Omnicom Group Inc. · NYSE:OMC
Omnicom — Q1 2020 Earnings Presentation
24 slides from Omnicom's earnings presentation, Apr 28, 2020
Slide 1: First Quarter 2020 Results
First Quarter 2020 Results April 28, 2020 Investor Presentation
Slide 2: COVID-19 Operational Update
COVID-19 Operational Update • Our assessment is focused on three key areas ◦ Protecting our people ◦ Serving our clients ◦ Preserving the strength of our businesses • Planning model is centered around ◦ Health and well-being of our people ◦ Assessment of economic conditions as lock-downs are lifted
Slide 3: COVID-19 Liquidity Update
COVID-19 Liquidity Update • Proactive steps to strengthen liquidity and financial position: ◦ Amended and extended $2.5 billion credit facility ◦ Suspension of share repurchase program ◦ In February, issued $600M 10-year 2.45% Senior Notes ◦ In March, redeemed $600M 10-year 4.45% Senior Notes due in
Slide 4: 2020 vs. 2019 P&L Summary
2020 vs. 2019 P&L Summary First Quarter First Quarter 2020 2019 Revenue $ 3,406.9 $ 3,468.9 Operating Expenses (a) 2,986.7 3,040.0 Operating Profit 420.2 428.9 Net Interest Expense (b) 45.8 46.0 Income Tax Expense 97.4 102.7 Tax Rate % 26.0% 26.8% Loss From Equity Method Investments (5.3) (0.5) Net
Slide 5: 2020 vs. 2019 Earnings per Share – Diluted
2020 vs. 2019 Earnings per Share – Diluted First Quarter First Quarter 2020 2019 Net Income - Omnicom Group Inc. $ 258.1 $ 263.2 Diluted Shares (millions) 217.5 224.2 Earnings per Share - Diluted $ 1.19 $ 1.17 Dividends Declared Per Common Share $ 0.65 $ 0.65 April 28, 2020 4
Slide 6: 2020 Total Revenue Change
2020 Total Revenue Change First Quarter $ %∆ Prior Period Revenue $ 3,468.9 Foreign exchange rate impact (a) (50.0) -1.4% Acquisition revenue, net of disposition revenue (b) (23.9) -0.7% Organic growth (c) 11.9 0.3% Current Period Revenue $ 3,406.9 -1.8% (a) Foreign exchange rate impact: calculated
Slide 7: 2020 Revenue by Discipline
2020 Revenue by Discipline First Quarter Healthcare 8.3% PR 9.7% % Organic $ Mix % Growth Growth (a) Advertising $ 1,892.8 -1.9% -0.1% CRM Execution CRM Consumer 583.1 -2.7% -1.3% & Support Experience 9.3% CRM Execution & 318.1 -8.6% -0.9% Advertising Support 55.6% PR 331.6 -0.7% 0.2% CRM Healthcare
Slide 8: 2020 Revenue by Region
2020 Revenue by Region First Quarter Latin Middle East America & Africa 2.1% 1.6% % Organic $ Mix % Growth Growth (a) Asia United States $ 1,894.2 0.5% 1.7% Pacific 10.6% Other North 103.1 -1.9% 0.6% America Euro UK 345.0 1.9% 3.7% Markets & Euro Markets & 578.4 -4.7% -2.3% Other Other Europe Europe
Slide 9: Revenue by Industry
Revenue by Industry First Quarter – 2020 First Quarter – 2019 Auto T&E Auto 10% 9% 11% T&E 8% Consumer Telcom Products Consumer 6% Telcom 9% Products 5% 7% Financial Tech Financial Tech Services 8% Services 7% 9% 8% Retail Retail 7% 6% Food & Food & Beverage Beverage 14% 14% Pharma & Pharma & Health
Slide 10: Cash Flow Performance
Cash Flow Performance Three Months Ended March 31 2020 2019 Net Income $ 271.7 $ 279.7 Depreciation and Amortization of Intangible Assets 57.0 59.6 Share-Based Compensation 18.7 16.8 Other Items to Reconcile to Net Cash Used in Operating 14.6 (15.4) Activities, net Free Cash Flow (a) $ 362.0 $ 340.7
Slide 11: Cash Flow Performance
Cash Flow Performance Three Months Ended March 31 2020 2019 Free Cash Flow (a) $ 362.0 $ 340.7 Primary Uses of Cash: Dividends paid to Common Shareholders 141.7 134.8 Dividends paid to Noncontrolling Interest Shareholders 10.4 17.0 Capital Expenditures 26.4 27.2 Acquisition of Businesses and Affilia
Slide 12: Current Credit Picture
Current Credit Picture Twelve Months Ended March 31 2020 2019 EBITDA (a) $ 2,342.5 $ 2,394.9 Gross Interest Expense on Indebtedness 221.8 245.0 EBITDA / Gross Interest Expense on Indebtedness 10.6 x 9.8 x Total Debt / EBITDA 2.2 x 2.3 x Net Debt (b) / EBITDA 1.0 x 0.9 x Debt Bank Loans (Due Less Tha
