Omnicom Group Inc. · NYSE:OMC
Omnicom — Q2 2023 Earnings Presentation
21 slides from Omnicom's earnings presentation, Jul 18, 2023
Slide 1: 2023 Second Quarter
2023 Second Quarter July 18, 2023
Slide 2: Second Quarter Highlights
Second Quarter Highlights Revenue Income – 3.4% organic revenue growth in 2Q23, 4.3% – 15.1% Non-GAAP adjusted operating income YTD on track with full-year expectation of margin (15.3% reported) on track with full-year 3%-5% expectation of 15.0%-15.4% – Key disciplines performing solidly despite cha
Slide 3: Income Statement Summary
Income Statement Summary Second Quarter Year to Date 2023 2022 2023 2022 Revenue $ 3,609.9 $ 3,567.2 $ 7,053.2 $ 6,977.5 Operating Expenses (a)(b) 3,059.2 3,025.6 6,156.0 6,082.9 Operating Income 550.7 541.6 897.2 894.6 Net Interest Expense 27.4 40.1 46.7 82.9 Income Tax Expense(c) 141.2 133.1 224.6
Slide 4: Revenue Change
Revenue Change Second Quarter Year to Date $ %∆ $ %∆ Prior Period Revenue $ 3,567.2 $ 6,977.5 Foreign exchange rate impact(a) (24.4) (0.7)% (134.4) (1.9)% Acquisition revenue, net of disposition revenue(b) (54.3) (1.5)% (90.0) (1.3)% Organic growth(c) 121.4 3.4 % 300.1 4.3 % Current Period Revenue $
Slide 5: Revenue by Discipline
Revenue by Discipline Second Quarter Year to Date % Organic % Organic Revenue % of Rev % Growth Growth(a) Revenue % of Rev % Growth Growth(a) Advertising & Media $ 1,911.5 53.0 % 4.2 % 5.1 % Advertising & Media $ 3,688.0 52.3 % 2.3 % 5.1 % Precision Marketing 369.0 10.2 % 1.4 % 2.3 % Precision Marke
Slide 6: Revenue by Region
Revenue by Region Second Quarter Year to Date % Organic % Organic Revenue % of Rev % Growth Growth(a) Revenue % of Rev % Growth Growth(a) United States $ 1,850.6 51.3 % 0.4 % 2.4 % United States $ 3,662.8 51.9 % 2.7 % 3.7 % Other North America 128.2 3.6 % 1.2 % 8.4 % Other North America 242.8 3.4 %
Slide 7: Revenue by Industry Sector
Revenue by Industry Sector Six Months Ended June 30 2023 2022 Pharmaceuticals and Healthcare 17% 16% Food and Beverage 15% 14% Auto 12% 10% Technology 8% 12% Consumer Products 8% 8% Financial Services 7% 7% Travel & Entertainment 7% 6% Retail 6% 6% Telecommunications 4% 5% Government 4% 3% Services
Slide 8: Operating Expense Detail
Operating Expense Detail Second Quarter Year to Date 2023 % of Rev 2022(c) % of Rev 2023 % of Rev 2022(c) % of Rev Revenue $ 3,609.9 $ 3,567.2 $ 7,053.2 $ 6,977.5 Operating expenses: Salary and related service costs 1,772.0 49.1 % 1,800.8 50.5 % 3,550.0 50.3 % 3,595.4 51.5 % Third-party service cost
Slide 9: Income Statement Summary - Non-GAAP Adjusted
Income Statement Summary - Non-GAAP Adjusted Second Quarter Year to Date Non-GAAP Non-GAAP Non-GAAP Reported Non-GAAP Reported Reported Non-GAAP Reported Non-GAAP Adjusted Adjusted Adjusted 2023 Adjustments 2022(d) 2023 Adjustments 2022 Adjustments 2023 2023 2022 Revenue $ 3,609.9 $ — $ 3,609.9 $ 3,
Slide 10: Cash Flow Performance
Cash Flow Performance Six Months Ended June 30, 2023 2022 Free Cash Flow(a) $ 880.2 $ 767.7 Primary Uses of Cash: Dividends paid to Common Shareholders 285.1 293.6 Dividends paid to Noncontrolling Interest Shareholders 32.0 37.7 Capital Expenditures 40.0 42.5 Acquisition payments, including payment
Slide 11: Credit & Liquidity
