Omnicom Group Inc. · NYSE:OMC
Omnicom — Q3 2022 Earnings Presentation
22 slides from Omnicom's earnings presentation, Oct 18, 2022
Slide 1: 2022 Third Quarter
2022 Third Quarter October 18, 2022
Slide 2: Third Quarter Highlights
Third Quarter Highlights Organic strength continues Profits increasing – 7.5% organic revenue growth – Net income per diluted share of $1.77, growth of +7.3% from 2021. Foreign currency – Growth in all disciplines and geographies translation reduction of approximately $0.09 – Raising organic revenue
Slide 3: Income Statement Summary
Income Statement Summary Third Quarter Year to Date(a)(b)(c) 2022 2021 2022 2021 Revenue $ 3,443.4 $ 3,435.0 $ 10,420.9 $ 10,433.6 Operating Expenses (a)(c) 2,897.4 2,893.4 8,980.3 8,858.2 Operating Profit 546.0 541.6 1,440.6 1,575.4 Net Interest Expense(b) 29.1 43.7 112.0 164.7 Income Tax Expense(c
Slide 4: Income Statement Summary - Adjusted
Income Statement Summary - Adjusted Third Quarter Year to Date(a)(b)(c) Non-GAAP Non-GAAP Reported Reported Reported Non-GAAP Reported Non-GAAP Adjusted Adjusted 2022 2021 2022 Adjustments 2021 Adjustments 2022 2021 Revenue $ 3,443.4 $ 3,435.0 $ 10,420.9 $ — $ 10,420.9 $ 10,433.6 $ — $ 10,433.6 Oper
Slide 5: Revenue Change
Revenue Change Third Quarter Year to Date $ %∆ $ %∆ Prior Period Revenue $ 3,435.0 $ 10,433.6 Foreign exchange rate impact(a) (216.6) (6.3)% (470.0) (4.5)% Acquisition revenue, net of disposition revenue(b) (32.7) (1.0)% (612.2) (5.9)% Organic growth(c) 257.7 7.5 % 1,069.5 10.3 % Current Period Reve
Slide 6: Revenue by Discipline
Revenue by Discipline Third Quarter Year to Date % % Organic % % Organic Revenue % of Rev Growth(b) Growth(a) Revenue % of Rev Growth(b) Growth(a) Advertising & Media $ 1,762.4 51.2 % (3.2)% 5.9 % Advertising & Media $ 5,362.8 51.5 % (8.2)% 7.8 % Precision Marketing 361.0 10.5 % 16.7 % 16.3 % Precis
Slide 7: Revenue by Region
Revenue by Region Third Quarter Year to Date % % Organic % % Organic Revenue % of Rev Growth(b) Growth(a) Revenue % of Rev Growth(b) Growth(a) United States $ 1,847.8 53.7 % 8.4 % 7.6 % United States $ 5,415.2 52.0 % —% 9.7 % Other North America 121.2 3.5 % 3.9 % 7.7 % Other North America 362.3 3.5
Slide 8: Revenue by Industry Sector
Revenue by Industry Sector Year to Date September 30, 2022 2021 Pharmaceuticals and Healthcare 16% 16% Food and Beverage 14% 14% Technology 11% 10% Auto 10% 10% Consumer Products 8% 8% Financial Services 7% 7% Travel and Entertainment 7% 8% Retail 6% 7% Telecommunications 5% 5% Government 3% 3% Serv
Slide 9: Operating Expense Detail
Operating Expense Detail Third Quarter Year to Date 2022 % of Rev 2021 % of Rev 2022(b) % of Rev 2021(c) % of Rev Revenue $ 3,443.4 $ 3,435.0 $ 10,420.9 $ 10,433.6 Operating expenses: Salary and related service costs 1,749.1 50.8 % 1,730.3 50.4 % (a) 5,344.5 51.3 % 5,101.2 48.9 % Third-party service
Slide 10: Adjusted Non-GAAP Operating Profit & Adjusted EBITA
Adjusted Non-GAAP Operating Profit & Adjusted EBITA Third Quarter Year to Date Reported Reported Reported Non-GAAP Adjusted Reported Non-GAAP Adjusted 2022 2021 2022 Adjustments 2022 2021 Adjustments 2021 Revenue $ 3,443.4 $ 3,435.0 $10,420.9 $ — $10,420.9 $10,433.6 $ — $10,433.6 Operating expenses(
Slide 11: Cash Flow Performance
Cash Flow Performance Nine Months Ended September 30, 2022 2021 Free Cash Flow(a) $ 1,232.5 $ 1,249.3 Primary Uses of Cash: Dividends paid to Common Shareholders 437.7 443.0 Dividends paid to Noncontrolling Interest Shareholders 62.9 69.8 Capital Expenditures 65.6 42.6 Acquisition payments, includin
