, the proposed transactions and other matters. These state
Slide 34: Safe harbor Statement: Important Additional Information
Safe harbor Statement Important Additional Information Will be Made Available in an AFM Approved Prospectus Publicis Omnicom Group will make publicly available a prospectus, approved by the Dutch financial markets regulator (Stichting Autoriteit Financiële Markten or “AFM”), with respect to the issu