Omnicom Group Inc. · NYSE:OMC
Omnicom — Q2 2024 Earnings Presentation
23 slides from Omnicom's earnings presentation, Jul 16, 2024
Slide 1: 2024 Second Quarter
2024 Second Quarter July 16, 2024
Slide 2: Highlights
Highlights Revenue Income • 5.2% organic revenue growth in Q2 2024, 4.6% • Q2 2024 reported operating income $510.3 YTD, solidly within annual expectation of million, 13.2% margin. Non-GAAP adjusted 4.0%-5.0% EBITA $589.6 million, increase of 5.5% from • Advertising & Media strong at +7.8% prior yea
Slide 3: Income Statement Summary
Income Statement Summary Second Quarter Year to Date 2024 2023 2024 2023 Revenue $ 3,853.8 $ 3,609.9 $ 7,484.3 $ 7,053.2 Operating Expenses (a) 3,343.5 3,059.2 6,495.1 6,156.0 Operating Income 510.3 550.7 989.2 897.2 Net Interest Expense 41.7 27.4 68.5 46.7 Income Tax Expense(b) 123.7 141.2 239.7 22
Slide 4: Revenue Change
Revenue Change Second Quarter Year to Date $ %∆ $ %∆ Prior Period Revenue $ 3,609.9 $ 7,053.2 Foreign exchange rate impact(1) (37.4) (1.0)% (40.1) (0.6)% Acquisition revenue, net of disposition revenue(2) 93.0 2.6 % 146.0 2.1 % Organic growth(3) 188.3 5.2 % 325.2 4.6 % Current Period Revenue $ 3,853
Slide 5: Revenue by Discipline
Revenue by Discipline Second Quarter Year to Date % % Organic % % Organic Revenue % of Rev Growth Growth(3) Revenue % of Rev Growth Growth(3) Advertising & Media $ 2,046.8 53.1 % 7.1 % 7.8 % Advertising & Media $ 3,953.6 52.8 % 7.2 % 7.4 % Precision Marketing 438.8 11.4 % 18.9 % 1.4 % Precision Mark
Slide 6: Revenue by Region
Revenue by Region Second Quarter Year to Date % Organic % Organic Revenue % of Rev % Growth Growth(3) Revenue % of Rev % Growth Growth(3) United States $ 2,033.4 52.8 % 9.9 % 6.3 % United States $ 3,959.3 52.9 % 8.1 % 5.3 % Other North America 115.0 3.0 % (10.3)% (8.3)% Other North America 230.0 3.1
Slide 7: Revenue by Industry Sector
Revenue by Industry Sector Second Quarter Year to Date 2024 2023 2024 2023 Pharma & Health 17% 17% 16% 17% Food and Beverage 15% 15% 16% 15% Auto 11% 12% 11% 12% Consumer Products 11% 8% 10% 8% Technology 7% 8% 7% 8% Financial Services 7% 7% 7% 7% Travel & Entertainment 7% 7% 7% 7% Retail 7% 7% 6% 6
Slide 8: Operating Expense Detail
Operating Expense Detail Second Quarter Year to Date 2024 % of Rev 2023 % of Rev 2024 % of Rev 2023 % of Rev Revenue $ 3,853.8 $ 3,609.9 $ 7,484.3 $ 7,053.2 Operating expenses: Salary and related costs 1,836.9 47.7 % 1,772.0 49.1 % 3,684.2 49.2 % 3,550.0 50.3 % Third-party service costs(c) 811.1 21.
