Omnicom Group Inc. · NYSE:OMC
Omnicom — Q4 2022 Earnings Presentation
21 slides from Omnicom's earnings presentation, Feb 7, 2023
Slide 1: 2022 Fourth Quarter & Full Year
2022 Fourth Quarter & Full Year February 7, 2023
Slide 2: Fourth Quarter Highlights
Fourth Quarter Highlights Revenue Profit – 7.2% organic revenue growth – 16.6% operating profit margin – Double-digit organic growth in Precision – 7.2% year-over-year growth in Diluted EPS, net Marketing, Public Relations, and Experiential of approximately 6% headwind from foreign – Solid organic g
Slide 3: Income Statement Summary
Income Statement Summary Fourth Quarter 2022 2021 Revenue $ 3,868.2 $ 3,855.9 Operating Expenses 3,225.5 3,233.4 Operating Profit 642.7 622.5 Net Interest Expense 25.9 44.4 Income Tax Expense 163.5 133.6 Income from Equity Method Investments 2.6 5.4 Net Income Attributed to Noncontrolling Interests
Slide 4: Income Statement Summary - Adjusted
Income Statement Summary - Adjusted Full Year Non-GAAP Non-GAAP Reported Non-GAAP Reported Non-GAAP Adjusted Adjusted 2022 Adjustments 2021 Adjustments 2022 2021 Revenue $ 14,289.1 $ — $ 14,289.1 $ 14,289.4 $ — $ 14,289.4 Operating Expenses (a)(c) 12,205.8 (113.4) 12,092.4 12,091.5 50.5 12,142.0 Ope
Slide 5: Revenue Change
Revenue Change Fourth Quarter Full Year $ %∆ $ %∆ Prior Period Revenue $ 3,855.9 $ 14,289.4 Foreign exchange rate impact(a) (211.0) (5.5)% (681.0) (4.8)% Acquisition revenue, net of disposition revenue(b) (53.5) (1.4)% (665.6) (4.7)% Organic growth(c) 276.8 7.2 % 1,346.3 9.4 % Current Period Revenue
Slide 6: Revenue by Discipline
Revenue by Discipline Fourth Quarter Full Year % Organic % Organic Revenue % of Rev % Growth Growth(a) Revenue % of Rev % Growth Growth(a) Advertising & Media(b) $ 2,061.9 53.3 % (2.8)% 6.0 % Advertising & Media(b) $ 7,424.7 52.0 % (6.7)% 7.3 % Precision Marketing 358.8 9.3 % 11.3 % 11.6 % Precision
Slide 7: Revenue by Region
Revenue by Region Fourth Quarter Full Year % Organic % Organic Revenue % of Rev % Growth Growth(a) Revenue % of Rev % Growth Growth(a) United States $ 1,952.1 50.5 % 6.6 % 5.6 % United States $ 7,367.3 51.6 % 1.7 % 8.7 % Other North America 126.4 3.2 % 0.2 % 7.3 % Other North America 488.7 3.4 % 5.4
Slide 8: Revenue by Industry Sector
Revenue by Industry Sector Full Year 2022 2021 Pharmaceuticals and Healthcare 16% 15% Food and Beverage 14% 14% Technology 10% 11% Auto 10% 10% Consumer Products 8% 8% Financial Services 8% 7% Travel & Entertainment 7% 7% Retail 6% 7% Telecommunications 4% 5% Government 4% 3% Services 2% 2% Oil, Gas
Slide 9: Operating Expense Detail
Operating Expense Detail Fourth Quarter Full Year 2022 % of Rev 2021 % of Rev 2022(b) % of Rev 2021(c) % of Rev Revenue $ 3,868.2 $ 3,855.9 $ 14,289.1 $ 14,289.4 Operating expenses: Salary and related service costs 1,853.4 47.9 % 1,869.8 48.5 % (a) 7,197.9 50.4 % 6,971.0 48.8 % Third-party service c
Slide 10: Adjusted Non-GAAP Operating Profit & Adjusted EBITA
Adjusted Non-GAAP Operating Profit & Adjusted EBITA Fourth Quarter Full Year Reported Reported Reported Non-GAAP Adjusted Reported Non-GAAP Adjusted 2022 2021 2022 Adjustments 2022 2021 Adjustments 2021 Revenue $ 3,868.2 $ 3,855.9 $14,289.1 $ — $14,289.1 $14,289.4 $ — $14,289.4 Operating expenses(b)
Slide 11: Cash Flow Performance
