Omnicom Group Inc. · NYSE:OMC
Omnicom — Q1 2017 Earnings Presentation
23 slides from Omnicom's earnings presentation, Apr 18, 2017
Slide 1: First Quarter 2017 Results
First Quarter 2017 Results April 18, 2017 Investor Presentation
Slide 2: 2017 vs. 2016 P&L Summary
2017 vs. 2016 P&L Summary First Quarter First Quarter 2017 2016 Revenue $ 3,587.4 $ 3,499.1 Operating Expenses (a) 3,177.5 3,107.0 Operating Profit 409.9 392.1 Net Interest Expense 39.6 40.1 Income Tax Expense (b) 108.0 (b) 115.5 (b) 29.2% (b ) 32.8% Tax Rate % Income/(Loss) from Equity Method Inves
Slide 3: 2017 vs. 2016 Earnings per Share – Diluted
2017 vs. 2016 Earnings per Share – Diluted First Quarter First Quarter 2017 2016 Net Income - Omnicom Group Inc. $ 241.8 $ 218.4 Net Income allocated to participating securities (0.5) (1.5) Net Income available for common shares (a) $ 241.3 (a) $ 216.9 Diluted Shares (millions) 236.5 241.1 (b) Earni
Slide 4: 2017 Total Revenue Change
2017 Total Revenue Change First Quarter $ %∆ Prior Period Revenue $ 3,499.1 Foreign exchange rate impact (a) (40.8) -1.2% Acquisition revenue, net of disposition revenue (b) (24.3) -0.7% Organic growth (c) 153.4 4.4% Current Period Revenue $ 3,587.4 2.5% (a) Foreign exchange rate impact: calculated
Slide 5: 2017 Revenue by Region
2017 Revenue by Region First Quarter Latin Africa America MidEast 3.0 % 2.2% Asia % Organic Pacific $ Mix % Growth Growth(a) 10.5% North America $ 2,139.3 0.8% 1.1% UK 309.2 -8.2% 8.1% Euro Markets & Euro & Other Europe 578.4 4.6% 8.2% Other Europe Asia Pacific 375.0 5.8% 9.1% 16.1% North America La
Slide 6: 2017 Revenue by Discipline
2017 Revenue by Discipline First Quarter Specialty 7.5% PR 9.1% % Organic $ Mix % Growth Growth(a) Advertising $ 1,920.8 6.5% 6.4% CRM 1,071.0 -4.4% 2.1% PR 325.3 2.0% 1.8% Advertising Specialty 270.3 5.3% 3.3% 53.5% CRM Total $ 3,587.4 2.5% 4.4% 29.9% (a) “Organic Growth” reflects the year-over-yea
Slide 7: Revenue by Industry
Revenue by Industry First Quarter – 2017 First Quarter – 2016 T&E Auto T&E Auto 7% 9% 6% 8% Telcom Telcom 5% 5% Consumer Consumer Products Products Tech 9% Tech 10% 9% 10% Financial Financial Services Services Retail 7% Retail 7% 6% 6% Food & Food & Pharma & Beverage Pharma & Beverage Health 13% Hea
Slide 8: Cash Flow Performance
Cash Flow Performance Three Months Ended March 31 2017 2016 Net Income $ 262.4 $ 236.3 Depreciation and Amortization Expense 72.7 74.2 Share-Based Compensation Expense 19.3 23.0 Other Items to Reconcile to Net Cash Provided by 0.9 19.6 Operating Activities, net (a) Free Cash Flow $ 355.3 $ 353.1 (b)
Slide 9: Cash Flow Performance
Cash Flow Performance Three Months Ended March 31 2017 2016 Free Cash Flow (a) $ 355.3 $ 353.1 (b) Primary Uses of Cash: Dividends paid to Common Shareholders 130.8 122.2 Dividends paid to Noncontrolling Interest Shareholders 10.3 14.9 Capital Expenditures 32.1 41.4 Acquisition of Businesses and Aff
Slide 10: Current Credit Picture
Current Credit Picture Twelve Months Ended March 31 2017 2016 EBITDA (a) $ 2,318.1 $ 2,225.6 Gross Interest Expense 212.9 187.8 EBITDA / Gross Interest Expense 10.9 x 11.9 x Total Debt / EBITDA 2.1 x 2.1 x Net Debt (b) / EBITDA 1.1 x 1.3 x Debt Bank Loans (Due Less Than 1 Year) $ 29 $ 39 CP & Borrow
Slide 11: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a) : Twelve Months Ended March 31, 2017 21.8% Twelve Months Ended March 31, 2016 19.3% Return on Equity (b): Twelve Months Ended March 31, 2017 52.0% Twelve Months Ended March 31, 2016 46.3% (a) Return on Invested Capital is After Tax Reported Op
Slide 12: Net Cash Returned to Shareholders through Dividends and Share Repurchases
