Omnicom Group Inc. · NYSE:OMC
Omnicom — Q4 2020 Earnings Presentation
27 slides from Omnicom's earnings presentation, Feb 18, 2021
Slide 1: Fourth Quarter 2020 Results
Fourth Quarter 2020 Results February 18, 2021 Investor Presentation
Slide 2: 2020 vs. 2019 P&L Summary – Fourth Quarter
2020 vs. 2019 P&L Summary Fourth Quarter Fourth Quarter 2020 (a) 2019 Revenue $ 3,757.0 $ 4,141.2 Operating Expenses (b) 3,142.3 3,494.8 Operating Profit 614.7 646.4 Net Interest Expense 48.0 38.6 Income Tax Expense 141.5 158.8 Tax Rate % 25.0 % 26.1 % Income From Equity Method Investments 3.3 0.8 N
Slide 3: 2020 vs. 2019 P&L Summary – Full Year
2020 vs. 2019 P&L Summary Full Year Full Year (a) 2020 2019 Revenue $ 13,171.1 $ 14,953.7 Operating Expenses (b) 11,572.3 12,831.4 Operating Profit 1,598.8 2,122.3 Net Interest Expense 189.5 184.0 Income Tax Expense 381.7 504.4 Tax Rate % 27.1 % 26.0 % Income (Loss) From Equity Method Investments (6
Slide 4: Operating Expense Detail
Operating Expense Detail Fourth Quarter Full Year % of % of % of % of 2020 Rev 2019 Rev 2020 Rev 2019 Rev Revenue $ 3,757.0 $ 4,141.2 $ 13,171.1 $ 14,953.7 Operating expenses: Salary and service costs: Salary and related service costs (a) 1,682.6 44.8 % 1,844.6 44.5 % 6,250.9 47.5 % 6,895.2 46.1 % (
Slide 5: 2020 Total Revenue Change
2020 Total Revenue Change Fourth Quarter Full Year $ %∆ $ %∆ Prior Period Revenue $ 4,141.2 $ 14,953.7 Foreign exchange rate impact (a) 32.4 0.8% (60.9) -0.4% Acquisition revenue, net of disposition revenue (b) (18.8) -0.5% (56.7) -0.4% Organic growth (c) (397.8) -9.6% (1,665.0) -11.1% Current Perio
Slide 6: 2020 Revenue by Discipline
2020 Revenue by Discipline Fourth Quarter Healthcare Full Year Healthcare 8.3% 9.0% PR PR CRM 9.4% CRM Execution 9.9% & Support Execution 8.3% & Support 8.6% CRM Consumer CRM Experience Consumer 15.9% Advertising Advertising Experience 58.1% 56.0% 16.5% % Organic % Organic $ Mix % Growth Growth (a)
Slide 7: 2020 Revenue by Region
2020 Revenue by Region Fourth Quarter Full Year Latin Middle East Latin Middle East America & Africa America & Africa 2.3% 1.9% 2.1% 1.6% Asia Asia Pacific Pacific 12.1% 11.4% Euro Euro Markets & Markets & Other Other Europe United States Europe 17.7% United States 51.7% 19.5% 54.5% UK 9.7% UK 9.3%
Slide 8: 2020 Revenue by Region
2020 Revenue by Region Fourth Quarter Full Year % Organic % Organic $ Mix % Growth Growth (a) $ Mix % Growth Growth (a) United States $ 1,941.4 -9.7% -9.4% United States $ 7,186.1 -10.5% -10.1% Other North America 119.7 -3.9% -3.2% Other North America 391.0 -12.3% -10.0% UK 350.9 -9.2% -12.4% UK 1,2
Slide 9: Revenue by Industry
Revenue by Industry Full Year – 2020 Full Year – 2019 T&E Auto Auto 7% T&E 10% 10% Telcom 9% Consumer 6% Consumer Products Products Telcom 9% 8% 6% Tech 9% Financial Financial Tech Services Services 7% 8% 8% Retail 7% Retail 7% Food & Food & Beverage Beverage 14% 14% Pharma & Health Pharma & 16% Hea
Slide 10: Revenue by Industry
Revenue by Industry Fourth Quarter – 2020 % Change excluding T&E FX rate Auto 6% % Mix impact (a) Telcom 10% 5% Food & Beverage 15 % (1.8)% Consumer Consumer Products 8% (8.0)% Products Tech Pharma & Health 15 % (6.6)% 10% 8% Financial Services 7% (15.5)% Financial Technology 10 % 14.9 % Services Au
Slide 11: Revenue by Industry
Revenue by Industry Full Year – 2020 % Change excluding T&E Auto FX rate 7% 10% % Mix impact (a) Telcom Food & Beverage 14 % (10.4)% 6% Consumer Consumer Products 8% (17.3)% Products 8% Pharma & Health 16 % (2.3)% Tech 9% Financial Services 8% (18.4)% Financial Technology 9% 9.2 % Services Auto 10 %
Slide 12: Cash Flow Performance
Cash Flow Performance Full Year 2020 2019 Net Income $ 1,020.8 $ 1,435.9 Depreciation and Amortization of Intangible Assets 222.6 231.5 Share-Based Compensation 70.8 72.5 COVID-19 Repositioning Costs 277.9 — Other Items to Reconcile to Net Cash Used in Operating 101.6 (9.0) Activities, net Free Cash
Slide 13: Cash Flow Performance
Cash Flow Performance Full Year 2020 2019 Free Cash Flow (a) $ 1,693.7 $ 1,730.9 Primary Uses of Cash: Dividends paid to Common Shareholders 562.7 564.3 Dividends paid to Noncontrolling Interest Shareholders 95.5 97.3 Capital Expenditures 75.4 102.2 Acquisition of Businesses and Affiliates, Acquisit
Slide 14: Current Credit Picture
