Slide 1: Fourth Quarter 2014 Results
Fourth Quarter 2014 Results February 10, 2015 Investor Presentation
Slide 2: 2014 vs. 2013 P&L Summary – Fourth Quarter
2014 vs. 2013 P&L Summary – Fourth Quarter Fourth Quarter 2014 2013 (a) Revenue $ 4,195.1 $ 4,058.1 (b) EBITA 609.4 575.7 Margin % 14.5% 14.2% Amortization of Intangibles 30.0 24.5 Operating Income $ 579.4 $ 551.2 Margin % 13.8% 13.6% (a) 2013 reported results include the impact of expenses incurred
Slide 3: 2014 vs. 2013 P&L Summary – Fourth Quarter
2014 vs. 2013 P&L Summary – Fourth Quarter Fourth Quarter 2014 2013 (a) Operating Income $ 579.4 $ 551.2 Net Interest Expense 30.0 39.8 Income Taxes 182.2 176.3 Tax Rate % 33.2% 34.5% Income from Equity Method Investments 5.7 5.4 Noncontrolling Interests 43.4 40.0 Net Income - Omnicom Group $ 329.5
Slide 4: 2014 vs. 2013 Earnings Per Share – Fourth Quarter
2014 vs. 2013 Earnings Per Share – Fourth Quarter Fourth Quarter 2014 2013 (a) Net Income - Omnicom Group $ 329.5 $ 300.5 Net Income allocated to Participating Securities (5.6) (7.0) Net Income available for common shares $ 323.9 $ 293.5 Diluted Shares (millions) 249.9 260.6 EPS - Diluted $ 1.30 $ 1
Slide 5: 2014 vs. 2013 P&L Summary – Full Year
2014 vs. 2013 P&L Summary – Full Year Full Year 2014 (a) 2013 (a) Revenue $ 15,317.8 $ 14,584.5 (b) EBITA 2,051.2 1,926.1 Margin % 13.4% 13.2% Amortization of Intangibles 107.1 100.8 Operating Income $ 1,944.1 $ 1,825.3 Margin % 12.7% 12.5% (a) 2014 and 2013 reported results include the impact of ex
Slide 6: 2014 vs. 2013 P&L Summary – Full Year
2014 vs. 2013 P&L Summary – Full Year Full Year 2014 (a) 2013 (a) Operating Income $ 1,944.1 $ 1,825.3 Net Interest Expense 134.1 164.4 Income Taxes 593.1 565.2 Tax Rate % 32.8% 34.0% Income from Equity Method Investments 16.2 15.9 Noncontrolling Interests 129.1 120.5 Net Income - Omnicom Group $ 1,
Slide 7: 2014 vs. 2013 Earnings Per Share – Full Year
2014 vs. 2013 Earnings Per Share – Full Year Full Year 2014 (a) 2013 (a) Net Income - Omnicom Group $ 1,104.0 $ 991.1 Net Income allocated to Participating Securities (20.4) (25.1) Net Income available for common shares $ 1,083.6 $ 966.0 Diluted Shares (millions) 255.3 260.4 EPS - Diluted (a) $ 4.24
Slide 8: 2014 Total Revenue Change – Fourth Quarter
2014 Total Revenue Change – Fourth Quarter 3.4% $240 $(129) $26 $4,195 $4,058 (3.1)% 0.6% 5.9% (a) (c) 4Q '13 FX Impact Net Organic 4Q '14 (b) Acquisitions Revenue (a) To calculate the FX impact, we first convert the current period’s local currency revenue using the average exchange rates from the e
Slide 9: 2014 Total Revenue Change – Full Year
2014 Total Revenue Change – Full Year 5.0% $827 $15,318 $19 $(113) $14,585 (0.8)% 0.1% 5.7% (a) (c) FY 2013 FX Impact Net Organic FY 2014 (b) Acquisitions Revenue (a) To calculate the FX impact, we first convert the current period’s local currency revenue using the average exchange rates from the eq
Slide 10: 2014 Revenue by Region
2014 Revenue by Region Fourth Quarter Full Year Latin Africa Latin Africa America MidEast America MidEast 3.0% 1.8% 2.8% 1.7% Asia Asia Pacific Pacific 10.4% 10.5% Euro Euro Markets & Markets & Other Other Europe North Europe North 18.3% America 18.5% America 56.9% 56.7% UK UK 9.6% 9.8% February 10,
Slide 11: 2014 Revenue by Region
2014 Revenue by Region Fourth Quarter Full Year % Organic % Organic (a) (a) $ Mix % Growth Growth $ Mix % Growth Growth North America $ 2,386.5 7.8% 8.3% North America $ 8,688.7 6.5% 7.5% UK 401.1 6.9% 6.2% UK 1,499.0 12.5% 5.2% Euro & Other Europe 771.0 -6.8% 1.2% Euro & Other Europe 2,838.9 0.1% 1
Slide 12: 2014 Revenue by Discipline
2014 Revenue by Discipline Fourth Quarter Full Year Specialty Specialty 7.3% 7.0% PR PR 8.8% 9.1% Advertising Advertising 49.6% 50.1% CRM CRM 33.8% 34.3% % Organic % Organic $ Mix % Growth Growth (a) $ Mix % Growth Growth (a) Advertising $ 2,102.1 5.1% 8.5% Advertising $ 7,593.5 8.1% 9.1% CRM 1,418.