Slide 9: Income Statement Summary - Non-GAAP Adjusted
Income Statement Summary - Non-GAAP Adjusted Second Quarter Non- Non- Non- Non- Reported GAAP GAAP Reported GAAP GAAP 2024 Adjs. Adj. 2024 2023 Adjs. Adj. 2023 Revenue $3,853.8 $— $3,853.8 $3,609.9 $— $3,609.9 Operating Expenses: Real estate and other repositioning costs(a) 57.8 (57.8) — 72.3 (72.3)
Slide 10: Income Statement Summary - Non-GAAP Adjusted
Income Statement Summary - Non-GAAP Adjusted Year to Date Non- Non- Non- Non- Reported GAAP GAAP Reported GAAP GAAP 2024 Adjs. Adj. 2024 2023 Adjs. Adj. 2023 Revenue $7,484.3 $— $7,484.3 $7,053.2 $— $7,053.2 Operating Expenses: Real estate and other repositioning costs(a) 57.8 (57.8) — 191.5 (191.5)
Slide 11: Cash Flow Performance
Cash Flow Performance Six Months Ended June 30, 2024 2023 Free Cash Flow(4) $ 901.3 $ 880.2 Primary Uses of Cash: Dividends paid to Common Shareholders 278.9 285.1 Dividends paid to Noncontrolling Interest Shareholders 34.2 32.0 Capital Expenditures 62.3 40.0 Acquisition payments, including payment
Slide 12: Credit & Liquidity
Credit & Liquidity $ Millions Twelve Months Ended June 30, 2024 2023 EBITDA(5) $ 2,422.8 $ 2,299.4 Total Debt / EBITDA 2.6 x 2.5 x Net Debt(6) / EBITDA 1.5 x 1.2 x Debt Bank Loans (Due Less Than 1 Year) $ 15.1 $ 20.5 USD-denominated Senior Notes 4,150.0 4,150.0 EUR-denominated Senior Notes 1,712.6 1
Slide 13: Historical Returns
Historical Returns Return on Invested Capital (ROIC)(7) Return on Equity(8) Twelve months ended June 30, 2024 20.4 % Twelve months ended June 30, 2024 42.5 % Twelve months ended June 30, 2023 22.4 % Twelve months ended June 30, 2023 46.4 % In millions. See Definitions (7) and (8) on page 14. 13
Slide 14: Notes
Notes Financial (a) For the three and six months ended June 30, 2024, operating expenses included $57.8 million ($42.9 million after-tax) of repositioning costs, primarily related to severance, which reduced diluted net income per share - Omnicom Group Inc. by $0.22. For the three months ended June
Slide 15: Appendix
Appendix Omnicom 15
Slide 16: Free Cash Flow
Free Cash Flow Six Months Ended June 30, 2024 2023 Net Income $ 685.2 $ 627.1 Depreciation and Amortization of Intangible Assets 120.0 105.0 Share-Based Compensation 44.7 41.1 Real estate repositioning costs 57.8 191.5 Gain on disposition of subsidiary — (78.8) Other Items to Reconcile to Net Cash U
Slide 17: Operating Expense Detail - Constant $
Operating Expense Detail - Constant $ Second Quarter Year to Date 2024 2024 C$(e) 2023 2024 2024 C$(e) 2023 Operating expenses: Salary and related costs $ 1,836.9 $ 1,852.9 $ 1,772.0 $ 3,684.2 $ 3,697.0 $ 3,550.0 Third-party service costs(c) 811.1 820.8 715.8 1,509.3 1,523.8 1,355.1 Third-party inci
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations Six Months Ended June 30, 2024 2023 Net Cash Used in Operating Activities $ (760.2) $ (784.6) Operating Activities items excluded from Free Cash Flow: Changes in Operating Capital (1,661.5) (1,664.8) Free Cash Flow $ 901.3 $ 880.2 Net Increase (Decrease) in Cash and Cash Equ
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended June 30, Six Months Ended June 30, Twelve Months Ended June 30, 2024 2023 2024 2023 2024 2023 Net Income - Omnicom Group Inc.(a)(b) $ 328.1 $ 366.3 $ 646.7 $ 593.8 $ 1,444.3 $ 1,388.1 Net Income Attributed to Noncontrolling Interests 20.1 16.9 38.5 33.3 87
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net Income - Omnicom Group Inc.- Reported $ 328.1 $ 366.3 $ 646.7 $ 593.8 Net Income Attributed To Noncontrolling Interests 20.1 16.9 38.5 33.3 Income From Equity Method Investments 3.3 1.1 4.2 1.2 Inc
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Second Quarter Year to Date 2024 2023 2024 2023 Net Income - Omnicom Group Inc. - Reported $ 328.1 $ 366.3 $ 646.7 $ 593.8 Impact on Net Income related to: Real estate and other repositioning costs 42.9 54.5 42.9 145.5 Gain on disposition of subsidiary — (55.9) — (55.9) Amor
Slide 22: Amortization of Intangible Assets
Amortization of Intangible Assets $ Millions 2024 2023 2023 2022 Q1 Q2 Q1 Q2 Q3 Q4 Full Year Full Year $ 18.2 $ 17.8 $ 13.0 $ 12.8 $ 13.7 $ 14.5 $ 54.0 $ 53.2 Acquired intangible assets 3.3 3.7 1.8 1.9 2.0 2.1 7.8 5.6 Internally developed strategic platform assets Acquired intangible assets and inte
Slide 23: Disclosures
Disclosures The preceding materials have been prepared for use in the July 16, 2024 conference call on Omnicom’s results of operations for the three and six months ended June 30, 2024. The call will be archived on the Internet at http://investor.omnicomgroup.com Forward-Looking Statements Certain st