Current Credit Picture Full Year 2020 2019 (a) EBITDA $ 1,821.4 $ 2,353.8 Total Debt / EBITDA 3.2 x 2.2 x Net Debt (b) / EBITDA 0.1 x 0.4 x Debt Bank Loans (Due Less Than 1 Year) $ 3.9 $ 10.1 CP & Borrowings Issued Under Revolver — — USD-denominated Senior Notes (c) 4,600.0 4,000.0 EUR-denominated S
Slide 15: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a): Twelve months ended December 31, 2020 23.0 % Twelve months ended December 31, 2019 29.5 % Return on Equity (b): Twelve months ended December 31, 2020 31.8 % Twelve months ended December 31, 2019 49.6 % (a) Return on Invested Capital is After
Slide 16: Supplemental Financial Information
Supplemental Financial Information February 18, 2021 15
Slide 17: Omnicom Debt Structure
Omnicom Debt Structure Short-term Debt $4 2031 Euro 2030 Senior Notes Senior Notes $600 € 500 2027 Euro 2030 Senior Notes Senior Notes $600 € 500 2022 Senior 2026 Senior Notes Notes $1,250 $1,400 2024 Senior Notes $750 The above chart sets forth Omnicom’s debt outstanding at December 31, 2020. The a
Slide 18: Omnicom Debt Maturity Profile
Omnicom Debt Maturity Profile 2026 Senior 2022 Notes $1,400 Senior Notes $1,200 $1,000 2024 Senior 2027 2031 $800 Notes Euro 2030 Euro Senior Senior Senior Notes Notes Notes $600 $400 $200 Other Borrowings $0 4 26 21 8 30 3 25 7 29 2 24 1 6 28 1 23 0 5 27 0 22 9 31 -2 -2 -2 -2 -2 -3 -2 -2 -3 -2 -2 -
Slide 19: Net Interest Expense Detail
Net Interest Expense Detail Fourth Quarter Full Year 2020 2019 2020 2019 Net Interest expense: Interest expense $ 55.3 $ 52.0 $ 221.8 $ 244.3 Interest income 7.3 13.4 32.3 60.3 Net Interest Expense $ 48.0 $ 38.6 $ 189.5 $ 184.0 February 18, 2021 18
Slide 20: 2020 Acquisition Related Expenditures
2020 Acquisition Related Expenditures Full Year Acquisition of Businesses and Affiliates (a) $ 67.1 Acquisition of Additional Noncontrolling Interests (b) 22.3 Contingent Purchase Price Payments (c) 31.2 Total Acquisition Expenditures (d) $ 120.6 (a) Includes acquisitions of a majority interest in a
Slide 21: Condensed Cash Flow
Condensed Cash Flow Full Year 2020 2019 Net Income $ 1,020.8 $ 1,435.9 Share-Based Compensation 70.8 72.5 Depreciation and Amortization of Intangible Assets 222.6 231.5 Other Items to Reconcile to Net Cash Provided by Operating Activities, net 101.6 (9.0) COVID-19 Repositioning Costs 277.9 — Changes
Slide 22: Net Cash Returned to Shareholders through Dividends and Share Repurchases
Net Cash Returned to Shareholders through Dividends and Share Repurchases From 2011 through December 31, 2020, Omnicom distributed 101% of Net Income to shareholders through dividends and share repurchases. 101% $12.5 102% $11.0 $10.0 $10.0 105% 109% 4.6 4.1 $7.5 110% $ In Billions 114% 6.2 6.4 115%
Slide 23: 2020 Operating Expenses – Impact of COVID-19 Repositioning Costs, Government Wage Programs and Asset Impairments
2020 Operating Expenses – Impact of COVID-19 Repositioning Costs, Government Wage Programs and Asset Impairments Fourth Quarter Full Year Asset Asset Gov't Wage Impairments Severance Real Estate Gov't Wage Impairments Programs Total Actions Actions Programs Total & Other & Other Operating expenses (
Slide 24: 2020 vs. 2019 Non-GAAP Financial Measures – EBITA
2020 vs. 2019 Non-GAAP Financial Measures – EBITA Fourth Quarter Year to Date 2020 2019 2020 2019 Revenue $ 3,757.0 $ 4,141.2 $ 13,171.1 $ 14,953.7 Operating expenses (a) 3,142.3 3,494.8 11,572.3 12,831.4 Operating Profit 614.7 646.4 1,598.8 2,122.3 Operating Profit Margin % 16.4 % 15.6 % 12.1 % 14.
Slide 25: Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA
Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA Three Months Ended Twelve Months Ended December 31 December 31 2020 2019 2020 2019 Net Income - Omnicom Group Inc. $ 398.1 $ 415.0 $ 945.4 $ 1,339.1 Net Income Attributed to Noncontrolling Interests 30.4 34.8 75.4 96.8 Net Income 428.5
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Full Year 2020 2019 Net Cash Provided by Operating Activities $ 1,724.6 $ 1,856.0 Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital 30.9 125.1 Free Cash Flow $ 1,693.7 $ 1,730.9 Full Year 2020 2019 Net Increase in Cash
Slide 27: Disclosure
Disclosure The preceding materials have been prepared for use in the February 18, 2021 conference call on Omnicom’s results of operations for the three and twelve months ended December 31, 2020. The call will be archived on the Internet at http://investor.omnicomgroup.com/investor-relations/news-eve