Slide 13: Revenue by Industry
Revenue by Industry Full Year – 2014 Full Year – 2013 Telcom Growth 5% T&E Auto T&E Auto Financial Auto 3.2% 6% 8% 5% 8% Services Telcom 7% 7% Food & Beverage 1.5% Tech Consumer Consumer Products Tech Products 9% Consumer Products 4.3% 10% 9% 10% Financial Financial Services 0.4% Retail Services 7%
Slide 14: Cash Flow Performance
Cash Flow Performance Full Year 2014 2013 Net Income $ 1,233.1 $ 1,111.6 Depreciation and Amortization Expense 294.4 284.8 Share-Based Compensation Expense 93.5 86.3 Other Non-Cash Items to Reconcile to Net Cash Provided by Operating (38.3) (25.0) Activities, net Free Cash Flow (a) $ 1,582.7 $ 1,457
Slide 15: Cash Flow Performance
Cash Flow Performance Full Year 2014 2013 Free Cash Flow (a) $ 1,582.7 $ 1,457.7 Primary Uses of Cash: (b) Dividends 468.0 318.4 Dividends paid to Noncontrolling Interest Shareholders 111.3 100.6 Capital Expenditures 213.0 212.0 Acquisitions and Payments for Additional Interest in Controlled Subsidi
Slide 16: Current Credit Picture
Current Credit Picture Full Year 2014 Reported 2013 Reported EBITDA (a) $ 2,238.5 $ 2,110.1 Gross Interest Expense 177.2 197.2 EBITDA / Gross Interest Expense 12.6 x 10.7 x Total Debt / EBITDA 2.0 x 1.9 x (b) Net Debt / EBITDA 1.0 x 0.6 x Debt Bank Loans (Due Less Than 1 Year) $ 8 $ 6 CP & Borrowing
Slide 17: Historical Returns
Historical Returns Return on Invested Capital (ROIC) (a) : Twelve Months Ended December 31, 2014 20.3% Twelve Months Ended December 31, 2013 18.1% Return on Equity (b): Twelve Months Ended December 31, 2014 34.3% Twelve Months Ended December 31, 2013 28.1% (a) Return on Invested Capital is After Tax
Slide 18: Net Cash Returned to Shareholders through Dividends and Share Repurchases
Net Cash Returned to Shareholders through Dividends and Share Repurchases From 2004 through 2014, Omnicom distributed over 100% of Net Income to shareholders through Dividends and Share Repurchases. 108% 104% $10.0 107% $10.0 $8.9 103% $7.9 $ In Billions $8.0 103% $6.9 92% 105% $5.9 8.0 $6.0 $5.1 7.