Net Cash Returned to Shareholders through Dividends and Share Repurchases From 2007 through March 31, 2017, Omnicom distributed 107% of Net Income to shareholders through Dividends and Share Repurchases. 107% $12.0 106% $10.1 107% $9.9 $10.0 $8.7 107% $ In Billions $7.6 $8.0 102% 105% $6.5 7.4 7.2 9
Slide 13: Supplemental Financial Information
Supplemental Financial Information April 18, 2017 12
Slide 14: Omnicom Debt Structure
Omnicom Debt Structure Bank Loans $29 2019 Senior Notes $500 2026 Senior 2020 Senior Notes Notes $1,400 $1,000 2024 Senior 2022 Senior Notes Notes $750 $1,250 The above chart sets forth Omnicom’s debt outstanding at March 31, 2017. The amounts reflected above for the 2019, 2020, 2022, 2024 and 2026
Slide 15: Omnicom Debt Maturity Profile
Omnicom Debt Maturity Profile 2026 Senior 2022 Notes $1,400 Senior Notes $1,200 2020 Senior Notes $1,000 2024 Senior $800 Notes 2019 Senior $600 Notes $400 $200 Other Borrowings $0 Other borrowings at March 31, 2017 include short-term borrowings of $29 million which are due in less than one year. Fo
Slide 16: 2017 Acquisition Related Expenditures
2017 Acquisition Related Expenditures Year to Date (a) Acquisition of Businesses and Affiliates $ 19.2 (b) Acquisition of Additional Noncontrolling Interests 2.7 (c) Contingent Purchase Price Payments 2.1 (d) Total Acquisition Expenditures $ 24.0 (a) Includes acquisitions of a majority interest in a
Slide 17: Condensed Cash Flow
Condensed Cash Flow Three Months Ended March 31 2017 2016 Net Income $ 262.4 $ 236.3 Share-Based Compensation 19.3 23.0 Depreciation and Amortization of Intangible Assets 72.7 74.2 Other Items to Reconcile to Net Cash Used in Operating Activities, net 0.9 19.6 (a) Changes in Operating Capital (550.6
Slide 18: 2017 vs. 2016 Non-GAAP Financial Measures – EBITA
2017 vs. 2016 Non-GAAP Financial Measures – EBITA First Quarter 2017 2016 Revenue $ 3,587.4 $ 3,499.1 Operating expenses (a) 3,177.5 3,107.0 Operating Profit 409.9 392.1 Operating Profit Margin % 11.4% 11.2% Add back: Amortization of intangible assets 30.4 28.3 (b) EBITA $ 440.3 $ 420.4 EBITA Margin
Slide 19: Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA
Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA 3 Months Ended March 31 12 Months Ended March 31 2017 2016 2017 2016 Net Income - Omnicom Group Inc. $ 241.8 $ 218.4 $ 1,172.0 $ 1,103.2 Net Income Attributed to Noncontrolling Interests 20.6 17.9 100.9 106.6 Net Income 262.4 236.3 1,2
Slide 20: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Three Months Ended March 31 2017 2016 Net Cash Used in Operating Activities $ (195.3) $ (454.0) (a) Net Cash Used in Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (550.6) (807.1) Free Cash Flow $ 355.3 $ 353.1 (a)
Slide 21: Supplemental Information
Supplemental Information First Quarter 2017 % of Rev 2016 % of Rev Revenue $ 3,587.4 $ 3,499.1 Operating expenses: Salary and service costs 2,694.2 75.1% 2,623.3 75.0% Occupancy and other Costs 302.0 8.4% 301.4 8.6% Cost of services 2,996.2 83.5% 2,924.7 83.6% Selling, general and administrative exp
Slide 22: First Quarter Acquisition
First Quarter Acquisition TBWA Worldwide has acquired a majority interest in Lucky Generals, a leading independent creative agency in the United Kingdom. Founded in 2013, Lucky Generals is a full-service creative agency offering a wide range of marketing services, including advertising, experiential
Slide 23: Disclosure
Disclosure The preceding materials have been prepared for use in the April 18, 2017 conference call on Omnicom’s results of operations for the period ended March 31, 2017. The call will be archived on the Internet at http://investor.omnicomgroup.com/investor-relations/news-events-and-filings/. Forwa