Slide 12: Credit & Liquidity
Credit & Liquidity Twelve Months Ended $ Millions September 30 2022 2021 EBITDA(a) $ 2,282.1 $ 2,401.8 Total Debt / EBITDA 2.4 x 2.2 x Net Debt(b) / EBITDA 0.9 x 0.4 x Debt Bank Loans (Due Less Than 1 Year) $ 10.2 $ 10.2 USD-denominated Senior Notes 4,150.0 4,150.0 EUR-denominated Senior Notes 976.0
Slide 13: Historical Returns
Historical Returns Return on Invested Capital (ROIC)(a) Return on Equity(b) Twelve months ended September 30, 2022 25.0 % Twelve months ended September 30, 2022 43.2 % Twelve months ended September 30, 2021 26.4 % Twelve months ended September 30, 2021 47.0 % (a) Return on Invested Capital is After
Slide 14: Appendix
Appendix 14
Slide 15: Free Cash Flow
Free Cash Flow Nine Months Ended September 30 2022 2021 Net Income $ 947.9 $ 1,057.7 Depreciation and Amortization of Intangible Assets 164.8 157.9 Share-Based Compensation 61.3 57.8 Non-cash charge related to the effects of the war in Ukraine 65.8 — Other Items to Reconcile to Net Cash (Used in) Pr
Slide 16: Operating Expense Detail - Constant $
Operating Expense Detail - Constant $ Third Quarter Year to Date 2022 2022 C$(c) 2021 2022 2022 C$(c) 2021 Operating expenses: Salary and related service costs $ 1,749.1 $ 1,863.2 $ 1,730.3 $ 5,344.5 $ 5,588.4 $ 5,101.2 Third-party service costs (a) 727.0 773.1 731.5 2,189.4 2,291.0 2,508.7 Salary a
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations Nine Months Ended September 30 2022 2021 Net Cash (Used in) Provided by Operating Activities $ (250.6) $ 238.6 Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (1,483.1) (1,010.7) Free Cash Flow $ 1,232.5 $ 1,249.3 Net Decrease in Cash an
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Nine Months Ended Twelve Months Ended September 30 September 30 September 30 2022 2021 2022 2021 2022 2021 Net Income - Omnicom Group Inc. $ 364.5 $ 355.6 $ 886.7 $ 991.6 $ 1,302.9 $ 1,389.7 Net Income Attributed to Noncontrolling Interests 18.8 24.5 61.2
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Nine Months Ended Nine Months Ended September 30, 2022 September 30, 2021 Non-GAAP Adjusted Non-GAAP Adjusted Operating Operating EBITA EBITA Profit Profit Net Income - Omnicom Group Inc. $ 886.7 $ 886.7 $ 991.6 $ 991.6 Net Income Attributed To Noncontrolling Interests 61.2
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Nine Months Ended September 30, 2022 2021 In millions except per share amounts Net Income - Omnicom Group Inc. - Reported $ 886.7 $ 991.6 Gain on disposition of subsidiary — (50.5) Early extinguishment of debt — 26.6 Tax expense on early extinguishment of debt — (7.1) Charge
Slide 21: Acquisition: dotdotdash
Acquisition: dotdotdash • September 2022 • TBWA\Worldwide acquired dotdotdash, an agency they collaborate with frequently • Brings additional customer experience design and immersive technology capabilities • Enhances focus on how shifts in culture, tech, and human behaviors are shaping the future o
Slide 22: Disclosures
Disclosures The preceding materials have been prepared for use in the October 18, 2022 conference call on Omnicom’s results of operations for the three and nine months ended September 30, 2022. The call will be archived on the Internet at http:// investor.omnicomgroup.com/investor-relations/news-eve