Slide 19: Supplemental Financial Information
Supplemental Financial Information February 10, 2015 18
Slide 20: 2014 vs. 2013 P&L Summary – Fourth Quarter
2014 vs. 2013 P&L Summary – Fourth Quarter Fourth Quarter 2014 2013 2013 Reported Non GAAP (a) Reported Revenue $ 4,195.1 $ 4,058.1 $ 4,058.1 EBITA (b) 609.4 589.0 575.7 Margin % 14.5% 14.5% 14.2% Amortization of Intangibles 30.0 24.5 24.5 Operating Income $ 579.4 $ 564.5 $ 551.2 Margin % 13.8% 13.9
Slide 21: 2014 vs. 2013 P&L Summary – Fourth Quarter
2014 vs. 2013 P&L Summary – Fourth Quarter Fourth Quarter 2014 2013 2013 Reported Non GAAP (a) Reported Operating Income $ 579.4 $ 564.5 $ 551.2 Net Interest Expense 30.0 39.8 39.8 Income Taxes 182.2 176.3 176.3 Tax Rate % 33.2% 33.6% 34.5% Income from Equity Method Investments 5.7 5.4 5.4 Noncontro
Slide 22: 2014 vs. 2013 Earnings Per Share – Fourth Quarter
2014 vs. 2013 Earnings Per Share – Fourth Quarter Fourth Quarter 2014 2013 2013 Reported Non GAAP (a) Reported Net Income - Omnicom Group $ 329.5 $ 313.8 $ 300.5 Net Income allocated to Participating Securities (5.6) (7.3) (7.0) Net Income available for common shares $ 323.9 $ 306.5 $ 293.5 Diluted
Slide 23: 2014 vs. 2013 P&L Summary – Full Year
2014 vs. 2013 P&L Summary – Full Year Full Year 2014 2013 2013 Reported (c) Non GAAP (a) Reported Revenue $ 15,317.8 $ 14,584.5 $ 14,584.5 EBITA (b) 2,051.2 1,967.5 1,926.1 Margin % 13.4% 13.5% 13.2% Amortization of Intangibles 107.1 100.8 100.8 Operating Income $ 1,944.1 $ 1,866.7 $ 1,825.3 Margin
Slide 24: 2014 vs. 2013 P&L Summary – Full Year
2014 vs. 2013 P&L Summary – Full Year Full Year 2014 2013 2013 Reported (c) Non GAAP (a) Reported Operating Income $ 1,944.1 $ 1,866.7 $ 1,825.3 Net Interest Expense 134.1 164.4 164.4 Income Taxes 593.1 571.7 565.2 Tax Rate % 32.8% 33.6% 34.0% Income from Equity Method Investments 16.2 15.9 15.9 Non
Slide 25: 2014 vs. 2013 Earnings Per Share – Full Year
2014 vs. 2013 Earnings Per Share – Full Year Full Year 2014 2013 2013 (c) (a) Reported Non GAAP Reported Net Income - Omnicom Group $ 1,104.0 $ 1,026.0 $ 991.1 Net Income allocated to Participating Securities (20.4) (26.0) (25.1) Net Income available for common shares $ 1,083.6 $ 1,000.0 $ 966.0 Dil
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Fourth Quarter 2013 Merger 2013 Reported Expenses Non GAAP EBITA $ 575.7 $ 13.3 $ 589.0 Operating Income 551.2 13.3 564.5 Income Tax Expense 176.3 - 176.3 Net Income - Omnicom Group Inc. 300.5 13.3 313.8 Net Income allocated to participating securities 7.0 0.3 7.3
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Full Year 2013 Merger 2013 Reported Expenses Non GAAP EBITA $ 1,926.1 $ 41.4 $ 1,967.5 Operating Income 1,825.3 41.4 1,866.7 Income Tax Expense 565.2 6.5 571.7 Net Income - Omnicom Group Inc. 991.1 34.9 1,026.0 Net Income allocated to participating securities 25.1
Slide 28: Omnicom Debt Structure
Omnicom Debt Structure Bank Loans $8 2024 Senior Notes $750 2016 Senior Notes $1,000 2019 Senior Notes 2022 Senior Notes $500 $1,250 2020 Senior Notes $1,000 The above chart sets forth Omnicom’s debt outstanding at December 31, 2014. The amounts reflected above for the 2016, 2019, 2020, 2022 and 202
Slide 29: Omnicom Debt Maturity Profile
Omnicom Debt Maturity Profile 2022 Senior Notes $1,250 2016 2020 Senior Senior Notes Notes $1,000 2024 Senior Notes $750 2019 Senior Notes $500 $250 Other Borrowings $0 Other borrowings at December 31, 2014 include short-term borrowings of $8 million which are due in less than one year. For purposes
Slide 30: Historical Return Trends
Historical Return Trends Return on Equity Average through December 31, 2014 - 25.3% Return on Invested Capital Average through December 31, 2014 - 20.6% 40.0% ROE(a) ROIC(b) 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 31: 2014 Acquisition Related Expenditures