Slide 13: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a): Twelve months ended March 31, 2020 25.1% Twelve months ended March 31, 2019 25.0% Return on Equity (b): Twelve months ended March 31, 2020 54.9% Twelve months ended March 31, 2019 52.6% (a) Return on Invested Capital is After Tax Reported Ope
Slide 14: Supplemental Financial Information
Supplemental Financial Information April 28, 2020 13
Slide 15: Omnicom Debt Structure
Omnicom Debt Structure Short-term Debt $11 2031 Euro 2030 Senior Senior Notes Notes $600 $547 2027 Euro Senior Notes $547 2026 Senior Notes $1,400 2022 Senior Notes $1,250 2024 Senior Notes $750 The above chart sets forth Omnicom’s debt outstanding at March 31, 2020. The amounts reflected above for
Slide 16: Omnicom Debt Maturity Profile
Omnicom Debt Maturity Profile 2026 Senior 2022 Notes $1,400 Senior Notes $1,200 $1,000 2024 Senior Notes 2027 2030 2031 $800 Senior Euro Euro Senior Notes Senior $600 Notes Notes $400 $200 Other Borrowings $0 9 20 0 21 1 22 2 23 3 24 4 25 5 26 6 27 7 28 8 29 9 30 0 31 1 -1 -2 -2 -2 -2 -2 -2 -2 -2 -2
Slide 17: 2020 Acquisition Related Expenditures
2020 Acquisition Related Expenditures Three Months Ended March 31 Acquisition of Businesses and Affiliates (a) $ — Acquisition of Additional Noncontrolling Interests (b) 10.4 Contingent Purchase Price Payments (c) 1.4 Total Acquisition Expenditures (d) $ 11.8 (a) Includes acquisitions of a majority
Slide 18: Condensed Cash Flow
Condensed Cash Flow Three Months Ended March 31 2020 2019 Net Income $ 271.7 $ 279.7 Share-Based Compensation 18.7 16.8 Depreciation and Amortization of Intangible Assets 57.0 59.6 Other Items to Reconcile to Net Cash Used in Operating Activities, net 14.6 (15.4) Changes in Operating Capital (1,349.
Slide 19: Supplemental Information
Supplemental Information First Quarter 2020 % of Rev 2019 % of Rev Revenue $ 3,406.9 $ 3,468.9 Operating expenses: Salary and service costs 2,533.3 74.4% 2,567.6 74.0% Occupancy and other costs 309.6 9.1% 309.2 8.9% Cost of services 2,842.9 2,876.8 Selling, general and administrative expenses 86.8 2
Slide 20: Net Cash Returned to Shareholders through Dividends and Share Repurchases
Net Cash Returned to Shareholders through Dividends and Share Repurchases From 2010 through March 31, 2020, Omnicom distributed 108% of Net Income to shareholders through Dividends and Share Repurchases. 108% 108% $12.0 110% $11.1 $10.9 115% 4.5 $10.0 $9.5 4.3 117% $8.2 3.7 $8.0 122% $ In Billions $
Slide 21: 2020 vs. 2019 Non-GAAP Financial Measures – EBITA
2020 vs. 2019 Non-GAAP Financial Measures – EBITA First Quarter 2020 2019 Revenue $ 3,406.9 $ 3,468.9 Operating Expenses (a) 2,986.7 3,040.0 Operating Profit 420.2 428.9 Operating Profit Margin % 12.3% 12.4% Add back: Amortization of intangible assets 20.8 21.6 EBITA (b) $ 441.0 $ 450.5 EBITA Margin
Slide 22: Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA
Reconciliation of Non-GAAP Financial Measures – EBITA and EBITDA Three Months Ended Twelve Months Ended March 31 March 31 2020 2019 2020 2019 Net Income - Omnicom Group Inc. $ 258.1 $ 263.2 $ 1,334.0 $ 1,325.5 Net Income Attributed to Noncontrolling Interests 13.6 16.5 93.9 110.0 Net Income 271.7 27
Slide 23: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Three Months Ended March 31 2020 2019 Net Cash Used in Operating Activities $ (987.2) $ (395.6) Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (1,349.2) (736.3) Free Cash Flow $ 362.0 $ 340.7 Three Months Ended Marc
Slide 24: Disclosure
Disclosure The preceding materials have been prepared for use in the April 28, 2020 conference call on Omnicom’s results of operations for the three months ended March 31, 2020. The call will be archived on the Internet at http:// investor.omnicomgroup.com/investor-relations/news-events-and-filings/