Cash Flow Performance Full Year 2022 2021 Free Cash Flow(a) $ 1,770.5 $ 1,784.9 Primary Uses of Cash: Dividends paid to Common Shareholders 581.1 592.3 Dividends paid to Noncontrolling Interest Shareholders 79.5 113.1 Capital Expenditures 78.2 665.8 Acquisition payments, including payment of conting
Slide 12: Credit & Liquidity
Credit & Liquidity $ Millions Full Year 2022 2021 EBITDA(a) $ 2,302.7 $ 2,410.0 Total Debt / EBITDA 2.4 x 2.4 x Net Debt(b) / EBITDA 0.5 x 0.2 x Debt Bank Loans (Due Less Than 1 Year) $ 16.9 $ 9.6 USD-denominated Senior Notes 4,150.0 4,150.0 EUR-denominated Senior Notes 1,069.8 1,137.2 GBP-denominat
Slide 13: Historical Returns
Historical Returns Return on Invested Capital (ROIC)(a) Return on Equity(b) Twelve months ended December 31, 2022 27.7 % Twelve months ended December 31, 2022 40.4 % Twelve months ended December 31, 2021 33.4 % Twelve months ended December 31, 2021 44.3 % (a) Return on Invested Capital is After Tax
Slide 14: Appendix
Appendix 14
Slide 15: Free Cash Flow
Free Cash Flow Full Year 2022 2021 Net Income $ 1,403.8 $ 1,507.6 Depreciation and Amortization of Intangible Assets 219.4 212.1 Share-Based Compensation 81.7 84.7 Non-cash charge related to the effects of the war in Ukraine 65.8 — Other Items to Reconcile to Net Cash (Used in) Provided by Operating
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations Full Year 2022 2021 Net Cash Provided by Operating Activities $ 926.5 $ 1,945.4 Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (844.0) 160.5 Free Cash Flow $ 1,770.5 $ 1,784.9 Net Decrease in Cash and Cash Equivalents $ (1,035.0) $ (283
Slide 17: Operating Expense Detail - Constant $
Operating Expense Detail - Constant $ Fourth Quarter Full Year 2022 2022 C$(c) 2021 2022 2022 C$(c) 2021 Operating expenses: Salary and related service costs $ 1,853.4 $ 1,960.7 $ 1,869.8 $ 7,197.9 $ 7,549.0 $ 6,971.0 Third-party service costs (a) 938.6 985.1 922.3 3,128.0 3,276.1 3,431.0 Salary and
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Twelve Months Ended December 31 December 31 2022 2021 2022 2021 Net Income - Omnicom Group Inc. $ 429.8 $ 416.2 $ 1,316.5 $ 1,407.8 Net Income Attributed to Noncontrolling Interests 26.1 33.7 87.3 99.8 Income From Equity Method Investments 2.6 5.4 5.2 7.5
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Twelve Months Ended December 31, 2022 Twelve Months Ended December 31, 2021 Non-GAAP Adjusted Non-GAAP Adjusted Operating Operating EBITA EBITA Profit Profit Net Income - Omnicom Group Inc.- reported $ 1,316.5 $ 1,316.5 $ 1,407.8 $ 1,407.8 Net Income Attributed To Noncontrol
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Fourth Quarter Full Year 2022 2021 2022 2021 In millions except per share amounts Net Income - Omnicom Group Inc. - Reported $ 429.8 $ 416.2 $ 1,316.5 $ 1,407.8 Gain on disposition of subsidiary — — — (50.5) Early extinguishment of debt — — — 26.6 Tax expense on early exting
Slide 21: Disclosures
Disclosures The preceding materials have been prepared for use in the February 7, 2023 conference call on Omnicom’s results of operations for the three and twelve months ended December 31, 2022. The call will be archived on the Internet at http:// investor.omnicomgroup.com Forward-Looking Statements