2014 Acquisition Related Expenditures Full Year (a) Acquisitions of Businesses and Affiliates $ 74.9 (b) Additional Interest in Controlled Subsidiaries 69.5 (c) Earn-outs on acquisitions completed after January 1, 2009 83.2 Total Acquisition Expenditures (d) $ 227.6 (a) Includes acquisitions of a ma
Slide 32: Condensed Cash Flow
Condensed Cash Flow Full Year 2014 2013 Net Income $ 1,233.1 $ 1,111.6 Share-Based Compensation Expense 93.5 86.3 Depreciation and Amortization 294.4 284.8 Impairment Charge on Equity Interest in Egyptian Affiliate, net - 10.7 Other Non-Cash Items to Reconcile to Net Cash Provided by Operating Activ
Slide 33: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 3 Months Ended December 31 Full Year 2014 2013 2014 2013 Revenue $ 4,195.1 $ 4,058.1 $ 15,317.8 $ 14,584.5 Operating Expenses, excluding Depreciation and Amortization 3,538.7 3,434.9 13,079.3 12,474.4 EBITDA 656.4 623.2 2,238.5 2,110.1 Depreciation 47.0 47.5 187.3
Slide 34: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Full Year 2014 2013 Net Free Cash Flow $ (410.3) $ 245.9 Cash Flow items excluded from Net Free Cash Flow: Changes in Operating Capital (106.2) 351.3 Repayment of Convertible Debt (252.7) (406.7) Proceeds from/(repayments of) Short-term & Long-term Debt, net 749.7
Slide 35: Supplemental Information
Supplemental Information Fourth Quarter Full Year 2014 2013 2014 2013 %∆ %∆ Reported Reported Reported Reported Operating expenses: Salary and service costs $ 3,119.2 $ 2,991.1 4.3% $ 11,350.0 $ 10,724.4 5.8% Office and general expenses: Amortization of Intangibles 30.0 24.5 107.1 100.8 Depreciation
Slide 36: Fourth Quarter Acquisitions
Fourth Quarter Acquisitions Founded in 1996, DDC Advocacy conducts advocacy campaigns for major corporations, trade associations, business coalitions and non-profit organizations. Among its comprehensive suite of services and products, DDC Advocacy offers advocacy strategy, global and local in-distr
Slide 37: Fourth Quarter Acquisitions
Fourth Quarter Acquisitions Ketchum, a leading global public relations consultancy, has purchased a controlling interest in its affiliate agency in Brazil, Ketchum Estratégia. The company has recognized public relations expertise in brand marketing, technology, digital, sports marketing and crisis m
Slide 38: Fourth Quarter Acquisitions
Fourth Quarter Acquisitions GRA Everingham is a bipartisan strategic advisory firm at the forefront of government relations, regulatory and public affairs in Australia. GRA Everingham specializes in providing companies and institutions with strategic advice about government, public policy, regulatio
Slide 39: Fourth Quarter Acquisitions
Fourth Quarter Acquisitions Marketforce is an Australian agency that provides fully integrated marketing solutions to its clients. For over 40 years Marketforce has represented clients in many industries, including consumer goods, health and general insurance, local and state government, public heal
Slide 40: Disclosure
Disclosure The preceding materials have been prepared for use in the February 10, 2015 conference call on Omnicom’s results of operations for the period ended December 31, 2014. The call will be archived on the Internet at http://www.omnicomgroup.com/financialwebcasts. Forward-Looking Statements Cer
Slide 41: Investor Presentation Addendum
Investor Presentation Addendum Following the publication of Omnicom’s Q4 2014 Earnings Release and Investor Presentation, the following supplemental revenue information was added to the presentation materials.
Slide 42: Quarterly Revenue by Region – 2014 Q1 through Q3
Quarterly Revenue by Region – 2014 Q1 through Q3 Q1 2014 % % Organic Q2 2014 % % Organic Q3 2014 % % Organic (a) (a) (a) $ Mix Growth Growth $ Mix Growth Growth $ Mix Growth Growth North America $ 1,993.0 2.8% 4.8% $ 2,184.9 6.6% 7.9% $ 2,124.4 8.6% 8.9% UK 336.2 10.9% 3.8% 381.4 16.7% 5.5% 380.3 16