Credit & Liquidity $ Millions Twelve Months Ended June 30, 2023 2022 EBITDA(a) $ 2,299.4 $ 2,274.9 Total Debt / EBITDA 2.5 x 2.4 x Net Debt(b) / EBITDA 1.2 x 1.0 x Debt Bank Loans (Due Less Than 1 Year) $ 20.5 $ 12.3 USD-denominated Senior Notes 4,150.0 4,150.0 EUR-denominated Senior Notes 1,086.6 1
Slide 12: Historical Returns
Historical Returns Return on Invested Capital (ROIC)(a) Return on Equity(b) Twelve months ended June 30, 2023 22.4 % Twelve months ended June 30, 2023 46.4 % Twelve months ended June 30, 2022 24.4 % Twelve months ended June 30, 2022 41.9 % (a) Return on Invested Capital is After Tax Reported Operati
Slide 13: Partnerships
Partnerships • Jun 22 - ADOBE: First holding company with access to Firefly diffusion model to integrate into Omni for GenAI creative, and the first holding company to join Adobe's Content Authenticity Initiative. • Jun 22 - AMAZON WEB SERVICES: Bedrock foundational GenAI models using Trainium and I
Slide 14: Appendix
Appendix 14
Slide 15: Free Cash Flow
Free Cash Flow Six Months Ended June 30, 2023 2022 Net Income $ 627.1 $ 564.6 Depreciation and Amortization of Intangible Assets 105.0 110.9 Share-Based Compensation 41.1 40.1 Real estate and other repositioning costs 191.5 — Gain on disposition of subsidiary (78.8) — Non-cash charge related to the
Slide 16: Operating Expense Detail - Constant $
Operating Expense Detail - Constant $ Second Quarter Year to Date 2023 2023 C$(e) 2022 2023 2023 C$(e) 2022 Operating expenses: Salary and related service costs $ 1,772.0 $ 1,782.2 $ 1,800.8 $ 3,550.0 $ 3,617.0 $ 3,595.4 Third-party service costs (a) 715.8 720.4 629.0 1,355.1 1,377.2 1,210.9 Third-p
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations Six Months Ended June 30, 2023 2022 Net Cash Used in Operating Activities $ (784.6) $ (739.9) Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (1,664.8) (1,507.6) Free Cash Flow $ 880.2 $ 767.7 Net Decrease in Cash and Cash Equivalents $
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Six Months Ended Twelve Months Ended June 30 June 30 June 30 2023 2022 2023 2022 2023 2022 Net Income - Omnicom Group Inc. $ 366.3 $ 348.4 $ 593.8 $ 522.2 $ 1,388.1 $ 1,294.0 Net Income Attributed to Noncontrolling Interests 16.9 21.6 33.3 42.4 78.2 100.7
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Six Months Ended June 30 June 30 2023 2022 2023 2022 Net Income - Omnicom Group Inc.- Reported $ 366.3 $ 348.4 $ 593.8 $ 522.2 Net Income Attributed To Noncontrolling Interests 16.9 21.6 33.3 42.4 Income From Equity Method Investments 1.1 1.6 1.2 1.5 Incom
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Second Quarter Year to Date 2023 2022 2023 2022 Net Income - Omnicom Group Inc. - Reported $ 366.3 $ 348.4 $ 593.8 $ 522.2 Impact on Net Income related to: Real estate and other repositioning costs 54.5 — 145.5 — Charges arising from the effects of the war in Ukraine — — — 1
Slide 21: Disclosures
Disclosures The preceding materials have been prepared for use in the July 18, 2023 conference call on Omnicom’s results of operations for the three and six months ended June 30, 2023. The call will be archived on the Internet at http:// investor.omnicomgroup.com Forward-Looking Statements Certain s